Importance of Quality Management - Literature review Example

Quality Management Introduction Quality management is an approach which seeks to improve the quality of products and services of an organisation in order to meet customer needs or to exceed their expectations. Daft and Lane (2009, p. 554) define quality management as a quality control strategy that emphasises a well-organized and unrelenting pursuit of better quality and reduced costs. Quality management is achieved through implementation of a quality management system in an organisation, which controls and directs the organisation with regard to quality. There are various methods by which an organisation can develop a quality management system and hence maintain high quality products and services. They include the Six Sigma principles, quality circles, reduced cycle time, continuous improvement and benchmarking (Daft & Lane, 2009, p. 554). This paper examines the importance of quality management to organisations. As well, it discusses the aforementioned quality control methods and explains how they can help to raise and maintain high quality products and services in an organisation. Further, an explanation is given of how a quality management project can be implemented in an organisation, with a critical evaluation of the importance and relationship between human and technical issues that highly influence the implementation process. Importance of quality management Quality management is an important principle to organisations for a variety of reasons. First, it ensures product and/or service quality. Some of the most important product qualities are reliability, durability and performance (Madura, 2006, p. 334). Through implementation of effective quality management techniques, an organisation can produce high quality products and/or services, which perform in accordance with organisational objectives and promises. Quality products will endure normal, daily use (Madura, 2006, p. 334). Implementation of quality management programmes also helps companies in designing new, better quality products and/or services. Secondly, quality management helps to ensure customer satisfaction. As Joiner (2007, p. 618) points out, it is essential for any organisation to conduct regular customer surveys in order to understand how customers rate its products or/and services. Surveys should also include individuals who are not the organisation’s customers. This will enable the organisation to understand the reasons why these customers prefer the organisation’s competitor. From the data collected, the organisation will be in a position to target specific features of products or services that require improvement. Through the use of quality management programmes, the organisation will be able to create the type of products or services desired by customers, thereby ensuring their satisfaction. Further, quality management enables customers to increase revenues in the long-term. As Joiner (2007, p. 618) notes, quality products and services give organisations a good reputation in any industry. This good reputation enables an organisation to sell more products and services to existing customers and to gain new customers. Effective quality management techniques also help to remove inefficient and unnecessary processes within an organisation’s system. According to Joiner (2007, p. 618), this helps to increase employee productivity. Removing unnecessary processes means that workers spend less time on job activities that do not contribute to the quality of the final product or service. Consequently, workers produce more work in less time, while salaries remain the same. Generally, this helps to alleviate costs incurred due to inefficiencies, which enables organisations to realise higher net profits. Another importance of quality management is that it helps organisations to reduce waste (Freeman & Evangeliou, 1996, p. 28). Organisations that keep inventory stock incur costs related to management, storage and tracking of inventory. Wastages in the process of keeping the inventory are also included into the price of a product. Quality management helps to reduce the size of inventory maintained in an organisation, which occupies valuable space and costs the organisation a lot. More importantly, quality management enables organisations to adopt a systematic approach to maintaining inventories at the most efficient levels, without incurring waste. The Just-in-Time (JIT) philosophy in particular enables organisations to work closely with suppliers to keep inventory at the most efficient level. According to Freeman and Evangeliou (1996, p. 28) JIT helps organisations and suppliers to remain in close communication with each other and to become more responsive to the needs of customers. Freeman and Evangeliou (1996, p. 28) further note that the implementation of quality management systems forces different departments in organisations to work together as a team. Different departments within an organisation rely upon one another to ensure that they produce quality products or/and services which meet or exceed customer expectations. Usually, implementation of quality systems incorporates measures that affect operations, sales, marketing, finance and customer service. A well designed quality system evaluates how each of these departments operates against their performance expectations. An effective system uses a balanced scorecard to show how the outcomes of each department are close to the target. Quality management methods There are numerous methods which can help an organisation to develop and maintain high quality products. One of these methods is the use of quality circles (Daft, 2007, p. 58). A quality circle refers to a group made up of six to twelve volunteer employees who meet regularly and discuss quality problems affecting their work and find solutions to these problems. Members of quality circles meet at set times during a workweek. They sometimes