Total Quality management effects on business performance

The focus of this report is to highlight to the finance director of this well-established public listed company (Plc) on how Total Quality Management (TQM) enables to develop better business performance through quality management. Through this report, there will be a review on TQM is viewed as a process involving all business functions to give out a continuous quality improvement. In a nutshell, TQM is all about customer satisfaction. Later, at the end of this report we can conclude that TQM promotes a more efficient emoting, thinking and feeling applicable for the growth of organisation. As a research assistant, it is the duty to further research and discuss on this topic to guide the finance director to make a more confident decisions for the purpose to provide strategic direction for the organisation.

2.0 Introduction

TQM was first developed in Japan in the early 1970s. In the early days of TQM, it is then developed in countries such as USA, Japan and countries of Western Europe has been implemented TQM mainly to maximise customer satisfaction, gaining better product quality, and obtaining higher productivity. Through the systematic method of TQM, it helps to reduce waste and reduce on the non-productive activities. As for today, TQM incorporates both a management philosophy and with the growth entity of tools and techniques for continuously improving products and services that meets the customer expectation (Jeffords, 1993, p.60). TQM is regarded to give a continuous improvement of quality of goods and services that required the participation of individuals at all levels of functions of an organisation (Pfau, 1989). TQM acted out more than just a programme, it is a way of how business management for whole organisation. TQM is separate to three fundamental principles, total stands for participation of every person and every department; quality stands for meeting customer needs and expectations exactly; management stands for enabling conditions for total quality.

Quality strategist guru, Juran (1985) described TQM as somewhat an abstract concept, even though TQM has been considered an effective management practice and even a necessity for corporate survival. However, the impact of TQM in organisations varies to the ways of how each organisation implemented it. Jeffords (1985) believes that in order TQM to be successful, management must incorporates at least three major concerns for example, the ultimate focus on TQM is the work process, customers and teamwork, rather than individual effort. Therefore, the correct practise of techniques and sufficient guidelines of TQM can contribute to successful TQM implementations to the organisation.

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3.0 TQM relates to giving out high quality of products & services

Within the global competitive world that we lived in nowadays, there are vast numbers of organisations offers the same type of products and services. A lot of innovative ideas were come up by organisations to make their products and services to be accepted by the current market. However, what makes a product and service stands out in the market is often the quality of the total service offered (Yusuf et al.,2007). Therefore, giving out the high quality of products and services and their associated customer satisfactions are the key survival for any enterprise. Hence, according to Yusuf et al. (2007), TQM is considered to be the most appropriate tool to give out that lasting quality improvement. Not only does TQM relates to reliability, but it also aim to meet the customer satisfaction requirement. As stated by Atkinson (cited in Mann, 2008), TQM is a strategic approach to produce the best product and service provided with constant innovation. The quality control method that are emphasised by TQM, provides comprehensive evaluation of both internal and external customers. Early concentration of TQM focus more on monitoring the manufacturing processes, thus, now it has developed to a customer-oriented process of continuous improvement. Thus, it is make believe that TQM delivered the products and services of consistently high quality in a timely fashion. This is supported by The Deming Prize Committee (cited in Mann, 2008) where they viewed TQM as a system of activities to ensure products and services of the quality required by customers are produced economically.

The article by Robin Mann discussed back on what makes TQM a successful tool for quality improvement in organisation. It is found that this article talks thoroughly about what are the quality activities that create TQM as a successful tool. They also provided depth research on companies regarding which quality activities that contribute most for TQM. This article is good start for those who seek to know more about TQM. However, since the creation of the article is to commemorate on the 70th birthday and achievement of Professor Gopal Kanji, the person who founded the Total Quality Management & Business Excellence journal, this article may be biased on some part. For example, there are hardly criticisms or drawbacks discussed about TQM, thus, the article may not be entirely relevant. Also, the article is prepared in 2008, thus, it is a good platform to reassess back on the development of TQM because of the ideal time gap since it was developed. The author, Robin Mann holds a Phd. in Total Quality Management. The publisher for this article, It was published by Routledge Taylor and Francis Group, which is respected for publishing journals such as Total Quality Management. Therefore, it may serve as a reliable source.

