In order to achieve the specific aims and objectives of the research it is necessary to carry out a literature review that includes a more comprehensive view on the Total Quality Management, Just-In-Time, Continuous improvement, Human Resources Management and Organisational culture and its competitive advantage in an Animal Feeds SME'S.
This literature review included various Theories, Models and Concept which would benefit the Quality Management approach in South Indian SME'S and at the same time it points out some condemnation relating to the overall philosophy. It also Point out different author's views about Quality and how it make as a strategic tool in South Indian SME'S and finally all the valuable data that are useful to the research are documented in the literature review that would provide a prepared model of the study and direct the research.
2.2 Total Quality Management
The purpose of this subject is to give facts about Quality Management, Which is considering, being one of the major topics in the research. This topic is clearly divided into three Sections from evolution of quality to its advanced development stage of Total Quality Management. First section discussed about the evolution of Quality and its continuous improvement over the decades and also present the clear connection between Quality and competitive advantage before set up into the function of Quality Management .The next section talk about its importance and benefits in SME's and the last section discusses about the Total Quality Management in South Indian Animal Feed SME'S and a common criticism against Total Quality Management.
2.2.2 Quality Management-The Basic
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Before widely discussing about the topic it is necessary to discuss about the birth of quality and its various stage of development over the centuries to achieve its final stage of Total Quality Management .The structural layout (Figure 2.1) provides a detailed view about basic definition of Quality to its final stage of TQM.
Evolution of Quality Management
Concept of Quality Management
The Five Function of Quality management
Integrated Quality management - The future
Figure 1: Structural Layout of TQM Development Model
The term quality is universal in present environment, due to the rapid development in Technology, unstable marketing condition and competition between similar products it is must for the organisation to apply quality as a strategic tool to drive business success. (Fassoula, 2006).
According to Kloppenborg and Petrick (2002), the quality has been practised over the decades, it begun in 13th century by the 'craftsman' in medieval Europe after that in early 19th century American follow the craftsmanship model from Europe, were the skilled workers are works to a master and master is the responsible for 'Quality inspection', This is the stage where the quality Inspection Concept exactly came into existence in Quality management. But unfortunately this concept fails to satisfy the customer requirement. At the time of industrial revolution the 'craftsmanship' model is restructured into 'Factory system' were craftsman are become factory workers and affected shop owners are act like a Production supervisor and if the product is found to be defective , it's either send for reworking process or Scrapped. Late in 19th century many American industries implement a new management approach called as 'Scientific Management' in order to achieve high productivity which is called as 'Taylor System'. This system of approach yields high productivity to many industries on those days.
Before the end of 19th century the quality has been inspected at the end of the product such as finished goods. Later on at the beginning of 20th century the American Physicist Shewhart introduce a new Statistical method in order to monitor and control of a process, this statistical method is widely known as the Statistical Process control (SPC) and he is also called as father of 'Quality Control'. According to Shewhart, it is not possible to provide the finest means of assuring non-defective batches of product through 100% Quality Inspection. The author also explains the difference between Quality Inspection and Control, quality should not be focused on finished goods but it should also focus on the process that created it. (James, 1996)
Later on mid of 20th century the term quality has been fully structured and polished where the Quality inspection and quality control are acts like a combined mission in the development of quality product . In this period, the term 'mass production' came into existence where the products are produced large in number and various parts of the products are manufactured by dividing the process into many smaller task and send it to different workstation to accomplish the process and finally all the parts are merged together to develop a product. From this stage onwards quality has been consider as an importance aspect of the organisation, in order to improve the process and to reduce the cost of the process. (Oakland, 2008).
2.2.3 Concept of Quality Management:
220.127.116.11 Authors views on Quality and Quality Management:
Always on Time
Marked to Standard
The term Quality is accepted by worldwide from individuals to all community of people; from small scale to large scale business but the way of practices would varies from place to place and from organisation to organisation depend upon the size, nature and structure of the organisation. (Dahlgaard et al., 2005).
