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In today’s business environment, quality is one of the important aspects that need to be considered in order to survive in this competitive environment. Almost everyone has the experience of poor quality. Poor quality is intensified when employees are not empowered to correct quality inadequacies or they are not willing to do so.
There are various ways of defining quality. Some of the most common definition of quality are as follows:
Conformance to specifications: Measures how well the product or service meets the target and tolerance determined by its designer (Crosby,1979)
Fitness for use: Focuses on how well the product performs its intended function or use (Juran, 1951).
Value for price paid: Is a definition of quality that consumers often use for products or service usefulness (Garvin,1984)
A psychological criterion: Is a subject definition that focuses on the judgmental evaluate on of what constitutes product or service quality (Garvin, 1984).
Support service provided: Often refers to the quality of a product or service is judged. Quality does not apply only to the product or service itself, it also applies to the people, processes, and organisations environment associated with it (Ishikawa, 1985).
There is a difference in the definition of quality in manufacturing sector and in the service organisation. In the manufacturing sector, the product is tangible, that is, it can be seen or touched but in the service sector it is intangible.
According to the research carried out by Rönnbäck and Witell (2008), the difference in the principles of quality management that are being used, is decreasing. In general, it is the service organization that is having a stronger development in quality management.
The table below shows some example of quality in the manufacturing and service organisation:
Examples of quality in manufacturing service sector:
- Conformance to specification
- Friendliness or courtesy
- Promptness or timeliness
2.2 Quality Cost
It is important for an organisation to provide good quality whether it is a manufacturing or service organisation. Consequences of poor quality can create customer dissatisfaction hence loss in business. It is said that quality has costs. The costs can be divided into 2 groups:
2.2.1 Quality control cost- cost necessary for achieving high quality
2.2.2 Quality failure cost- cost occurring due to poor quality.
For the survival in this demanding environment, organisation must leverage all its knowledge resources. Employees need to have information about the changes happening in an organization’s environment. They must have the understanding of its impact on their work (Moore et al, 1998). According to Athanasia (2006), by increasing the employees’ understanding of how the organisation functions, there is cost reduction and improvement in competitiveness. Employee’s understanding of business strategy and how their work contribute to organizational success can be used to increase to high performance (Becker et al., 2001)
There has been a continuous development of quality management over centuries. This development can not be ascribed to only one or a group of person. Quality management is a method ensuring that all the required activities connected to the production of goods and services (implementation, design and development) are efficient and effective. The practical implementation of management strategies seeking customer satisfaction has brought us to this actual stage of quality (Dale, 2008)
The 4 Eras of quality management
The quality management eras provides a basis for continuous and discrete development from one management period to another.
2.4.1 Quality development through inspection
According to Garvin (1988), the development of quality management started with inspection. The outcome of Industrial Revolution developed specialists who ‘inspected’ quality into products. It was a flawed attempt. Scientific management occurred because of environmental influences. Scientific management provides the frameworks for the development of quality management inspection.
2.4.2 Quality development through quality control
The management of quality through control refers to dealing with information, derived from actual process used to manufacture goods and services. As products are manufactured according to customer specification, it is very important to effectively control the manufacturing processes. This results in consistency and standardized products whereby customers’ requirements are met. This brings reduction in waste, more efficiency and even more profits. The difference between inspection and quality control is that, the focus was on the product for inspection while for quality control it was on the process.
2.4.3 Quality development through quality assurance
Quality assurance took quality from a slender perspective to a broader one. While quality used to include only specialists, quality assurance involved management also. There has been increasing awareness of quality among workforce and management. It is about the planned and systematic actions needed to provide confidence that the requirement will be met. Quality assurance systems are implemented in many departments of an organisation.
2.4.4 Quality development through TQM.
TQM involves the application of quality management principles to each and every aspect of a business. An organisation passing through a total quality process would have a clear vision, very few barriers, training, very good supplier and customer relationship. The realization of the product does not only represent the quality of the product but that of the whole organisation.
2.5 Quality Management Principles
There are eight quality management principles. These principles can be used by senior management as a guidance to improve the performance of the organization. They are defined in the ISO standards and they are as follows:
2.5.1 Customer focused organisation
An organisation depends on its customers. It is essential to know their current and future needs, to meet the requirement and to exceed their expectation. This helps in increasing revenue and market share.
