Total quality management - Literature review

Literature review

The world experienced the quality revolution in the early 1990’s. From that instance organisations were improving in overall quality of the organisation. The companies around the world competed with their quality of products and services, price and delivery. Organisations believed that by improving the quality, they can achieve lower cost, fewer failures and better marketability.

In this period total quality management became popular. TQM is applied in organisations to improve its effectiveness, flexibility and competitiveness, by improving the overall quality of the organisation. It is focused mainly on continuous improvement. TQM is nothing but a philosophy and guide to organisations, which helps them in ways towards continuous improvement. TQM is a combination of system of systems. All the companies have not achieved competitive advantage or benefits using TQM is because of implementation and usage in the organisation. To be successful with TQM the indicators which are to be achieved by an organisation are the leadership, continuous improvements, internal or external co- operation, customer focus, learning, employee fulfilment and process management.

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According to Hansson and Klefsjö (2003) TQM can be defined as a management system, which consists of three interdependent units, namely core values, techniques and tools. But the definitions for total quality management are vague. The aim of TQM is Zero defect and it mainly emphasis on quality. The core values of TQM which will lead to better quality in the organisation is summarised from the authors (Boulter and Bendell, 2002, Ehresman, 1995, Ghobadian and Gallear 1995, Hansson and Klefsjö 2003, 2006 ) it is divided into three parts, first the whole organisation has to committed and work towards common goal i.e. continuous improvement. Secondly the customers are to be focused, through better satisfaction in the products and services. The decisions made with regard to customers are to be given the highest priority by top level management. Thirdly the decisions must be taken with trusted facts and figures.

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• Boulter, L., Bendell, T. (2002), “How can ISO 9000:2000 help companies achieve excellence? What the company think”, Measuring Business Excellence, Vol. 6 No.2, pp.37-41.
• Ehresman, T. (1995), Small Business Success through TQM, ASQC Quality Press, Milwaukee, WI.
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From the definition and study it is stated that the environmental management is a part of quality management. When the organisation is moving towards total improvement in performance, the environmental performance has its presence. Governments and agencies around the world created quality systems to help the organisations to achieve their quality objectives through quality management systems and environmental performance in environmental management systems. The QM and EMS share a common aim and values. QM and EMS are integrated now.

According to Wilkinson and Dale, 1998 and Karapetrovic and Willborn, 1998 integration can be carried out in many different ways but, the results differ in terms of applying it and it is also called as system of systems.

• Wilkinson, G., Dale, B.G. (1998), “System integration: the views and activities of certification bodies”, The TQM Magazine, Vol. 10 No.4, pp.288-92
• Karapetrovic, S., Willborn, W. (1998), “Integration of quality and environmental management systems”, The TQM Magazine, Vol. 10 No.3, pp.204-13.

For example the ISO has developed management systems separately for quality management and environmental management i.e. ISO9000 for quality and ISO14000 for environmental management. Integration was done by the technical committee in 2004 between quality and environment systems. They had explored the common factors between two systems and modified ISO 14000-2004 to enable organisations to use both systems at once. This resulted in superior performance in many organisations. They introduced the PDCA which is common for both systems. Bernardo et al, 2008

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Environmental management and quality management are parallel to each other. They have common factors like zero defects and no wastage and the process of implementation with corrective and preventive actions. But some basic value does not integrate, exactly with each other. QMS mainly concentrates on consumer requirements and on the other had EMS focuses on the environment. According to Chinn a new concept was formed in late 90s which was named as QEMS which means quality and environment management system. It has stated the common elements they worked upon. They are planning, objectives, management responsibility, communication, training, control of records and many others.

So when an organisation need to equipped with total quality system, the EMS will also must be in place to monitor the environmental sustainability measures from the organisation.

What is Benchmarking?

In the present business scenario, quality has become a major criterion in all aspects of the organisation, so the managers have taken up quality improvement tools such as total quality management, quality function development and continuous improvement. The exertion of these tools is to discover the flaws in the organisational process. The next step is to convert these flaws and improving the component. Here the question rises of how to fix these inadequacies?

