What is the role of Quality within Organisations today?

University Degree Business and Administrative studies

“Good business, which in turn means general prosperity and employment, is not something which comes about by chance. It is a result of the skill with which business in general is managed – and business in general is only the sum of the activities of the business units. Through all the years that I have been in business I have never yet found our business bad as a result of any outside force. It has always been due to some defect in our own company, and whenever we located and repaired that defect our business became good again – regardless of what anybody else may be doing.”

Henry Ford

According to Peter Drucker, “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for”. (Drucker, 1993)

Introduction

There are differing degrees of customer satisfaction as some customers are harder to please than others. Increasingly differences in people’s income and expectations are putting pressure on companies today to find ways of satisfying their needs and wants, although mere satisfaction is not always enough. Delighting and thrilling are the order of the day, as companies believe these reactions in customers generate loyalty. To be perceived to have quality and to give improving levels of quality, whether it is in a product or service, is believed to be an important factor in encouraging people to buy from you and to return time and time again.

Aim

The aim of this essay is to investigate and discuss the role of quality within organisations today. In order to do so the essay will look at the following headings so that a gradual understanding of quality is achieved, further compounded by examples of organisations using ‘quality’ and studies conducted over the past three decades used at each stage:

- A Brief History. This brief section serves to orientate the reader as to the reasons and origin of quality theories.

What is Quality? Here the author will attempt to capture the evolvement of ‘Quality’ since its inception by looking at the philosophies of Quality ‘gurus’ and the relevance their work has in today’s working environment.
Quality within the organisation. Following a look at what has been contributed to the concept the author will attempt to define what it means in a modern environment using ‘Gallery Furniture’ as a study example.
Managing Quality. In this section the essay looks at the relevance of Total Quality Management (TQM) and its role in implementing and maintaining quality within the organisation.
Difficulties with implementing quality. As with many concepts problems ensue and this section will attempt to highlight generic problems encountered by many organisations. A look at a longitudinal study of the pharmaceutical industry hopes to capture some of these common issues.
Guidelines for Quality. This penultimate section covers some of the guidelines and standards used today and how they play a role in defining quality in some organisations to enhance the reader’s basic knowledge and finally;
In Conclusion. This final paragraph will capture the aim of the essay and explain the role quality plays within an organisation today by bringing out the main points discussed in previous sections.

A Brief History.

In order to fully understand Quality it is important for us to look at its origin. Along with many other modern practices the concept of quality and quality management was developed within Japanese industry after the Second World War. At the time Japan was a defeated nation with a few natural resources. It has become unable to feed a population of 90 million by itself. Consequently it began to export consumer products across the world market to generate the necessary funding needed to feed its people. These goods however quickly developed a reputation for being shoddy and their management systems were considered to be ‘feudal’ and ‘despotic’.

General Douglas McArthur realised the need for radical change to enable the regeneration of the Japanese economy. Old management and systems were replaced by younger, more willing men eager for change. Thus the Union of Japanese Scientists and Engineers (JUSE) was formed and shortly afterwards an American statistician called Dr. W. Edwards Deming was invited to present some ideas he had on improving quality in the industry. Deming addressed the top business leaders, including managers from companies now considered household names such as Sony, Nissan, Mitsubishi and Toyota and gradually his forums and ideas led to the introduction of new management methods, including Total Quality Management (TQM), which resulted in Japan becoming the world leader in quality and productivity. Once implemented, his ideas led, during the 80s, to American businesses being battered by Japan’s superior industrial practices. (Sowerbutts, 2003) This does not explain however the thinking behind the concept as it is known today and so it is necessary to define quality by its development since its use in Japan.

What is Quality?

