The Importance of Quality and Quality Management Systems Essay Example

to undertake appropriate training in the use of the tools and techniques of TQM (Collin, 1996).In this paper, we will discuss how TQM is implemented and the various benefits organizations derive from implementation of quality management systems and policies, both in theory and with the help of real-life examples of companies. We will also shed light on ISO 9001, often perceived as the most significant outcome of the quality movement. Implementation of TQM: Implementation of TQM approach depends on several vital factors like the structure and culture of an organization, employee involvement, and organization communication. The effectiveness of TQM implementation involves defining and deployment of several key elements.They include both the “soft” aspects of leadership, employee empowerment culture and the 'hard' aspects which include the systems, improvement tools and techniques (Thiagarajan et al, 2000).

The main reason why TQM fails is because of lack of knowledge about the proper TQM implementation. According to Tsang and Antony (2001), one of the most critical success factors for TQM implementation is top management and commitment. Sila and Ebrahimpour (2002) also found top management commitment to be the most common and critical aspect of TQM.Research conducted by McKinsey and Company (1989) found that 95% of the participants believed that top management commitment was the key requirement for successful implementation of TQM. Another study conducted by Lascelles & Dale (1990) supported this view when it found that the CEO was viewed as the most powerful internal change agent for quality improvement in the organization. Ugboro and Obeng (2000) performed a study in which they linked employee empowerment to consequent job satisfaction which in turn, leads to increased customer satisfaction, the

cornerstone of most TQM programs.

They obtained data on empowerment, job satisfaction and top management leadership and commitment from organizations selected for this purpose due to their commitment to and implementation of important elements of TQM. It was found that the roles and commitment of top management is strongly and positively correlated with employee empowerment and employee satisfaction. Also statistically significant were the correlations between employee empowerment and job satisfaction. Hence, the authors proposed that if employees were satisfied because of both reasons.The empowerment their jobs provided them and from top management commitment, this would invariably lead to enhanced customer satisfaction, which, for a TQM-oriented company, is its first priority.

In organizations where the TQM program was successful, top management was not just committed by actively involved in communicating with lower organizational levels, making job requirements and specifications easily available, providing better promotion and development opportunities and ensuring that employees were aware of organization's values, vision and tactical plans.Also, top management created a culture where total quality was promoted – they were involved in monitoring and evaluating progress of important quality control programs, they ensured that ample resources were available and appropriately allocated to implement these total quality initiatives, and they put in place effective performance measure mechanisms and reward systems which recognized and credited the contributions which employees and managers made towards fulfilling the organization's total quality objectives (Ugboro and Obeng, 2000).Advantages of TQM: Some of the major benefits of TQM are as follows: Reduced operating cost: Manufacturing a quality product, providing a quality service, or doing a quality job with a high degree of customer satisfaction is alone not enough. The cost of achieving

this goal must be carefully managed, so that the long term effect of quality costs on the business or organization is the desirable one (Oakland, 1993). Quality cost is the quantification in terms of money of the various aspects of quality as it relates to the organization.

The quality cost approach demonstrates quality as a valuable perspective that can be utilized within the organization to measure, analyze and improve operational efficiency. The examples of the internal failure costs are waste, scrap, rework, re-inspection and failure analysis. External failure costs are the costs that occur when products or services fail to reach design quality standards, but are not detected until they are transferred to the customers.This refers to repair and servicing, warranty claims, complaints, returns, liability and loss of goodwill (Oakland, 1993). When these errors and wastages are reduced, it invariably leads to better productivity and increase in profitability.

Quality cost is considered to be a very effective tool to monitor the financial functions of TQM. Improved employee involvement: By practicing TQM, teamwork is improved and employees are motivated and encouraged to control, manage and improve the processes which are within their responsibility.Improve company morale: No organization can succeed without a certain level of commitment and effort from its members (Stoner and Freeman, 1992). Even though the management can do much to design a high performance workplace, the day-to-day management activities which include how employees are selected and developed, how they are motivated at work, and how their performance is evaluated can have a major impact on the success or failure of total quality effort in an organization (Evan and Lindsay, 2002).

