Total Quality Management; bringing forth the change required to obtain competitive advantage

Total Quality Management; bringing forth the change required to obtain competitive advantage The world economy has undergone rapid changes during the past two decades with the advent of global competition to an extent that almost every company (large or small) is touch by it in some ways. As creativity and innovation are necessary for bringing forth the change required to obtain competitive advantage, quality is the most effective factor a company can use in the battle for customers/clients. To be competitive, the customers must be satisfied and to satisfy customers we must focus on quality. Total Quality Management (TQM) provides the philosophy and driving force for designing quality in order to delight the customers by focusing on best value of a companys products or services. The above summation agreed with Zikmund (1994), who opined that Total Quality Management is a business philosophy that embodies the belief that management process must focus on integrating the idea of Customer drives quality throughout an organization. It is in line with the above that this chapter will discuss:  ¨ An overview of Total Quality Management  ¨ Basic principles and concepts of Total Quality Management  ¨ Tools and techniques of Total Quality Management  ¨ Total Quality Management as a business strategy and implementation  ¨ Review and evaluation of TQM on organisational performance and productivity This is however to ensure that management, scholars, researchers and others fully grasp TQM principles, tools, techniques and methodology as a way of contributing to quality improvement process and enhancing corporate performance and productivity. Therefore, the objective of Total Quality Management practice is to improve the corporate performance of organization. 2.1 OVERVIEW OF TOTAL QUALITY MANAGEMENT 2.1.1What is Total Quality Management? Total Quality Management is an American perception of managing quality. Since TQM deals with quality, it seems evident that the first step towards understanding the meaning of the phrase would require an understanding of the word â€Å"quality.† The word which means different thing to different people, is often used to describe goods and services. Although, Quality as a concept is subjective, but in general, it can be defined as a measure of the degree to which a particular product satisfies customers expectations with respect to certain tangible and intangible features of the product. However, Robert Kotler (1994), view a products quality as the ability to perform its functions. It includes the products overall durability, reliability, precision, ease of operation and repairs and other valued attributes. Although some of these attributes can be measured objectively from marketing point of view, but quality should be measured in terms of buyers perception. Sullivan (1986), showed evidence on this issue when he defined seven stages of quality in Japan in order of increasing level of quality to include: product oriented, process oriented, systems oriented, humanistic, society, cost oriented, and quality function deployment (QFD). Deming (1986), saw quality as aiming at the needs of the customers (present and future). Juran sees quality as fitness for purpose while Crosby (1979), saw quality primarily as conformance to requirements. Rao, et.al (1996) also approached the scope on quality when they cited Garvin (1988) as the first to categorize the numerous definitions on quality existing in the literature in an effort to create a common understanding. Five approaches were identified to defining quality: the transcendent, product-based, user-based, manufacturing-based, and value-based approach. a. The transcendent approach is typified by Barbara Tuchmans (1980), definition: â€Å"a condition of excellence implying fine quality as distinct from poor quality. Quality is achieving or reaching for the highest standard as against being satisfied with the sloppy or fraudulent.† Examples of fine quality that meet this definition are present in fine arts and literature. However, these items may not represent quality to everyone and its lack of objectivity also create problem for companies in business environment who are striving for quality. b. The product-based approach identifies features or attributes that can be measured to indicate higher quality. This approach provides objective measures of quality compared to the first. c. The user-based approach determines the quality of the goods. The product or service that best satisfies the user is the higher quality product. This approach equates customers satisfaction with quality. d. The manufacturing-based approach was described by Crosby (1979), as conformance to requirements. e. The value-based approach introduces the element of price. Broh (1982), provided one expression of this approach: â€Å"Quality is the degree of excellence at an acceptable price and control of variability at an acceptable cost.† Unfortunately, like as said earlier, most of these definitions are subjective. Although the manufacturing-base and product-based approaches are objective, quality has to be defined by the organisation concerned. Having come to term that quality is a necessary pre-requisite for any company operating in todays highly competitive business environment, it is therefore implied that as quality varies from one company to another, it also dependent on their mission, policy, and other elements that guide the company in the realisation of its corporate goals. It is therefore common that in the manufacturing sector, quality in both product and service is a compelling competitive differentiator, while for service business, quality is everything-essentially, it is the product. From an institutional point of view, Total Quality Management is maintaining an environment in which all employees are empowered to participate as a team in determining, measuring, and improving quality of a company. It includes the use of facts and data to implement a management philosophy with the overall aim of increasing customers satisfaction, profitability, and job satisfaction. It is from this perspective that Akpeiyi (1995), defined TQM as â€Å"a business strategy for ensuring that organization delivers quality goods and services to both its external and internal customers so that the organization can continuously remain in a profitably rewarding business.