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Benchmarking is the way to fix them. As benchmarking is a quality improvement process. It is a systematic process of searching and monitoring the best practices in the sector. Benchmarking has been the concept of imitating the best practices in the industry. Organizations have to achieve cost benefits, better operations and better environment by which it induces the company to learn quickly and cheaply from adopting the best practices and performance standards from other companies in order to get better competitive advantage over its competitors. This can be extended anywhere because the ultimate goal is to be best in class.

Benchmarking is commonly used tool in the organisations. This technique can be implemented in all sectors and it is due to increasing competitiveness. Benchmark means to a unit on a scale for measurement. It was a fashionable concept for the large manufacturing companies which predominantly uses quantitative economic parameters, such as inventory turnover, set-up times, lead time, direct labour time or working time, return on sales, return on equity are measured.(Miller et al.,1992). Nowadays benchmarking is used everywhere and it is used to measure any process, activity, procedure in an organisation which may be of products or services.

Many authors and literatures have given many different forms of definitions for benchmarking. Definitions from Sarkis, Andersen and pettersen and Marosszeky and Karim are benchmarking means comparing the practices, operations, results of an organisation with the best organisation in the sector and adopt and practice the techniques used in there to improve one’s own organisation. And it focuses on continuous improvement, in quality and helps to learn from the competitors. Through which the faults and breakthroughs in the organisation can be easily identified and systematically dealt with. It also helps in improving the overall quality and business environment carried out through learning from each other. It forms a continuous and systematic improvement in an organisation’s processes, products and services which are being monitored and adopted from the best practices globally or nation wide or in a particular sector.

Benchmarking is used to achieve and maintain high level of competitiveness. It monitors the continuous improvement by the process of measuring the products, services and business practices against the best practices in the industry. The organisations strengths and weakness can be easily identified and measured with the best and toughest competitors in the industry.

Best practices is finding and using the best ways to achieve the desired objectives in the organisation. It is done by imitating the practices and processes of the organisation who are leaders in the sector and measuring the ways it worked with.

Benchmarking can be done in five steps for an organisation. Firstly the required data are collected in a planned manner from the organisation and the data is converted into a report format, which make it easy for analyzing the situation. After creating a report the gaps are to be detected and corrective action has to be implemented to fill the gaps. When the gaps in the organisation are corrected, review has to be done in regular intervals and reported. It is compared with best practice in the industry.

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Many organisations are not aware of what needed to be benchmarked. because of the lack of management knowledge. A key issue is that what to benchmark in business or an organisation. It is mainly used to compare and measure of business and product performance and how it is extended to the business processes. Determining the issues to be benchmarked is a critical issue. The following questions can aid to the question of what to benchmark with environment (Cassell et. al.., 2001)

• To find the critical factors which are of organisation’s success
• To find the process causing the trouble in the system
• To find the process which contribute to maximum customer satisfaction and in which the performance is not to the expectation
• Examine and define the competitive pressures impacting the organisation
• What the processes which have the greatest potential for differentiating in the business competitiveness?

Environmental benchmarking

The environmental benchmarking is derived from benchmarking and it mainly focuses on the natural environment. It helps the organisation to become green and eco efficient by adopting the practices from the leaders in industry. It is also a quality improvement tool and has become very essential to an organisation. They are used to achieve environmental performance in the organisation i.e. it helps the organisation to manipulate on the natural environment. It is adapted in many organisations due to the pressure from stake holders, public and authorises.

According to Greeno and Robinson 1992, “Demands on companies to measure, document and disclose information about environmental performance will become invasive….and environmental performance will become a critical factor to scrutinize”. It is been predicted a decade ago, and the governments has now made it mandatory and bought it to the legislations that organisations must be environmental conscious and friendly.

According to Szekely, et. al.., 1996, Makrinou et al 2008 and Mandaraka, et. al 2003 Environmental benchmarking is used by various organisation in their practices, process and in business operation to achieve environmental efficiency and environmental performance. The tool framed to rigorously concentrate on every activity of the organisation and examines and compares the process to achieve its objectives. The process is the elimination and rectification of weak activities and processes in the organisation and the objective is to identify and access the abilities and attributes in business to achieve maximum environmental performance.

