Influence of Quality Management on the Overall Performance - Research Paper Example

Research Proposal Title: Total Quality Management and its effect on the overall performance of an organisation Background to the Research: To remain competitive and to witness a rapid growth momentum in today’s business scenario, an organisation needs to ensure higher customer satisfaction each time it launches a new product or offers a particular service. A need of continuous improvement in products, processes and services is increasingly felt by the organisations. This has triggered the wide acceptance of Total Quality Management (TQM) techniques and models across a vast array of organisations, eager to occupy the leading position in the market. TQM is now recognized as a management strategy adopted to constantly improve all the processes and functions of an organisation. This approach helps to minimise the chances of errors in production system, ensuring meeting of tough deadlines on-time. This is achieved by adopting suitable techniques by which the available resources can be utilized optimally thereby leading to the maximization of outputs. Adoption of TQM has increased as companies strive to strengthen their competitive edge in the industry and carve out their niche in new markets. TQM ensures minimum wastage during production cycle making the production system lean thereby reducing the need of maintaining huge inventory levels. TQM helps in controlling the performance of all the operations, relating each process with the following one, in such a way that it helps in reducing the time taken to perform each operation. This helps in minimisation of idle time and speeds up the total manufacturing process which results in the production of superior quality products. TQM is achieved with the help of quality control techniques and processes like Kaizen,5S,six sigma and Just in Time(JIT) approaches(to name a few) and quality circles. TQM underlines the philosophy of an organisation-wide integrated approach where each process and function is completed adhering to the standards of quality, outlined by the organisation. TQM follows a proactive approach which helps organisations to identify the expected bottlenecks in a process before their actual occurrence and enables the company to take measures to prevent the actual occurrence of the same. So, TQM has earned a lot of attention over the years because of its positive influence in enhancing the product and service quality of organisations. This is also the reason due to which this has emerged as one of the major area of research today. Research Questions and Objectives: The research is aimed at understanding the importance of Kaizen and JIT in achieving TQM within an organisation. Some of the questions which the proposal wishes to find an answer are as follows: The significance of the Kaizen technique in TQM The role played by JIT in speeding up the production operations The effects on the performance of an organisation after adopting these quality management tools and techniques. Methodology Conceptual framework: This research proposal would intend to understand the importance of Kaizen (Continuous improvement) and JIT (Just in Time) in achieving TQM within an organisation. Kaizen is a japanese philosophy and it aims at attaining continuous improvement in process, products, technology, human resources and all the aspects that form an integral part of the organisation. This philosophy supports lean manufacturing by eliminating the possibilities of manufacturing defective products. With the help of this proactive approach, bottlenecks in the production process can be easily detected and removed before it affects the total production system thereby increasing idle time. JIT, on the other hand, emphasizes the necessity of maintaining zero inventory level. The adoption of this technique would help an organisation in reducing the overall cost of manufacturing and can only be achieved by maintaining strong supplier relationships. With the help of JIT, the need of storing finished items before being launched in the market can be eliminated. This concept emphasizes that items should be manufactured after being ordered and would be delivered as soon as they are produced. It stresses on the concept of make to order rather than the conventional system of make to stock. Research Design: To find answers and probable solutions to the above mentioned questions, the case study approach has been adopted and found most suitable. With the help of the case study, it would be possible to understand the role played by TQM in enhancing the overall performance of an organisation. Case studies help to understand the practical relevance of a concept which cannot be understood with the help of only theoretical analysis. It helps to have a thorough knowledge about the different facets of a given problem and how adoption of a technique has impacted the business of an organisation. Instances exist how adoption of TQM measures have changed the ways businesses were performing in the past and have transformed some of the unprofitable organisations into profitable ventures. Products which have not been able to create its niche in the market have been found to be profitable ventures after