Total Quality Management in Manufacturing - Case Study Example

Running head: DOES TOTAL QUALITY Does Total quality Management improve manufacturing production systems? affiliation This study is part of a research programme on the implementation and implication of quality management in the Irish manufacturing industry. One of its main objectives is to identify an implementation order concerning tools and techniques. Data from survey show there has been continuous decline in the number of new ISO 9000 registrations in the manufacturing industry since reaching its peak some 4-5 years (up to and including survey year, 1996) ago. Statistically significant relationships exist between firms with ISO and those without ISO registration. The survey is expected to show that a majority of the firms have ISO 9000 registration before successfully embracing and implementing total quality management (TQM). Empirical results are expected to show that there would be a marginal increase in performance over a 4-year and 6-year period, respectively, upon installing ISO and TQM programmes. This means that unless firms maintain and sustain the TQM drives continuously, there will be a decline in competitiveness. Table of Contents Chapter One: Introduction………………………………………………………….4 Chapter Two: Critical Literature Review………………………………………….5 Chapter Three: Methodology and Methods………………………………………12 Chapter Four: Discussion…………………………………………………………. 13 Bibliography Chapter One: Introduction Research Rationale: There has been continuous decline in the number of new ISO 9000 registrations in the manufacturing industry since reaching its peak some 4-5 years (up to and including survey year, 1996) ago. Objectives: One of its main objectives is to identify an implementation order concerning tools and techniques. Data from survey show there has been continuous decline in the number of new ISO 9000 registrations in the manufacturing industry since reaching its peak some 4-5 years (up to and including survey year, 1996) ago. This study was conducted to investigate the effects of ISO 9000 and TQM either singly or in combination on the performance of companies. It also explores the order of implementation, which was not addressed previously. In the process, the relationship of practice and performance is investigated and the practices and performance of firms with or without TQM and ISO 9000 in the manufacturing industry is examined. Research Question: Does Total quality Management improve manufacturing production systems? Chapter Two: Critical Literature Review Theoretical Frameworks Saraph et al. (1989) were among the first to attempt to organize and coalesce the various TQM prescriptions. They identified eight critical factors of quality management: the role of management leadership and quality policy; the role of the quality department; training; product/service design; supplier quality management; process management; quality data and reporting; and employee relations. Operational measures of these factors were developed and were found to be reliable and valid. By using such measures, decision-makers can assess the level of quality management in their organization in order to devise strategies for further improvements. Starting from a strategic perspective, the work by Flynn et al. (1994) identified and accentuated seven key dimensions of quality management that included top management support, quality information, process management, product design, workforce management and supplier and customer involvement. These dimensions were then tested for reliability and validity and, by doing so, described a clear framework for subsequent research and established a standard by which practitioners could evaluate the effectiveness of their quality management programmes. Through a detailed analysis of the literature, Ahire et al. (1996a) identified 12 constructs of integrated quality management strategies, namely, top management commitment, customer focus, supplier quality management, design quality management, benchmarking, SPC, internal quality information usage, employee empowerment, employee involvement, employee training, product quality and supplier performance. The constructs spanned the entire ambit of activities deemed critical by the Malcolm Baldrige Quality Award. Based on these factors, a framework to delve the effects of integrated quality management strategies on a firms product quality was suggested. Another contribution to the development of an instrument to measure the levels of TQM implementation was made by Black and Porter (1996). Their work presented a research methodology that could be used to improve self-assessment frameworks and make organizations more effective in the development of total quality systems. Their research focused on the important elements of the Baldrige Award model and other established literature, and identified 10 critical components of TQM, viz. corporate quality culture, strategic quality management, quality improvement measurement systems, people and customer management, operational quality planning, external interface management, supplier partnerships, teamwork structures, customer satisfaction orientation and communication of improvement information. These factors were found to be reliable and valid, and provided key contributions for the better understanding of TQM. Black and Porter (1995) also developed a model for TQM which provided visual information on the various factors of TQM, relationships between those factors, strength of those relationships and the relative importance (or criticality) of those factors. In a recent research work, Joseph et al. (1999) identified 10 factors of TQM. These include organizational commitment, human resource management, supplier integration, quality policy, product design, and role of quality department, quality information systems, technology utilization, operating procedures and training. A measurement instrument was also developed which can be used to evaluate the extent of TQM practice in an organization. Flynn et al. (1994) argued that the cornerstone for theory building is enunciation of the distinction between quality management practices (inputs) and quality performance (outputs), which, until then, had been lumped together under the broad heading of quality. Madhu et al. (1996) reasoned that, although many conceptual models do claim the utility of certain quality dimensions (such as customer satisfaction, employee satisfaction and employee service quality) in improving organizational performance, no empirical study until that time had verified such claims. In their empirical work, Madhu et al. (1996) investigated the effect of the quality dimensions on nine component items that would make up organizational performance for both manufacturing and service firms. The measures used for the three quality dimensions and organizational performance were shown to be reliable and valid. However, information derived from the study indicated that, when compared to manufacturing, practising managers in the service sector seem not to have understood some of the relevance and values of quality management activities. The decision as to which management practices should be emphasized for effective TQM implementation has been a major concern of decision-makers in the field (Flynn et al., 1995). In an exploratory investigation of the relationships between specific quality management practices and quality performance, these authors contrived a framework and found that different quality management practices lead to success in different quality dimensions. A study by Adam (1994) examined the relationships between alternate quality improvement approaches and actual operating and financial performance. The results indicated that each organization has a profile that identifies the improvement strategies that are required to achieve objectives, whether they are to improve quality, operating and/or financial performance. Depending upon the selected measure(s) of quality, operating and financial performance, an appropriate approach to quality improvement can also be selected. Samson and Terziovski (1999) attempted to find the relationships between the various TQM practices, individually and collectively, and company performance. The results showed that the intensity of TQM practice does contribute significantly to the performance. In another investigation, Terziovski and Samson (1999) tested the relationship between TQM practice and organizational performance with and without the covariates, company size, industry type and ISO 9000 certification status. The authors concluded that there were significant differences in the relationship between TQM and organizational performance across industry type and size, especially on the effect of defect rates, warranty costs and innovation of new products. The work of Powell (1995) provided valuable insights into the `soft issues of TQM. Powell explored TQM as a potential source of sustainable competitive advantage and found that the most generally acceptable features associated with TQM, such as quality training, process improvement, benchmarking, etc. may not be that useful for effective TQM implementation. However, they might be useful that certain tacit, behavioural, imperfectly imitable features, such as open culture, employee empowerment and executive commitment, are vital for an environment conducive to TQM. He concluded that these tacit resources, and not mere TQM tools and techniques, are instrumental for success and that organizations that acquire them can win over their competitors with or without the TQM label. With many organizations striving to implement TQM, it becomes paramount that managers see a link between the quality of their products and their customers perceptions of the quality of their products (Waller & Ahire, 1996). If managers fail to see the validity of this link, they may not appreciate the importance of improving product quality and, consequently, the significance of implementing TQM or other quality improvement techniques. In other research, Ahire et al. (1996b) ventured to provide a clear demarcation between what is actually meant by TQM and non-TQM firms. The authors stated that firms should be classified on a scrupulous evaluation of the extent to which they have embraced the TQM philosophy. They also claim that if organizations do practise the various elements of TQM philosophy to perfection, it will definitely help them to ameliorate their quality performance. There is a belief that the benefits of TQM take a long time to show through. Ahire (1996) argued that successful firms get the feel of their success with TQM in terms of greater operational results within the first 2-3 years of its implementation. He concluded that firms that manage their TQM efforts fittingly would benefit more as TQM mellows in these firms. Ahire and Golhar (1996) examined the relationships between company size and TQM implementation. The findings suggested that small firms, though restrained by such inadequacies as want of managerial expertise, clout in the market, insufficient