make surveys and collect data regarding quality trends of organisational products and services. Some organisations train individuals on statistical quality control, team building and problem solving. Quality circles help to push decision-making from management to employees, who better understand the job they do and hence, make better recommendations. Another technique which is vital while implementing quality management within an organisation is benchmarking. Daft (2007, p. 58) defines benchmarking as the ongoing process of evaluating products, services as well as practices against the most robust competitors or those firms recognised as industry leaders to highlight areas that require improvement. The strength of a successful benchmarking process lies in the analysis process. According to Daft (2007, p. 58), an organisation needs first to honestly analyse its current practices and procedures and determine areas that need to be improved. The second step should involve careful selection of successful competitors who are worthy of copying. For instance, Daft and Marcic (2010, p. 518) note that Xerox company studied the order-fulfilment strategies of its key competitors including the Freeport, L. L. Bean and Main. From both internal and external analysis, Xerox learned how to reduce warehouse costs by around 10%. Generally, benchmarking can help companies to improve quality by emulating the practices and procedures of competitors but as Daft and Marcic (2010, p. 518) explain, they must select organisations whose methods are compatible. Once the benchmarking company finds and analyses compatible programmes, it can then develop a strategy of implementing the programme. The Six Sigma approach is also a major component of the quality management process within organisations. This method emphasises relentless pursuit of low costs and high quality. The approach is based on a five-step methodology known as DMAIC (Define, Measure, Analyze, Improve and Control) (Daft & Marcic, 2010, p. 518). The methodology provides a structured way for organisations to determine and solve quality problems. It also involves massive changes within organisations and therefore, it requires a lot of commitment from management. Organisations send managers to training on the sigma approach and they come back to lead projects which are aimed at improving specific areas within businesses. One of the most critical issues in today’s business world is cycle time. This refers to the steps taken to complete a process within an organisation, such as opening a retirement fund, processing an order or airline reservation (Daft & Marcic, 2010, p. 518). The simplification of work cycles, including removal of worthless steps and dropping barriers between work steps enables a quality management programme to succeed. Generally, quality improvement in organisations is enabled by focusing on acceleration and improved responsiveness of activities into a short time. This leads to reduced cycle time, which helps to improve organisational performance as well as quality. L. L. Bean is a good example of organisations which implement cycle time control (Daft & Marcic, 2010, p. 518). Continuous improvement is another common approach in quality management. Daft and Marcic (2010, p. 518) define continuous improvement as the execution of small, progressive improvements in all areas of an organisation on a continuous basis. In an effective quality management programme, all workers are taught that they are expected to initiate changes in their own jobs. The notion behind this process is that improving quality a little bit at a time, continuously, has a high probability of success. Innovations can be initiated in a simple manner and then employees build their success on this continuous process. The importance of and relationship between people and technical issues According to Beker (2008, p. 425), the quality of the products and services of an organisation is dependent upon the quality of its people. As noted earlier, for an organisation to implement an effective quality management system, all workers in the organisation have to always focus on doing the right things. Every worker is responsible for the quality of the job activity he/she is assigned. However, as Beker (2008, p. 425) explains, there must be good communication within the organisation and the workers must be motivated to embrace the change. According to Beker (2008, p. 425), this is a matter of the organisation’s management. Determining quality problems, finding solutions and instituting improvements do not depend on availability of extra resources and spare time. To realise this objective, an organization must focus on human issues such as communication and motivation. However, a balanced scorecard needs also to emphasise on the importance of technical issues such as measurement and control and strike a balance between these issues and the human issues. According to Beker (2008, p. 425), workers are often afraid of the changes that occur during the implementation of a quality management system. They fear the effects that such a programme will have on their job situation and job processes. Beker (2008, p. 425) therefore argues that the implementation of a quality system should be sold to workers by motivating them. They must be provided with full information regarding the impact of such a system on their jobs. An organization’s management can motivate workers in various ways. First, workers can be motivated by simply empowering them (Bij & Ekert, 1999, p. 688). This involves giving the workers autonomy, encouragement, trust and authority to accomplish a task. To achieve this, it is essential for the management to shed bureaucratic ideas and encourage the workers to pursue new ideas in relation to the organisation’s objectives and give them authority to promote their ideas. In the implementation of a quality system, this will help to unshackle the employees and make