Having a good leader provides a sense of direction to the organisation. A leader should create an environment which ensures that the people are fully involved in achieving the organization’s goals. There should be effective communication to make sure that the objectives are well understood. This will also lead to motivation.
2.5.3 Involvement of people
People are the one who makes the business work no matter at which level they are. It can be said that they are the heart of the organization. Hence, they should be motivated, committed and involved within the organization.
2.5.4 Process approach
When resources and activities are managed as a process, the result is achieved in a more efficient manner. By using the process approach, there can be lower costs and shorter cycle times because of the effective use of resources.
2.5.5 System approach to management
By applying this approach, the organisation can improve its effectiveness and efficiency. There will be alignment and integration of processes.
This should be a permanent objective of a business. Management must strive continually improving the effectiveness of the QMS.
Factual approach to decision making
Decision making is always based on the analysis of information and data. This approach can prove the effectiveness of past decisions through reference to factual records.
Mutually beneficial supplier.
A mutually beneficial relationship improves flexibility and speed of joint response. It improves cost of resources.
There is an indication that the mentioned principles are not being fully applied at Palmar Limitée. Hence, these principles will be assessed in the survey.
2.6 Quality Management System
It is important to have a Quality Management System (QMS). QMS is tools and processes used by an organization to obtain good quality. The entire responsibility of the QMS lies on the management. A good QMS will see that the following two important requirements are met- the customer’s requirement and the organization’s requirement. Good quality leads to customer satisfaction. Having an ISO certification give the customer assurance that the quality is certain. In other words, the QMS satisfies the requirement of the standards.
Figure 2.2: The QMS Model
Components of a Quality Management System
The QMS should apply and interact with all the processes in the organisation. The QMS consists of the following:
2.6.1 Management Responsibility:
The management responsibility is to develop and improve the quality system, listen to the customers, formulate quality policy, plan and define responsibilities so that there will be an effective quality management. This is a way for the top management to show their commitment to QMS development and improving their effectiveness (Biazzo & Benardi, 2003)
2.6.2 Resource Management:
An organisation needs to have the necessary means to implement and maintain the QMS and to progress on an incessant basis. Customer satisfaction must be enhanced by meeting the requirements of consumers. (ISO 2008)
2.6.3 Product Realization:
It consists of the identification of customer requirements, reviewing of product realization, communication with customers, design and development of products, purchasing, production and controlling measurement and devices (Biazzo & Bernardi, 2003). According to Seaver (2001), product realization is the day to day productive business whether it is a good or service.
2.6.4 Measurement analysis and improvement:
This part states the necessities for monitoring information on client satisfaction, assessing and monitoring process and management of internal audits, non-conformity defection and improvement actions (Biazzo & Benardi, 2003).
2.7. ISO 9001
ISO 9001 is one among the range of ISO 9000 standards. The ISO 9001:2000 is being replaced by the ISO 9001:2008. The aim of this standard is to provide QMS which is beneficial to an organisation and helps in managing the business in an effective way.
The application of ISO 9001 standards according to Magd and Curry, 2003, is a way to increase employee motivation and efficiency. This leads to constancy and reliability in the business.
According to Wickramasuriya and Dharmasiri, the implementation of ISO 9000 standards is among the approaches used to show the importance of quality management. In Sri Lanka many companies are achieving the ISO certification. However this accreditation does not necessarily reflects the certification’s effect. The study indicates that issues like customer oriented behavior, organisation culture, measurement and monitoring of process, employee satisfaction are the main factor present in organisation, whereas factors like approach to implementation of ISO standards, leadership and involvement of management, company reputation and employees involvement have low presence. Employees have a strong perception that ISO implementation and profitability are connected. According to the discussion, if there is more concentration on low presence factors, the implementation will be more effective and hence there will be improvement in the quality management system and profitability as well.
According to Basir et al, (2011), organizational culture can have a significant impact on IS0 9000 standards. Both the technical and cultural requirements must be considered.
Quality certification might be important for competitiveness. Firms should focus on development of standards for improving quality and thus increasing customer satisfaction. This certification helps in achieving competitive advantage (Tari et al, 2010).
Dearing (2007) has discussed that ISO 9001 can have both benefits and costs. There are 3 fixed advantages of using ISO certification. The benefits are listed below:
The requirement of ISO 9001 is that the quality system must be reviewed on a routine basis. In case there is failure in maintaining the quality system, corrective actions are taken. There is the risk of losing the certification.