adoption of TQM techniques and processes. One of the best examples which depict the positive changes that TQM measures can have on a business is the example of Toyota Motor Corporation Ltd. (TMC). It was in 1960, that the then vice-president of TMC, Mr. Eiji Toyoda, decided to implement quality control techniques to generate a proactive approach in the production process of the company (Toyota-Vision & Philosophy- Toyota Traditions, September/October 2005). His objective was to reduce the need of supervision at every stage of production process as this stretched the production cycle and increased the total time of production. Moreover, it was not possible to minimise the idle time between the subsequent processes and identify the bottlenecks of the production process. The approach which was then followed by the company was a reactive approach which meant that after the actual occurrence of the problem, steps were taken to remove the problem which again increased the total cost of operation and also made the production process lengthy and time consuming. Due to such occurrences, the company was not able to launch superior quality products in the market and was not also successful in tapping the demand of the market. This was affecting its overall financial performance and its growth momentum. Forced by such circumstances, Mr. Toyoda decided to refocus on the quality standards followed by the company. He emphasized the role of adopting a proactive approach in the production system which would help in eliminating the unnecessary cost involved in supervising each process of production. He stressed on the point that high benchmarks must be framed for each process, involved in carrying out the production of vehicles, so that quests should be made to achieve them which would leave no room for redundancies or unnecessary processes. The company then was suffering from the problem of inferior product quality. In 1960s, the demand for cars in the Japanese automobile industry was found to show a rapid growing trend (Toyota-Vision & Philosophy- Toyota Traditions, September/October 2005). To tap the demand, Toyota had launched the second generation of Corona at that time, but the product proved to be a big failure in the market. To mitigate the problem and prevent the recurrence of the same in the future, the Japanese company adopted some new quality –related techniques and named it ‘Total Quality Control (TQC)’ measures. TQC was framed with the idea that it would help the company to undergo a total modernization of all its processes adhering strictly to the underlined quality standards (Toyota-Vision & Philosophy- Toyota Traditions, September/October 2005). The focus was entirely customer driven. The employees of the company were told to regard their next work station as their immediate customer and thus strive to deliver the best quality product and service to the next work station. Toyota aimed at ensuring adherence to quality standards at every step of the production process as it believed that doing so would ultimately lead to the production of a superior quality product. Toyota started emphasizing the role of ‘continuous improvement (Kaizen)’ which would only be achieved by improving the quality of each of the processes gradually over time. To ensure an organisation wide progress, ‘quality control circles’ and ‘quality control teams’ were formed. Quality control circles helped in carrying out the cause and effect analysis by which the underlying causes leading to the occurrence of a certain problem could be traced out and appropriate measures could be taken to prevent the same. Toyota also redefined its production system which came to be known as the Toyota Production System (TPS). This system followed the rules of lean manufacturing .TPS consisted of two vital process-Jidoka and JIT (Just In time) (Toyota-Vision & Philosophy-Toyota Production System, n.d.). Jidoka aimed at minimizing the production of defective end products. This was mainly achieved by stopping the machine from producing a defective product as soon as it was discovered. This helped in saving time as well as the cost of operation. This also minimised the possibilities of producing a defective product. JIT, on the other hand, aimed at maintaining zero inventory level, which would reduce the cost of maintaining huge inventory levels at various stages of production. This in turn would lower the lead time between processes and speed up the inventory cycle. Toyota wanted to follow the technique of make to order rather than make-to stock. This also meant strengthening ties with the suppliers. With the help of control charts, scatter diagrams, pareto analysis and fish bone analysis, the company was able to detect the bottlenecks in the production process and adopt suitable measures to remove the same. Basically, Toyota adopted an overall quality management initiative which was based on the concept of continuous improvement (Kaizen) and JIT. The benefits became apparent over the years. The first, being the success of the third generation Corona which was launched in 1964(Toyota-Vision & Philosophy- Toyota Traditions, September/October 2005). This car was then acclaimed for its durability and for its performance especially because