Quality Management and Its Peculiarities - Research Paper Example

Quality Management Table of Contents 2. Quality Management Systems 3 3. Adoption of EFQM 5 4. Structure of EFQM 6 5. Communications required within the organization 8 6. Conclusion 10 1. Quality and its relationship with customer satisfaction The global manufacturing industry has undergone some significant changes over the last 20 years. Today the challenge of remaining competitive for a long period of time is more pronounced that it was ever before. Competition nowadays, is not only concentrated on ‘price’ rather it is centred on quality of the products and services offered. It is found that products and services of good quality enable a company to gain competitive advantages in terms of higher market share and this ultimately results in better profitability of the firm. In general, quality implies a certain level or degree of excellence. Many experts and several organizations have attempted to define the term ‘quality’. For instance American Society for Quality Control and American National Standards Institute defined the term as “the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs”. Quality is defined from two important perspectives – customer and manufacturer. Quality of conformance – From a manufacture’s perspective, quality is referred to ‘quality of conformance’. Manufacturers have to produce a product according to the given design. In order to achieve ‘quality of conformance’ improvement needs to be made in the design of materials, equipments, training modules and controlling processes. Quality of design – From customers’ point of view quality is perceived as ‘quality of design’ (SME Toolkit, n.d.). Customer satisfaction and quality are closely related to each other in the present business environment. Customer satisfaction is normally understood as a feeling of contentment which is sensed by a customer at the time of comparing the actual quality of the product or service that has been acquired with the preliminary expectations that the customer had from that particular product or service. This statement reflects the extent to which the quality of product or service is related to customer satisfaction. As far as services are concerned it is very difficult to assess their due to their intangible nature. According to Olga V. Krivobokova, “It is not feasible to develop well-defined quality standards that will allow the manufacturer to exercise full control and reject "unsuitable" services before they are sold to the consumer.” (Krivobokova, 2009). He also opined that “Customer Satisfaction” is equivalent to “Quality” (Krivobokova, 2009). In the present competitive business environment, the principle objective of the firm is to keep their customers satisfied and in order to do so the strategy that has been adopted by them is ‘improving quality’ on a continual basis. The logic is simple – improved quality means satisfied customer which implies increased sales of products and services which finally results in improved revenue. So in other words, in order to remain profitable in the long run, firms must focus on improving the quality of products and the resultant satisfaction of the customers. 2. Quality Management Systems ISO9002 The full title of ISO 9002 is ISO 9002:1994. ISO 9002, one of the most crucial quality management systems, is basically a quality assurance model which is constituted of some quality system requirements. This model is applicable to those organizations that are involved in the production, installation and servicing of a particular product. There are 19 quality system requirements. However numbering is done from 4.1 to 4.20 as ISO 9002 keeps the 20 part numbering system of ISO 9001 (Praxiom Research Group Limited, n.d.). ISO 9002 is, however, an obsolete version and is recently replaced by ISO 9001:2008 which is the fourth and the latest edition of ISO 9000 standard. EFQM EFQM or European Foundation for Quality Management is one of the most popular quality management systems that are practiced in Europe. It is mainly a Business Excellence Framework that is used by more than 30,000 businesses with the purpose of improving performance and increasing their bottom-line. A holistic view of the organization is taken in this model. The use of EFQM model as a diagnostic tool enables an organization to evaluate its strengths and weaknesses in detail by fusing nine key areas. The model is non-prescriptive in nature that makes it flexible enough to be adopted by any kinds of organization irrespective of the size and the sector it belongs to (Quality Scotland, n.d.). CHARTERMARK Charter Mark is a ‘national standard of excellence’ award that is issued by the government for providing excellent customer service. In UK, giving Charter Mark is a part of the drive for modernizing public services. It is a unique quality management scheme as organizations are evaluated on the basis of the service that the customers actually receive from them (Improvement and Development Agency, n.d.). An organization awarded with Charter Mark means that customer service is its principle concern. The use of Charter Mark principle helps organizations to determine the actual needs and wants of customers and the manner in which it can be met effectively. Charter Mark is the recognition of excellence that the company has achieved in the customer service section. Charter Mark is mainly used by the UK government (The Charter Mark, n.d.). CITZENS' CHARTER Citizens’ Charter is nothing but a document that represents the organization’s commitment towards the citizens by focusing on standard of services, non-discrimination and accessibility, information choice and consultation, courtesy, grievance redress and value for money. In Citizens’ Charter, the term ‘citizen’ is referred to the customers and clients whose values and interests are addressed. Citizens’ Charter is non-justifiable as legal enforcement is not possible. However it can be considered as a tool to facilitate the service delivery to the citizens with specific standards and quality. There are certain components that must be included in a Citizens’ Charter. These are the organization’s mission and vision statement, details of business transactions, details of ‘clients’ or ‘citizens’ and details of the mechanism for redressing grievance (Department of Administrative Reforms and Public Grievances, n.d.). 