Basics of a good quality system
The customer requirements are taken into consideration. The organisation ensures that they can meet customer requirements hence providing customer satisfaction. Capable staffs are employed so that the work is well done so as to achieve quality. If there are problems, corrective measures are taken.
Having an ISO 9001 certification, customers can have faith that the products are of good quality. Dearing (2007) disagrees that the certification makes the organisation a good supplier. According to him, ISO 9001 reduces efforts to improve quality.
The weakness of ISO 9001 is its reliance on the 3rd party audits. The requirements do not contribute to controlling quality. More than half of the requirements are overhead burden that is they do not contribute directly to the improvement of quality.
2.8 Total Quality Management (TQM)
TQM is a philosophy that seeks to encourage both individual and collective responsibility to quality at every stage of production (from design to sales). TQM is a management method to planning and applying continuous improvement in an organisation and may have an influence on the organisation performance of both manufacturing and service sector (Claver-Cortes et al, 2008). Methods for implementing this approach originated from various quality gurus (Refer to table below). These personalities have shaped the evolution of TQM. Their philosophies have contributed to our awareness and understanding of quality. The table shows their contribution:
Table 2.2: Contribution of different quality Gurus
TQM must be viewed as a system which comprises of 3 interdependent components- values, techniques and tools. The implementation process should start with the core values, techniques which are suitable for the organisation must be decided and finally suitable tools must be identified so that they can be used in an efficient way to support the techniques (Hellsten & Klefsjö, 2000)
TQM is used to attain productivity and process efficiency by identifying and reducing problems in work processes. TQM addresses main problematic areas such as mistakes in work processes, redundant processes, unnecessary tasks, and duplicate efforts. TQM helps with forecasting and preventing mistakes and unproductive activities. Productivity is the concern of many business managers. TQM is used as a tool to improve productivity. TQM helps in inspiring employees to improve their performance and thus productivity also will be better (Belay et al, 2011).
The TQM principles are related to competitiveness of enterprises. The main purpose is to achieve high efficiency, high quality, low cost and high competitive power (Yatkin, 2004)
There is the possibility that there is a reduction in the absenteeism and labour turnover, increase in job satisfaction, staff motivation and improvement in commitment to workplace (Simsek, 1998).
2.9 Elements of TQM
TQM consists of six basic components. The application of these concepts helps to run the business successfully. The six concepts are follows:
The first feature is that the company focuses on its customers. The organisation has to identify their customer needs and then fulfill them. Customer is among the most important asset of an organisation. The success of an organisation depends on the customers. Therefore, an organisation should examine their quality system on a regular basis to see if it is fulfilling the ever-changing requirement over the customers (Besterfield et al, 2003)
In the past, business did not pay attention to customer satisfaction. They have realized that customer satisfaction increases customer loyalty which brings profits (Bruhn & Grunh, 2001). Also, the risk of chances of switching to other brands due to poor quality is lower according to Anderson & Fornell (2000).
Quality is customer driven. Products should be manufactured according to customer wants. A main long-term advantage of TQM relates to customer satisfaction. Successful quality management practices had a positive impact on customers’ satisfaction. Quality management practices that have been successfully adopted have a positive impact on customer satisfaction level. The focus on customers also results in good business performance (Ranganathan, S. & Mehra, S. 2008).
However, according to a study carried out by Bruce Han (2007), there is no direct relationship between TQM and customer satisfaction. TQM increases organizational competitiveness hence resulting in customer satisfaction.
2.9.2 Involvement and commitment of management
The implementation of TQM process starts with the top management. Hence the involvement of the managers is required. They should be engaged in the process. Communication is important in order to implement the TQM process successfully (Besterfield et al, 2003). The Deming philosophy can be useful, that is the 14 points. Ristova E. and Serafimovska H. carried out a study about the impact of leadership on achieving TQM. The conclusion of the study was that quality improvement is the concern of all individual, groups and the organisation as a whole. But the key element is leadership. It is the ability and attitude of the management that decides the success of the organisation.
Top management is essential for the successful implementation of TQM in manufacturing sector (Raja W., Bodla M.A., Malik A.S., 2011).