The empowerment of employees through the

use of teamwork, education and by giving people responsibility for the control over the quality of their work will also cultivate a friendly and happy working environment. Indirectly this will improve the morale of the employees, reduce the cost of poor quality and lead to the increase in productivity. Establishing a process of continuous improvement and business process Reengineering: The journey toward excellence is a never-ending road. Some people, because they see no end to their road, never take the first step.Others accept the challenge of the new day and continue down the road, forever improving, and looking forward to tomorrow’s challenge (Harrington, 1987).

The tools of TQM, provides an environment conducive to improve performance of employees and management alike. TQM is a good management practice which when followed, will change the management characteristics and personality of an organization. Quality Management Systems The design of how a company supports its quality is called the quality management system (QMS).A QMS is comprised of the systems and processes the company uses to support its quality efforts such as its inspection processes, how it measures performance against requirements and any personnel dedicated to quality, etc.

The International Organization for Standardization, commonly referred to as the ISO, is a global body which has as its members representatives of many national standards organizations. It sets international standards and its ISO 9001:2000 series includes standards for a Quality Management System detailing the principles and processes which go into the design, development and delivery of a products or services.According to Pearch and Kitka (2000), this was by far the most influential initiative that grew from the quality movement of the 90s. It

combined the three standards 9001, 9002, and 9003 into one, now known as 9001.

It has five major clauses: Management Responsibility: Top management is the driving force behind a successful quality system's implementation. The leadership must establish quality policies and objectives ensure that resources are provided and conduct periodic management reviews.This is a strategic function and the focus should be employee participation and customer requirements. Consequently, a top management representative is required to be an overseer of the ISO 9001. QMS: ISO 9001 requires that a QMS be established, documented and implemented, and mechanisms be set for continually improving the system. The required elements of a QMS are: documented statement of quality policy and objectives, quality manual, written procedures, written documents for planning, operations and control, and records.

The key to QMS are carefully formulated procedures and their management. Resource Management: This clause mandates that three types of resources will be mandated by an organization to ensure QMS implementation, maintenance and continual improvement: (a) human resources, (b) physical resources (infrastructure) and (c) work environment. Key features of this section are: the competence and training of people involved, process equipment and controls, technology and utilities. The focus, of course, is customer satisfaction.Product Realization: This clause broadly pertains to the standard operating procedures, monitoring, inspection, testing, controls and documentation necessary to achieve product quality. In view of the heavy emphasis on customer satisfaction, this section tacitly points out a pivotal requirement of ISO 9001 or any other quality system: An agile organization working in concert (all functional units including, for example, marketing, research, purchasing, raw material management, production, maintenance) is a must to maintain customer confidence.

Measurement, analysis and

improvement: To some degree, this is the feedback component of the ISO 9001. The section requires an organization to monitor customer perception, conduct quality audits, identify nonconforming product to ensure its proper disposal and take corrective actions to prevent recurrence of the problem. Also emphasized is the need for carefully designed databases and spreadsheets to facilitate information retrieval and meaningful analysis. By itself, data has no value, unless analyzed in the context of the organization and its environment.Thus, databases/spreadsheets should be used to generate information and then eventually knowledge – or in other words, "professional wisdom" (Shah, 2003). Case in Point - Implementation of Six Sigma and its benefits: Six Sigma is a concept that concentrates on the customer rather than the product.

Its supporters claim that it leads to a corporate cultural change, a paradigm shift toward an expectation of the highest quality, which then drives a passion for continuous improvement by all players involved.The basic premise is to improve customer satisfaction by reducing defects and it strives to deliver virtually defect-free processes and products. The Six Sigma concept matured between 1985 and 1986, growing out of various quality initiatives at Motorola. The company's Land Mobile Products Sector established a single matrix for quality, total defects per unit, dramatically changing the way management could measure and compare the quality improvement rates of all divisions. For the first time, everyone spoke the same language.

Because all operations were using the same measurement, the goal for defect reduction was uniformly applied to all activities. Sigma is a statistical expression that indicates how much variation there is in a product. A performance level of Six Sigma equates to

3. 4 defects per one million opportunities--not perfect, but pretty close. A defect was defined as anything that caused customer dissatisfaction.