Most of the weak activities cause heavy pollution and burden to the environment. The weak process and activities are very dangerous to the environment and life. The world in has seen many industrial disasters in last two decades due to unhealthy practices and operations by the environment. The best examples are the

Efficient and maximum usage of virgin materials in the organisation, recycling of waste, waste, treatment plant to neutralise end pipe discharge, maximum utilization of assets and machinery and power saving equipments and minimum usage of non renewable resource.

Minor modifications in the process of operations in the organisations, will lead to lesser impact on the environment and can avoid these kinds of disasters in future. The improved process, practices and operations can be identified from the best practices. Benchmarking tools helps in finding the best practices in national and international level. Environmental benchmarking is an integral part of environmental management systems. This helps in setting up of goals and targets for an organization towards environmental efficiency. It also helps in monitoring the performance of the targets which are to be achieved towards better environment. It is one of the tools used in management systems like EMS (Bolli and Emtairah 2001).

Environmental management system

EMS is a management type system which aims in managing the environmental aspects of the organisation in a pro active way, and it directly relates to the organisation’s overall performance. It relates to the process, practices, products and services and day to day operations. The main objective of Ems is to continually improve the environmental performance of the organisation with overall performance.

Ems is a collection of policies, statements, assessments, plan and actions which directly or indirectly affects the organisation and its performance. Organisations achieve environmental performance with Ems in a systematic manner. It is a continuous cycle which plans, implements, reviews and improves the practices and processes of the organisation for continuous improvement towards environmental sustainability. Ems mainly focuses on minimizing the environmental impacts of the organisation on the natural environment.

The main objectives of Ems for the SMEs are

It induces the organisation to have an environmental management system. It assists the SMEs in understanding the concepts of Ems in their operations, in order to help the management to adopt precisely. This reduces the impacts on natural environment and it is easy to comply with the regulation. This helps in cost savings and increased productivity. The third objective is developing a awareness with the SMEs entrepreneurs, regarding the importance of environment and the organisation’s impact on them. It helps the SMEs in creating a strong foundation to implement the international standards like ISO and EMAS in organisations.

According to British standards institute, Ems is defined as “the organisational structure, responsibilities, practices, procedures, processes and resources for determining and implementing environmental policy. According to BSI is nothing but an environmental policy which outlines the organisation’s commitment to the environmental performance.

Many organisation in different countries follow and adopt the environmental management system such as BS8555, ISO 14000 series, EMAS, Green dragon. But in common it works on the Deming Cycle. “Plan, what you are going to do, do what you planned to do, check to ensure that you did what you planned to do and act to make improvements”.

SMEs adopt EMS

EMS is an unobserved quality. It can be examined only by the drivers, practices. The organisations are motivated to use EMS and its environmental strategies to increase their efficiency and legitimacy. It is very controversial because from the study of —— states those SMEs are not only motivated by the rewards and befits such as environmental performance, organisational/business performance and export orientation but they are pressurized to adopt EMS by their stake holders and institutional pressures.

According to Khanna and Anton 2002 EMS becomes complete when they are more environmental practices is undertaken in the organisation. The environmental practices are the environmental policy, evaluation, training for employees, regular audits of internal and external in nature, environmental performance and benchmarking with the best practices, goals and targets and public report.

Motivation and EMS

Motivation is the driving force behind for an organisation to implement a management techniques or tool or system in their operations and business process. The factors and statistics which can be used to motivate the organisations to implement EMS in their organisation and in the same time become environmentally sustainable and reduce the impact on natural environment. The factors are the organisation can achieve compliance with the regulations of the government, it creates an eco friendly image to the stake holders and better marketability options and it also reduces cost with greater organisational performance.

Export orientation

In the globalised world export and import has taken the centre stage. Export orientation becomes imperative when organisation operates within or depends on the foreign markets. When the goods are carried out of national borders EMS becomes essential to meet the demands of the importing country and the needs of diverse customers. Buyers gain trust of exporters by looking into the operations and eco friendly procedures and facilities implemented in the organisation.