Nevertheless, Deming's stated that, quality cannot be defined exactly but in general he says that it is
"A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market" (Ramasamy, 2005).
And at the same time he define quality in another three ways based on Statistical method such as
'Quality of Design', 'Quality of Conformance', and 'Quality of Sales and Service Function'. (Ramasamy, 2005).
From Deming's analysis it is noticed that only 15% of quality problems are caused by the workers and remaining 85% are caused by process and system which include poor management. This 85% of quality problems take place in process and systems are due to their Statistical variation and remaining 15% of quality problems by workers are due to their improper Training, inadequate Knowledge etc. On the other hand, he also argued that each and every firm should focus on the process that involved in order reducing its statistical variation; that would increase the productivity and also boost the firms to achieve better position in the competitive environment. (Dale, 2003).
At the same time Deming's also point out 14 points that would helpful in many ways to direct the management to stay in business and intend to look after their shareholder and jobs. These 14 points is also suitable to apply in Small Medium and large organisation in order to improve the organisational effectiveness and simultaneously it also indicate that top level management must build up a commitment to quality and form a system to support this commitment which includes all employees and suppliers. He also reveals that without upper management involvement quality improvement can't occur though there is a change in the organisational structure. As well as author also formulate a systematic approach called PDCA CYCLE (Plan, Do, Check, Action) into practice in order to solve quality related problem and also improve the business process and later on stages this cycles is slightly reform into PDSA CYCLE (Plan, Do, Study, Action) in order to illustrate his recommendation. (Rungtusanatham et.al, 2003)
On the other hand Joseph M.Juran is considered to be one of the quality guru and an influential quality practitioners after W.Edward Deming's; whose major quality philosophies and its direction towards quality management are accepted and followed in many organisations all over world up till now. According to him quality can be viewed based on user perspective which means that Quality depends by means of the
'Definite use of a product or service'
"Fitness for use" (Nwabueze, 2001).
He strongly disagree the statement 'simply conformance to specification'. (Tam Wai-Ming & Yin-Cheong, 2003)
From Juran point of view, it is noted that most of the philosophies devise by Juran exactly coincidence with Deming's philosophy but there are some slight difference between them. According to Deming's, quality can be improved only through an 'organisational transformation'. Nevertheless, Juran stated that it is no way to improve quality without the involvement of quality management teams though the company has have an effective quality initiatives programmes. (Chandrupatla, 2009)
From his framework, it is apparent that most of his involvement is decisive on the 'definition of quality' and 'cost of quality'. At the same time he is also eminent for initiating the background of the quality trilogy - Quality planning, Quality control, Quality improvement. According to Juran, the Quality trilogy is must for the each and every organisation in order to provide a good quality management. This concept can be seen in figure (2.2) and points out the connection between Quality planning, Quality control and Quality improvement.
Holding the gains
Figure 2: Quality Trilogy
Source (Zair, 2008)
Here, the process attain control at one level of quality performance, after that by using appropriate tools and techniques such as Pareto analysis- it is necessary to implement the plans that are needed to improve the performance on a project by project basis. By doing this activity, it would benefit the firm by improving the process at higher level, which is again controlled, to prevent any deterioration. From Juran and Deming's point of view it is clear that both of them insist to put into practices of continuous improvement program so that workers should get training in proper methods on a systematic basis. Source (Stephens & Juran, 2005)
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However, from Armand.V.Feigenbaum point of view quality can be defined as
"Best for the customer use and selling price" (Beckford, 2002)
According to Feigenbaum quality should be improved through the 'total system approach method'. This system of approach should support the ideas of work environment, which means that all the functions of organisation from top level to bottom level, from manufacturing to delivering stage etc. are all involved together in order to improve quality, and people learn from each other's successes. The author also suggest that instead of implementing quality at the end of the process completion through inspection and controlling, it is best to implement quality in the starting stage itself so that it is possible to manage the cost and time of the process. From his philosophy it is clear that he stress, quality does not mean 'best' but 'best for the customer'. This quality philosophy was slightly modified by the Japanese and named it as "company-wide quality control."(Watson, 2005).