A unit was any unit of work--for example, an hour of labor, a circuit board, or a keystroke. According to Robert W. Galvin, chairman of the executive committee of the Motorola Management Board, Six Sigma signifies "near perfection.Such corporate change has taken place at Citibank, the international financial division of Citicorp.

In spring 1997, Citibank undertook Six Sigma within its various divisions with a goal of reducing defects more than ten times during the first three years of implementation. In fact, the corporation has already reaped five-to ten-times defect reductions. General Electric (GE) officials, who launched a Six Sigma initiative in late 1995, say the $300 million invested in 1997 toward quality improvement will deliver between $400 and $500 million in savings, producing an additional $100 to $200 million in incremental margins.Wipro Corp. , a diversified conglomerate headquartered in Bangalore, India, reports that using the Six Sigma methodology during the past 20 months eliminated unnecessary steps and decreased rework, leading to an eight-fold gain over the investments.

Motorola University (MU), the education and training arm of Motorola, teaches the Six Sigma concepts and courses and has saved billions of dollars for its worldwide corporation by practicing what it teaches. According to Howie Berg, a senior consultant for MU, "It's irrelevant whether perfection is possible.Companies have reduced defect rates by factors of ten and 20 annually, when unshackled by presuppositions that it's impossible. Improve, and improve aggressively, is the vision. That's doable.

" According to Craig Erwin, quality engineering manager at Motorola Semiconductor Products Sector

(SPS), Phoenix, Arizona, "Before Six Sigma, we were interested in continuous improvement, but we tended to accept quality levels that merely mirrored our competitors'. We were somewhat internally focused and accepted the argument that things couldn't be made better.Six Sigma is part of the SPS culture now, and is included in every new employee's orientation. For those who went through training years ago, the company is refreshing its drive with a combination of classes and a renewed emphasis by senior management.

In the short term, SPS saw some increased costs, but in the long run, the decisions allowed them to improve their processes and apply more effective controls. Erwin stated improvements in product reliability, manufacturing yields, and internal quality metrics, in spite of increasing product complexity and higher customer expectations as some of the ways Six Sigma has benefited his company.Management at Motorola believes that making designs more robust and reducing the opportunity for defects to creep into the final product is a one-time expense. If that is not done, then the cost of repairs, rework, excessive scrap, and unhappy customers will continue through the product's life. In this day and age, product complexity is growing exponentially.

Future products such as semiconductors and software will undoubtedly contain tens of millions, even billions, of elements; hence the imperative is to reduce defect rates to a few parts per billion.Six Sigma has saved Motorola billions of dollars in costs in terms of scrap and rework, enabling greater customer satisfaction which is the organization's ultimate goal. " Another pleased Six Sigma client is GE. According to a 1996 annual report, "Quality improvement, under the disciplined rubric of Six

Sigma methodology, will define the way we work. " A three-to-four Sigma level, average for most U.

S. companies, can cost a company as much as 10 to 15 percent of its revenues. For GE, that would mean $8 to $12 billion.GE undertook the program with 200 projects and massive training, and then moved to 3,000 projects and more training during 1996. In 1997, 6,000 projects were started (Douglas & Erwin, 2000).

Conclusion: The importance of quality and employment of quality management systems as a means of improving profits, market share and competitiveness have become pervasive features of organizations today. Quality standards, procedures, policies and various concepts such as TQM and Six Sigma have been implemented all over the world in manufacturing and service firms.However, such measures often fail because of improper management, implementation or intent. Quality measurement systems are not quick-fix recipes to reverse organizational fortunes and should certainly not be implemented as a means of 'keeping up with the Jones's. Companies often implement practices such as ISO 9001 not because they particularly need it to improve their operations but because they see their competitors implementing it, and as such feel disadvantaged in the eyes of the customer if they do not also have it.

The outcome then is one in which there has been little fit between the techniques, and the realities of companies, with these measures not even coming close to solving the actual predicament of the company. Quality management systems such as TQM require patience as well as major changes in the cultural aspects as well as employee mindset in an organization. They should be sufficiently understood first and then be used

by organizations as a powerful vehicle by which they can achieve excellent business performance, but not as a prescriptive 'bag' of techniques, promising to solve operational and quality woes near-overnight.