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The Manufacturing Industry Quality Issue Management Essay

Paper Type: Free Essay Subject: Management
Wordcount: 5425 words Published: 1st Jan 2015

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Introduction

In the manufacturing industries, the word quality appeared more than 50 years ago. It has linked with every organisation that has a connection with business, industries, manufacturing, and events in the governmental sectors. The quality issue was largely ignored by the American and British industries when the principle first appeared, but was taken into consideration by the Japanese (Moir 1988). In recent days, the quality concept has been widely known and many national and international organisations have been specifically funded to deal only with quality issues and implementations. Furthermore, due to the rapid development of world economics, the term quality evolved into a more specific requirement, according to implementation situations, to fit different organisations’ needs. Implementing quality in any organisation has emerged as a strategic competitive tool for the organisation’s success (Yang and Wilkinson 2002). Adopting quality philosophies has become essential in establishing goals of winning and doing well in the competitive world. As a result, the areas of quality management, quality management systems and total quality management have been created.

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In 1987, quality management and systems ISO 9000 was founded by the international organisation for standardisation (ISO) to establish the minimum requirements of quality systems in firms and organisations. The aim of the ISO 9000 family of standards is to provide means of ensuring that suppliers provide products and services that satisfy specified requirements. Moreover, according to Magd, et al. (2003), implementing ISO 9000 has been used more and more throughout the developed countries and this implementation has had a positive effect in the developing countries. These standards were developed to help companies and organisations effectively document the elements required to maintain efficient quality systems in different industries. Many recent studies have examined the impact of implementing ISO 9000 in organisational performance and concluded that the adoption of ISO 9000 has been justified by the many positive results associated with this implementation.

The manufacturing industry is the heart of any growing economy. Therefore, implementing quality management in the manufacturing industry is a key factor to improving products, customer/supplier relationships and the organisation’s goals, and this leads to enhancing the general economy. Customers’ satisfaction through products and services is the key issue to the success of the economic outlook. Moreover, competition between companies to meet the demands and requirements of their customers requires an organisation to consider and implement the elements of quality internally and externally, which helps to maintain or rise above this competition. So, as the economic world becomes increasingly more complex, the need to implement quality systems is vital to gain the required success involved in this complexity.

This thesis will evaluate the implementation of quality management and systems in small- and medium-sized enterprises in the manufacturing industry in the United Kingdom through research that has been achieved by evaluating answers from a relative questionnaire developed to achieve the research objectives.

Research Aims:

The aim of the research is to evaluate quality management and systems in small- and medium-sized manufacturing enterprises in the United Kingdom. The research is done by analysing the collected data from the focused industry, in addition to the literature of the related aspects.

Research Objectives:

The main objectives of this research were as the follows:

To explain the methods of implementing quality management in the United Kingdom small- and medium-sized enterprises (SMEs).

To illustrate the situation of quality management systems in the United Kingdom SMEs.

To describe the methods of improving quality management systems in the United Kingdom manufacturing SMEs

To analyse the data that has been collected from a questionnaire directed at the United Kingdom manufacturing SMEs.

To provide some suggestions and recommendations to improve the implementation of quality in the United Kingdom manufacturing SMEs.

Chapter II: The Literature Review

2.1 Introduction

The United Kingdom is considered one of the most important developed countries in the world and is currently the sixth-largest economy in the world. Moreover, it is considered the third-strongest and largest economy in Europe after the French and German economies. The manufacturing industry is the leading sector in the United Kingdom that supports the economy; this sector is also responsible for supporting an increasing number of businesses in the production and services sectors, such as automotive, casting, moulding and machining, chemical, packaging and material manufacturing. Furthermore, according to Management Technology Policy (2009), in terms of labour productivity, the manufacturing industry in the UK is the leading component for sustaining the economy. To understand this important aspect, it is recommended to study the influence of implementing quality management correctly in any organisation looking to provide the best products/services for its customers and to provide help in growing the general economy. Armand Feigenbaum, the American quality guru, said “Quality is now the single most important force in organisational success and growth in national and international markets”.

2.2 The United Kingdom SMEs Sector

Small- and medium-sized enterprises (SMEs) are a key part of manufacturing in any developed economy. Lauder, et al. (1994) claim that small- and medium-sized enterprises are considered important factors in the health of the economy by offering more job vacancies. Moreover, SMEs constitute the core of enterprises by way of major contribution to the private sector output and employment in worldwide economics (Kumar, Antony 2008). According to Eurofound organisation (2007), SMEs were first introduced by the European Commission in 1996. In 2003, they adopted a new update for the definition of small- and medium-sized enterprises; the new definition considers all companies and firms with fewer than 250 people and an annual turnover below EUR 50 million, or with an annual balance sheet not exceeding EUR 43 million, as medium enterprises (ibid.). Moreover, all companies with fewer than 50 employees and an annual turnover or balance sheet not exceeding EUR 10 million are small businesses (ibid.).