In contrast, Philip B.Crosby is another well known quality guru followed by Deming's, Juran and Feigenbaum. According to Crosby, Quality is stated as
"Conformance to the requirement"
"Quality is free" (Panchkula, 2009)
He developed the quality improvement process which his based on the principle of "doing it right the first time" (DIRFT) and also he introduce the concept of zero defects, in order to improve the quality process and also at the same time it promote the suppliers to develop the quality of supplies. In contract Deming's criticise that the concept of 'zero defect' is 'fad' and also he says that it is cost effective method in order to meeting the standards. But at the same time some of the Crosby's view matches with Deming and Juran views. For example, "Crosby stressed the role of management in the quality improvement effort and the use of statistical control tools in measuring and monitoring quality" (Battikha, 2003)
Similar to Shewhart, Kaoru Ishikawa was also eminent for the development of quality management, through statistical quality control. According to him there is no specific definition for quality but he focuses his orientation more towards people rather than statistical method. Ishikawa was considered to be the first quality guru, whose major contribution is based on the significance of the "internal Customer" the next person in production process. Out of his 'seven basic tools of quality' one is more famous and practised by all over the world in order to solve quality related problems known as 'Fish Bone Diagram' or 'Cause and Effect Diagram'.
Figure 3: Fish Bone Diagram
Similar to Deming's and Juran, Ishikawa was also put forward the significance of "Company-Wide Quality Control" relatively than focusing on product and services. He also introduces the concept of 'Quality Circle' where the multi-skilling task was encouraged in order that each and every individual could do every one's job. From his above quality development philosophies it is clear that his major intention is to engage each and every individual in quality development program. (Mahadevan, 2010).
However, Genichi Taguchi is one of the Japanese quality experts whose major contribution was in the area of product design. According to Taguchi, there is no specific definition for qualities from his perspective about 80% of all defective products are caused by improper product design. He strongly put forward certain quality design views while the product is in design process. According to him all the quality inspection and improvements process should be taken at the starting stage of product design, so that it is possible to reduce the cost on quality inspection in production process and also it is easier to modify the changes during the design stage, instead of modifying it in production process. He is well known for his concept called 'design of experiment' or in other ways called as Taguchi Method. This method enables the designer to perform over a wide range of robust product that can survive manufacturing time after time, piece after piece, and provide what the customer wants. Taguchi has also worried about the present view of cost of quality. (Source)
According to him the traditional view of costs of conformance to specifications is not suitable for present situation and he framed the new method to view at these cost which is commonly known as 'Taguchi Quality Loss Function'. In this method "cost of quality increase as a quadratic function as conformance values move away from the target". This function also explains that slight differences on the target would end in slighter cost and vice versa. Source
Figure 4: Taguchi Quality Loss Function
According to Garvin (1988), quality can be defined based on 'Value for price paid' which means consumer always prefer their product or services based on the worth of the product .From Garvin point of view quality can be focused by five different ways based on Customer, Manufacturing, Product, Value and Transcendent. The below figure1 represent the definition of quality based on five different targets.
Aptness for use, Satisfying customer expectation
Meeting the requirements for design, specification. Achieving Zero Percent defect
The product should resemble a bit special to others when compare to other similar product that adds value
Customer should feel convenient both for the price and features of the product
It is not clear what it is, but it is something good...
Figure 1: Definition of quality based on five different targets
Since, from the beginning of 1900's to right now there have been various changes took place on quality management by different quality gurus which has been clearly illustrated from this topic. However, there are some criticism has been pointed out in this topic about gurus philosophy, their different opinion on quality management and its practices. Even though, all the gurus have different opinions about quality management their ultimate objective is common, which is to increase the level of productivity and to achieve better customer satisfaction in the competitive market environment. Finally, among various 'Quality Improvement Techniques' that has been seen in this topic earlier it is must to examine the appropriate Techniques, which is best suitable for this research that has been undergoing in Animal feed SME'S in order for its current and future needs.