It is important to note that the quality practices and theories used today are not solely the work of Dr. Deming. Other Quality Gurus have added to the mix along the way and in order to understand quality it is worth considering some of their work. It is important to begin with Deming in order to establish a foundation as the concept was built partly from his ideas. He encapsulated quality in terms of reliability, dependability, predictability and consistency of product and service and further, according to him quality improvement was all about the reduction in process variation. By reducing this, with the aid of statistical control methods, variation in product quality is also reduced, thus better control leads to lower cost and improved productivity. He identified two types of variation:

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External influences on the process, which he described as uncontrolled variation due to “special causes”. These being changes of operation, procedures and raw materials which interrupt the normal pattern of operation.
Controlled variations - due to chance, random or “common causes”. All of these are due to the process itself, its design or installation.

This is a preview of the whole essay

External influences on the process, which he described as uncontrolled variation due to “special causes”. These being changes of operation, procedures and raw materials which interrupt the normal pattern of operation.
Controlled variations - due to chance, random or “common causes”. All of these are due to the process itself, its design or installation.

Furthermore improvements in quality involved identifying these two types of variation followed by the elimination of the “special causes”, before addressing the “common causes”. Deming insisted these processes be assisted by the use of Statistical Process Control (SPC) and various forms of simple control charts for use on the shop floor. He considered it the responsibility of Management to improve the process by redesign, which in turn would improve their ability to meet customer needs. Deming also advocated the need for a deep understanding of business processes if any progress was to be made and he later expanded his thoughts and ideas to cover the management of people, Leadership and training. (Oakland, 2002; Sowerbutts, 2003, Hutchins, 1990)

Joseph Juran is another major contributor to the development of the quality and quality management concept. He published “The Quality Handbook” in 1950 and this became the standards reference book on quality word-wide. Juran developed a TQM philosophy around three main processes:

1. Quality planning - the process for preparing to meet quality goals

2. Quality control - the process for meeting quality goals through operations

3. Quality improvement - the process for break through levels of performance

Juran agreed with Deming in that involving people was paramount to the success of implementing quality improvement throughout the organisation and that management’s understanding of systems was vital. Juran believed that getting the system right was more important than blaming failure on operator error. He also advocated the development of quality teams and their subsequent training in measurement and problem solving. (Juran, 1988, Hutchins 1990).

Kaoru Ishikawa is considered to be the father of the quality circle approach, involved in building shop floor teams. He was responsible for developing many of the tools and techniques used today in problem solving, measurement and analysis common to TQM principles. These tools include the Pareto analysis, Fishbone diagram, Stratification, Histograms, Control Charts and Scatter Diagrams. Without these tools TQM would be a nightmarish concept to implement. (Oakland 2002, Hutchins, 1990). All of the above have made a considerable contribution to the development of the quality movement and subsequent management systems to implement total quality. In as much as these people developed and articulated guidelines for Quality and the Japanese industry, Philip Crosby popularised TQM through his consultancy college and through the development of training programmes now used throughout the USA (Sowerbutts,2003). Although brief in writing, the reader can see already that quality can have an impact where applied and much has happened over the past fifty or so years in terms of its evolution. On a grand scale it can kick start a country’s economy and it was this event that attracted the attention of other nations to the potential and benefits quality management systems and processes could bring to their own economies.

Quality within the organisation.

According to McAdam and Barron (2002) quality is now the major differentiator in today’s increasingly competitive business environment. In the event of increasing global competition, the continuous increase in customer expectations and customers’ demands, as the quality of services and products improve, those companies that become unable to cater for the needs and wants of customers risk losing them to competitors. Ultimately they risk erosion of profits and thus failure. As a result and according to Kandampully (1998) companies are being forced to think up strategies that will assist them in building and maintaining a competitive edge. One such strategy has been the development of quality and quality management within the organisation.