Unlike the article by Robin Mann, the article by Yusuf et al. discussed thoroughly on TQM and they concluded that aspects such as customer focus, continuous improvement and Just-In-Time should be incorporated in the TQM implementation in order to establish a quality culture in the organisation. They also explained that these factors that were mentioned just now are cornerstones for the perfect TQM improvement. However, analysis of the implementation is based on China, therefore results of the analysis only accurate for the China region. But, the thoroughness of explanation in this article makes it relevant for this part. This article is reliable because all the three authors are professors from a respective business schools. Since the publisher is same like the previous article, thus, the source of this article is reliable.

4.0 Tools that strengthened the TQM model

i) Kaizen

When TQM was emigrated from Japan it totally altered the perceptions of the Western on issues such as corporate sensibility and manufactures. They quickly learned that continuous improvement is the goal for many early quality programs (Kinni, 1995). Kaizen comes from the Japanese word of ‘continuous improvement’. Kaizen is often embedded in TQM because with the implementation of TQM in organisations, a continuous improvement method has to be included in order for the program to be improved. The key to achieve kaizen through TQM is to have the managers to carry the main responsibility of to stimulate and support the effort of organisational members to improve processes. Second is process-orientation, where it is there to evaluate criteria which can monitor and bring attention to the improvement process itself (Berger, 1997). Apart from continuous improvement, Kaizen also serves as a low-cost, high-return entry point into TQM. Its common-sense approach helps introduce the workforce to a process orientation. Kaizen also teaches the skills needed to solve out the true cause of a problem (Kinni, 1995). With TQM programme, it is best to also have continuous improvement. Daily operation of kaizen will leads to many small improvements of relatively minor cost.

The article by Kinni presents rough idea on the three-stage process of kaizen. The article provided research companied with real occurrence on how kaizen is implemented in real life. However, the author tends to get carried away with the explanations, thus, making it less reader-friendly. The article still serves as a relevant source. The author Theodore Kinni is founder of The Business Reader, a business-to-business bookseller. He has written articles and reviews for many magazines and newspapers exploring on practices in management and manufacturing. Although no results were found on the qualification of the author, but the article that he wrote seems reliable because of his experience and expertise in writing articles and journals on management. The article is published by Industry Week, a reputable magazine for manufacturers.

Meanwhile, the article by Berger is not relevant, but only the part on the introduction is relevant to this sub-topic. This is because; the article provides too much detail on kaizen. Although it helps reader to understand on the process orientation on kaizen and also incorporated along cases for readers to relate to the real life organisations, but it is found that that is not relevant for the sub-topic. The author Anders Berger works at the centre of research on organisational renewal, Chalmers University of Technology, Sweden and has produced many articles on continuous improvements. Since the qualification of the author is unknown, therefore the article is not entirely reliable.

ii) Six Sigma

TQM has been defined as ‘managing the organisation so that it excels in all dimensions of products and services that are important to the customer (Chase et al. cited in Green, 2006). However, in the early 1990s, many articles began to appear that questioned the value of TQM in a number of organisations. According to Harari (cited in Green, 2006), he argued that there are at least ten reasons why TQM does not work. He stated that TQM is too unmanageable and they overshadow the real reason a company is in business. Thus, this leads to the emergence of six-sigma. According to Green (2006), he claimed that six-sigma is a process design or process goal stated in terms of the properties of a normal distribution. Six-sigma is believed to be a tool that will revive and strengthens the so-called perceived failures of TQM.

Six-sigma constitutes five steps methodology. This begins with define, followed by measure, analyze, improve and control (DMAIC) (Green, 2006). For example, one of TQM aspect is strong customer focus. Six-sigma tackles this aspect by begin with ‘define’ to assure that customer needs and requirements are foremost. By understanding how to define the goal of meeting customer expectations it is further demonstrated by a rigorous adherence to a five step process – DMAIC. With six-sigma, almost all the elements of TQM is in place. The strategic approach like strong executive involvement and bottom-line accountability strengthens TQM efforts to improve projects.