of its high speed (engine capacity). This product then became the best selling car in Japan. With its continuous focus on quality control measures, in 1965, the company was awarded the ‘Deming application prize’ for implementing successfully quality control processes and techniques within the organistaion (Toyota-Vision & Philosophy- Toyota Traditions, September/October 2005). By 1970s, the company’s production unit in Japan was successful in producing 100 thousand automobiles (Toyota Motor Corporation-Annual Report 2008, March 2008). Following the TQM approach, by 2003, the company became the second largest car manufacturer across the globe producing 6.78 million vehicles (SWOT Analysis Toyota, n.d.) (Exhibit I). Even today, Toyota aims at achieving lowest manufacturing costs by bringing in continuous improvement in some of the core processes such as ‘ production & supply’, ‘technology’,’ sales & marketing’, ‘human resources’, ’product quality’ and ‘cost’. Exhibit I: After adopting TQM standards, Toyota emerges as the second largest automobile manufacturer Source: Chithra G. R. S., n.d. Toyota redefined its TQM philosophy in 2005 and created a ‘CF Activity Promotion Committee’ whose principal aim was to underline that customer satisfaction and quality aspects were the major objectives of the company (Toyota Motor Corporation-Annual Report 2008, March 2008) (Exhibit II). This committee reinforced the idea that every stage of production or processes should ensure that best quality products are produced and are then only allowed to move onto the next stage. Production of defective products should be minimised and if already produced, eliminated readily. Exhibit II: CF Activity Promotion Programme of Toyota to reinforce TQM Source: Toyota Motor Corporation-Annual Report 2008, March 2008 Following the TQM approaches, the company has been found to record a year on year sales growth in the fiscal year 2008. The company’s sales of automobiles increased from 389,000 units to 8,913,000 units within a year as per the annual report of 2008. The company showed a growth in the financial performance where net revenues were found to grow by 9.8% operating income by 14% and net income by 4.5 % (Toyota Motor Corporation-Annual Report 2008, March 2008) ( Exhibit III). Exhibit III: Financial performance of Toyota over the years Source: Toyota Motor Corporation-Annual Report 2008, March 2008 The growth of Toyota has resulted due the adoption of TQM standards and its focus on Kaizen philosophy. Expected data collection: The primary data would be collected by interviewing the top managers of Toyota. The production manager would be interviewed to get hands on knowledge about the basics of the assembly line that leads to lean production and adds to the growth of the company. Information about the bottlenecks that the production process generally faces can also be understood. The methods of implementation of Kaizen and the gradual improvements that this process is bringing into the production system would also become apparent. Furthermore, information about the implementation of JIT process can be understood by talking with some of the major suppliers of the organisation and taking their interviews. Knowledge about the methods that the company has adopted to ensure continuous gradual improvement can also be identified. Significant data which would help to assert the role of TQM in the daily operations of the company can be gained from the interviews that would be conducted. The gradual improvement in processes can be traced by knowing whether the rate of daily production has increased or not say within six months time frame, whether daily targets are met as underlined, the time taken to complete a given production process, the number of defective products produced in a million, the time taken to deliver an end product to the customer etc.. These data would help one to compare whether the company has been able to make significant improvements in these areas within say about six months or a year. This would help one to establish the role played by Kaizen and JIT in improvising the overall operations of the production process. Resources: The primary data would be collected by interviewing the managers of Toyota related with the production process and the supervisors who would be able to give information about the ways in which TQM has made the production process more efficient. Workers can also be interviewed to understand whether the lean manufacturing techniques and the emphasis on continuous improvement have helped to speed up the production processes or not. This would help to understand the role played by TQM in improvising the production processes at Toyota. Literature Review TQM concept has evolved over the years. Though the evolution has been gradual but marked changes have been brought in the concept with the passage of every decade (Exhibit IV). Exhibit IV: Evolution of the concept of TQM Source: Total Quality Management, n.d. Walter A. Shewhart was one of the early statisticians during 1920s who brought an awareness about the concept of ‘quality’ and the role played by it in improving the production process of an organisation (Total Quality Management, n.d.). His approach to quality control was of