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Impact of TQM Practice to SMEs

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Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

CHAPTER 1

Introduction and Objectives

1. Introduction

In today's consumer driven world, companies are forced to offer quality products and at the same time also keep the pricing competitive to fight the competition. Today's consumer is not only aware but also smart to evaluate similar products for its quality. This smart and knowledgeable consumer is pushing the companies to the edge in providing quality products at competitive prices.

In the 1980s and early 1990s, when many large Japanese companies set up manufacturing operations in North America they suffered from a competitive environment that caused people to think that North American goods were better in quality than Japanese goods. To fight this general consumer perception, Japanese companies sought manufacturing methods to produce goods with a high level of quality so they could penetrate the market at a competitive price. 'The Japanese management guru's come up with a concept that integrates all functions of an organisation such as finance, marketing, engineering and production so that the company can meet the customer requirements and achieve their desired goals'. This was termed as 'Total Quality Management" and till date widely practised by organisation across the globe [TQM, 2007].

What is Total Quality Management (TQM)? TQM is an approach to improving the competitiveness, effectiveness and flexibility throughout the company; it is essentially a way of planning and understanding each activity, depends on each individual at each level (Oakland, John 2005).

TQM helps in improving the organisational efficiency. As we all know most of the companies in the small business sector act as a source of raw-material to large organisations so it's important to adopt TQM approach in their company, it is extremely difficult for SMEs to accept TQM as whole in their company as compared to large organisation as they always have the problem of finance resources, lack of technical expertise, manpower and some other related issues so it is important for them to revised the TQM approach adopted by large organisations which will help them to be more flexible and move quickly with a change so that they can meet the needs of their customers with good quality products with effective cost.

1.1 Aim of the investigation:

This research paper aim's to locate the effectiveness of TQM practices in SMEs-specially in manufacturing sector and to discuss the benefits of TQM practices to SMEs.

1.2 Research Objectives & Rationale:

This research will look into TQM and its practices and its involvement in SMEs industry. Nowadays, competitiveness is based on quality for many organisations; hence it will look into ways of integrating organisation activities with TQM practices in SMEs-working within manufacturing sector. On the other hand, this study will explore the link between the SMEs and TQM practice and evaluating the benefits of TQM to SMEs with special reference to the TMD technologies Ltd UK.

1.3 Structure of the Study:

The entire research is designed in five distinct chapters. The following are the key ingredients of each chapter providing a bird's eye view of the research:

Chapter 1: Firstly, as outlined above, the research objectives and the rationale of the research are outlaid.

Chapter 2: The literature surrounding total quality management is discussed and related with the real examples focusing on works carried out by Deming, Juran, and the models of ISO-9001 and Six Sigma.

Chapter 3: The Research Methodologies are studied in this chapter concluding with the qualitative research process carrying out through semi-structured interviews.

Chapter 4: The data collected from interviews in the manufacturing company TMD Technologies Ltd is discussed in relation to the concepts and literature of TQM.

Chapter 5: Researcher has discussed about his Personal Development Plan.

Chapter 6: The project is concluded in this chapter with recommendations and the scope of further research being discussed. In addition, the research limitations and data analysis are outlaid.

1.4 Chapter Summary:

The research objectives along with the rationale for the research are presented at the outset followed by the structure in which the entire dissertation is constructed. After going through customer requirements, company can focus on producing better quality products within the budget so the improvement in business can be achieved.

CHAPTER 2

Total Quality Management & Small Medium-Sized Enterprises

2. Literature Review:

Quality is vital for organisation success; specially require for SMEs to compete with large competitors. It has become inevitable for SMEs to work on enhancing quality within their functions, product and services and the way they manage their organisations. Manufacturing industry within SMEs framework is the main area of this research where the importance of TQM is needed and has been highlighted by many authors and practitioners.

Quality has been defined differently by different authors and professionals; Crosby (Bean, J. & Hussey, L. 1998, p.4) defines it as conformance to requirement; whereas (Sadgrove In Bean, J. & Hussey, L. 1998, p.4) comments on quality as the product which should be fit for its intended purpose.

Quality is the term which drives productivity of the company in the manufacturing sector, if there is an increase in productivity of the organization then it will lead to the increase in revenues and job opportunities. It is a continuous process, which helps the employees to learn from their past and using it to develop the organisation so that they can satisfy their customers. In some manufacturing firms quality used to indicate that a piece of material conforms to certain physical dimensional characteristics often set down in the form of particularly tight specification. (Oakland, S. John, 2005)

To be more specific and clear about the different concepts i.e. Quality, Total Quality Management and others which I will be looking at this chapter, I am using an example of Dadoos Foodstore based in South East London who are engaged in retail business i.e. buying few products like bread, fruit drinks, juices, milk, butter, crisps and some other various products in wholesale from suppliers and manufacturing few products like lentils, rice and spices and selling them in this competitive market to earn profit. Their views is to render their services in the most effective manner and customer satisfaction is their main propriety and I am using this example just to explain my knowledge and understanding of different concepts which I have laid down in this part of my research paper and I will use some more real examples but they do not have any link with Chapter 4 later.

In Dadoos Foodstore their quality lies in their work as well as their location, which adds to their quality of service as it on the main road i.e. easy to access. They believe they rendering their service in the right way, their quality of work shows when a person walks out happily. They also believe this a continuous process, as they have to change with the latest demands in the market and keep on assessing the change in customer requirements, as customer satisfaction is most important factor in any business. (Appendix A- Case Study of Dadoos Foodstore)

2.1 Total Quality Management (TQM):

What is TQM? Word itself gave you the answer; total quality management i.e. quality of the product and successful running of this system lies throughout the company. 'Total quality management is a structured system for satisfying internal and external customers and suppliers by integrating the business environment, continuous improvement, and breakthroughs with development, improvement, and maintenance cycles while changing organizational culture'(Legge, K. 1994). Small businesses like Dadoos Foodstore; they have to monitor external supplier's quality. Obviously if the quality is not good they are likely to change their supplier until they find a supplier which can meet their needs and a relationship is likely to form. In this quality process the issues are therefore cleanliness and control of the shop, efficiency and friendly staff, competence and storage in warehouse, understanding the customer demands and management commitment which altogether can satisfy their customers and enables them in achievement of the organisational goals.