According to the Department for Business Enterprise and Regulation Reform (2008), in 2007 there were about 4.7 million private sector enterprises in the United Kingdom, an increase of about 4.8% from the previous year. Further, these enterprises employed about 22.7 million people with an estimated annual turnover of £2,800 billion (ibid.). The percentage of small- and medium-sized enterprises is about 99.9% of all enterprises and the employment in the SMEs is estimated at 13.5 million, an increase of 2% from 2006, and the turnover was increased 6.1% for the same year (ibid.).

The previous numbers show that the economy of the UK is actually maintained by the impact of small- and medium-sized businesses. According to Meyer (2010), about 54% of all new jobs created in the UK’s industries are in small- and medium-sized enterprises. This growth in SMEs increases the tax income and helps fill the country’s treasury coffers (ibid.). Small- and medium-sized enterprises play an important role in the British economy. Creating more jobs, reducing the percentage of unemployment and enhancing the competition between companies to produce the best products or services, are all positive results of SMEs in the UK. Hence, exerting all effort toward quality is an essential role for any organisation’s development.

2.3 The Manufacturing Industry in the United Kingdom

The British manufacturing sector is thriving by playing on its strengths, namely, in design, technology, innovation, creativity and services. Harrington (2010) claims that the manufacturing industry in the United Kingdom is growing faster than it has for the last 15 years, which refutes the reputation that it has been in decline. About 20% of the UK’s national economy is supported by the manufacturing sector with more than £150 billion per year (BBC news 2004). Moreover, the industry employs more than four million people, which is about 14% of the overall workers in the UK (ibid.). Furthermore, the manufacturing industry still accounts for the largest share of the British economy at about 12%; 3% more than the financial services (Harrington 2010).

The British manufacturing industry is widely diverse. According to CBI, the largest manufacturing sector in 2000 was the electrical and optical equipment industry, manufacturing about 15%. The wood and products manufacturing sector comes second with about 13% of the total manufacturing in the UK. The third sector was basic metals and fabricated metal products, manufacturing 11% of the total manufacturing industry.

Figure 2.1: The United Kingdom Manufacturing Industry (source CBI)

2.4 Quality Management

Lots of scholars introduce different meanings and definitions for the word “quality”; however, all the definitions are focused on only the customers. According to ISO 8402 (1994), the word quality is defined as “the set of characteristics of an entity that gives that entity the ability to satisfy expressed and implicit needs”. In other words, it is the number of processes and implementations that can offer a good quality product to the consumer, besides achieving the organisation’s objectives. However, reaching the desired level of quality can be achieved by implementing several aspects related to this purpose.

In recent years, the concern about quality management practices, which is a number of management principles that can be used as a framework and guide the organisation to the required improvement performance (OGC 2009), has a strong priority all over the world, specifically in the developed and developing countries. Yeung and Chan (1998) claimed that the success of any firm depends on how much the firm is adopting and implementing the rules of quality management, according to the leading gurus of quality, such as Deming.

The UK is considered one of the developed countries that include the quality management process in their agenda of improvement and development. Oakland (2003) claims that there are several facets that are very important in an organisation’s reputation:

Building the reputation upon factors of quality, delivery and the price.

It is very difficult for a company to enhance the quality level after having a poor quality reputation.

Reputation can be nationwide, whether good or bad.

Studying and applying quality can change the bad reputation to a good one.

According to Brown (2010), there are seven important issues and factors that are considered essential to any quality management agenda:

Commitment to total quality management.

Preparing a pleasant implementing environment.

Controlling the process using a statistical process control system.

Preparing reports from the statistical process control system.

Setting up formal problem-solving reports.

Focusing on limiting variety in the production process.

Concentrating on the organisational structure of the work group authority.

For a successful quality management programme, several phases should be followed to support the organisation. William Edward Deming, an American statistician, published a book in 1986 all about quality issues and problems in America in that period of time (Mawhinney 1992). In the 1980s, Deming invented 14 points that are considered the main points of implementing a successful quality management programme in an organisation. Anderson and Schroeder (1994) said that these 14 points represent what Deming believes about management practices in quality management. According to Chizmar (1994), the key points and principles of quality management suggested by Deming are:

“Create consistence of purpose towards improvement”. This includes products and services and must be aimed at the competition to stay in business and still provide jobs.

