Why TQM?
The Inevitability of offering poor quality products or services to today’s sophisticated buyers is the direct loss of profit and market share. New ventures getting their nascent operations off the ground as well as established enterprises are facing this reality routinely. Consequently CEO’s around the world have begun viewing quality more seriously than they have done in the past. Some are seeking ISO 9000 accreditation, while others are integrating quality formally into their business strategy. However, many of them find the related tasks to be a bigger challenge than commissioning new technology or getting a collaboration to work smoothly. Success in today’s competitive market place appears to depend on one key factor- the proximity of company’s practices to Total Quality Management (TQM).
Experts remind repeatedly that TQM goes considerably beyond ISO 9000 and also beyond QS 9000. TQM means a major re-orientation in a company’s practices. Indeed TQM requires all functional activities to be conducted with the soul purpose of satisfying the customer. Running a company based on such a philosophy therefore is tougher than acquiring an accreditation. TQM holds that all other business objectives follow from the single objective of “satisfying the customer”. TQM has no other mission.
In organization under TQM achieving customer satisfaction and ceaselessly seeking incremental improvement become the guiding beacons. In these organizations CEO’s commit their time, their enthusiasm and the resources of the organization to achieve satisfaction of “internal and external” customers.
What is TQM?
TQM is said to be a major augmentation to the traditional way an enterprise does business. TQM requires all activities of the enterprise to be managed with the single focus “satisfy the customer”. All other objectives if the enterprise – profits market share expansion, improved competitive position, capital productivity, cost reductions etc follow as its consequences. When quality products and quality services become the enterprise’s obsession, productivity and lower cost’s materialize from reduced scrap, rework, returns and the reduced recurrence of quality problems. Productivity is also positively affected by the extend each employee owns the results of his/her efforts.
Ownership of results means that the individual or team has taken responsibility for and is willing to be held accountable for improving the performance of the process. Training greatly enhances this willingness. Improving a process implies, improving not only the process itself, but also improving the links between that process and others- either before it or after it, or parallel to it. Participation in delivering and sustaining quality thus becomes necessary to adopting TQM successfully. This is a state that traditionally managed enterprises find very difficult to attain for they provide little, if any training. TQM is defined as an organizational obsession with meeting or exceeding customer expectation.
There are numerous valuable contributions related to the theory, techniques, studies and guidance on TQM. The philosophy of TQM is trying to involve employees at all levels to promote well-being of the company as a whole. TQM depends on linking the top management goals with a set of TQC tools for the operators to achieve these goals. Dr.W. E. Deming and Dr. J.M. Juran were the pioneers who introduced concepts of TQM. When compared with the 20 requirements of the ISO 9001 quality system. Dr. Deming and Dr.Juran also list 14 points and 7 points respectively as guidelines on quality systems.
As previously stated, quality is everyone’s responsibility. TQM is a method by which all people can be involved in improvement. The philosophy and techniques used TQM can be applied throughout the organization. They are equally useful in finance, sales, marketing, engineering and production; to everyone involved in a company’s activities. To be successful in promoting business efficiency and effectiveness, TQM must be truly company- wide and it must start at the top management level. The following are the key elements for successful implementation of TQM (10):
· Commitment and involvement by top management;
· A team work approach to solving problems;
· Thorough training to promote quality awareness;
· Improvement of quality control techniques and method;
· A continuous improvement programme;
· Participation of staffs at all levels.
THE VALUES OF TQM IN THE REVISED ISO 9000 QUALITY SYSTEM
ISO 9000 background
The ISO 9000 series of quality management and quality assurance standards
are published by the International organization for standardization (ISO),
which is based in Geneva. The standards were published in 1987, based on
The earlier British standard 5750 with input from other countries such as Canada.
The five standards in the series (ISO 9000-ISO 9004) provide a framework for quality
system development in nearly all types of industry.
At present, more than 50 countries, including Australia, Japan, New Zealand, the UK and the USA, have adopted the ISO 9000 series as their national quality system standards. In most cases, these national standards are identical to the ISO 9000 series. The ISO 9000 standard were also originally adopted in Europe as EN 29000 and now have been redesignated EN ISO 9000. Any mandatory requirement for quality system within European community (EC) directives will refer to these standards.
However, careful study of the ISO 9000 series of standards in recent years by certain major groups of users or potential users identified a number of needs that are not easily met in the 1987 version. Also, a number of users felt that the 1987 version should be revised to take into account changes in technology, terminology and practice. In particular, the key areas to be addressed in the revision were:
The importance of all peoples needs being satisfied (including employees, Owners, suppliers/subcontractors and society);
Management commitment with a greater emphasis on executive roles;
Full involvement of personal;
Operational processes showing linkages to the overall system;
Customer satisfaction and importance of meeting customer requirements.
[/list]
Accordingly, the technical committee of ISO (TC176) has revised the ISO 9000 series and released them mid-1994. The new revision is part of a broader programme resulting from a long-term strategy, which was published as document-Vision 2000. One of the elements addressed were the need to make more significant changes to take account of the move towards the principles of total quality management (TQM). Thus the TC 176 directive, in revising the ISO 9000 series, is to “build in” some TQM ingredients into the system including: quality improvement; management commitment with a greater emphasis on executive roles; operational processes showing linkages to the overall systems; and customer satisfaction.
