Quality Management Essentials. Key Concepts, Pros and Cons of Total Quality Management (TQM)

April 6, 2009 by kutenk · Leave a Comment
Filed under: Quality Management 

What is Quality?
David Garvin (1984) has categorised five different definitions of quality based on the theories of quality gurus:
1.    The transcendent approach-this is like areté, being synonymous with ‘innate excellence’, such as a quality player or quality diamond (24-carat). It’s an absolute judgement.




2.    The manufacturing-based approach-this is an approach associated with TQM guru Phillip B Crosby and is based on ‘freedom from errors’. For example, a plastic cup may not have innate excellence like a handmade item of porcelain, but if it is manufactured according to its design specification, then it has quality. It is said to ‘conform to requirements’.
3.    The user-based approach-this interprets quality as ‘fit for purpose’, not only in terms of its specifications but also in terms of the specifications being appropriate from an end-user or customer point of view. For example, a plastic cup may have manufacturing-based quality, but it may not be appropriate for a garden party at Buckingham Palace. It not only lacks innate excellence, it is also not fit for the particular purpose of showing how refined people imbibe tea.
4.    The product-based approach-this views quality as ‘a measurable set of characteristics’. For example, so-and-so batteries are designed to last 120
hours, or ‘this wood stain dries in 30 minutes’.
5.    The value-based approach-this looks at quality in terms of cost and price. For example, flying easyJet is not everyone’s idea of quality travel. On the other hand, it is good value as you can get from A to B at a much lower cost compared with a British Airways flight which also only gets you from A to B.

Quality from the organisational point of view involves a number of key dimensions:




    It is to do with excellence, however subjective.
    It is about setting specifications and standards-for example, in operations processes or product and service quality.
    Measurability is important-otherwise how do you know you have achieved quality? There is, therefore, the need for measurement tools.
    Value for money is relevant-prices and costs from both the customer and organisational point of view.
    It is about meeting customer needs or expectations.

Total quality management (TQM) is an effective system for integrating the quality development, quality maintenance and quality improvement efforts of the various groups in an organisation so as to enable production and service at the most economical levels which allow for full customer satisfaction.

The key themes or concepts of TQM are as follows:
    Meeting the needs/expectations of internal and external customers-this is the goal of TQM, and it means looking at your business and its products/services from the customer’s point of view. It means everyone is a customer, internally and externally. You are a consumer or customer of goods and services provided by other people/units in your organisation and you are a supplier of goods and services to other people and units in your organisation.
Organisations use service level agreements (SLAs) to cement these internal relationships.
    Covering everyone in the organisation-everyone is involved, including the supply chain where appropriate (continuous improvement). Task and work group programmes such as job enrichment, job enlargement and job rotation may be used to enhance employee involvement and participation.
    Continuous improvement-TQM is not a one-off fix. It is ongoing and always looking for improvements. TQM is insatiable.
    Teamwork-a key theme in involving employees. ‘People are our greatest asset’ is a familiar slogan in TQM organisations.
    Top management commitment-a vital ingredient, and one of the common failings of TQM. TQM is a whole-organisation programme. It is strategic with
long-term objectives. It frequently involves culture change. It must be led from the top otherwise the vision fades and it becomes diluted. Partial TQM is no good-it’s all or nothing.
    Development of quality systems, standards, measures and tools-a systematic approach based on standards, performance measures and measurement tools is the nittygritty of TQM.



The gurus of TQM
Gurus    Their contributions to TQM
A Feigenbaum Responsible for the idea of total quality control which is popular in Japan-see Total Quality Control(1986)
W E Deming Father of quality control. Emphasised quality as a top management and strategic activity. Famous for his ‘14 points for quality improvement’–see Out of Crisis(1986)
J M Juran Emphasised a more user-based approach to quality management based on ‘fitness for purpose’. Concerned with management responsibility for quality and the involvement of individual workers in quality improvements. See the Juran Institute website–http://www.juran.com

K Ishikawa Originated quality circles and cause and effect diagrams. Saw quality circles as a way of involving employees to make TQM work
G Taguchi Emphasised the importance of engineering in quality through design combined with statistical methods of process control. Originated the idea of quality loss on a product/service from the time it was created (quality loss function or QLF)
P B Crosby The idea of cost of quality and zero defects was his main concern-he developed a zero defects programme in his book Quality is Free(1979)

Pros and Cons of TQM
Arguments for TQM
It can reduce product defect rates or customer complaints
Getting employees on board improves productivity
People take pride in, and responsibility for, their products
Quality cascades through the whole organisation at every level
Quality throughout the supply chain improves product supply and distribution
Continuous improvement keeps people challenged
Everybody has a customer focus
People use their brains to solve problems
Reduces costs and improves bottom line



Arguments against TQM
Management is unable to make the necessary commitment
Over-complex tools, systems and standards
It is stressful for employees who can be over-empowered
The time and resources needed to implement it are too great
It is impossible to improve continually
People are expected to do more but are not paid any more
TQM is not suitable for all organisations (and the culture change required is too great)
It takes too long to implement
It increases costs and harms bottom line

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MANAGEMENT CAPABILITY MATURITY MODEL BEST-PRACTICES

March 3, 2009 by kutenk · Leave a Comment
Filed under: Quality Management 

The best-practices management capability maturity model consists of five stages or levels needed to improve the efficiency and effectiveness of business processes through proper implementation of best practices. These five stages are (1) select, (2) implement, (3) measure, (4) evaluate, and (5) institutionalize.