† Besterfields, et.al (1995) on the other hand, defines TQM as â€Å"both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization.† According to Arene (1995), TQM stands for customer satisfaction at the lowest cost involving all the people in the organization. She further stated that the three key elements of TQM (Customer satisfaction, low cost, people involvement and empowerment) call for a total cultural change in leadership and management style, values for effectiveness and deficiency. Quality according to her stands for the highest standards and the best of the best. Speaking in the same vein, Juran (1995) said that following World War II, the Japanese embarked on a course of reaching national goals by trade rather than by military means. And that the major manufacturers who had been involved extensively in military production were faced with converting to civilian production but a major obstacle to selling their products in the international markets was a national reputation for shoddy goods created by export of poor quality goods prior to world war II. He then went on to say that to solve this problem, the Japanese undertook to learn how other countries achieve high quality. To this end, the Japanese carried out in-depth research and study from which they devised some unprecedented strategies for creating a revolutionary pace. The Japanese experience confirms the fact that giving the growing competition in world, a competition which not only put one country against another and ultimately one race against another, it is only those organizations or countries and races that can compete on the quality of their products and services will survive. Carlos Cordon (1996) postulated that a fundamental basis of TQM is a culture for countinuous improvement. He pointed out that workers are the experts because they have the detailed knowledge of how the work is done and they are the best to improve the process. Cordon further noted that while top management should endorse and initiate the change, it is at the bottom of the organization that the responsibility for improving process lays. Under this philosophy, work is done in teams. These teams are responsible for the individual operations and also improving the process. He argued further that the role of the supervisors and managers changes in which they become the team coaches, making sure that the team has the resources needed to fulfill their mission. Cordon maintained that to implement this TQM cultural change, a company should train its workers to equip them with tools for process improvement and typically, such training includes techniques about effective team work, problem solv ing, process analysis, project management, statistical tools etc. Once trained in the use of these tools, the teams generate ideas for improvement and thereby implement the ideas. With this spirit, mistakes are considered as opportunities for improvement and the objectives is to obtain improvement is a continuous process. It is noteworthy to point out that training in TQM is a continuous process for all employees and not an â€Å"on-off† investment for a year, because if this â€Å"on-off† approach is adopted, then the TQM training will be seen as a program not as a process. Festus Iyayi (1994), also instructively noted that â€Å"TQM is both a routine and philosophy of excellence in an organizational means for providing products and services that have good qualities to a high degree.† According to him, as a route to excellence, TQM is a conscious, formalized and systematic process of seeking, achieving a sustaining improvement in the quality of all activities, structures and processes for the purpose of satisfying the organizations customers which in turn improves the overall performance of the organization. Miller (1994), also did an exploration on TQM and found out that only those companies that apply the techniques of TQM can survive the competition in future. Such companies according to Miller, will increase greatly in competitiveness and performance due to the effect of TQM. From the foregoing definitions, TQM can be described as the most important management methodology available today to achieve and maintain a competitive edge against worldwide competition. It can be tailored for a particular environment and there are many ways for implementation, which will be discussed later. Due to high and growing tension, which leads to feelings of blame, mistrust, lack of common vision of the future, coupled with low morale, many organizations are gradually turning to TQM. It is therefore essential at this point to identify the leading sages in TQM in order to understand its principles and concepts to be discussed later. 2.1.2 The Deming Philosophy: Dr. W. Edwards Deming was the first American to introduce quality principles to the Japanese on a large scale. He is credited with providing the foundation of the Japanese quality †¦Ã¢â‚¬ ¦ and resurgence as an economic power. Over the years, Deming condensed his philosophy into 14 points, which became action items for top management to adopt. He also outlines seven deadly diseases that can prevent the successful introduction of TQM. Below are the 14 points he developed as a theory for management for improvement of quality, productivity and competitive position:  § Create constancy of purpose toward improvement of product and service.  § Learn the new philosophy  § Cease dependence on inspection of the product to achieve quality. But require statistical evidence of process control along with incoming critical parts.  § Buy materials only if the supplier has a quality process. End the practice of awarding business on the basis of the price tag alone.  § Use statistical methods to find troubleshoots and constantly improve the system.  § Institute modern aids to training on the job  § Institute modern methods of supervision.  § Drive out fear  § Break down barriers between departments  § Eliminate numeral goals  § Review work standards to account for quality  § Remove barriers that rob people of their pride of workmanship  § Institute a vigorous program for training people in new skills  § Create a structure in top management that will push the above 13 points every day. 2.1.3 Juran Juran is regarded as one of the prime architects of the quality revolution in Japan. After graduating as an engineer, in 1924 he joined the Western Electric Hawthorne Works where he was assigned to the inspection function. In 1951 he published the Quality Control Handbook, which later became a seminal work in the area. He arrived in Japan four years after Deming. He founded the Juran Institute in 1979. Juran expresses his approach to quality in the form of the Quality Trilogy. Managing for quality, he stated, involved three basic processes:  § Quality planning.  § Quality control  § Quality improvement 2.1.4 Crosby In 1965 Crosby joined ITT as a corporate vice president of quality, the first one in the United States. In 1979 he launched a consulting practice focused on quality. Crosby described quality as â€Å"free† and argued that zero defects were a desirable and achievable goal. He defined quality as conformance to requirements. Accordingly, a Pinto meeting the requirements for a Pinto were a quality product just as much as was a Cadillac conforming to Cadillac requirements. Recognising that improving quality by increasing the level of inspection would raise costs, he insisted that the way to achieve zero defects was to improve prevention techniques. Conformance costs include appraisal and prevention costs. The traditional view, as expressed by Juran, is that the cost of appraisal must increase if quality is to increase. Crosbys contribution was that, by improving prevention approaches, the cost would decline since the entire quality-appraisal trade-off curve would move in the direction shown. He articulated his view of quality as the four absolutes of quality management:  § Quality means conformance to requirements. Requirements needed to be clearly specified so that everyone knew what was expected of them  § Quality comes from prevention. And prevention was a result of training, discipline, example, leadership, and more.  § Quality performance standard is zero defects. Errors should not be tolerated.  § Quality measurement is the price of nonconformance. In order to improve quality, Crosby proposed a 14-point program:  § Demonstrate management commitment by being convinced that quality improvement is needed and subscribing to a written quality policy. This policy should specify clearly that each person be expected to perform exactly as specified or cause the specifications to be changes to match the needs of the company or the customer.  § Form quality improvement teams. These should be cross -functional and include department heads to oversee the quality improvement process. The team of department heads should be responsible for promoting quality through the entire company.  § Establish measurements for quality in all activities. Although many of these measures could be error rates, he also included some others. As examples, he suggested that accounting could use the percentage of late reports; plant engineering could use time lost because of equipment failures.  § Evaluate the cost of quality and use it to identify where quality improvements could be profitably made.  § Raise the awareness of quality through the organization. Get employees involved by making them aware of costs.  § Take corrective action to improve quality in areas identified in the previous steps.  § Plan for zero defects. Using members of the quality improvement team, plan a zero defects program that fits the company and its culture.  § Train all employees to carry out their part of the quality improvement program.  § Hold a Zero Defects Day to signal to all employees that the company has established a new performance standard.  § Encourage people to set goals for themselves and their groups. These goals should be specific and measurable, and progress should be measured against them.  § Remove obstacles that prevent employees from achieving these goals by encouraging them to report these obstacles to management  § Provide recognition for those who participate. This should be public and non-financial  § Establish quality councils consisting of team chairpersons and quality professionals. They should meet regularly, share experiences, and generate ideas.  § Do it all over again to stress that quality improvement is a continuous process. 2.1.5 Feigenbaum Armand Feigenbaum joined General Electric in Schenectady, New York, in 1944. While working on the jet engines he found that statistical techniques helped him improve their performance, and, as a result, GE put him in charge of its quality programs. Later, at MIT he developed the concepts of Total Quality Control. In 1968 he founded his own consulting company, General Systems. Throughout his career he promoted the concept of Total Quality Control. Feigenbaum defines total quality as an excellence-driven rather than a defect-driven concept. In his view quality is defined by the customer, and in this regard he is similar to Juran. He also feels that the quality philosophy extends beyond the factory floor to include all of the functions in an organisation. This is similar to Crosbys view of a broader scope for TQM. In order to persuade management to adopt a quality strategy, he also used the Cost-of -Quality approach. 