The article by Green covers in-depth input on six-sigma. It explains on how TQM should be incorporated with six-sigma. The author also gave various point-of-views from several authors on why they think TQM should work along with six-sigma. Although the author explains the step-by-step process on how six-sigma works with TQM, in the end part of the article he clarified that the implementation of six-sigma does not necessarily guarantee success. His open-minded attitude towards the guaranties of six-sigma proved that the author is not biased when writing about the attractiveness of six-sigma. Based from this, this article by Green is relevant to the topic. The author, Forrest Green is a Professor in Management in Radford University and his area of expertise included productions management, TQM and management science. The article is published by Routledge Taylor & Francis Group, a well-known publisher for TQM journals.

5.0 What influence organisations to adopt the TQM model?

There a lot of TQM literature is associated with studies that have been done in the UK and US. Therefore, the implementation of TQM in other countries may differ in terms of location and culture. The influence of implementation of TQM has proven to be successful in the Eastern countries. According to Maccoby (cited in Psychogios et al., 2007) because of the interpersonal relationship is value more than the individual work in the Eastern culture, it is proven that the influence of TQM in that region contribute to most success. Meanwhile, the TQM characteristics as a new management philosophy with a set of concepts and tools, has started to enter the consciousness of managers in Greek organisation (Psychogios et al., 2007). He stated that, there are two kinds of cultural ‘forces’ that influence the Greek organisations on the application of TQM, which are conservatism and reformism. The conservative cultural ‘force’ identified the top managers is dominance over the system of TQM. The lack of open and clear communication among organisational members in Greek organisations leads to the influence of adoption of TQM model.

The article by Psychogios et al. develops the theoretical understanding of TQM that differ from those where it emerged. The adoption of TQM by Greek organisation is a prime example on what influence them to adopt the system. The article is supported with depth results of 73 semi-structured interviews conducted with managers working in Greek public and private organisations. The article also provides several loose example of other nation like in the Eastern countries regarding on the influences. However, the influence of adoption of the TQM model is only limit to Greek organisations. Since the article focuses more on one nation, therefore the relevance of this article is questioned. Up to this sub-topic, it is assumed to be relevant. Since the research is done in 2007, therefore it is considered relevant because the research is still quite recent. The author, Alexandors Psychogios, is a senior lecturer on Management and HR. He is also an adjunct lecturer at the Hellenic Open University which he teaches Total Quality Management and Environmental Resources Management. His work in this article is considered reliable because of his experience in teaching the TQM subject as well as his broad knowledge on the TQM.

6.0 Impact of TQM on process performance – long-term commitment

TQM is related with process performance, where no doubt that a in order to achieve a good performance it will takes organisation to be ready with the long-term commitment that they will face. The effects on the organisation itself depend on how well they implemented it. However, the evidence of the impact of TQM on performance is somewhat mixed. TQM is considered a strategy capable of helping the organisation pursue and attain some key strategic objectives. The impact on TQM, as concluded by Longbottom et al.(2006), where TQM is well implemented in organisation, the most significant evidence is that it will gives a better financial performance, that is including profitability, market share growth and ROCE. Also, with well implementation of TQM, it will give strong relationship with the customers through the achievement of giving out high quality that result to customer satisfaction. However, without the supports and determination of the top management, it will also give a negative impact towards the organisation because management blindly copying it without developing a clearer links in the process of defining strategy and performance objectives (Longbottom et al., 2006).

The article by David Longbottom et al. discussed that there are many on-going debates that regards TQM as a concept that is started to lose its attractiveness. This is argued in several articles that perceived TQM as a ‘falling star’ because too many initiatives have failed to yield expected results. However this article opposed the ideas that perceived TQM as failure that gives negative impact to organisations. The article do mentioned that, yes; TQM will sometimes leads to failure, but, they strongly claimed that organisations can also gain success. They justified that the root failures of TQM is in the implementation process itself, and not because of the underlying concept of TQM. Therefore, the authors questioned the reader whether the implementation of TQM is being handled correctly by the failed organisations. With this, the article is not biased, and served as a relevant source.