3. Adoption of EFQM There are huge numbers of organizations that have adopted EFQM framework. Lloyds TSB is one of them. It is one of the largest insurance and banking groups in UK. The company has adopted EFQM frame work to meet their ‘corporate social responsibilities’. The group has employed more than 60,000 people throughout the world. It is probably the largest bank in UK in terms of distribution network as the bank has almost 2000 retail outlets for serving both rural and urban communities. Focusing on Corporate Social Responsibility has been an important part of the company’s overall business strategy. The company’s corporate vision is to become the best financial service provider first in UK and then in the foreign market. Lloyds TSB’s CSR strategy supports its corporate vision as it focuses on building a great workplace, a comfortable place to do business and most importantly its CSR strategy helps in generating the maximum possible returns for its shareholders. The company has been using EFQM’s excellence model over the last ten years. According to the company this model helps it to make sure that the company has a clear purpose of working. The model also helps the company to focus on clients and to find better ways of value creation. Furthermore with the help of this model the company easily identifies the ways of developing and maximizing the potentials of its employees. Lloyds TSB has found that no other ‘corporate social responsibility’ specific model is as effective as EFQM framework for CSR. This is because EFQM framework is business driven; it aligns business strategy with corporate responsibility, complements approaches like balanced scorecard, facilitates intrinsic external and internal benchmarking opportunities and links improvement activity, external reporting and self-assessment. The importance of EFQM in improving the overall performance of Lloyds TSB is further reflected by the relationship between the employees and management. The company values the employees’ perception regarding its social, ethical and environmental performance. In 2006, an ‘employee focused CR report’ was published by the company for the first time in its history. This included key CR issues that were told by the employees in a series of interviews (focus group) in 2005. These key issues were people development, responsible lending and local community engagement. This CR report was published in the company’s employee magazine named ‘UpFront’ which was then circulated to each and every employee. UpFront is a monthly magazine that contains different news stories on important CR issues and events. In addition to this magazine, there is customer CR leaflet titled “honest, trustworthy…who cares?” that contains case studies regarding the company’s commitment to different stakeholder groups. It was made available for different branches from 2006 and almost 200,000 were distributed by early 2007. Such incidents reflect the nature of relationships among staffs, customers and management in Lloyds TSB and their role in the development of CR strategy which is further driven by EFQM framework (Avlonas, & Swannich, n.d.). 4. Structure of EFQM There are nine key areas in the ‘European Foundation for Quality Management’ framework. Organizations that implement this framework can assess their strengths and weaknesses in certain areas. The nine areas are represented by the following model. [Source: Quality Scotland, n.d.] The model can be adopted by any organization regardless of its sector and size. Moreover it is considered as an over-arching framework which can be used along with other quality management tools like Charter Mark, IIP and Balanced Scorecard (Quality Scotland, n.d.). The EFQM model is actually used in the form of a diagnostic tool by the organizations for the purpose of self-assessment. There is a set of criteria under all of the nine areas. Organizations grade themselves on the basis of these sets of criteria. The overall score is considered as a European benchmark. It also helps organizations in identifying those areas that require improvement. Once these areas are identified; improvement plans are developed and implemented (Quality Scotland, n.d.). There is a network of National Partner Organisations (NPOs). These NPOs have the license of delivering training, providing EFQM accreditation, selling and distributing EFQM publications. Quality Scotland is the NPO for Scotland. Hence any organization that is interested in using EFQM framework needs to contact Quality Scotland in order to get started. There is an application form that needs to be filled up to apply for the membership. As far as costs are concerned, members need to pay yearly membership fees which are decided on the annual turnover (Quality Scotland, n.d.). Employees play an important role in the use of EFQM model. In fact the self-assessment of organization actually means self-assessment of the employees. As a result active participation of the employees is crucial for the successful use of EFQM. The self-assessment process actually plays important role in creating a motivated, committed and empowered workforce. The ultimate objective of using the quality management systems like EFQM is to improve the quality of the products and services. It is expected that better quality will result in improved relationships with the customers. So it is very important for the organizations to monitor the progress pertaining to customer relationship after using EFQM framework. 