EMS and organisational Performance

A management system is framed and practiced in the business is to gain from the management practices. The gain or benefit can be in the form of monetary benefit or non monetary benefit.

EMS and environmental performance

EMS and pressure on SMEs

SMEs are exposed to stakeholder’s pressure to adopt environmental management system. The stakeholders are person, group, organisation or the government which has a direct or indirect stake in the organisation and can or would be affected by the organisations policy, decision and operations. The stake holders for an SME are

Regulatory pressure

The regulatory pressure is created from the regulators, governments, insurers on the organisation to curb their pollution levels and employ eco friendly operations and which doesn’t impact the natural environment. If the organisations fail, it is imposed with fines, penalties, strategic actions or even closure of firms. The regulatory pressure creates an opportunity for the organisation to become more competitive and capitalize of the situation. But when the regulation becomes stricter, the SMEs are compelled to implement costly pollution control technologies. Better pollution control leads to lesser insurance premiums and better credit options from the bank and financial agencies.

Market pressure

In this competitive world the organisations are concerned about the market share. Customers have become concerned about the natural environment and they have started to use the products and services of the organisations which are eco efficient and sustainable towards the environment. When organisation adopts EMS it increases organisation’s reputation. The market pressures drive the managers to adopt EMS to survive in the business and to stay competitive.

Social pressure

An organisation must have a better public image to survive and competitive in the market. To gain the image the organisation need to become environmental friendly and work towards continual improvement. The word social include the environmental organisation, community groups, labour unions and association which regards to trade. There is been a increase in awareness towards the natural environment in recent times because of industrial accident like Bhopal disaster and Exxon oil spill which shock the world. When an organisation does not implement EMS in their organisation the worst scenario of boycott of goods and it may damage the image in the business environment.

Ownership pressure

This pressure is imposed on the organisation by their share holders. In SMEs the share holders are in the form of partnership within the company. The pressure is on the organisation to adopt EMS with wide-range of tools and techniques to create an environmental friendly organisation. Organisation is prone to financial liabilities when it has a poor reputation in terms of environment and performance.

Internal and external barriers to SMEs in adopting EMS

Internal barriers are of resources, understanding and perception, implementation and attitudes and company culture. SMEs are lack of time from the management and staff, to concentrate on EMS implementation and maintenance. Staffs in SMEs lack managerial skill and it is not possible for SMEs to give training due to the constraint of limited resources. When there is an inexperienced or unskilled staff force it becomes difficult to implement EMS, because lack of understanding of the procedures, policies and legal compliances. Implementation of EMS is very cumbersome. Minor breaches in the implementation would cause a heavy loss of resources to the organisation and possible deregistration from the standards. SMEs have to concentrate on continual improvement and it is very difficult to adopt in every stage on the process.

The external barriers are the obstacles and hindrances which arise from the external environment of the organisation. High costs of recruiting a consultant and verification/ certification is a major barrier to the SMEs. They are limited number of verifiers in each country and it becomes more expensive to hire. SMEs are not beneficial with EMS because of change in economic climate and Uncertainty which prevails within the market for the value of EMS standard.

Benefits and disbenefits of SMEs adopting EMS

Small and medium scale enterprises around the world share common characteristics. According to ———- SMEs around the world contribute 70 percent of pollution ie the SMEs cause great impact to the natural environment. So the EMS model was adapted to SMEs from large scales enterprises. SMEs adapting EMS face disbenefits or non materialization benefits from EMS in their organisation. They are being classified into three (i) resources (ii) surprises (iii) lack of rewards.

SMEs characteristics are it lacks professionalism, lack of knowledge, is has started with a minimum capital, lack of skills and time. They also have the barrier of specialized staff and skills to co ordinate the EMS activities in the organisation. The SME has to rely completely on consultants for the certification and adaption on EMS. It is evident that, some may misguide and it results in negative results and wastage of resources for the organisation. SMEs have to incur cost of certification and implementation which is of high capital expenditure to the organisation. which is beyond reach for many organisations. The EMS surprises the SMEs with resources and time spent to implement system which are complex in nature. The other surprises are it is difficult to meet the expectations of all stake holders, it difficult to synchronise with other management