If Oakland (2000) is to be believed then traditionally quality was considered the responsibility of the QA or QC department. He also states that employing more inspectors, tightening up standards, developing correction, repair and rework teams do not necessarily improve quality. From this then, there is a notion that something more grounded, more continuous and all encapsulating is needed to address the issue of mistakes and errors, often made by humans, which lead to delays and dissatisfaction across the board. Put succinctly by Hutchins (1992), Quality, in terms of ‘Total Quality’ is a comparative concept and, contrary to the opinion of Philip Crosby cannot be regarded as an absolute. A customer’s assessment of the quality of any organisation is based on the best the customer has seen. The author is inclined to agree here in that the customer does not always know what is feasible within the organisation. So the challenge to the organisation is to raise the expectations of the marketplace by providing goods and services at a higher perceived quality than those of its competitors. Hutchins also argues that a Total Quality company therefore will continue to change these expectations, usually in directions not predicted by the competitor thus gaining a competitive edge. When applied to industrial organisation, Total Quality is a competitive concept because it is concerned with being the ‘best’ where ‘best’ is defined by the marketplace rather than by the product or service provider. It is also described by Hutchins to be ‘everything that an organisation, a society or a community does, which in the eyes of others determines its reputation on a comparative basis with the best alternatives’. If we are therefore to believe these theories then we should conclude that to have total quality is to have market domination.

One such company that benefited greatly from the implementation of quality processes was Gallery Furniture, an American furniture company based in Houston. In 1989, the company director and owner Jim McIngvale became unhappy with the level of mistakes occurring within the organisation after seven years of business. He discovered all of his time, and his wife’s, was being spent on resolving customer problems, fixing mistakes and redoing tasks that should have been carried out properly in the first place. The business was suffering dramatically and in his own words, “We were disappointing customers, missing deliveries, late with shipments, over-inventoried and losing market-share by the minute. We were as W. Edwards Deming described ‘in the crisis’.” That was until he read a copy of Philip Crosby’s book Quality is free. Following this inspiration he and his wife attended Crosby College in Florida, which further educated the furniture retailer on the world of quality. His newly developed perspective was now to focus on improving the whole business and so he sent ten of his senior managers to attend the same course.

Initially the employees were not keen on the upheaval that was promising to ruin their way of life but they soon caught on to the idea and embraced the new philosophy in a creative manner. They replaced ‘dull’ quality meetings with skits that conveyed quality messages which, although disapproved of by Mcingvale, served to improve their awareness of quality issues and increased their commitment to the organisation. This was still not enough and so McIngvale went looking for model organisations and as a result The Southwest Quality Group was formed. McIngvale started the group in order to trade quality improvement ideas with other organisations that included The South Western Bell, Amoco Chemical, Exxon, Allied-Signal, and Houston Community College. From Amoco Chemical, Gallery learned processes for working on common store problems such as ceasing delivery mistakes, correcting sales ticket errors and measuring the number of times best selling stock was nowhere to be found. Prevention became the focus and learning to do things right the first time became more than a quality slogan in his eyes, it became a mindset and a way of doing business. Gallery’s success was also attributed to quick response, a concept McIngvale adopted from the 1989 Malcolm Baldridge Quality Award Winners, Miliken & Company. Miliken attributed his success to his company’s belief that quick response drove quality and quality was not possible without quick response. The five elements of quick response being; supplier partnerships; a quality improvement process; a complete associate involvement; a reduction of non-value added activities and electronic data interchange. Consequently Gallery Furniture, nine years later, was able to boast a service of 300 same day deliveries on any given Saturday.

Although the Gallery quality process is still ongoing, the number of customer service employees has been reduced from 25 to 3 despite sales growing by 30% in the first eighteen months following implementation of new delivery processes. Delivery times were reduced from 10 hours to 3 and employees are now rewarded on a points system. Today Gallery Furniture delivers products to its customers on time, right the first time and the furniture is defect free. Customers are more satisfied, and employees face less hassle at work. Processes continue to be reviewed and improved with the customers in mind and the company owner is full of confidence about its future. (The APQC, website, 2003).