In the figure below we can see that TQM system is divided in three stages i.e. planning, implementing and then results. It is the process that moves around all over the business internally as well as externally, from top to lower level. It seeks to develop and manage organisational culture in line with organisation's strategic objectives. It is an approach that includes several contents or aspects that may or may not exist in the business.

American Federal Office of Management Budget Circular (Milakovich, 1995), 'TQM is a total organizational approach for meeting customer needs and expectations that involves all managers and employees in using quantitative methods to improve continuously the organization's processes, products and services.' In researcher's example of Dadoos Foodstore let's take a look on one of their business activity for which TQM is important. In their manufacturing unit, they produce different kinds of products like rice, lentils and spices e.g. if they producing 100 bags of rice of 20 kg, now its very important for the quality department to make sure that the quality of the rice should be of the required standards and all the bags produced should exactly be in same shape, colour, weight and size. After the production of these rice bags, quality manager was assessing the results and he finds that there was no difference between the bags, all the bags look exactly same, nobody can see the difference, equal in size, same colour, in short manager was happy and satisfied. How did the production team manage such consistency, they know their job, they got right vision, everything was strategically planned, they know what they are doing, by using right tools and system, right temperament and same procedure so that they can get the same result. This shows an existence of good quality system where employees working are properly trained and know what they are doing, working to the required level of standards and customer satisfaction makes them happy, which will leads to growth and attaining the required goals.

In the manufacturing sector TQM has taken by nearly each kind of organization like hotels, government, military and education (Jurow & Barnard, 1993). It is an ongoing process which helps in improving all business activities, from top to bottom at all levels doesn't matter it's from high level strategic planning and decision-making, to detailed execution of work elements on the shop floor. Continuous improvements with TQM not only deal with improving results but also more importantly with improving capabilities to produce better result in the future. TQM follows a rule that people make mistakes but changing the process can prevent most of the times the causes of such mistakes are faulty systems and processes so it believes that the root cause of such mistakes can be identified and eliminated, and repetition. It is a combination of quality and management tools that aimed at increasing business and reducing losses due to wasteful practices. Some of the companies who have implemented TQM include Ford Motor Company, Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.

According to Ho and Fung (1994), TQM is a way of managing to improve the effectiveness, flexibility, and competitiveness of a business as a whole. It is also a method of removing waste; by involving everyone in improving the way things are done. Dean and Bowen (1994) defined TQM as a philosophy or approach to management that can be characterized by its principles, practices, and techniques. In researcher's example of Dadoos Foodstore there can be some quality issues like cleanliness and control of shop, efficiency and friendly shop staff, stock control and communication with the suppliers. TQM helps the store manager in getting better in their day-to-day business activities, which in return not only helps them in surviving in this competitive market but also helps them in moving towards their desired goals. After discussing about TQM lets go further towards its principles i.e. customer focus, continuous improvement, and management commitment:

These are the one of the most important principles that a company should follow in terms of total quality management. TQM ensures the management to lead the organisation in strategic overview of quality. To be successful in today's world each and every person of the company should contribute, it must start from the top to bottom. TQM focuses on prevention not detention of problems. It's the duty at the top level management to show their seriousness and commitment towards the quality of the products and then middle management should demonstrate and communicate the principle and strategies to the people under their authority, then only there will be right attitude of work throughout the company, which will lead to continuous improvement. Management should take the responsibility for preparing and monitoring all the policies of the company for continuous improvement and to make sure each employee of all the departments should understand all the required information.

For example, a small business firm named Paperco started in 1971 and engaged in the supplying and distribution of all kinds of paper to public and specialist printers. This firm has 14 employees with the annual turnover of 500,000. Paperco judges the quality in terms of 'giving the customers what it wants'. According to the Director of the company, he strongly believes in supplying the right quality of goods to the customer without compromising on anything if that is related to meeting the customer needs i.e. the correct paper, paper size, colour, delivery of goods, customer feedback in short follow up until the customer is satisfied. As we can see there is strong management commitment in this company (North, J., Blackburn, R.A., and Curran, J.1998).

Hashmi (2007) comments on combining TQM with effective commitment from senior management with a clear goal, followed by a strategic plan, which is spread as an action plan throughout the company results in good quality products and services with satisfied customers. TQM always focuses on improving the effectiveness of the company that in turn leads to the benefits for their stakeholders. TQM is an ongoing process and aims in continuous improvement so it is an activity which involves planning and organising of all the activities and tasks in advance and to make sure that all the actual activities are matched with the planned ones and to concentrate on not to waste any effort and energy that is routinely spent in the company

For continuous improvement a leader should make sure to develop the values and objectives of the company as its mission statement and to act as a role model for others by personal involvement for quality of the products. Senior management is a continuous process for them to develop the strategic plans and keep on reviewing and improving the management system and should always motivate their subordinates and encourage them for effective employee participation [Introduction and Implementation of Quality Management Systems, 2007]

In Paperco company, they do not have formal system for maintaining quality then one of the directors suggested to implement a total quality system which enable them to take advantage over their competitors and improve their quality of products and service. For implementation process they decided to hire a specialist, as it would be difficult to interpret the initial stages of the quality process and cost was the least issue as the problem was related to quality of the product that is important. Company director believes in continuous improvement worked with the specialist to develop the plans and procedure and finally the quality manual and was eager to engage all the employees and staff in this process so they can also learn about the change in business activities and suggested them to get rid of all those things which are useless for the company and squeeze all the plans and procedure in the best possible manner, this helps in motivating employees and they were happy as they were involved in such a important procedure. By implementing proper quality system and all the changes are made according to the needs of the customers with strong top-level commitment and training the employees at the same time, Paperco gain an advantage over its competitors and enjoys a reasonable market share (North, J., Blackburn, R.A., and Curran, J. 1998).