change to be part of their responsibility. Secondly, management can motivate workers by instituting an effective reward system. Rewards can either be intrinsic or extrinsic. Extrinsic rewards are given to an employee by another person or persons, typically the management, in recognition of good performance. Examples of extrinsic rewards are promotions, bonuses, special assignments, office fixtures, time off, awards and verbal praise. Intrinsic rewards, on the other hand, are self administered. Basically, an employee feels good and “naturally high” after completing a job and delivering a high quality outcome. Such an employee feels that he or she is more competent, has achieved more personal development and has self control over his or her work. Generally, as Bij and Ekert (1999, p. 688) note, in order to effectively implement a quality system, an organisation needs to motivate behaviour of employees by providing an effective reward system. An effective reward system has to satisfy the basic needs of all employees, has to be available to all workers and be distributed fairly and equitably, and need to be comparable to those given by other competitive organisations in the same area. According to Heras, Cilleruelo and Iradi (2008, p. 664), the process of introducing and implementing a quality system in an organization is totally dependent upon continuous and effective communication. Communication in an organisation should effectively move via upward, horizontal and downward channels. Downwards communication is the transfer of messages, information and ideas from the management to the workers in an organisation. The opposite of this is upward communication. A horizontal channel involves communication between colleagues or workers of equal rank in an organisation. Communication from the management about the introduction of a quality system must cover all individuals involved and must be open, encouraging and honest (Heras, Cilleruelo & Iradi, 2008, p. 664). Details must be provided about the pros and cons of the programme that is to be implemented, the short-term and long-term goals, and also the phases that the implementation process will take. In short, communication must be interactive in all directions and must cover all details of implementation of the quality system from planning to monitoring phases. Generally, this will help to encourage management staff and all employees to embrace the new programme. Therefore, communication within an organisation and motivation of workers are essential factors needed for the introduction and implementation of a quality system to be successful. However, the above human factors are not sufficient for the successful implementation of the programme. As noted, there is need for striking a balance between the human factors and factors related to technical change such as measurement and control. According to Ahire and O’Shaughnessy (1998, p. 29) control techniques help managers to gather information that they need to use to measure and monitor performance. An organisation’s management may rely on various controls such as financial controls, budget controls, marketing controls, human resource controls and computers and information controls to gather the required information during the implementation of a quality control system. In some instances, the implementation of a quality management system requires the installation of computer and information systems which lead to improved information management, productivity and quality of products and services (Ahire & O’Shaughnessy, 1998, p. 29). However, there are several limitations of such a move. Though implementation of new technology may result into better quality products and services, replacement of workers with new equipment may lead to loss of expert knowledge that is held by those individuals. Additionally, new equipment may be too expensive and difficult to develop. After a new system is installed, it may be more difficult to coordinate it with existing equipments. Also, technology may allow managers to access too much information which can overwhelm employees and even slow down decision making (Ahire & O’Shaughnessy, 1998, p. 29). It is therefore essential to implement controls which will help to ensure that a balanced decision is made during the implementation of a quality system. Computers and information controls help to collect, store and monitor information that is only enough and useful and to an organisation. Others such as human resource controls help to monitor the daily performances of workers, among other functions. Financial controls help to track how money is used during the implementation process and to ensure that the generally accepted accounting principles, procedures, policies and ethical guidelines are followed. Conclusion In conclusion, quality management is an important approach for any organisation that focuses on achieving high productivity levels by ensuring that it offers high quality products and services. An effective quality management system in an organisation ensures that products and/or services offered by an organisation have the quality that customers desire, ensures customer satisfaction, forces different departments within an organisation to work together as a team, helps to reduce inventory wastage, and most importantly, it helps to increase an organisation’s net profits. As noted, there are various quality management methods that can be adopted in an organisation including the Six Sigma principles, quality circles, reduced cycle time, continuous improvement and benchmarking. To introduce a quality management project successfully in an organisation, the management has to ensure that the change is well communicated within the organisation and that employees are motivated to embrace it. As well, it is vital to strike a balance between these human issues and the technical issues involved in the process. 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