resources, etc. can make up for that with their relative strengths in flexibility and innovation, thereby implementing TQM just as effectively as large firms. Recognition of quality management as an important factor in the competitive survival of most organizations has grown rapidly in recent years and is now widespread. It has long been an accepted fact that quality holds the key to competitiveness in the global market irrespective of the size of the company. Competitiveness for a firm means the ability to produce the right goods and services of the right quality, at the right price and at the right time. Many have claimed that implementing total quality improves competitive ability but few have provided satisfactory proof of this relationship and, most importantly, at what stage in the quality ladder. Oakland et al. (1994) and Clayton and Charles (1995) used hard and soft indicators to measure competitive achievement for businesses. Voss et al. (1995) provided a comprehensive study into European manufacturing competitiveness. However, these are taken from trade databases, or from companies volunteering to participate or from pre-selected and large firms, and are thus not representative of the population at large. Quality Management Systems A lot has been said about the merits and demerits of ISO 9000. ISO 9000 is about quality systems and about consistency. It does not directly ensure product quality. It was designed to satisfy customers about their suppliers performance rather than to meet the suppliers needs. In a way, ISO 9000 would be equivalent to the early Japanese total quality control (TQC) (Akao, 1991; Ishikawa, 1988) which, according to Sullivan (1986), is a subset of company-wide quality control covering the first three stages. It may probably be in the early stage 4, with the inclusion of training as one of the key clauses in ISO 9001, as described in Part 1 (1987) in BS 5750. The SEPSU (1994) study was highly critical of the administration and implementation of ISO 9000 and its negative effects on the quality management system in the UK. OConnor (1995) strongly advocates downgrading ISO 9000 to a mere guidance document providing description of a minimal quality system. According to Akao (1991), the subject and scope of total quality management (TQM) as is understood by non-Japanese manufacturers, are equivalent to Japanese TQC or company-wide quality control. According to Sullivan (1986), the build-up of total quality occurs in seven stages. It involves after, during and before production and quality-related activities, with the last stage being the quality function deployment (QFD), which transforms the voice of the customer. It may be possible that one of the reasons for most of the poor performances and the failures could be a companys quality position relative to the seven stages. That is, generally, a company at a lower level of quality management practices is more susceptible to poor performance and failure than a company at a much higher level of quality management practices is. Complementary Effects Research into the practices and consequent successes of ISO 9000 and/or TQM in companies has been distorted by the focus on either one and pays little or no attention to the other, and has failed to acknowledge their complementary effects. Much of the literature on the success stories and corresponding competitiveness of firms attributed it to TQM. Chapter Three: Methodology and Methods Research Design The research design employed in this study will involve designing a postal-survey questionnaire and mailing it to 1800 manufacturing firms in the Republic of Ireland. Research Context 1800 manufacturing firms in the Republic of Ireland will be used. Methods for Data Collection Questions will be designed to capture information about the quality management practices and business results from supplier to manufacturing system to customer. In the main survey, a selected reminder to a sub sample of the initial non-respondents will be sent without a copy of the questionnaire. Nineteen questionnaires will be mailed to the US Malcolm Baldrige National Quality Award (MBNQA) winners. This will be an attempt at gathering information for the purposes of understanding and comparing how well Irish firms are performing relative to excellent manufacturers. Methods for Data Analysis Statistical methods will be used to analyse data. Chapter Four: Discussion Significance of Proposed Research This research will be very significant because the individual effects of ISO 9000 and TQM on the performance of the firms will be found out. The practices and resulting performance of firms with ISO 9000 only in place are expected to be significantly better than those firms without an official quality system are. The competitiveness of firms in Ireland or, for that matter, the competitiveness of Irish manufacturing industry, is not determined by the standards set by a few leading companies, but by the average. It is established that performance is correlated with practice, and this in turn establishes the importance of TQM/TQC/CWQC. Research Limitation This research involves the effects of ISO 9000 and TQM on the performance of the Irish manufacturing firms. The results might be changed if only the effects of TQM on the performance of the Irish manufacturing firms would have been found out. References Akao, Y. 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(1993) A proposal for the measurement of quality position in UK manufacturing industries, PhD Thesis, University of Liverpool. Read More