2.2 Small Medium-Sized Enterprise (SMEs):

In today's European market SMEs plays a vital role as they got the large source of employment and entrepreneur skills. There was a rapid growth in the numbers of SMEs in UK in early 90s and their performance was outstanding, this small business sector becomes one of the important factors for the performance of the UK economy as they also create large number of job opportunities. In the enlarged European Union of 25 countries, Around 23 million SMEs provide around 75 million jobs, which shows that the SMEs provides 99% of the total jobs of all the enterprises. UK government and EU programmes has always supported SMEs and they create various opportunities for these businesses as they account 56% of the total workforce in the country. As many SMEs runs their business processes at the 2 to 3 quality level and any improvement of even 1 represents a vital step in satisfying their customers within the cost budget (Spanyi and Wurtzel, 2004).

SMEs can be distinguished with regards to the number of people working in the company, depending upon the market share and most of the times small businesses are run by their owners or partners, for example; a firm producing utensils employs less than 50 people in their company and enjoys small share of market and run by two partners then this firm will come under the category of small business sector. In the UK, sections 247 and 249 of the Companies Act 1985 define a SME for the purpose of accounting requirements. These sections have been amended a number of times, most recently by Statutory Instrument 2004/16. According to this a small company is one that has a turnover of not more than £5.6 million, a balance sheet total of not more than £2.8 million and not more than 50 employees. A medium-sized company has a turnover of not more than £22.8 million, a balance sheet total of not more than £11.4 million and not more than 250 employees. It is worth noting that even within the UK this definition is not universally applied. (Strathclyde Library Resources, 2007)

2.3 SME's in Manufacturing:

SMEs in the manufacturing sector in earlier days used to follow the path where the chances of growth are very low. In SMEs the owner of the company enjoys with a source of income and employment and they have to operate most of the activities in the company. SMEs are gaining attention and support from the government but they often have to face the problem of resources especially in finance and growth of the company is depending on the allocation of funds that can be arranged by the owner externally. The migrants and unskilled labour dominate the manufacturing industry. (The Economists, Jan 2006). So there is a need to upgrade the training standards in the organisation so that the quality of the product can be maintained up to the prescribed level. In the production department, it is necessary to recognize the issues, which affect the efficiency of the successfulness of this sector, and to take corrective actions. Thus, a system of certification of such skills will be required to give recognition to their skills acquired in an informal manner, which will help in improving the efficiency of the workforce in this sector.

For example TVR Company, a small and medium-sized enterprise in the manufacturing sector in UK engage in producing cars, the first car was built by Trevor Wilkinson the owner of the company himself in 1947 and it took around 10 years for the company to be famous in the car market, company was started by one man who join his hands with Ray Saidel, who become the first TVR dealer and after a long struggle TVR finally becomes the 3rd largest producer of cars in the world. They have employed 450 peoples out of 200 works in the production department, 50 are involved in financial, 85 are busy in marketing, packing and distribution section, 30 are involved in administrative department, 25 are busy in research and development department, 35 are working in maintaining the quality of the product i.e. quality department and rest in other various departments [TVR, 2007].

2.4 Quality in SMEs:

In the case of TVR there are likely to be many quality issues. Indeed Quality has been described by many people as a multi-dimensional entity; for example some have described it as an ‘umbrella' protecting the business from the harsh weather of competition, globalisation etc (Preston, 1996). In particular TVR has product quality issues and process quality issues. The produce quality issues include the reliability and performance of its vehicles; the process quality issues include the after sales service and even whether the sales staffs are professional or ill mannered.

One of the problems facing TVR is retention of its customers; they seem to enjoy the car but once they have used it for a number of years they switch to a mass-build vehicle such as Toyota or Mercedes. The reason is likely to be that TVR has a young 0and male image and is seen as ‘edgy' and the company service is similarly not conveniently ordered as many manufacturers recommend. Essentially the quality process is not what it could be; even young women are somewhat frightened off by the brash salesmanship of TVR staff. This is a quality issue. It is believed by TVR that if they could change this quality factor they would improve retention, bring new markets (e.g. UK women) and hence improve the performance of the company. Indeed much research says techniques of total quality management that can be adopted by the SMEs to improve the performance of the company through effective quality system doesn't matter if its related to managerial, financial or operational activities. Among so many model of quality, we have seen that the most effective model is Quality Assurance and TQM. Quality assurance refers to the evaluation and certification by a customer or by an independent certification bodies of an organization's quality system, to demonstrate that a 'specific quality system standard has been met' (Husband & Mandal, 1999).

2.5 TQM APPROACHES:

2.5.1 Deming's Approach to Total Quality Management:

Its processes are divided into four sequential categories: plan, do, check, and act (the PDCA cycle. The theoretical essence of Deming approach to TQM concerns the creation of organisational system that fosters cooperation and learning for facilitating the implementation of process management practices, which, in turn, lead to continuous improvement of processes, products, and services as well as to employee fulfilment, both of which are critical to customer satisfaction, and ultimately to firm's survival (Anderson, J.C., Rungtusanatham, M. and Schroeder, R.G. 1994).