This case demonstrates the benefits of a committed and focused approach to implementing quality processes. The concept can drastically improve the organisation’s performance and productivity, as well as being able to motivate workers in eradicating the causes of customer complaints thus making their own workspace hassle free. Quality in this case transformed the business from being sub-optimal to being best-practice and extremely competitive. Especially prevalent also was the role senior management.

Managing Quality.

TQM was introduced into the business world to address some of the managerial and organisational features of total quality. Menon (1992) refers to TQM as a system that looks at far more than the product the company makes. TQM applies to the raw materials coming into the doors, to the method used by the company to interface with its suppliers and customers, to the service it provides, and to the condition and management of its tools and machines. Its modern principles, in line with quality gurus, can be summed up as follows:

The customer defines quality and this is the start point
The senior management team is responsible for taking the lead in setting the company strategy, values, and culture with regard to quality
Quality depends upon the design and execution of systems and processes to a high standard
A key part of the philosophy is that of the need for continuous improvement and the need to reach for continually higher standards
Leadership in quality can only be achieved through management setting clear goals and forming the strategic and operational plans to achieve them
Understanding the processes that drive your business and base your decisions on facts
Involve employees at all levels in quality improvement activities through appropriate education, training and communication
Key parts of quality systems include designing quality into processes and error prevention
The shortening of response times for all processes is an objective of improvement efforts
Companies should communicate with and involve their suppliers in achieving their quality targets

Dave Sowerbutts, PHS Associates website.

(All of the above incidentally can be seen to good effect in the ‘Gallery Furniture’ case study.) TQM programmes should gain top level commitment in the business as well as creating awareness of the need and opportunity for quality and improvement. As encouraged by Deming, goals should be set and methods put in place in order to achieve these goals, such as quality councils etc. Everyone in the organisation should be trained on the philosophy and its tools and techniques, with all resources being geared around applying these theories. (Hutchins, 1990)

TQM pretty much covers the whole enterprise and in line with some of the theories presented already, if TQM exists within the organisation then so does total quality and a zero defect environment? Let us look at the realities.

Difficulties with implementing Quality.

The pharmaceutical industry is heavily regulated and for obvious reasons mistakes in product design or production can have severe, even fatal, consequences for patients. Research carried out by Barron and McAdam (2002) concluded that a significant number of companies within the pharmaceutical industry had adopted TQM. It was also made clear that they had done so in response to the difficulties they faced from changes in industry such as increasing customer demands; globalisation; the emergence of new drugs; pressure to reduce costs and the emergence of smaller companies. Overall, the results revealed that the organisations had made progress in a number of areas such as improving processes, implementing its quality system, procedures and using IT to improve information flow, particularly to external customers. It also became clear during the research that the implementation of TQM did not go smoothly and that each company had some difficulty in implementing the concept. In hindsight it was concluded that in order to be successful in achieving total quality a culture of continuous improvement was required, as was the need to overcome a lack of trust and understanding of the TQM process and clarification of what the company was trying to achieve.

Theoretically total quality and total quality management are promising concepts. For many organisations their implementation within the organisation proves to be more challenging. Briscoe, Fawcett and Lee (2002) support the notion of unsuccessful implementation and identify two main overriding problems to having quality management,

Companies struggle to manage the “process” of quality improvement; and
Managers and workers alike must be committed to changing the way they think about quality as well as the way they work on a daily basis.

One of the quality directors quoted in their research said, “The ‘want to’ is there, the ‘how to’ is weak.” The authors in this case discovered that managers were intent on improving quality, but they did not know how to make progress along what they saw as a long and challenging implementation journey. In fact some had even been quoted as saying that the quality quest was merely a ‘fad’ or an attempt at a ‘quick fix designed to lower costs’. In actual fact similar cases were found, on a trawl of other quality journals on the web, which seems to indicate that achieving total quality is a long and difficult process that requires strong leadership from the top.