Involvement of workforce
Employees’ involvement is very important in the production of good and services. They are the ones who contribute in the manufacturing of the goods hence meeting the organization’s goals. They should be motivated so that they give their best. Various ways can be used to motivate them. TQM practices have an important aspect of effectively involving employees in practices that lead to improvement in company performance (Mohrman et al., 1996). The use of TQM practices can create a culture that encourages employees to work together across the company, improve personal responsibility, and enhance a sense of accomplishment in job tasks.
It enables employees to perform better and empower them to optimize the use of their abilities and capabilities. The purpose of training is to help an organization to achieve its objectives by adding value to the people it employs. There is increase in job satisfaction and productivity. Employees need good training so that they can identify and take corrective actions against quality problems. They must know how to make assessment of quality by using the quality control tools. They must know how to interpret the findings and the corrective actions to be taken. Since TQM is an on-going process, training also should be the same. TQM will be successful only if all employees are given training. But the top management should be the one receiving training first (Crous M.J., & Vermeulen, W. 2000)
Another aspect of TQM is to authorize the employees so as to look for quality problems and correct them. Employees are provided with incentives to identify problems unlike in the old concept where they were scared of detecting problems. In the new concept, employees are empowered to take decisions concerning quality. Their suggestion and contribution are valued. They are given training. Employees are considered as the internal customers while those purchasing the goods and services are known as the external customers
Continuous Process Improvement
An organisation which aims for perfection strives to attain it by continuously improving the process. Perfection can never be achieved and hence performance must always be evaluated and measures must be taken to improve it. There are different approaches that can be used for continuous improvement.
18.104.22.168 PDCA cycle (also known as the Deming wheel)
The cycle Plan- Do- Study-Act (PDSA) was first developed by Shewhart and then modified by Deming. This cycle shows that improvement is a never ending process.
Figure 2.3 : PDCA cycle
22.214.171.124 Juran’s Trilogy
The Juran’s trilogy consists of 3 steps which are as follows:
In the planning process, it is important to know who the customers are and what their wants are. The product/service is developed according to the customers’ requirements. The quality function deployment (QFD) can be used. QFD is a tool use to convert the wants of customers into specific technical requirement. It helps to view the relationship among the variable into design of product. QFD identifies the customer requirement and these requirements are scored based on their importance and hence converted in the specific product characteristics. Next, an evaluation is done to compare the product with that of competitors. Finally the goals are set.
It helps to meet the requirement of the product and services. The performance are measured and compared to the goals that have been set. Actions are taken if there are differences. Statistical tools are used to achieve control. Some of the tools are: Cause and effect diagram (also known as the fishbone or Ishikawa diagram), flowcharts, checklist, control chart, scatter diagram, pareto chart and histogram.
The third and last part of Juran trilogy is improvement. The aim is to attain performances which are higher than expected. Improvement strategies such as repair, refinement, and renovation and re invention can be used. (Besterfield et al, 2003).
According to TQM, the suppliers also must meet the quality standards so that it is guaranteed that quality materials are being supplied. If suppliers are delivering good quality hence there is no need for inspection of the materials upon delivery, thus there will not be waste of time. The better the quality being supplied, the better will be the position of the supplier. The customer also will benefit from this as they will have a good quality product.
2.9.6 Performance Measures
This is the final concept of TQM. Performance measure plays a vital role in the success or failure of a company. It helps to know what the trends are, which processes need to be improved and so on. The performances are compared to the goals set. Feedback about the performance of the employees and the organisation as a whole can be obtained. Performances can be measured in various ways. The absenteeism rate and turnover rate are example of typical performance measurement. (Besterfield et al, 2003)
Rewards and recognition is a form of motivation. Reward can be of two forms- intrinsic (non-monetary) and extrinsic (monetary). A heartfelt thank you for a job that has been well done is one form of reward and recognition. This helps to boost the moral of employees. They know that they are valued for their contribution.
“An effective performance measurement system should provide timely, accurate feedback on efficiency and effectiveness of operations” Kaplan & North (1993). According to Claver et al, 2003, an effective performance measurement system must be based on customer satisfaction.
In a research conducted by Kumar et al, 2008, it was pointed out that performance measures are less financially and more process oriented in TQM environment.