Deming (1986) describes organizations as composites of systems designed to meet customer needs. He focuses more on the top management and explained that it's their responsibility to go forward and lead the organisation in changing processes and systems that leads to continuous improvement. Top management has to create and communicate a vision and be a leader that is the most important factor in ensuring the success of quality management in any organisation. He also focuses towards the importance of identification of customer needs and requirements from the products and services which they are buying and the use of functional tools and teams to solve quality problems, which require participation of employees and pursuit of continuous improvement.

According to Deming (1986) leadership must come from top-management and leaders must be trained and have full knowledge of systems, variations (statistical thinking), knowledge of theory, and knowledge of psychology so that they can lead in a more effective way. This means to improve quality lies in the ability to control and manage systems and processes properly so therefore the role of management responsibilities in achieving the desired goals is critical. For example, Hitachi-rail, one of the Japanese leading companies was founded in 1915 and since then they are producing products like Steam locomotive, First Electric locomotive, Tokyo Monorail, 'Suica' contact-less smart card ticketing system which are famous for their quality and used worldwide by most of the companies. How did they manage to meet the customer requirements and maintaining the required quality standards? They also follow Deming's PDCA Model, they believe in continuous improvement just like a circle has no end and for non-stop development and growth they use this cycle on regular intervals.

Plan:

After the research for a long period of time and taking into consideration all the aspects in their field of manufacturing loconotives and rolling stocks the managers in Hitachi had laid out the strategic plan i.e first they manufacture Japenese elctric locomotive then the bullet train and presently as well as manufacturing they are also engage in supplying the important components of the service administration for the bullet train. Hitachi concentrates most on their after sale services, they planned everything from the feedbak which they gained from their customers and evaluate the present and future market conditions and therefore they make their maintainence plan as well as plans for their new their new products.

Hitachi makes their customers comfortable and solve their problems makes them feel happy so that they can relia on the company as any other successful company Hitachi also beieves in customers satisfation. Hitachi provides the satisfactory level of maintenance management planning and support equipment i.e. on-board inspection tools and depot integrated management system.

PDCA Cycle-Japanese style of maintenance

Do:

This is the stage where all the planned activities have to be transformed into actual activities i.e. this is the time for action. Hitachi's aims to achieve high level of maintenance for which they used various systems:

  • Depot integrated management system
  • Ground based automatic inspection system,
  • On-board self-diagnostic system,
  • Material control system
  • Vehicle utilization system.

Hitachi used all thses system in order to achive their desired goals, total depot management system that combines the maintenance management system, the vehicle utilization system and the parts/material control system. With the help of this process company can contribute in labour saving [Hitachi maintenance system, 2007].

Check:

This step is basically in which you go thru your experiment, analyse the outcomes and identify the knowledge what you have gained. Hitachi with the help of the depot integrated management system data and effective staff allocation keeps an eye on the progress and functioning of its business activities. Hitachi is producing railway products for a long period of time and its obvious that they have good and effective knowledge about their manufacturing system, in this step Hitachi can check its formal and informal assessment constantly for a longer period of time.

Act:

As we know Hitachi produced first electric locomotive in 1924 and they used their local technology system and they have majorly contributed in the manufacturing of bullet train. With the product like these, Hitachi is not only dominating the market but also maintianing their quality standards andtheir technology which help in continuous improvement.

Anderson, J.C., Rungtusanatham, M. and Schroeder, R.G. (1994) developed a theory of quality management underlying Deming management method. They proposed that: the effectiveness of Deming management method arises from leadership efforts and at the same time creating a cooperative and learning organisation to facilitate the implementation of management practices, which will lead to support customer satisfaction and help in organisational survival as well as in the long run.

2.5.2 Juran's Approach to Total Quality Management:

Juran's, J.M. (1993) approach is laid through emphasis on teamwork and project work, which can promote and improve quality as well as improve communication between management and employees. According to Juran TQM is the system of activities directed towards achieving delighted customers, empowered employees, and focuses towards higher revenues with lower costs.

According to Juran, it is very important to understand customer needs and requirements and each and every department like marketing design, manufacturing, and services should apply this requirement. Identifying customer needs requires more vigorous analysis and understanding to ensure the product meets customer's needs.

2.6 Implementation of TQM practices by SMEs in U.K.:

TVR being a small firm are proud of having detailed knowledge of their small band of customers; they even have a social club that is very well attended, the TVR Car Club [TVR Car Club, 2007]. Consequently they know before any competitor who their customers are, what they think and how they live. So there are many advantages to being small. This customer focus of TVR one of the major claims of the TQM methodology for as we know TQM is a customer-focus system, which is very important for large business organisations in the same way, it is vital for small business also. 'Government and EU market are beginning to see SME sector as an important engine of growth', (Carter, K., (1993) pp. 16-18.)

When a particular SME organisation move towards setting effective quality system in the company, sometimes they have to face few problems or difficulties which obstructs them in setting the standards for total quality management. Some of the problems like lack of financial resources and expertise for quality issues, poor delivery service, lack of Benchmarking, low morale among the employees and less ways of incentives and sometimes there is a bad impression among the public regarding the quality image of the organisation. Following are some of the optimal solutions for these difficulties, which enable the SMEs to implement effective TQM:

  1. Most of the times arranging financial resources is the major issues for SMEs while implementing effective TQM. SMEs can obtain funds from external resources such as Training and Enterprise Councils (TECs) that support quality initiatives and help the companies in the arrangement of funds. SMEs should learn from the success and failures of the organisations that has already developed TQM. In 1957 Ray Saidel (First TVR Dealer) helps in the manufacturing process of TVR cars, he built a new design with better quality system and the car was named 'Jomar' which becomes very popular and large amount of orders were coming and company had some financial issues that's why they were struggling in keeping up the quality of the product, for this they transformed the company in 1958 under the name of Layton Sports Car Ltd and with the help of some financial institution there problem of finance was solved[TVR, 2007].
  2. SMEs has to make sure that through proper training and development there should be a cultural change in the organisation that reflects the required level of quality service and allow the employees to develop and maintain their own quality manuals. There should be a beginning point where quality definition should be laid which explains everyone what are the requirements of the customers which company has to fulfil. SME like Hitachi: Hitachi and Japenese train maintainence system work along each other and try to achieve the high level of maintainence but at the same time Hitachi spent huge capital and time in training their employees and teaching them all the related business activities as Hitachi rely on their people and understand the importance of lives of many human beings so they work according to the Health and Safety measures adopted by the company in this training progress [Hitachi, 2007].
  3. As we know sometimes there is a bad impression among the public regarding the quality image or brand name of the company. Management should set some marketing campaigns that explain the change of quality and attitude towards it which has adopted by the company and should also enables them to understand the change of quality standards for the required service. In researcher's example of the SME like TVR they also have to struggle for their brand name for a long period. After the launch of their second car named ‘JOMAR', people loved the car and quality of the car was highly appreciated. At the end of 1958 due to some problems TVR has to close the American market because of which they have to cancel many orders of their customers which spoiled the reputation of the company and In 1959 when they launch their next car named ‘GRANTURA', they adopted various marketing strategies to explain their customers regarding the quality of the product and as well as the company [TVR, 2007].
  4. Feedback is very important for the company so they should always promote the positive feedback from the staff and make sure they shouldn't miss the chance of praising the staff at each and every moment and giving employees awards for delivering quality service and helping the organisation to reach its targets (Bean, J. & Hussey, L. 1998). Hitachi rely and believe in their employees, they believe that if employees of the company are happy then only they can keep their customers happy so they consider their employees suggestions and feedback in various important decisions and they have different bonus schemes and targets for their employees which help in motivating them and on their achievement they do get rewarded [Hitachi, 2007].

There are few steps, which are vital in the task of implementing TQM in the organisation, and the senior management has to be very careful while laying down the plans for implementing TQM in the company. The first step for the company is from where to start and sometimes this step may results in so much of difficulties for some companies that they never implement it. This step is known as (TQP) Total Quality Paralysis, which laid down the foundation of the whole TQM structure. Most of the companies start from the next step assuming that they have right quality system information and awareness in the company but there is an existence of some gaps in their quality system. A proper understanding of TQM process is important and which should be translated into plans, policies, procedures and actins for TQM to exist. There should be an effective strategy for the implementation of TQM, which should be developed by the top management through successful leadership without which all the efforts and work will lead into frustration

The implementation process begins with the establishments of quality policies and organisational structure, which will lead to managing and encouraging quality through effective teamwork. It is vital for all the managers to make planned improvement at early stages of the TQM process which will help in setting the quality system in the right places, in order to solve the problems using corrective measures and actions. The next stage of this process is training, development and continuous education of all the employees regarding the adopting of new quality system. SMEs should understand the importance of training process, it should be continuous and all the stages of the TQM process should be laid down in a cohesive program of introduction. The as there is a change in the culture and operational activities of the organisation, there should be an effective communication between the employees and management otherwise this change will lead to the waste of resources and time (Oakland, John 2005).

When an organisation decides to implement TQM, it's usual that they have a good knowledge of quality and its management process. To have a successful planning stage a company requires senior management commitment, right quality policies and procedures and effective organisational structure. There may be a formulation of council or committees, which protect the actual performance through teamwork.

The next step is process improvement, which should be launched, in a right order and it is based on the three conditions without which effective quality system will not exist and it will satisfy customers with a reasonable share for SME in the competitive market. The three conditions are:

  • There should be a successful management system without beginning any activities
  • Statistical Process control (SPC) shouldn't be started without good operating procedures.
  • A quality system alone without successful teamwork and SPC will operate ineffectively

SMEs should develop a strategy for the implementation of TQM process by acquiring the knowledge of core business processes. To identify the improvement activities for the SME with people development can only be done through process analysis, benchmarking and self- assessment. The framework for the implementation of TQM explains the vision, goals, mission and critical success factors (CSFs) whose progress can only be determine by performance-based measurement. Once the top management has clearly established the objectives of the company after that they always think of ‘how to achieve them?' As seen in the figure above CSFs enables the management that they are moving towards the right direction or not. Identified Key performance indicators (KPIs) with CSFs will help the SME to understand its core processes with which the process analysis can be done either by mapping or flowcharting and with the help of this analysis all the available business opportunities can be understood.

At this stage only ISO 9000 system can be identified and benchmarking helps in continuous improvement opportunities and will lead too many tasks to be fulfilled that require training and education. Business process re-engineering helps in observing some of the processes which are going pretty well and can be linked with on-going improvement system and some of the processes should be revised or redesigned which are not going well. This research study explains the need and importance of TQM in the small and medium sized businesses. If SME concentrates on the TQM process and make sure that all the steps are used and integrated properly in the business then they can easily meets the requirements of the customers and can satisfy them with good quality and can achieve the desired targets. (Oakland, John 2005)

2.7 Using ISO 9001 as a TQM Program:

ISO is the International Organization for Standardization and is a network of the national standards with institutes in 148 countries having the Central Secretariat in Geneva, Switzerland, that coordinates the system Stott, H. ISO 9001 is the latest version of total quality management and thousands of company has adopted this method worldwide. This standard is much simpler and easier to understand then from 1994 series of standard. It is more towards the process-based approach, which believes in ‘what you do'. It is much more flexible now and we can see a proper balance between the work and the workers involved.