a reactive nature. After studying various production processes, he came to the conclusion that all production processes show certain amount of variability. To find out the cause of such variabilities, he designed ‘quality control charts’ which helped in understanding whether the variations in production processes were due to poor machinery or lack of skilled workers. He also stressed on the point that to produce better quality finished products, one needs to control these variations. It is on the basis of his deductions and research that statistical process control techniques were later developed. The concept of TQM was further stressed by W. Edwards Deming in 1940-1950s by his revolutionary research in this domain (Total Quality Management, n.d.). He is acclaimed globally as the ‘father of quality control’ (Total Quality Management, n.d.). He had played a major role in revamping the production processes of many of the Japanese organisations after the end of World War II. He was the first to underline the fact that it is not the workers who should be made primarily responsible for the poor quality of the products but the major role is played by the top management. In his theory, he outlined the role played by management in ensuring quality management. His research findings pointed out that though traditionally it was workers who were held responsible for the poor quality standards of products and processes, but in reality a greater role was played by the management. Actual findings revealed that only 15% of the quality issues were due to the mistakes committed by the workers but the management was responsible for the remaining 85% of the problems (Total Quality Management, n.d.). He stressed that to achieve superior quality in products and processes, the management should adopt suitable measures and frame strategies accordingly to ensure that the workers were able to produce better quality products. His theory stated that it is the total responsibility of the managers to impart proper training to the workers so that they become aware of the quality standards and the parameters which would help them to achieve the same. The workers should be given knowledge about the various processes needed to identify defective products and steps that they should adopt to minimise the recurrence of the problem. He pointed out that to ensure better quality an organisation needs to undergo an overall organisational change. He outlined ‘14 principles’ which would help in meeting quality standards. (Exhibit V) Exhibit V: ’14 principles’ of Deming  Create consistency of purpose toward improvement of product and service.  Adopt the new philosophy. Refuse to accept defects.  Cease dependence on mass inspection.  End the practice of awarding business on the basis of price tag. Require suppliers to provide statistical evidence of quality.  Find problems. Continually and forever make improvements.  Institute modern methods of training on the job.  Give all employees the proper tools to do the job right.  Drive out fear so that everyone can work effectively.  Break down barriers between departments; encourage different departments to work together on problem solving.  Eliminate numerical goals, posters, and slogans that ask for new levels of productivity without providing specific improvement methods.  Eliminate work standards that prescribe numerical quotas; use statistical methods to continually improve quality and productivity.  Remove all barriers to pride in workmanship.  Provide vigorous and ongoing education and retraining.  Clearly demonstrate management commitment to the above 13 points every day. Source: Dr. W. Edwards Deming’s 14 Points of Management, n.d. The gradual evolution of the concept of TQM can be understood by analysing the transition between Shewhart and Deming’s underlined principles (Exhibit VI). Exhibit VI: Difference in Shewhart and Deming’s Quality Management Approach Source: Quality Management Text Manuscript, 2008 Another remarkable development in the field of TQM had been brought about by Joseph M. Juran. This theory did not support Deming’s philosophy of undergoing a thorough organisational change to imbibe awareness about quality standards within it. Juran’s theory proposed that there was no need to initiate such a major change to inculcate awareness about quality standards within an organisation. He revolutionized the concept of quality by redefining it. Prior to his theory quality was defined as ‘conforming to specifications’ which later was revised by him as ‘fitness for use’ (Total Quality Management, n.d.). He is the first person to throw light on the relation between cost and quality. His theory stressed on the fact that customer satisfaction is the ultimate objective of an organisation and so quality standards should be framed keeping customers in mind. He diverted the focus of quality from just being related with the technical aspect of a product to the customer centric approach. He is universally acclaimed for developing the concept of ‘quality triology’ which underlines three concepts namely ‘quality control’ ,’ quality improvement’ and ‘quality planning’(Exhibit VII). ‘Quality planning’ would help companies to recognize their potential customer group, the changing demands of products and setting business objectives.’ Quality control’ seeks to minimise the variations in the production process which leads to the production of defective items. This technique can be deployed by organisations with the help of various statistical tools and control techniques. This would help to detect the variations and thus help organisations to adopt suitable corrective measures to prevent their future occurrence. The last part of the triology, ‘quality improvement’ emphasizes the concept of ‘continuous improvement’ This process helps in reducing the costs incurred in adhering to the quality standards by minimising the possibilities of producing defective products. Exhibit VII: Juran’s ‘Quality Triology’ Source: Dr. Juran quality program, n.d. Juran also stressed that in order to ensure ‘continuous improvement’, proper training should be imparted to the workforce. Juran’s philosophy of quality management can de understood with the help of this following exhibit. (Exhibit VIII). Exhibit VIII: Juran’s Philosophy on quality management Source: Dr. Juran quality program, n.d. Some new concepts and ideas were established by some of the researchers which later revolutionized the concept of quality management and created foundation for the development of TQM standards followed by the organisations of today. Out of them, one of the researchers who need a special mention is Armand V. Feigenbaum who established the concept of ‘Total Quality Control’. He outlined 40 principles in support of his research to enable the organisations to understand the importance of quality control techniques. His theory underlined that an organisation should adopt an integrated approach in order to successfully implement quality standards. He underlined that it is not the onus of either the workers alone or the management to ensure that quality standards are followed and abided by in the organisation, but it should be a concerted effort by both the sides which would ultimately lead to the successful implementation of quality standards. This theory was then adopted by the Japanese organisation at large and they named his philosophy as ‘company-wide quality control’. Philip B. Crosby (1970s) introduced a new dimension to the total quality management approaches that was followed in the organisations at that time (Total Quality Management, n.d.). He was the first to point out the importance of proactive approach in ensuring that error or defect free products were produced during the operation cycle. The main principle in his theory was- ‘Do it right the first time’ which emphasized that the production process should be made free of defects (Total Quality Management, n.d.). He did not accept the traditional idea that a manufacturing process would lead to the production of some defective products, which may result due to problems with machinery or some errors made by the workers and it is not possible to make a process entirely defect-free. According to his concept, a manufacturing process should be ideally redesigned in such a way that it does not lead to the production of any defective products. He stressed on the concept of ‘zero defects’. This would be possible by identifying the causes which lead to a defective product prior to the actual production of the products and taking corrective measures to prevent them from actually interrupting the production flow. This would help the manufacturing process to be absolutely free from bottlenecks which would lead to the production of defect-free products. His ideas and theories were published by him in a book ‘Quality is Free’ (Total Quality Management, n.d.). He is also famous for introducing a concept named ‘quality is free’. This theory helped the organisations to identify the various costs associated with quality such as costs incurred in producing a defective product which can be categorised as the cost of labour involved in it, machinery cost and some hidden costs which have a sound impact on the organisation’s overall performance and productivity. He also identified the significance of the role played by management in striving to improve the quality standards of an organisation. The benefits of using the various statistical techniques and processes in controlling quality standards were also pointed by him. Crosby outlined 14 processes which would help an organisation to enhance and continuously improve their quality standards (Exhibit IX). Exhibit IX: Croby’s 14 principles on TQM 1. Management is committed to quality – and this is clear to all 2. Create quality improvement teams – with (senior) representatives from all departments. 3. Measure processes to determine current and potential quality issues. 4. Calculate the cost of (poor) quality 5. Raise quality awareness of all employees 6. Take action to correct quality issues 7. Monitor progress of quality improvement – establish a zero defects committee. 