“Adopt the new philosophy” by facing new challenges that happen during the change in economics. Management needs to adopt the new philosophy rather than expect the workers to do it.

“Cease dependence on inspection”. There will not be any defective items if the variation is reduced by creating an effective quality programme.

“Move towards a single supplier for any one item”. This is done by forging a long-term relationship contract with the supplier; loyalty and trust will develop between the two sides.

“Improve constantly and forever”, reasons for increasing productivity and decreasing costs.

“Institute training on the job”; this is vital for staff improvement. However, if the workforce is inadequately trained, there will be no consistency and will cause deterioration in the variation.

“Institute leadership”. The main goal of leadership is to support their people to do their very best.

“Drive out of fear”. This point will help motivate the workforce to work efficiently and effectively.

“Break down barriers between departments”. People working in different departments in the organisation should work as a team.

“Eliminate slogans”. Mistakes are caused by the process of leading, not by the people who are leading the process.

“Eliminate management by objectives”.

“Remove barriers to pride of workmanship”.

“Institute education and self improvement”.

“The transformation of everyone’s job”.

Deming’s principles have different goals and objectives; some points focus on the organisation infrastructure and the cultural system; for example, points 8 and 9, which concentrate on the employees and how to build trust between them and the organisation (Anderson and Schroeder 1994). Some other points are methodological and are aimed at using specific ways, such as management, design and services (ibid.).

ISO documented that the quality management principle contains eight elements, which are included in the quality management system of ISO 9000:2000 and ISO 2008 (iso.org, 2010). These eight factors will be explained later on in this chapter.

2.5 The Quality Gurus

To understand the different concepts of quality, many researchers and scholars have been studying this purpose for years. The quality gurus are the people who are studying and inventing the modern quality perspectives of the world. Since the 1940s, there have been three groups and categories of quality gurus. According to the Department of trade and industry (2009), the first period was in the early 1950s; this category is known as the early Americans and includes Deming, Juran and Feigenbaum who visited Japan after the Second World War. This period represents the time when Americans took the message of quality concerns to the Japanese. The second period, which was the late 1950s, is the Japanese category and includes Ishikawa, Taguchi and Shingo. This period represents the time the Japanese developed the concepts of quality. The last period of time, the 1970s to 1980s, called the New Western Wave, includes the Western quality gurus, namely Crosby, Peters and Moller. This followed the Japanese success in implementing the concepts of quality in the industrial sector this group.

W. Edward Deming:

W. Edward Deming is the most famous scientist in the world in terms of quality management. Deming was first to introduce the principles of quality and management to the Japanese in the 1950s. Moreover, Deming invented the famous 14 points of approaching a successful quality improvement system in an organisation. This 14-point system helped people understand and implement quality management procedures. Furthermore, Deming introduced the systematic approach to problem solving (the Deming or the PDCA – plan, do, and check and action – cycle).

Joseph M. Juran:

Joseph M. Juran followed Edward Deming in introducing the basics of quality management to the Japanese in the 1950s. Juran focused on the wider issues of quality, mainly planning and organisational issues, and introduced an approach to express an effective management process. This approach is known as Juran’s trilogy. He believed that quality does not happen by accident; it must be planned (Bendell et al. 1995). Simply, Juran’s trilogy states that to implement a successful quality management process, one should follow these three managerial processes: quality planning, quality controlling and quality improvement. To implement quality in any company, Juran’s quality planning method has to be implemented correctly with good strategy. Bendell et al. (1995) state the key elements necessary in implementing a wide strategic quality planning in the organisation are:

Determining the customers.

Identifying the customers’ needs and demands.

Transferring and translating the customers’ needs to the organisation’s language.

Developing products which match the consumers’ needs.

Optimizing the product features to meet the organisations’ needs as well as the customers’ needs.

Developing the mechanism that will be able to produce the products.

Optimisation for the products’ mechanism.

Proving that the processes and mechanisms can produce the product under operational conditions.

Transferring the mechanisms to operations.

Armand Feigenbaum:

Feigenbaum was the originator of total quality control; he defined total quality as “an effective system for integrating quality development, quality maintenance, and quality improvement efforts of the various groups within an organisation, so as to enable production and service at the most economical levels yet still allow for total customer satisfaction”. This concept applies the administrative function in order to involve measurement and control of quality in every level, starting from customer satisfaction and sales through design, engineering, assembly and shipment (Bendell et al. 1995). Feigenbaum argues that there are two main reasons for establishing a total quality system in order to help reduce operating costs. These reasons are:

The shortage of existing, effective customer standards may mean that the current quality for the products is not the most favourable.

Expenditure on prevention costs can lead to a several-fold reduction in internal and external failure costs (ibid.).