Although Total Quality Management (TQM) came on the scene first as a method for companies to improve profits and repeat business, complying to the ISO 9001 standards is the first thing a company should consider to improve the way it does business (Cronin and Taylor, 1992). People and process act as two actors for ISO 9001 quality system that comprises of proper description and documentation of all the business activities everything that happens in an organisation does so by virtue of someone doing something. When this is represented by means of flow charts, it is possible to build a picture showing the process that delivers a service, the people involved at different stages and the relevant interactions between them (Pearch and Kitka, 2000).

The approach clearly delineates the core process - the way the organisation works. The principal strength in defining an organisation in these terms is that it is possible to represent the view from the customer, rather than those of managers, becomes the key objective (Blackham, 1994). The model discussed in the following subdivisions outlines the role of management by utilizing the internal resources and measuring performance levels. ISO 9001 laid down the entire necessary requirement for the total quality management of the company which ensures the ability of the company to produce good quality products consistently and fulfil the needs of the customers and at the same time focuses on continuous improvement with prevention of errors and mistakes.

2.8 Benefits of TQM to SMEs:

As we have seen above how important quality in to SMEs so there must be some benefits of quality. These benefits of TQM to SMEs are the outcome of the investment made by the company in the quality. (Bean, J. & Hussey, L. 1998, p.76)

TQM activities benefits the company with the great level of satisfaction as it improves the quality of the product which meets the customer requirements as managers feels satisfied with the quality of product as the are properly following and implementing TQM activities in their production process which helps in increasing the service output. TQM activities improve the working conditions like latest technology being adopted in the production process and with improved quality products it helps in the reductions of complaints. If all the TQM activities are implemented effectively it helps in effective utilisation of all the company resources that leads to reduction in errors and waste.

The company and the customers relationship totally depends upon the quality of product as the business is producing high-quality output with the help of TQM tools effectively which ensures in satisfying customer needs and builds a good reputation of the company's product and it's name in the eye of customer and as well in the competitive market. This helps in improving customer relation with the company. If Senior Management clears the use and objective of TQM process to all the employees in the company, it will result in effective work throughout the organisation that will lead to improvement in staff relationship with low stress and sickness level

2.9 Six Sigma:

2.9.1 Six Sigma Model:

Design for Six Sigma (DFSS) is a methodology for designing and re-designing new and existing products and/or process. It combines the concept of quality planning along with the goal of customer satisfaction. DFSS is targeted at design activities that result in a new product or a new design of an existing product (Tennant, 2003). DMADV is almost universally used to guide Six Sigma process-improvement projects which transforming the management philosophy and organizational culture (Pyzdek, 2003). It consists of five phases, which are Define, Measure, Analyse, Design and Verify.

In researcher's example of Dadoos Foodstore; they produce different kinds of products like rice bags, lentils and spices, their brand is one of the best sellers in the market. To maintain the reputation in this competitive market, Dadoos Foodstore has evaluated their performance and makes some changes in their product in the following:

(a) Define:

The Define phase of the DMDAV framework of Six Sigma methodology helps identify what is to be achieved and how to achieve it. This process is initiated with brainstorming between the Management and the chosen design team (Tennant, 2003). For example, Previous years feedback and sales report of Dadoos Foodstore;, managers have made few changes and laid down all the information what they need in their product's new design to the project designing team.

(b) Measure:

This phase helps in identifying the key customers, their needs and the measurable critical-to-quality (CTQ) requirements that are essential for the product design (Pyzdek, 2003). In other words this phase helps in laying the design framework and at the same time also forecast the 'error level'. Coming back to Dadoos Foodstore; the team has to identify what customer needs are, what exactly they are looking and expecting from the product, latest technology and after evaluating these requirements then the next phase is to analyse the product design.

(c) Analyse:

In the Analyse phase, a design is shortlisted from the various other designs that are laid down. This phase requires doing in-depth study into and tests variations of the selected design (George, 2002). Dadoos Foodstore having analysed the performance of their product selects a particular design for the new look of their products.

(d) Design:

This stage helps in building on the selected design to check the feasibility of that design for production, customer needs, quality etc. In order to understand the said feasibility, simulation, prototyping and pilot testing are undertaken (Creveling et al., 2002). E.g. Dadoos Foodstore; has changed the design of their product to compete in the market by using different designs and colours for different culture and changing the look after a particular period of time and promoting new products with different offers in the middle of the season to attract the customers that will helps in increasing sales.

(e) Verify:

This phase helps in identifying the measurement of the selected design for its manufacturing ability while maintain the required quality standards and above all financial feasibility of producing the said design. This phase also helps in checking the longevity and services issues (Tennant, 2003).

2.9.2 Using Six Sigma as a TQM Program:

In early 1980s Six Sigma was originated in the company called Motorola and since then six sigma tools and theory have developed internally and externally as strength of the company which enables the company to satisfy customer needs and produce good quality products (Creveling et al., 2002). Six-Sigma is a Quality Improvement Process (QIP) and can be considered as a sub-set of TQM (Pyzdek, 2003). It is a perfect tool for Total Quality Management with rigorous and a systematic methodology that utilizes information and statistical analysis to measure and improve a company's operational performance, practices and systems by identifying and preventing 'defects' in manufacturing and service-related processes in order to anticipate and exceed expectations of all stakeholders to accomplish effectiveness (isixsigma, 2007).

For the successful deployment of a Six Sigma program there should be visible commitment from the management level that all should understand the needs and wants of the customers and this whole process of understanding are essential for the management not only to maintain and satisfy the old customers but also to attract new customers. Management should select the right people for the Six Sigma projects and should then specify a measurement system that can measure the performance of the process of Six Sigma project with the strategic objectives of the business. Management should also keep in mind while selecting the people for this job that all these employees are properly trained and expertise for this project (Antony & Banuelas, 2002) Six Sigma helps in transforming customer's needs into value and divide them into different tasks or steps that can be performed properly. Each of these steps can affect the quality and design of the products or services. There should be an ongoing training and development of employees and management should make sure that the process of eliminating of waste and errors should exist. Although, there are various tools and models that are deployed by Six Sigma but the following subdivisions attempt to analyze the specific tools, processes and approaches relevant to the manufacturing companies Six Sigma Model.