2.1.6 Ishikawa Kaoru Ishikawa graduated from the University of Tokyo in 1939 with a degree in applied chemistry. His life was totally committed to the promotion of Total Quality through Japan. Ishikawa believed that all divisions and all employees in the organization should be involved in studying and promoting quality control by learning seven statistical tools. He created one of these tools, the cause-and-effect diagram, which is also known as the Ishikawa diagram. Ishikawas second concept was that of the customer as primary in defining quality. He defined the customer as the next person in the line, the person who gets your work or anybody who relies on you. 2.1.6 Taguchi Genichi Taguchi formerly an employee of Nippon Telephone and Telegraph has had significant influence on the quality movement in Japan. His prime focus was in making statistics practical. For this endeavor he won the Deming Prize in 1960, and since then he has won the prize again on three separate occasions. His ideas are promoted in the United States through the American Supplier Institute. Taguchi viewed quality as an issue for the entire company and focused on the use of statistical methods to improve quality, particularly in the area of product design. Two of his concepts are particularly significant:  § The loss function  § Design characteristics and â€Å"noise† Although Deming, Juran and Crosby are the most well-known TQM gurus in the United States, it could be argued that Feignenbaum, Ishikama, Taguchi have been as influential as they in defining the scope of TQM. In broad terms, they all agree with each other. Accordingly, they all agreed that TQM seeks to improve productivity, and it does so by focusing on satisfying the customer and by involving employees in the process. TQM they further agreed, has the practical goal of improving the bottom line and at the same time raising employee morale. 2.2 BASIC PRINCIPLES AND CONCEPTS OF TQM With such strong evidence that TQM integrates fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach, it is there important to highlight some of its underlying basic principles and concepts. The principles of TQM are a set of commonsense beliefs that determine the individuals action in everyday life not just at work. According to Colin Burns, (1995) experience has shown over and over again that for TQM culture to be entrenched in any organization, the individual in that organization must undergo personal change. This is because the ability of an organization to imbibe in TQM culture is considerably enhanced when the individuals within such organizations first believe in and apply with passion the principles of TQM in their lives and interactions with people. He further maintained that the innovative principles that have been known to transform the individual â€Å"inside-out† and provide the glue for holding together the entire TQM process include: * Personal vision * Personal leadership * Personal management * Interpersonal leadership * Emphatic communication * Creative co-operation * Balanced self renewal He opined further that without observing and applying the above principles of good management in our individual lives, methods and techniques of TQM alone would rarely produce good quality products and services. The bottom-line according to him is that quality and excellence can only be built on a foundation of sound management principles. Aluko, et.al (1997) states that each TQM is a unique initiative that acts as a framework for morality in business. According to them, TQM consider the efforts of those directly involved, both inside and outside the organization. It is no coincidence therefore that successful TQM models all tends to embody concepts of integrity, honesty, commitment, participation and ownership. Indeed, they value and respect the contributions from each individual as the driving force within TQM organization. Although the principles of TQM may differ from one authority to another, they were able to summarize sixteen principles of TQM that should guide management as given by Choppins (1995) to include the following: Highest priority: Total quality must overtly be the highest priority of the organization / company / individual.. Quality definition: Any definition of quality must include meeting / satisfying /conforming to agreed/negotiated customer needs / requirements / wants / expectations. Customer definition: The concept of customers include investors / employees / stakeholders / suppliers / the community and even interpersonal relationship. Customer satisfaction: Long-term satisfaction of customer needs will be an aim of any total quality organization. Aim: A total quality organization will have a clearly stated, widely understood and generally accepted direction/aim. Communication: A total quality organization will communicated openly and clearly its principles / beliefs / values / mission statement/policy for quality. Ethos: Total quality management embodies the values / beliefs / ethos of the organization, and thus total quality is intrinsic to every activity, decision and action. Values: The highest levels of integrity, honesty, trust and openness is essential ingredients of total quality management. Mutual respect and benefit: There is an implicit mutual respect of all stakeholders involved with a total quality organization, which assumes that long term business is intended to be mutually beneficial to all concerned. Health and safety: Health, safety and environmental issues have a high priority within a total quality organization since the welfare of all investors / employees / suppliers / the community as stakeholders in the enterprise is intrinsic to the future well being of the organization. Commitment: Leadership of total quality management stems from the top of the organization and enlists individual and team commitment throughout. Participation and ownership: Total quality offers each individual the opportunity to participate in, and to feel ownership of his/her activities, and jointly to share a sense of ownership for the success of the entire company. Continuous improvement: TQM involves continuous and measurable improvement at all levels of the organization, ranging from organizational performance to individual staff performance, such that continuous process improvement becomes a salient aspect of success. Performance: TQM requires consistent, predictable, accurate, and precise performance to high standards in all areas of the organization. Therefore, measurement, assessment and auditing are common TQM activities. Resources: One major aim of every total quality organization is to use resources better, and to achieve greater success (financial and / or otherwise). Investment: TQM will always require