When an organization reaches the institutionalization stage, it is a positive reflection of management’s capabilities in properly implementing best practices. This model provides a simple and practical framework that can be standardized for organization-wide implementation of best practices.

(a) STAGE 1. SELECT. This stage first identifies a business unit, division, or group needing improvement in performance. It can also identify a specific business function (e.g., accounts payable) or a process within the business function (e.g., vendor invoice processing) that needs improvement. Other examples of topics for selection include (1) freight audit and payment, (2) travel and entertainment expense management, (3) payroll processing by an outsourcing vendor, (4) customer-claims processing by an insurance company, and (5) patient bill estimation and processing by a hospital.

Appoint a project manager to manage the best practices project from start to finish. The project manager should prepare an inventory of all business processes that need improvement and should prioritize them with the approval of senior management. The project manager should issue detailed status reports periodically to all affected managers and summarized status reports to senior managers describing the progress, problems, and issues.

As part of a pilot project, the championing or sponsoring functional manager should select a process or function within his responsibility that is easy to address and that is in need of the most improvement. The idea is to demonstrate positive results to senior management and to convince skeptics among the other functional managers. Lessons learned from the pilot project can then be applied to the other parts of the organization.

The project team, consisting of the project manager and the functional manager and his staff, should then search for organizations that were successful in implementing the best practices in the chosen function or process. Benchmark results can be used to develop or modify best practices. Conduct the benchmark research to identify best-in-class public and private organizations (within an industry or across industries) that benefited from best practices. Obtain the benchmark study results, reports, and related information from reputable sources. Due to copyright restrictions, obtaining written permissions from the benchmark organizations to use their best practices methods is a good legal practice. Prior to implementation, it is important to obtain senior management support and commitment by presenting a developed business case to them.

(b) STAGE 2. IMPLEMENT. This stage incorporates into an organization’s day-to-day work habits and routines the general best practices available outside the organization. The task is not easy. In fact, many organizations fail in their implementation efforts due to people problems (i.e., people risk). Finalize what benchmark results and best practices are appropriate to the business function or process within a business unit, division, or group. The project team tailors these general best practices into company-specific best practices in terms of developing policies, procedures, tools, and internal systems. Identify resources (e.g., time and people) needed to achieve proper implementation of best practices.
A full implementation of best practices will not be efficient and effective until a business process is streamlined, simplified, standardized, and institutionalized. Otherwise, it is like throwing good money at bad things. To make things better, inefficient and ineffective business processes must be completely fixed prior to implementation of best practices.
The business case should include goals and objectives to be achieved from the implementation of best practices along with expected performance measures (e.g., scorecards, metrics, cycle times, and standards).

(c) STAGE 3. MEASURE. This stage compares actual performance levels resulting from the implementation efforts against the defined performance indicators and measures. The performance measures identified in the business case from the second stage are compared with the generally accepted indicators and measures, such as scorecards, metrics, cycle times, and standards.
This measurement exercise identifies gaps in performance between the actual levels and the expected levels. Management can then develop appropriate remedial plans and take action steps to close the gaps.

(d) STAGE 4. EVALUATE. This stage requires a careful evaluation of progress from stages one through three and takes a snapshot of the progress to date. This stage requires honest feedback from all employees involved in the best-practices project implementation in terms of its strengths and weaknesses. It asks specific questions, such as (1) whether the defined goals and objectives were achieved, (2) whether the defined benefits and gains were achieved, (3) what were the factors that led to success, (4) what went wrong, (5) what lessons were learned, and (6) what worked and what did not, and why. The evaluation should focus on the overall management system for improvement and not on people to blame. It also looks at whether the benefits and gains can be sustainable and repeatable in other business units, divisions, or groups.

If the evaluation turns out to be negative, with many problems surfacing that were not discovered in the previous stages, management should rethink and reassess the situation and replan and proceed further with caution. Or management could direct the project team to start from the first stage by revisiting other best-in-class organizations and obtaining different benchmark study results and reports from other sources.

(e) STAGE 5. INSTITUTIONALIZE. This stage takes a “big picture” approach to the best practices for continuous improvement throughout the organization. If the evaluation from the previous stage turns out to be positive in a specific business area and the benefits and gains are sustainable and repeatable in other business units, divisions, or groups, management should streamline, simplify, and standardize the business processes related to the selected business area.

Management can then institutionalize the standardized best practices by rolling out to the other parts of the business units, divisions, and groups of
businesses. Organizations can realize full potential benefits from best practices only after they successfully complete this stage.

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