CHAPTER 3

Research Methodology

3. RESEARCH METHODOLOGY:

In this section researcher has talked about the overview of research methodology in the form of qualitative and quantitative research technique. Researcher has taken case study approach, which enables him to talk in brief about the topic and implementing it on a particular company and analyse the result. Moreover, with the help of a case study the applicability of a subject in a working example that is tested and tried by researchers is easily understandable. However, since different situations demand different solutions, a case study example helps is highlighting the known issues faced by various researchers.

As described by Robert K. Yin, 'the case study research method as an empirical inquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used' [Yin, 1984].

Furthermore, the case study method helps researches in understanding the complexities of decision-making by managers face on a daily basis. This in turn helps the student to bridge the gaps between the theoretical knowledge they have gained and the practical implication of a particular subject faced by working managers in real life situations. The Harvard Business review describes the case method as 'the case method creates a classroom in which students succeed not by simply absorbing facts and theories, but also by exercising the skills of leadership and teamwork in the face of real problems' [Hbs Education, 2007]

According to Saunders (2003) information collected for purposes other than for the specific research in hand but which offers an insight into the field being investigated.

Secondary data was collected first and then primary data so that the researcher can understand the information given by secondary data and if there is any missing information that creating any gaps that researcher can complete with the help of primary data collection.

3.1 Research Philosophy:

This study includes TQM and its application with Small Medium-sized Enterprises that justify the growth of the TQM concept and its implementation procedure. The research then considers the relation between SMEs and TQM for which researcher has taken a specific case study of TMD Technologies Limited, U.K.

The main purpose of TQM research by TMD should be to understand its latent use in order to improve their business activities and to help it to direct its quality standards. TMD's case study has been taken into deep consideration including all various departments, manager's notes, key personal of the company have been interviewed and researcher has done the SWOT analyses of the information obtained.

3.2 Secondary Data:

In this research, it was felt that secondary data composed was most appropriate to the task at hand. The secondary data consisted of material available in literature on TQM and SMEs (articles etc):

  • Articles from various online databases and online Library Resources
  • Books by various authors on TQM and SMEs

Information that the researcher has taken from online was to explain and understand the concept of TQM and SMEs and to measure and manage their performance. Also, it helps in understanding the need for a performance measurement tool such as Six Sigma This tool was mostly discussed in the literature review of this research, Therefore; the secondary research was undertaken ahead of the primary research. Other various performance tools were used to evaluate the actions of the firm used in the case study i.e. TMD Technologies Ltd.

Data included in a Case Study is important to evaluate to the research topic as TMD Technologies Ltd, a Small and Medium-sized Enterprises that implemented TQM approach to manage and measure their quality performance. The Secondary data was collected mainly with the help of balance sheet, annual reports, management reviews of TMD Technologies Ltd and articles from books, journal, magazines and internet based resources on the subject of TQM and their measurement process, which would further help in evaluating the suitability of various tools to manage multiple strategies.

3.3 Primary Data:

Primary data is best used to supplement secondary data by giving a recent and live example. The Researcher contacted TMD and has gathered information from the heads of Quality Department of TMD to understand how TMD is implementing TQM and discover their predictions for the future. Interviews help the researcher in experiencing the actual working of a TMD. It enables him to develop the experience of evaluating the use of TQM at TMD. TMD was involved in using previous year data and evaluated the future targets and then measuring their performance.

Moreover, while interviewing them on various issues of TMD's performance, researcher faced a situation where managers are managing and measuring multiple strategies in a single framework. This case was based on TMD and highlights their approach towards TQM. To reach a conclusion for this, practical case study was taken in this research as primary data to identify the possible routes where TQM can be used to manage multiple and improve their quality issues. TMD Technologies Ltd - a practical example was undertaken by the researcher to identify the relevancy of TQM approaches taken in SMEs and its benefits.

3.4 Qualitative versus Quantitative Research

Data can be collected in two ways i.e. Qualitative and Quantitative. Both the methods are effective in their own way; both have their own strength and weaknesses.

Quantitative method utilizes the standardised techniques so that the changing perspectives and experiences of individuals can put together in a restricted number of set categories, to which information are assigned (Maanen, 1983) where as qualitative method enables the researcher to look in detail for various issues related to the research. Quality decisions can be made without being affected by predetermined activities of the research, which contributes in detail (Silverman, D. 1995)

Quantitative method is much broader and easy to understand and can give more accurate results than qualitative method. It measures the reactions of different people for a particular set of questions which help the researcher in comparison process and come to the conclusion which is more accurate where as qualitative method provides detailed information about a less number of people and helps in understanding the various cases and situations with less generalization (Patton, 1986).

3.5 Semi-Structured and In-Depth Interviews:

Interviews are very important for researcher for his research, with the help of which he can produce the outcome of the particular topic in more detail and can link it with practical situations. This is the discussion between more than two people. The person who is taking the interview has to lay down a set of questions that he will ask in the interview in advance. In the short period of time researcher can get the information quickly with the help of interview, which in turn motivates the interviewees to promote their respective quality system of their companies.

To build the framework of TQM many researchers used these interviews as a tool and their intentions are to carry out their research in exposed manner. While conducting these interviews, researcher has to establish some quality issues and should make sure that if there is lack of standardisation in these interviews it may lead to concerns about reliability (Robson, 1993). Researcher collects all the information provided by the interviewees about their TQM implementation practices, since the interviewees did not allow to record any interviews, the information provided by the key personal are used in building a case on TMD is analysed and are highlighted throughout the chapter 4 of this research paper.