Karachan & Tetik (2012) have carried out a research about TQM based on manufacturing industry in Turkey and have found that TQM is having a positive impact on the performance in general. Employees’ performances were affected by four issues which are management satisfaction, job satisfaction, customer orientation and finally process analysis and continuous improvement. Continuous improvement and improvement in the working environments affect employee performance in an optimistic way.
TQM definitely has an important positive effect on a firm’s performance as said by Vanichichinchai and Igel (2011) and Anwar et al (2012).
2.10 Quality approaches
Kaizen is a Japanese term where the word ‘Kai’ means change and ‘Zen’ means good. In other words, it means continuous improvement. It is about continuously improving the process but at a low cost. Just in Time (JIT) is one of the concepts in kaizen. JIT is a strategy that attempts to improve quality and efficiency by reducing the in process inventory and associated cost.
Benchmarking is about studying business practices of other companies for comparison purposes. It can help to achieve competitive objective.
2.10.3 Statistical Process Control (SPC)
Rungasamy, S et al. (2002) specifies that SPC is considered as an significant part of TQM in many organisations. SPC is about the variability in process which is essential for a never ending improvement of product quality. SPC is a powerful technique for monitoring, managing scrutinizing and improving process through use of statistical tools.
2.10.4 Six Sigma
Six sigma is a process methodology which uses data and statistical analysis to identify and fix problems area. It is a deployment model that aligns employees with a series of high impact projects. The benefits are cost reductions, increase in quality level and better customer relationship. (http://www.6-sigma.com)
2.10.5 Zero defects concepts
This concept is one of the postulates from Philip B. Crosby. It can be applied to any type of business. The principles of the concept are four-fold: Quality is conformance to requirement, defect prevention is preferable to quality inspection and correction, Zero Defects is the quality standard and Quality is measured in monetary terms – the Price of Nonconformance (PONC).
2.11 Quality tools.
According to Erdil & Kitapci (2007), by making use of quality tools, defining the potential quality problems in the firms, giving training to employees and benchmarking helps the business to better focus on customer. This helps in increasing productivity and the response.
2.12 Obstacles to TQM
Several research have been carried out over decades o the obstacles that hinder the ability of an organisation to make a successful application of quality management. Sebastianelli and Tamimi (2003) carried out a study to explore how obstacles are related to potential undesirable outcomes of failed TQM. According to this study the most significant obstacle was inadequate resources. According to others studies, the common obstacles found are poor communication, inadequate performance evaluation and reward systems, lack of employee empowerment and so on.
2.13 The Malcolm Baldrige National Quality Award (MBNQA)
The MBNQA was designed in 1987, to raise awareness about quality management and spot US companies that they have implemented successful quality management system. MBNQA is an American tool for measuring the level of quality in an organisation. Firms acquiring such and award gain competitive advantages. There are 7 categories known as Baldrige Criteria for Performance Excellence which are as follows:
Measurement, Analysis and Knowledge Management
Organisations are selected based on achievement and improvement in these 7 criteria. Below is the MBNQA framework. Quality can be quantified when this model is used.
Figure 2.4: The MBNQA Model
Studies that have been carried out show that more and more businesses are recognizing the importance of improving quality in order to survive in this worldwide competition. The prevention of problems is better than taking corrective actions upon the manufacture of the product. TQM does not happen abruptly. This is a long process. A quality system is one of the tools of TQM. The ISO 9000 quality system is a phase towards TQM.
As seen in the past studies, emphasis is more on the impact of ISO and TQM on performance, improvement of quality and so on. In other words, more importance was given to the benefits of these quality systems. Some researchers have pointed out that despite these quality systems, it is not necessary that the companies are providing good quality products or services. For example as said by Dearing (2007) the ISO certification does not necessarily makes a company a good supplier. According to him, ISO 9001 cuts the efforts to improve quality as the customers know that since the company is ISO certified, their products must be of good quality. According to Sousa-Posa et al (2009), TQM only talks about the presence of QMS but its functionality is not guaranteed.
On the other hand, Matinez-Lorente and Martinez-Costa (2004) carried out a study to determine whether TQM and ISO 9000 standards are complements or substitutes. Their study showed that the application of TQM together with ISO 9000 standards did not show any optimistic outcomes. The benefits would have been better if the system were functional individually.
To summarize, the main objective of this research is to make an assessment on the quality management practices at Palmar Limitée (Mon-Loisir Unit). This literature shows the different contexts that have been used by different authors to shed light on the quality management principles.
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