One of the authors, David Longbottom is a professor in Derbyshire Business School, University of Derby, UK. He teaches the subject on HRM and Marketing and has also produced many articles on TQM. His expertise and experience on writing on TQM, makes this article a reliable source for this sub-topic. The publisher, Routledge Taylor and Francis Group is a reliable source in publishing reputable collection of management and operations journals.

7.0 Benchmarking: A systematic process that implements best practices for TQM

TQM is a program that stands within the economic development organisation that can create a sustainable competitive advantage for funding investment. When we talk about TQM, we develop an understanding on customer expectations, then exceeding expectations. According to Canada (1993), to satisfy these ever-increasing expectations of ‘benchmarking’, benchmarking should be adapted to economic development as it is extremely useful tool. Without benchmarks, it is loaded of unnecessary risk when organisation tried to improve the quality development in organisation through a trial and error exercise. The quality improvement of TQM relies on benchmarking that will helps to accurately identify customer need, hence carefully identify and try to model the best practices (Canada, 1993). With benchmarking, it requires an alternate view of organisational structure. Benchmarking allows organisations to have meaningful comparisons among other organisations. Organisations that applied benchmarking in their TQM improvement will provide results that will give a reference points for evaluation and the models to be emulated. This is also supported by Rahman (2004) where he considered that one of the eight elements of quality management of TQM is benchmarking where it gives the commitment continually to improve employees’ capabilities and work process.

The article done by Eric Canada on TQM benchmarking is explaining that with benchmarking in TQM, good is not good where better is expected. It is found that the author talks thoroughly about why organisations cannot just implement only TQM. The author added that benchmarking is appropriate cornerstone for TQM, where one organisation can measure its performance against others. The article provides a relevant case study on why an economic development organisations need to have benchmarking to improve the TQM cycle. The case study that he incorporated along in the article indeed supports his ideas on benchmarking in TQM. The relevant qualitative results based from his case study definitely relevant to this sub-topic. Moreover, this article is produced in 1993 which in seventeen years ago is considered as the heyday for the development of TQM. The author, Eric Canada has 20 years experience in economic development including managing the management programs. He is trained and experienced in organisational dynamic and management. His works on this article serve as a reliable source.

But, article by Shams-ur Rahman is not relevant for this sub-topic. This is because, the article only talks about the innovation of TQM on organisational performance and how TQM is fading and whether there is still future for TQM. However, the part on where he explained on benchmarking is one of the elements for TQM is considered relevant for this sub-topic. The author is a Director of Logistics and Supply Chain Management programme at the School of Management, RMIT University, Melbourne, Australia. His involvement in the editorial board for Journal of Quality and Management and his interest and paper research on theory of constraints and quality management in logistics served this article as a reliable source for the sub-topic.

8.0 The incorporation of TQM in Just-In-Time (JIT) model

JIT is considered to be an approach that involves delivering and producing at the right time and in the right place that aims to satisfy customers without waste (Yusuf et al., 2007). JIT will not work well without TQM in operation. Since TQM implementation is mainly to gives out high quality of products and services therefore JIT need to incorporate along this value to make the operation of JIT succeed. In general, the JIT philosophy focuses on improving manufacturing efficiency by eliminating non-value added activities and minimizing inventory (Lau, 2000). Meanwhile Lau (2000) also believed that the TQM philosophy has a broader focus on improving the overall effectiveness of a company through focus on quality improvement. Based from the sample of the qualitative and quantitative results of 379 US computer and electronics companies by Lau (2000), the study revealed that the synergistic effects of joint JIT-TQM were more obvious when comparing to those companies with no JIT or TQM implementation. Companies implementing both JIT and TQM were also found to be superior in a number of performance measures when comparing to those JIT companies. However, the synergistic benefits of joint JIT-TQM were found marginal, at best, when comparing to TQM companies. Meanwhile, Vokurka (2007) results from his research based on flexibility of usage of JIT and TQM in organisations has found out that companies who identified themselves as flexible across all three dimensions were implementing TQM and JIT.

The article by Yusuf et al. that is used to cover this section on JIT is relevant to the sub-topic because it covers the benefits and the reasons behind of implementing both JIT and TQM. But the article by