8. Train supervisors in quality improvement 9. Hold “zero defects” days 10. Encourage employees to create their own quality improvement goals 11. Encourage employee communication with management about obstacles to quality 12. Recognise participants’ effort 13. Create quality councils 14. Do it all over again – quality improvement does not end Source: Philip Crosby – “Zero Defects” and “Right First Time”, n.d. With the increasing awareness about the significance of quality standards and the role played by them in increasing the performance standards of an organisation, the need of problem solving tools was becoming necessary. Kaoru Ishikawa was one of the principal contributors in this field. He developed a concept, a problem solving tool which was named as ‘the fish bone analysis’ (Total Quality Management, n.d.). With the help of this analysis the core cause of a problem could be readily identified. It was also known as the’ cause and effect analysis’ (Total Quality Management, n.d.). The head of the fish symbolised the main problem which had caused some problem such as production of defective items or sudden stoppage in the production process etc. The bones of the fish denoted the minor problems which would ultimately help in locating the major problem encountered in the production process. The minor causes could be some small machinery problem or lack of proper training amongst the workers. This tool would be beneficial if the personnel related with the quality control measures utilised this technique effectively while solving problems. He was also one of the pioneers who underlined the fact that the workers needed to treat their next works station as their customer and thus strive to offer them the best quality product and services. He stressed on the importance that quality control should be a company wide process and every person working in the organisation should adhere to the quality standards and devise strategies to continuously improve these standards. He proposed that without the adoption of team culture, it is not possible for organisations to make quality improvement a continuous process within the organisation. The concept of ‘quality circles’ and its significance was underlined by him (Total Quality Management, n.d.). The major objective of these quality circles was to solve immediate problems related with the quality standards of an organisation. Another revolutionary work in the field of quality management was done by Genichi Taguchi. He stressed on the importance of ‘product design’ (Total Quality Management, n.d.). According to his theory, improper product design is responsible for the production of at least 80% of the defective items (Total Quality Management, n.d.). He suggested that in order to reduce the chances of defective production of items, organisations should ensure that the products are designed accurately as per the specifications. This would help them to minimise the expenses incurred in eliminating the defects of the process as it becomes quite expensive and also troublesome to identify defects in the production stage and remove them accordingly. If this is taken care at the initial design stage and the necessary changes made therein, it would lead to the production of a defect-free product. He introduced a new concept in product design known as the ‘design of experiment’ (Total Quality Management, n.d.). This concept is based on the engineering concepts and would enable the companies to make the design of their products robust. According to his theory, such a design would help the companies to develop a product which would have a long service life and would be able to sustain amidst environmental changes. Furthermore, Taguchi discovered the ‘loss function’ which opened a new dimension of understanding the role of ‘quality cost’ and its importance in an organisation (Total Quality Management, n.d.). According to this function, variations to exact specifications are directly proportional to the cost incurred by an organisation., The lower the variations, the smaller is the cost borne by the company and the larger the variations from specifications , the greater the cost incurred by the company. With such increasing awareness about quality parameters, many advanced quality management techniques and processes have been invented, one of them which has gained the highest attention is the concept of ‘six sigma’. In this technique standard deviation is used to signify the amount of variation from the exact specification of a product. This technique helps in detecting defects in a production process so that corrective measures can be adopted to eliminate the bottlenecks of the process. This process is built on the concept of lean management and the basics of total quality management principles. TQM has become one of the major areas of importance today as organisations thrive to sustain and strengthen their competitive edge in the industry. More advanced research can be done to find out the methods which would help in establishing the principle of ‘zero defects’ and would ensure that production can be continued smoothly by maintaining zero inventory levels. There is no end to superior quality so more improvisation needs to be done on the Kaizen philosophy to ensure that continuous improvement can be sustained within an organisation. This would help the organisations to reduce the smallest variation/defects in meeting the exact product specifications and would eventually help them to produce absolutely error free products. References Chithra G. R. 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