Worldwide awareness of Quality
Since the EC has begun to eliminate internal trade barriers by harmonizing the standardization process (although not very successfully), ISO 9000 has become a trademark for manufactures to demonstrate their “good quality system” to their international purchasers. Many companies, originally unconcerned about quality, have started to establish their on quality systems in complaints with ISO 9000 requirements, in order to survive and remain competitive in their market. Consequently, the ISO 9000 quality system has created a quality – oriented climate around the world, and people have become more quality conscious and aware.
As yet, there seems to be no other quality methodology or philosophy (e.g. SPC, TQM, quality function deployment (QFD), 0 defect, six sigma) that has same influence on the world market. Even television and newspaper advertisement frequently mention the ISO 9000 quality system! Through ISO 9000 quality certification, worldwide awareness of quality has been created.
A similar situation was found in Hong Kong. Over 1000 companies have no setup their quality system according to ISO 9000 requirements and received certification in Hong Kong. A significant number of those certified are companies in the building industry. The driving force came from the housing authority department of the Hong Kong government, which enforces the ISO 9000 certification of its sub contractors.
ISO 9000 has brought quality awareness to Hong Kong. However, it does not bring a cultural change in attitude on quality as evidence shows that most companies apply ISO 9000 because of customer requirements, and do not introduce internal quality and the productivity improvement. Unlike TQM, which is management system to mobilize and motivate all employees for continuous quality and productivity improvement, ISO 9000 on its own can hardly results in such a cultural change in a company.
A recent survey contacted in Malaysia, the UK, South Africa and the USA revealed the world’s perceptions of the ISO 9000 quality systems. In the survey, when asked why companies go for ISO 9000 quality system certification 36 percent said that they used ISO 9001 because of customer demand, expectation and requirement; 23 percent said that it was because of foresee ably quality benefits and cost reductions; and 18 percent said that they used it to gain a marketing or competitive advantage.
When asked what was the most important internal benefit of ISO 9000 certification, 41 percent reported a greater quality awareness, 32 percent said that a better documentation system resulted: and only 16 percent reported efficiency productivity increased and reduced rework.
On the question of what were the most important external benefits of certification, 33 percent responded that there was higher perceived quality; 27 percent reported improved customer satisfaction and 21.5 percent felt that they had gained competitive edge.
A similar survey was contacted subsequently on more than 600 Canadian companies and US. The reason for attaining ISO 9000 certification was reported as being mainly due to customer demands and market advantage (43%), while the internal benefit of certification where reported as better documentation and greater quality awareness (57%).
Collectively, these to surveys revealed that the driving force to setup a quality system in accordance with ISO 9000 requirements and be certified resulted largely from customer expectations, market demand and competition. The internal benefits identified were mainly better documentation and quality awareness.
The revised ISO 9000 quality system (1994revision)
In mid-1994, the ISO 9000 quality system standards were completely revised and re-issued. They consist of three revised assessment standards (ISO9001, 9002,9003), two sets of revised guidance documents (ISO9000’s and 9004s) and other auxiliary documents.
The changes in the assessment standards (i.e., ISO 9001,9002and 9003) will not be detailed here as this is not the focus our discussion in this paper. Our main focus is the changes in the ISO 9000s and ISO 9004s guidance documents, which relate more directly to the well known TQM philosophy and system.
Many changes are found in the revised guidance documents (viz. ISO 9000 and ISO9004 series documents). More emphasis has been put on quality management. Although the stated objective of the revised ISO 9000 quality system continues to be the quality control of products and service, it address more issues than just meeting customer-stated requirements. The revised ISO 9000 standards aim to reduce, eliminate and prevent quality deficiencies and take into account both the customer’s and the companies on needs and expectations. More elements in the revised ISO 9000 system place and emphasis on better quality management and look more closely at market-oriented requirements, for example:
Measuring and evaluating quality costs (guideline ISO 9004, section6);
Emphasizing quality improvement (guideline ISO9000-1, section4.1b; guideline ISO 9004,section 5.6);
Predetermining and satisfying customer expectations (guideline ISO 9004, section 7.1);
Analyzing the market and reacting to feedback (guideline ISO 9004-1, section7.3);
Addition of a guideline for quality improvement (guideline ISO 9000-4).
[/list]
A new paragraph relating to quality improvement was added to section 5.6 of the ISO 9000-4 guideline. It states that the management of an organization should ensure that the quality system would facilitate and promote continuous quality improvement. This includes:
Encouraging and sustaining a supportive style of management;
Promoting values, attitudes and behavior that foster improvement;
Setting clear quality improvement goals;
Encouraging effective communication and team work;
Recognizing success and achievements;
Training and educating for improvement.
[/list]
When compared with its 1987 version, the revised ISO system seems to more on [he human factors that affect the quality system; something which is more in line with the philosophy of TQM.