sufficient/ appropriate investment to ensure that planned activities can occur. Speaking in a similar vein, Onanusi (1998), remarked that every organization which want to unite her work force and provide horizons for thoughts and action amongst them require the following values to compliment the above listed principles. Quality service focusing on clients in order to deliver quality service that exceeds expectation is an essential value. Quality people: This stems from recruiting the best people and training them to be the best of the best. Meritocracy: Connotes providing employees with challenging opportunities for career development, based on their effectiveness in serving the client. The fourth value: Concerns the approach of employing the same methodologies and sharing resources to ensure that each employee delivers high quality services consistently. Integrity: Which expects that everybody adhere to personal and professional standards. Innovation Referring to delivering unique solution to each clients need And the last value stewardship Concerns a commitment to investigating in the future order to bequeath a stronger and more effective organization to future generation of people in the work place. From the above, it follows logically, that organizations will not begin the transformation of TQM until it is aware, recognized the importance and necessity of the principles of TQM towards quality improvement if they are to survive domestic and global competition. Robert Helter (1995) in â€Å"The Leadership Imperative† defines the concepts of TQM as a practical methodology for continuously improving all business process†. But the Besterfields believe that TQM requires six basic concepts in order to integrate fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach. These concepts as highlighted by them include the following:  § A committed and involved management to provide long-term top-to-bottom organizational support.  § An unwavering focus on the customer, both internally and externally.  § Effective involvement and utilization of the entire work force.  § Continuous improvement of the business and production process.  § Treating supplies as partners  § Establishing performance measures for the process. These concepts outline an excellent way to run a business. Organizations in Nigeria that practice TQM are therefore seriously advised to internalize the above concepts into their activities and continuously defend the concepts from dilution by carrying out quality audits periodically to ensure that established systems are maintained. As TQM concepts work when it is completely integrated into the culture of the organization and it becomes a way of life and an endless journey practiced by all. 2.3.1 TQM AS A BUSINESS STRATEGY AND IMPLEMENTATION As Rao et.al (1996) remarked, most corporate leaders today would agree that the only constant in business life is change. This change can be large or small, rapid or slow, planned or unplanned, controllable or uncontrollable and it occurs in all aspects of organizational life. One of the tasks of TQM is the successful utilization of the tools and techniques. And above all, the ability to change the organizational culture so that paying attention to quality is a normal part of the behavior of the organization. However, sustaining the method of organizational change necessary to transform an organization so that quality becomes a way of life is the hardest part of TQM process. It is important to recognize that TQM is not a program that can be implemented and completed; rather TQM is an ongoing effort. This rationale was instructively noted in Crosbys work when he says, â€Å"Do it all over again†¦Ã¢â‚¬  and Deming when he says, â€Å"†¦push the above thirteen points every day.† 2.4.1 TQM Implementation Without implementation, there is absolutely no point in a company adopting TQM as a business strategy for whatever purpose. Because from all indications, implementing TQM is a forever process, with no finite end. It is a never-ending journey of quality improvement process. This conclusively brings to us that, all in an organization need to work together to meet the challenges of implementing TQM. Even though there may be a major difference in the degree of implementation, the relevant literatures of TQM focus largely on management and management techniques on TQM implementation. In implementing TQM in an organization, implementation plans need to be established in order to accomplish the organizational desired goals. Implementation plans in this context refers to sequence of events, programs, meetings, and activities designed to help employees learn new perspectives, skills, attitudes, behaviors in the TQM process. This means that the process of introducing TQM is one that requires changing various elements of the existing culture in the organization. The process must be planned and managed from the top. This is why Besterfields, et.al noted that, TQM implementation process begins with senior management and most important, the CEOs commitment, hence, the importance of the role of senior management. It is critically important that senior management take time to fully understand TQM and what it can achieve for the organization and develop and agreed (at board level) plan for implementation before attempting to implement the plan. The attitude of senior managem ent to TQM must be positively demonstrated everyday and in every action as indifference and lack of involvement are frequently cited as the principal reasons for the failure of quality improvement efforts. Delegation and rhetoric is insufficient involvement is required. As a general rule, the senior management starts implementation with clear statement of â€Å"quality policy† which entails the ethics, mission and value of the organization and of course its philosophy. This can be regarded as the planning phase (where the decision to implement TQM is taken, the planning, implementing and monitoring processes are established as well as the organizational structures to be used in the implementation process). The next line of action under implementation process is organizational change phase. H