Total Quality Management

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Abstract

Total Quality Management is one of the most important and exciting new fields of study in the science of business management. It has been initially conceived in the 50’s.  It has not been really recognized for its real importance until much later in the 80’s, when it was widely applied by Japanese organizations to a huge success. Total Quality Management starts with identifying the idea that quality must be applied to the organization as a whole, rather than just the product. The aim of TQM is to achieve an effective, efficient production process that would result in a product or service that would meet the requirements of the customer, thereby achieving customer satisfaction. The importance of TQM is that it can be a competitive weapon. By ‘getting it right the first time’, an organization can save most of the time and resources previously consumed by activities aimed to prevent and fix quality disorders, and at the same time maintaining customer satisfaction and providing a good image for the organization associated with quality.


Introduction

Total Quality Management is a quest for ensuring and maintaining customer satisfaction by ‘fixing’ the process from within. It is a quest to ‘do the right thing the right way to begin with - and to keep it that way’.

By broadening the concept of ‘customer’ to more than merely the buyer of the product or the user of the service, we arrive at a new type of quality – Total Quality. Total Quality means quality in all transactions that occur during the business process. By identifying the process as a chain of suppliers and customers, one can recognize the effect of maintaining quality - in all transactions in the process - on the total quality of the output of that process. Once we recognize that quality can be a resource, we need to know how to manage it.

My objective in this research project is two-fold. Firstly, I will try to introduce the reader to the concepts of Total Quality Management.  Secondly, by using a questionnaire that I prepared, I want to shed some light on the status of the common concept of quality management in local work environments and markets, and on the quality-related habits and opinions of local firms and their general management.

In the literature review part of this research project, I will start by introducing the reader to the ‘new’ concept of quality. After that, Total Quality Management is properly introduced, and the reader will be taken through a tour of the core concepts of total quality management. The reader and I will then proceed to spice up our current knowledge of processes and their management. After that I will present the reader with a conceptual view of the cost of quality. After all is said and done, and after you have been (hopefully) convinced of the virtue of total quality management, it is time to discuss how we can ‘sense’ quality. The reader will be guided through measuring quality and comparing it. Our final stop will be at some implementation details of total quality management, after which we will arrive at what some of you may be waiting for, that is, the end of the literature review ☺…

We will proceed then to examine the results of the questionnaire, and analyze these results to extract useful information regarding quality management and control in our market, and to provide grounds for the observations and recommendations that will follow.


Part one:

Literature review

Chapter 1:

Understanding Quality


1.1 What is Quality?

 Quality means doing things right, but the things which the operation needs to do right will vary according to the kind of operation. For example, in the hospital, quality could mean making sure that patents get the most appropriate treatment, that the treatment is carried out in a medically correct manner, it would also include such things as ensuring that the hospital is clean, and that the staff are well informed and friendly towards patients. For the manager of the supermarket, quality means that the goods it sells are in a good condition, the store is clean, the décor is attractive, and the staff are friendly and helpful.

 

 It’s not surprising that all operations regard quality as a particularly important object. In some ways quality is the most visible part of what an operation does. Furthermore, it’s some thing that a customer finds relatively easy to judge about the operation. By asking is it right or wrong? Is it the way it’s supposed to be? There is some thing fundamental about quality. Because of this, it’s clearly a major influence on customer satisfaction or dissatisfaction.

 Quality then is simple meeting the customer requirements, and this has been expressed in many ways: ‘Fitness for purpose or use’, ‘Conformance to requirements’, and in many other ways. Good quality products mean high customer satisfaction and therefore the likelihood that the customer will return. Conversely, poor quality reduces the chances of a customer coming back for more.

 

 Clearly, part of the acceptability of a product or service will depend on its ability to function satisfactorily over a period of time, and it is this aspect of performance that is given the name reliability. It is the ability of the product or service to continue to meet the customer requirements. It is important to realize that the 'meeting the customer requirements' definition of quality is not restrictive to the functional characteristics of products or services. Anyone with children knows that the quality of some of the products they purchase is more associated with satisfaction in ownership than some functional property.

1.2 Understanding quality chains

 

 The ability to meet the customer requirements is vital, not only between two separate organizations, but within the same organization.

Throughout and beyond all organizations, whether they be manufacturing concerns, banks, retail stores, universities, hospitals or hotels, there is a series of quality chains of customer and suppliers that may be broken at any point by one person or one piece of equipment not meeting the requirements of the customer, internal or external. The interesting point is that this failure usually finds its way to the interface between the organization and its outside customers, and the people who operate at that interface usually experience the ramifications.

The concept of internal and external customers/suppliers forms the core of total quality.

 Customers and suppliers are both inside (internal) and outside (external) to the organization. People in and outside organizations that provide input to the steps in a process are "suppliers" and those who use products or services are "customers". Thus, employees in one phase of a work process are customers of the employees who produced the goods or services used by them in their work processes. Sales employees are customers of the marketing research employees, the marketing research employees are customers of statisticians and computer information systems employees who are assisting them and maintaining computing capacity for use in analyzing data. Employees within the organization receive work passed through their systems from other employees, the "internal" suppliers.

Therefore, each employee is a customer of preceding employees; and each has customers, the people who receive the results of his or her work. Likewise, the people outside the organization who sell materials, information or services to be used by employees are "external" suppliers. A company's external customers purchase a product or service and contribute to profits. They must ultimately be satisfied if the business is to survive.

 Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere, leading to yet more failure, more problems and so on. The price of quality is the continual examination of the requirements and our ability to meet them. This alone will lead to a 'continuing improvement' philosophy.

 The benefits of making sure the requirements are met at every stage, every time, are truly enormous in terms of increased competitiveness and market share, reduced costs, improved productivity, and delivery performance, and the elimination of waste.

1.3 Quality starts with marketing

 The marketing function of an organization must take the lead in establishing the true requirements for the product or service. Having determined the need, marketing should define the market sector and demand, to determine such product or service features as grade, price, quality, timing, etc.

 Marketing will also need to establish customer requirements by reviewing the market needs. Marketing is responsible for determining the key characteristics that determine the suitability of the product or service in the eyes of the customer.

 Marketing must also establish systems for feedback of customer information and reaction, and these systems should be designed on a continuous monitoring basis.

 Any information pertinent to the product or service should be collected and collated, interpreted, analyzed, and communicated, to improve the response to customer experience and expectations. These same principles must also be applied inside the organization if continuous improvement at every transformation process interface is to be achieved.


1.4 Quality in all functions

 For an organization to be truly effective, each part of it must work properly together. Each part, each activity, each person in the organization affects and is in turn affected by others. Errors have a way of multiplying, and failure to meet the requirements in one part or area creates problems elsewhere, leading to yet more errors, yet more problems, and so on. The benefits of getting it right the first time everywhere are enormous.

 Everyone experiences problems in working life. This causes people to spend a large part of their time on useless activities - correcting errors, looking for

things, finding out why things are late, checking suspect information, rectifying and reworking. The list is endless, and it is estimated that one third of our efforts are wasted in this way.

 Quality, the way we have defined it as meeting the customer requirements, gives people in different functions of an organization a common language for improvement. It enables all the people, with different abilities and priorities, to communicate readily with one another, in pursuit of a common goal.

 The commitment of all members of an organization is a requirement of 'company-wide quality improvement'. Everyone must work together at every interface to achieve perfection. And that can only happen if the top management is really committed to quality improvement.

1.5 Managing processes

 A process is the transformation of a set of inputs into the desired outputs. Under this definition, everything we do is essentially a process, and so is quality. Quality is a process that should be managed and controlled in order to do the job correctly and to continue doing it correctly.


1.6 The concept of total quality management (TQM)

 Total quality management is an approach to the art of management that originated in Japanese industry in the 1950’s and has steadily become more popular since the early 1980’s.

 

 Total quality is a description of culture, attitude and the organization of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company’s operations, with processes being done right the first time and defects and waste eradicated from operations.

 The TQM philosophy of management is customer oriented. All members of a total quality management organization strive to systematically manage the improvement of the organization through the on going participation of all employees in problem solving efforts across functional and hierarchical boundaries.

 TQM is the control of all transformation processes of an organization to better satisfy customer needs in the most economical way. Total quality management is based on internal or self control, which is embedded in each unit of the work system. Pushing problem solving and decision making down in the organization allows people who do the work to both measure and take corrective action in order to deliver a product or service that meets the needs of their customers.

 Total quality management is a method by which management and employees can become involve in the continuous improvement of the production of goods and services. It is a combination of quality and management tools aimed at increasing business and reducing losses due to wasteful practices.

 The simple objective of total quality management is “do the right things, right the first time, every time”.


Chapter 2:

Core Concepts of Total Quality Management


 There are four important core concepts of total quality management that should be well understood in order to better understand what total quality management is about, and these core concepts are: continuous improvement, customer orientation, defect prevention, and universal responsibility.

2.1 Continuous Improvement

 Most people tend to think of their own work in terms of a task carried out in relative isolation from other work in the organization. The first step in quality improvement is for people to look at their work in terms of being part of a continuous process.

 A process is simply a sequence of tasks which together produce a product or service. The best way to understand a process is to draw a flow chart showing all the steps. When you do this it is possible to visualize one's own work in terms of being a step in a process. A whole set of new insights opens up. For instance, every workgroup has a supplier and a customer, People take the output from another work group, do work that adds value, and then pass it on to another work group.

 Continuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. As well as recognizing the link between product quality and customer satisfaction, TQM also recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes. This will lead to an improvement in process quality; in turn this will lead to an improvement in product quality, and to an increase in customer satisfaction.

 Continuous Improvement is a term used to describe the fact that process improvement takes place in incremental steps. It never stops. However good things may be, they can always be better. Continuous Improvement is a relentless effort to add value for the customer.

 The steps in the continuous improvement process are to:

- Select an improvement project with a specific goal

- Assign a team to improve it.

- Define the process using a flow chart.

- Define variability and problems in the process.

- Find the root causes of the problems.

- Recommend improvements.

- Implement the improvements.

- Measure the results.

- Proceed to a final implementation.

- Move on to the next problem.

 The continuous improvement process should be driven from the top, but implemented from the bottom. The selection of improvement projects needs a sharp focus. The problem areas must be prioritized, critical processes selected for improvement, and improvement goals set for the project team. This is a top down process.

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2.2 Customer Orientation

 Understanding and meeting customer expectations is a challenging proposition and requires processes that support continuing progress toward the goal of meeting customer expectations the first time, every time.

Everyone has a customer. The external customer is the person who purchases the product or service. We also have to think of the internal customers. Internal customers are those who use what another group provides.

 This has quite profound implications. It means that every work group has to think about providing value to the people who use their product. This involves finding out ...

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