Dr Kaoru Ishikawa:

Ishikawa was born in 1915 and graduated from the engineering department of Tokyo University. He is one of the most well-known gurus of quality management. Moreover, Ishikawa made a great advancement in quality improvement by using his cause and effect diagram, which is also called the Ishikawa fishbone diagram. After the Second World War, Edward Deming adopted the Ishikawa diagram to use as a tool to teach total quality control in Japan. In 1962, Ishikawa invented the concept of quality circles (QC) and defined the QC as “a small group to perform quality control activities voluntarily within the same workshop, carrying out its work continuously as a part of companywide, quality control activities”, and he promoted the statistical process control (SPC) as a vital tool for quality (Morehouse 1996). Additionally, Kaoru Ishikawa supported the importance of using the seven quality control tools:

Pareto charts to prioritize actions.

Cause and effect diagrams to identify causes of variation.

Stratification for dividing data into subsets.

Check sheets for data collection.

Histograms for displaying variation graphically.

Scatter diagrams to identify relations between two factors.

Shewhart’s control charts and graphs to monitor and control variation (ibid).

According to Macdonald (1993), Dr. Ishikawa stated his own revolutionary management philosophy is characterised by the following strategic goals:

Finding quality before seeking profit.

Enhancing employee potential through education and positive support.

Building up long-term customer orientation, inside and outside the organisation.

Being in touch with the facts and statistical data and using the measurement for motivation.

Enhancing an organisation-wide system focusing all employees on quality-related implications of every decision and action at all stages of the improvement process of the products or services.

Dr. Genichi Taguchi:

Taguchi is one of the quality gurus who supported the approaches of Japanese quality control in the 1950s. His approach states that higher quality generally results in lower costs. Cheng (1990) claims that Taguchi’s basic contribution to quality control was the Taguchi methods approach, which can be described by these two fundamental concepts:

Quality losses must be defined as a deviation from the target value.

Quality must be designed into the product at its early stage of development.

The main concept of Taguchi methods is the quality loss function. The proper definition for quality loss function is “the losses a product imparts to the society from the time the product is shipped”. It means that the quality of any product does not plummet suddenly and the private and social costs do not rise suddenly if the product does not meet the specifications (Nayab 2010).

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Philip B. Crosby:

Philip Crosby is an American quality guru who invented the zero defect approach to quality in the 1960s. His definition of the term quality is simple and he used absolute terms in order to give anyone the opportunity to start implementing, whether or not quality existed in the organisation. He believed that management should be involved in beginning the correct implementation of quality. The Crosby approach to quality improvement can be reached by the creation of a core quality specialist in the organisation (Bendell 1991). Moreover, Crosby introduced four absolutes for quality performance. The first absolute is a definition for quality, which simply refers to a conformance to customers’ requirements. The second absolute is that the system for quality improvement is in prevention rather than appraisal. The third is the performance standard of zero defects and a commitment to conform to requirements each and every time. The last absolute is that measurement of quality is the price of non-conformance. Crosby has his own quality improvement technique. He introduced 14 steps to quality improvement. According to Quality Classic (2005), Crosby’s 14 steps are:

Management commitment

The management commitment is the basis for any improvement program in any organisation. First, by discussing the needs for quality improvement with management, emphasising the need for defect prevention. Second, by preparing a quality policy that states each individual is to perform the requirements exactly. And, finally, by making an agreement that quality improvement is a practical method to improve profit.

The quality improvement team

The team that is responsible for the improvement process should have clear direction and leadership. This can be done by teaming together representatives of each department to form the quality management team. The representatives should be people who can speak for their department and commit operations in order to implement actions.

Quality measurement

The measurement process will help the team in the improvement process. Furthermore, quality measurement is necessary to determine the status of quality throughout the organisation. This process should record the quality status to show where improvement is possible and where creative action is needed and to document actual improvement later.

Cost of quality evaluation

The quality function is aimed at keeping quality costs small and relating to the manufacturing system so it is more likely to get more accurate figures. Cost of quality is not an absolute performance measurement; it is an indication of where corrective action will be profitable for the organisation.

Quality awareness

Establishing an awareness programme that uses the existing systems inside the organisation should be a priority in the management process. The aim of quality awareness is to show the workforce the measurement of what non quality is costing. It is done through training supervisors to orient the employees and by providing visible evidence of the concern for quality improvement by the communication material.

Corrective action

Reducing problems forever is the main aim of the corrective action process. People problems must be brought to supervisory meetings at each level. If a specific function does not hold such meetings, the team should take action to establish them in the department.