Definition of TQM:
Numerous definitions have been given on Total Quality Management (TQM) by quality gurus, practitioners and academician. Besterfield (1995) defined TQM as both a philosophy and a set of guiding principles that represents the foundation of a continuously improving organization. It integrates fundamental management techniques, existing improvement efforts and technical tools under a disciplined approach. Using a three-word definition, Wilkinson and Wither (1990) defines TQM as (Ho, 1999):
Total: every person is involved (its customers and suppliers)
Quality: customer requirements are met exactly
Management: senior executives are fully committed
Berry (1991) defined TQM process as a total corporate focus on meeting and exceeding customer's expectations and significantly reducing costs resulting from poor quality by adopting a new management system and corporate culture (Yusof, 1999). Wolkins (1996) outlined TQM as a tool to integrate fundamental management techniques, existing improvement efforts and technical tools under a disciplined approach focused on continuous improvement.
All these definitions actually yield to the same conclusion that strong emphasis must be given towards achieving excellence in organization. However, there are no solid rules on how TQM should be implemented. As Kanji (1990) had described that TQM is:
The way of life of an organization committed to customer satisfaction through Continuous improvement. This way of life varies from organization to organization And from one country to another but has certain principles, which can be implemented to secure market share, increase profits and reduce costs.
2.5 TQM Philosophy
The TQM philosophy provides the overall concept that fosters continuous improvement in an organization. This philosophy stresses a systematic, integrated, consistent, organization-wide perspective involving everyone and everything. It focuses primarily on total satisfaction for both internal and external customers within a management environment that seeks continuous improvement of all systems and processes.
Continuous improvements can be achieved through internal and external quality improvements (Dahlgaard, Kristensen and Kanji, 1998). Figure 2.2 shows how to achieve higher profit by stressing on internal and external quality improvements. Internal improvements refer to the utilization of resources and preventing defects and problems in the process. Gradually, this result in the effectiveness of controlling and minimizing production cost which in turn yield to higher profits. Similarly, external quality improvements put more emphasis on designing quality into the product, which aims to earn higher profits by remaining competitive with a bigger market share. This can be done through the ability of
Companies to respond quickly to the demands of their customer and offering them with a better value added services.
Figure 2.2: Continuous improvements and their consequences (Source )
2.6 TQM Basic Principles
TQM calls for a cultural transformation that requires employee involvement at all levels and a spirit of teamwork among customers, suppliers, employees, and managers. Employee involvement, participation and empowerment form the cornerstones of TQM (Saylor, 1992). There are certain essential principles, which can be implemented to secure greater market share, increase profits and reduce cost. The followings are the five basic factors which provide a competitive advantage in animal feed sme's .
Management leadership and commitment
Continuous improvement of all systems and processes in an organization is essential for TQM success. A continuous improvement system gears the organization toward attainment of the vision (Richardson, 1997). The improvement system must not only be continuously applied, but also consistently, throughout the organization. This requires a disciplined continuous improvement system based on trust, with everyone in the organization striving to improve the system (Crosby, 1979).
Saylor (1992) suggested a continuous system cycle that involves 5 stages as showed in Figure 2.3. The cycle starts by defining the vision or mission of the organization. Top leadership determines the vision, with input from everyone. Then everyone in the organization ascertains his specific mission to accomplish the overall vision. In doing so this, the focus and priorities of the vision are determined, established, understood and supported by all. The next phase after defining their vision includes listing all improvement opportunities. It is important to obtain an understanding of the process of determining improvement opportunity at this stage. Customers, both internal and external, are identified and their needs and expectations understood. Suppliers also are matched with requirements. Any potential problems are identified during this process.