Another study by a group of professors at the department of Management at the University of New Orleans (2002) identified that some organisations appear to adopt quality management only superficially, giving more “lip service” than real use, while others buy far more fully into QM and its philosophies. What they discovered was that there was indeed a positive impact on the organisation if the implementation of QM programs was effective and thorough. Where the organisation’s culture was aligned to fit the requirements of QM an empowered, participative workforce was encountered and workers also believed that the organisation was more effective (Hartman, Fok, Fok, Li, 2002). Another more longitudinal study carried out by Brown and Van der Wiele (2002) found that the most significant factor impacting on quality in all of their cases was the role of top management. Based on the experiences of five companies over a ten year period it was concluded that each one had dealt with quality differently. The more successful businesses were no longer pursuing quality as a religion but had incorporated specific quality principles into core processes where high risks were involved. Quality in these organisations was seen as a means to an end rather than an end in itself and the sustainability of quality management was attributed to trade-offs between early quality ‘packages’ promoted by gurus in the 1990’s, and some fundamental principles like continuous improvement, customer satisfaction and teamwork.

Guidelines for Quality

The longitudinal study mentioned above also highlighted that in many cases quality management simply related to certification according to ISO9000 series and other standards. The organisations involved found that this sufficed in terms of linking quality with its environmental systems and safety audits. Put simply standards are guidelines for a particular area within business. There are many in existence and new or revised standards are published every 7 – 10 years (Jackson, 2000) and exist to simplify and rationalise processes and procedures within industry. Standards are voluntary but certifying to one suggests that the organisation agrees to follow and ensure a basic level of compliance to safe, technical criteria approved by a body of specialists. According to the British standard for standards, ‘standardisation should aim to increase the satisfaction of users of goods and services; standards should be framed in a manner which recognises user requirements and how they will be satisfied. Typical user requirements for quality in the sense of fitness for purpose include reliability, compatibility, interchangeability and amenity’. (BS 0 – 1: 1997)

Registering a quality system to ISO 9001-2000 may help the organisation gain international recognition as a business committed to quality. It proves to the marketplace that the company has achieved consistency and dependability in its products and services and in some cases standards act as a seal of approvement and can be used as a competitive advantage over those that are not certified. In the case of the pharmaceutical study companies followed the path of achieving a quality certification; namely, ISO 9000 accreditation, in the pursuit of excellence.

Furthermore accreditation to these standards means subjecting the organisation to sometimes rigorous and regular auditing which itself ensures some basic level of quality and safety. Certification may be attractive to certain customers and may even convince existing ones that they are dealing with a company that is continually seeking to improve its product and business practices. Thus the company’s perceived reputation within the marketplace improves. Benefits therefore include improved procedures, improved safety, improved reliability, improved compatibility all of which should translate into improved market position.

In Conclusion.

The reader may conclude that ‘Quality’, ‘total Quality’ and ‘total quality management’ are vast concepts, which have much written about them. The concept has its heroes, namely Deming, Juran, Ishikawa and Crosby, yet it also has the power to instil dread in those managers new to the concept, as discovered by the study into the pharmaceutical industry. The theory and philosophy behind ‘Total Quality” seems to make sense in that the processes involved seek to improve the organisation’s functions and output in order to maintain or rather attain a competitive edge as demonstrated by ‘Gallery Furniture’. The case highlighted the possibility that quality is achievable across the board and it is possible to satisfy all of the people all of the time as well as being easy to implement. That is as long as the people within the organisation understand why they are trying to improve what they’re doing; why the organisation is doing so and why the customer is important. Furthermore employees will not understand any of this unless management knows the processes they are trying to improve and also possesses the leadership to align the culture within the organisation, to achieving total quality. The reader should have gained a basic background for the progression of quality and TQM and understand some of the thinking behind these concepts based on the ideas of some of the major contributors to the quality movement. Overall however the author concludes that the role of quality within organisations today is invaluable. The ‘quality’ organisation gains a competitive edge, but also in becoming so, makes the workplace more bearable and working that much more enjoyable.