5. Communications required within the organization Communication process within the organization is likely to play an important role while a specific quality management system is followed by the company. For instance in case of ISO 9001:2000 internal communication is a crucial aspect that needs to be given proper importance by the company. The organization must ensure that the effectiveness and significance of the quality management tool are properly communicated to the employees. Top management has to take the responsibility to make sure that the employees are aware of the quality management system and its effectiveness. The management, particularly in case of ISO 9001:2000, plays an important role in communicating the significance of meeting not only for the sake of customer requirements but also for regulatory and statutory requirements. Moreover the quality policy also needs to be explained by the management to the employees. The communication should be made in such a way that the employees can have a clear understanding regarding the quality policy and their respective roles in the overall process of quality management system. Effective internal communication system is expected to encourage the employees to become more committed in identifying and achieving the objectives related to quality. The internal communication process can take place in a formal consultation situation wherein quality is considered as a regular or permanent issue of discussion. Things like personnel newsletters, memos, electronic and audiovisual media can play important part in the process of internal communication. Employees must have a fair idea about the places where they can have the required information regarding quality management system of the organization (Bergenhenegouwen, Jong, & Vries, 2002). Posters and strategically placed bulletin boards can be very effective in facilitating the internal communication process. Information regarding the progress of the implementation phase of the quality management system can be displayed in the bulletin boards. For instance, during the planning phase PMC members’ names from each of the departments can be given in the bulletin board. The intranet used in the company can also be used as an effective vehicle. Departmental progress, future plans and the accomplishments can be published in the company intranet. Action plans are needed to be properly identified and then published in the intranet so that the employees can have clear knowledge about it (Nanda, 2005). The top management has to provide evidence in order to prove its dedication in the process of development, execution and betterment of the existing quality management system in the organization. Top management is responsible for planning quality management system, internal communication and meeting quality objectives (Bergenhenegouwen, Jong, & Vries, 2002). 6. Conclusion Quality has become a determining factor of success across organisations in different industries in the modern business arena. In today’s business environment competition among firms is centred on the quality of the offerings. In other words it can be said that firms try to gain competitive advantage by focusing on the aspect of quality. Customer satisfaction is heavily dependent on the quality of products. There are several quality management systems in the industry. Some of them are EFQM, ISO 9002, Charter Mark, Citizens’ Charter etc. Large number of organization throughout the world has implemented these quality management systems. There are almost 30,000 organizations that have used EFQM model. However the implementation process involves significant amount of cost, documentation and above all effective communication within the organization. Top management of the company is mainly responsible for communicating all the details of the quality management system to the employees. Some formal consultations, posters, strategic bulletin boards, company intranet are likely to prove as effective tools for internal communication process. 7. References Avlonas, N & Swannich, J. No Date. Developing Business Excellence While Delivering Responsible Competitiveness – The case of Lloyds TSB, [pdf] Available at: http://www.cse-net.org/library/downloads/Docs/Documents/Developing%20Business%20Excellence%20While%20Delivering%20Responsible%20Competitiveness.pdf [Accessed on May 20, 2010] Bergenhenegouwen, L. Jong, A. J. & Vries, H. J. 2002. 100 frequently asked questions on the ISO 9000:2000 series, American Society for Qualit Department of Administrative Reforms and Public Grievances, No Date. FAQs, Citizen’s Charter, [Online] Available at: http://goicharters.nic.in/faq.htm [Accessed on May 20, 2010] Improvement and Development Agency, No Date. Definition, Charter Mark, [Online] Available at: http://www.idea.gov.uk/idk/core/page.do?pageId=71569 [Accessed on May 20, 2010] Krivobokova, O. V. 2009. Evaluating Customer Satisfaction as an Aspect of Quality Management, World Academy of Science, Engineering and Technology, pp-565 Nanda, V. 2005. Quality management system handbook for product development companies, CRC Press Praxiom Research Group Limited, No Date. Archive of Obsolete ISO 9002:1994 Material, Look Communications Inc. [Online] Available at: http://www.connect.ab.ca/~praxiom/9002.htm [Accessed on May 20, 2010] SME Toolkit, No Date. Managing Quality, [Online] Available at: http://www.smetoolkit.org/smetoolkit/en/content/en/956/Managing-Quality [Accessed on May 20, 2010] The Charter Mark, No Date. The Charter Mark (UK only). [Online] Available at: http://www.charter-uk.com/charter-mark.asp [Accessed on May 20, 2010] Quality Scotland, No Date. What is EFQM?, EFQM, [Online] Available at: http://www.qualityscotland.co.uk/efqm.asp [Accessed on May 20, 2010] Read More