Deming's fourteen points for management are worth remembering. The basis of his philosophy is contained in the following principle: 1) institute training on the job. 2) Break down barriers between departments to build teamwork. 3) Drive out fear in the workplace. 4) Eliminate quotas on the shop floor. 5) Create conditions that allow employees to have pride in their workmanship and abolish annual reviews and merit ratings and 6) institute a program of education and self-improvement (Saunders, 1995).
Employee involvement is a long-term commitment for a new way of doing business and needs a fundamental change in culture (George, 1994). Binney (1992) described unlocking people potential as one of the total quality principles whereby it creates an environment in which people can readily learn, where teamwork can flourish and individuals grow in self-confidence and self-esteem. In the past, the focus in achieving such improvements was frequently the "system" - traditional techniques and methods of quality control. Such a focus may overlook the fact that operation of the system depends on people, and no system will
Work with disinterested or poorly trained employees. It must be coordinating the system and people at the same time. Employee involvement is a process for empowering members of an organization to make decisions and to solve problems appropriate to their levels in the organization (Richardson, 1997). Empowerment is equally effective in service industries, where most frequently customer perception of quality stands or falls based on the action of the employee in a - one-on one relationship with the customer. This can be achieved by making the employee part of the organization, which is essential to the success of the organization. Employees who believe they are important will be motivated to ensure that their efforts are consistent and dependable upon the contributions made.
Training and Education:
Training and education provide the necessary skills and knowledge- the ability to make it happen (Saylor, 1992). This process is an investment that must be made.According to Dahlagaard et.al (1994) Japan, Estonia and India are reported to allocate between 65 and 80 hours per year for each educational and training activity per employee. They believe that satisfaction of the workforce and hence motivation and ability to act as a constructive part in the process of continuous improvement depend on education and training.
In the TQM environment, everyone is required to gain additional capabilities to improve the process and perform work. Hence, a comprehensive training program is necessary and must be institutionalized within the entire organization. Training in TQM philosophy, guiding principles and tools and techniques is never ending.
Personal and team interaction skills must be continually refined. This training should be given only as it is needed to the people who will use it immediately. It should start with specific training for management. Once management has the skills to lead the TQM process, the rest of the organization should be trained to ensure a systematic, integrated, consistent organization- wide effort (Richardson, 1997).
Specific job skills training must be provided and constantly updated to reflect the improved processes. All too often management exhorts employees to get things right first time, to operate effectively in quality improvement teams and to participate in the never ending search for excellence. Yet, at the same time, they often fail to provide the training, tools, information and empowerment required for self-management to work effectively.
Hence, all training must be geared to specific, clearly define objectives; it must be performed as close as possible to the time it is required and must be reinforced to ensure the results needed to achieve victory. It should bear in mind that training and education are never ending for everyone in the organization. Continuous improvement means learning and companies seeking to adopt TQM need to become learning organization (Binney, 1992).
Rewards and Recognition:
Rewards are generally considered to be something given for quality work such as
money or other tangible things of financial value. Recognition is an act of acknowledgement that is directed at an individual's self-esteem and social needs (Richardson, 1997). Crosby's 12th step and Juran's 7th step indicate that reward and recognition should be instituted to support TQM movement. They feel that recognition, praise, coaching and show of concern are all vital forms of reward that must never be neglected.
Reward and recognition should be appropriate to the situation by being rank ordered- the higher the achievement, the higher the reward. It could be such things as a bonus, salary increase, and change in the title, promotion, theatre tickets, or perhaps a pat on the back (Besterfield, 1995).
In a TQM environment, there must be a change in the usual recognition system. One must give recognition for efforts, not just for goal attainment. This recognition of effort provides a powerful incentive for everyone to become involved in quality improvement. It helps illustrate the commitment from management. It is also essential that employee involvement be used in planning and executing any recognition or reward system.