Customer expectations and marketing feedback
ISO 9004 section states that the marketing function should establish an information monitoring and feedback system on a continuous basis. Also, it is added that all information pertinent to the customer's use and satisfaction with the quality of a product should be analyzed, collated, interpreted, verified and reported in accordance with documented procedures. Such information will help to determine the nature and extent of product problems in relation to customer experience and expectations. The new revision also refers to corrective action programmes (ISO 9004-1. section 15) for improving product quality in order to satisfy customers' needs.
Further, the revised ISO 9004-1 added in section 7.1 that it is important to consider the requirements for all elements of the total product, whether hardware. Software, processed materials or services, particularly at the early stage in the product life cycle. In addition, all relevant organizational functions must have the capability to meet customer requirements. When compared with its 1987 version, as a whole, the revised non-assessment guidelines place more emphasis on satisfying customer. Expectations, marketing analysis and feedback action.
THE FOUR ESSENTIALS OF TQM
Four essentials that characterize the TQM approach are:
Top managements direct involvement in the delivery of quality (note that involvement cannot be delegated).
Strong customer orientation (quality is customer driven).
Company wide participation in the delivery of quality goods and services to the customer and
Systematic methods used in solving and resolving quality problems.
[/list]
These ‘ideals’ provide a good benchmark for what to do when competition is running over. It is shown later how the Japanese have internalized these four essentials in their own practices.
Why must management (and indeed the CEO) become involved in the delivery of quality? Why is not the QC department enough? Western managers, who for too long took the success of their business for granted, primarly because of their technology advantage, which had given them an edge, have painfully discovered the answers to such questions. By focusing excessively on the quarterly earnings bar charts, many of them even lost sight of satisfying the needs and preferences of those who would be paying from their pockets to provide those earnings. Lost markets were blamed on the onslaught of competition, and the ‘fixes’ in many companies lacked courage to achieve a fundamental that only top management could activate. In 1991 a comprehensive study completed by the US conference board showed that competitors who have adopted quality as the ‘new management technology’ eventually pass the companies without formal quality improvement programmes centered on customer satisfaction.
For an enterprise, being out done by competition is too painful. From shrinking market shares to downright closure of firms and wholesales layoffs are only too real when ever quality lacks. This happened to US steel in the 60s, to Detroit automakers in the 70s and 80s, and to the western electronics industries in 80s. Globalization and liberalization of trade world wide and enhanced customer awareness are also decimating and advantage protected or niched business have enjoyed till recently. There is little reason to believe that this latest tide will turn back in the foreseeable future unless there is large-scale scarcity of some sort. The gainers of open competition are the customers hence the few monopolies must reshape their ways drastically or shut down.
Satisfying ‘internal’ customers, experts say, is an excellent way to start TQM. TQM then quickly becomes an organization wide challenge where everyone’s responsibility becomes understanding and satisfying the needs of the following stage of processing or production. For this to be realized all personal must be trained in the appropriate quality improvement skills, 7-tools, SPC etc. in order to effectively do their part of the task. In terms of attitudinal change, training should develop people to the extent that they come to the factory not just to work, but also to think about how to improve their jobs to meet the needs of their customers better. Quality improvement projects such as on time delivery, efficient order entry, reduced billing errors, scrap reduction and better supplier management then become routine, rather than rare celebrated events.
ADOPTING TQM ASSURES CULTURAL OVERHALL
A major change in the manner a company is managed is actually effected by TQM. Such a transformation causes changes in the thoughts and actions of everyone inside and those interacting with the organization. For instance, management will now pursue company goals in a more enlightened way (particularly with respect to the real needs of the customers) with out ‘becoming less concerned about the business goals’. Striving to continuously improve customer value is actually very purposeful in a competitive marketplace. On the other hand, in many companies ‘ tools and techniques TQM’ alone without paying attention to the four TQM essentials above failed to raise the level of customer satisfaction. In these companies the impediments were cultural - they were due to the mindsets of the people, their traditional philosophy, values and beliefs about how things work. Culture, it might be said, gets constructed socially and provides people making a way of sense of events. It then guides behavior, and becomes the glue that holds the organization together and ensures that its members behave according to norms. Thus only a thorough understanding of existing culture can help top management change undesirable human behavior. A good article to read on this subject is by Collins, et al.
It should be obvious now that a TQM programme requires some crucial changes in the manner things may be getting conventionally done. For instance, since on the average 40%of the sales price is made up of purchased product or service, a partnering rather than the traditional adversarial relationship with the suppliers is a
fundamental precondition of moving into TQM. Both the parties have much to gain if the final customer is satisfied with what he/she receives. Another aspect of a TQM programme is to focus on minimizing the product’s ‘lifecycle cost’ rather than reducing production cost in order to make the sale price competitive. For simple consumable products like food, the purchase price is also the cost of using the product. As products grow in complexity and the length of use increases, the ‘purchase’ price must also increase to include operational , maintenance and other special costs. To the buyer today, a lower lifecycle cost is an important indicator of superior value. Lastly, for TQM to deliver results, the organization should monitor cus