The main issues faced by the researcher in undertaking and scheduling the interviews with key personnel at TMD as sources of primary data are as follows:

  • Due to limited time available to the managers, the interviews were time-bound, hence not being able to undertake extensive conversations.
  • As TMD is a listed entity, the managers were unable to provide key facts as the information might be sensitive to financial markets.
  • The Interviewee's neither allowed the researcher to record any details.
  • Due to non-availability of key personnel, the researcher only interviewed personnel pre-selected by TMD.

CHAPTER 4

TMD Technologies LTD

Case Study and Data Analysis

4. TMD Technologies Limited:

Company Profile:

TMD Technologies Limited formerly Thorn Microwave Devices Limited) is based in Hayes, Middlesex, England and has a turnover of approximately £12 million which shows that TMD represents small business sector. TMD has an experience of six decades in the sophisticated field of microwave amplifier technology with the good quality reputation. TMD has extensive experience and capability in all aspects of the design and some of the world's top engineers on the board who are specialist in manufacturing of Microwave Tubes, Microwave Amplifiers, Power Supplies and Microwave Receivers for the following main applications:

  • Radar,
  • Electronic Warfare,
  • EMC/RF testing,
  • Communications,
  • Laboratory and Medical.

TMD Company was formed in 1969 under the name of EMI Varian. Following there was the merger between EMI and THORN in the early 1980s and the Company name becomes THORN EMI Varian. TMD has all the in-house skills and resources to bring their customer an impressive range of product and services. In 1989 the joint venture with Varian was terminated and the Company was renamed Thorn Microwave Devices. In 1995 the Company completed a management buyout from THORN EMI plc and in 1996 moved to its new headquarters in Hayes. It is now ideally positioned to exploit its considerable technological advantages. In June 2000 TMD officially changed its name from Thorn Microwave Devices to TMD (TMD Quality Manual, 2006).

In order to fulfil the complex requirements of manufacturing these highly sophisticated products. TMD has available a wide range of specialist skills, processing techniques and they strongly committed to the following principles:

  • Teamwork to achieve a common goal: They know that teamwork inspires individuals to achieve higher levels of performance through sharing knowledge and experience and working in teams provide greater support for the company to achieve their common objectives.
  • Quality in everything they do: TMD Technologies Limited is approved to the rigorous quality standard BS EN ISO9001: 2000. Their quality philosophy is seeking to install quality awareness and continuous improvement in all departments and at all levels of the organization [TMD, 2007].
  • Constantly innovating: They value innovation and actively encourage new ideas. Their commitment towards innovation help them to improve continuously the way they work, the products they make and the standard of service they offer to their customers.
  • Customer comes first: Any company in this world doesn't matter how big or small is the company they all exist on their customers so TMD also exist on their customers. Their survival and growth depends solely on how well they meet their needs of the customers. They believe in behaving in the highest level of professionalism, honesty and integrity and thus create a feeling of mutual respect.

TMD Technologies is regularly audited against, and approved to the rigorous quality standard BS EN ISO9001: 2000. However their quality philosophy goes beyond this seeking to install quality awareness and continuous improvement in all departments. The following are some of the most important aspects: [TMD, 2007]

  • Expert design of products at the outset, achieves optimum performance and reliability.
  • Development of 5S Initiatives taken from the Japanese approach to quality - (Sort, Set in Order, Shine, Standardise and Sustain).
  • Inspection and quality control during production and test.
  • Photo flow quality control systems to reduce ambiguity and improve consistency.
  • Systematic cause & effect failure analysis to enable problems to be solved quickly.
  • Supplier improvement initiatives and ship to stock policies.
  • TMD operates a continual product and process improvement policy using customer feedback and live, regularly updated quality databases.

In chapter 2 we discussed about TQM, its principles and how its work in the organization. In TQM implementation process first of all company's present position has to be assessed and look at history of the organization for the relevant preconditions and precipitating events leading to TQM. Its very unlikely TQM will succeed if the present figure does not include the vital preconditions. TQM is easier to operate if the firm keep verifying their work in the market.

4.1 TMD's Quality Management System:

Interviewing key personnel at TMD, researcher found out that Quality Management System followed by TMD is fully documented and all the legal procedures and process are recorded and maintained by the quality department. There are few Programmes and systems like the Problem Reporting System, the Internal Audit and External Assessment Programmes, Monthly Reports which followed by the company to continuously review their quality management system and quality are discussed at the TMD Board meeting, which is held once a month (TMD Quality Manual, 2006)

 

TMD's Documents within the Quality Management System are divided into four general levels:

In this stage quality manager is responsible for all the prescribed and legal policies are followed before going to the next stage and most importantly considering the health and safety and environmental policies. The documents are mostly in soft format and if the company has to make any change in them they have to use of the Change Note that is filled in the Configuration Control Administration process. The entire quality files are recorded so that successful activities from the quality department can be achieved, to make sure that the actual plans are in line with the laid plans so that the company can produce good quality product and services which an meet the needs of their customers. In the TMD Board meeting they also laid down few Health & Safety rules and regulations and Health & Safety representative has to devolve all these policy in the Health & Safety System of the company.

TMD uses Quality procedures and process diagrams, where practicable, as the branch of improvement process. This is an ongoing process. To support the quality objective, all the employees in the quality department are busy in developing the database for the company and reports produced from the quality database are first analyzed and then they are forwarded to the Senior Management team. This is an ongoing process of feedback of information for the company towards continuous improvement and in turn will lead to the definition of SMART (Specific, Measurable, Achievable, Realistic, and Time).

As we have seen in chapter 2 Principle of TQM, let's relate them wi


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