Zero defect planning

This can be done by involving members of the team to investigate the zero defects concept and methods to implement the program. The responsibility of the quality manager is to state clearly that the zero defects concept is not a motivation program. All the different parties, such as customers and government, should be invited as speakers during the planning process of zero defects.

Employee education

Management should educate all employees in quality matters. To implement the steps, a formal orientation with all levels of management should be conducted and must be understood by the managers so it can be explained to the workforce.

Zero defect day

The zero defect day should be organised after planning zero defects. It is supported by top management commitment to all the employees that quality is fundamental, everyone should be involved, and the management department is serious about implementing quality successfully.

Goal setting

The ideal thought is that every supervisor should discuss during meetings with his people the goals they would like to strive for. This process is usually carried out after the measurement steps of quality improvement.

Error cause removal

This aims to offer solutions to the employees who are dealing with problems and issues. All they have to do is list the problems and the appropriate functional group will develop the answer.

Recognition

It is very important to recognise good performance as a quality improvement process. The prizes or awards should not be financial. Recognition is what is important.

Quality councils

This process should involve bringing quality professionals together regularly to communicate and discuss all matters related to quality for upgrading and improving the implemented program.

Do it over again

The improvement process for quality must be continuous and never considered as a one-time only task.

2.6 Total Quality Management (TQM)

Total quality management (TQM) is one aspect of management that appeared in the 1950s in the Japanese industrial sector. For many organisations in different sectors, practicing the issues of total quality management is essential. According to Hakes (1991), TQM is one type of management philosophy aimed at using all available resources and opportunities in order to enhance the organisation. TQM philosophy is focusing on “managing to improve the effectiveness, flexibility, and competitiveness of a business as a whole” (Ho and Fung 1994). McAdam (2000) claims that the correct implementation of total quality management can be done successfully by following these management points:

It must be connected to the organisational goals.

Customer satisfaction is essential to the organisation.

Bringing continuous improvement to the organisation through employee participation and planning.

Management commitment is essential to organisation development.

Incorporate customer/supplier relationships via several processes suggested by the organisation.

However, defining the meaning of TQM was not a big issue for many; many new organisations adopted the quality management concepts from the quality gurus such as William Edward Deming and Joseph Juran, and the adoption by the Japanese of the principles of quality control (QC) (Boaden 1997). According to the Department of Trade and Industry (2010), the new revolution of quality management practices and implementations started in the 1980s in the Western countries after rapid changes and development in the Japanese factories in the early 1950s.

TQM is a huge system containing a combination of four basics factors: ISO 9000, satisfying customers, improvement tools and the people. These factors are important to accomplish an effective TQM programme. The Venn Diagram shows clearly how implementing the four factors successfully can achieve total quality management goals (Figure 2).

Figure 2: The Venn Diagram for TQM

2.7 Total Quality Management in the United Kingdom SMEs

In recent years, practicing total quality management concepts is not only a concern for large organisations, it is also an issue for small- and medium-sized enterprises (McAdom 2000). There are many definitions for the concept of TQM. However, according to learning manufacturing concepts (2008), TQM is “a process and philosophy of achieving the best possible outcomes from the inputs by using them effectively and efficiently in order to deliver the best value for the customers, while achieving the long-term objectives of the organisation”. In fact, total quality management, which should be a top priority of the organisation’s strategy, should involve a focus on customers, delighting them by reaching their demands, and providing the best quality products with competitive prices. Moreover, implementing TQM in the organisation should help to prevent any defects and the target must be zero defects, which will be explained later on. To sum up, TQM is a management and control process invented to focus an entire organisation and all of its employees on providing products and services that satisfy the customers, considering the organisational benefits (Talha 2004).

SMEs are the heart of any growing economy, and the application of total quality management to maintain this relationship is essential. This approach satisfies the maximum number of customers and allows the organisation to gain the experience and knowledge it needs to achieve its stated goals. Furthermore, in the United Kingdom, SMEs are the basic source of employment for people. According to Ghobadian and Gallear (1996), 93% of United Kingdom companies employ fewer than 500 employees and about 60% employ fewer than 100 workers in the industrial and commercial organisations of SMEs. They also mentioned two ways that SMEs can be encouraged to apply total quality management: by pointing out that in the short term, the higher yields of quality increase profitability through premium pricing. In the long term, the higher yields of quality improvement are increased according to the market share (ibid.). Producing the higher outcome with the lowest operating costs is the cause of the economic enhancement. Therefore, to achieve this goal, the firm must investment in improving its quality (ibid.).

2.8 Total Quality Management Benefit for SMEs

Getting the total benefits of applying total quality management in SMEs is a complicated process. According to Beheshti and Lollar (2

 

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