Bus 520- Tqm Term Paper

MZUMBE UNIVERSITY

FACULTY OF COMMERCE

Department of Procurement and Logistics Management

TERM PAPER

Differentiating between Traditional and Total Quality Management views of

Quality and Identifying three requirements for quality improvement Strategy

PREPARED BY: FRANSISKO T. MASHIMBI [Reg. No. 3131/T.10]

PROGRAMME: MSc. [procurement and Supply Chain Management]

YEAR: 2010/2011

SUBJECT: Strategic Business Management

CODE: BUS 520

SEMESTER: 1

LECTURER: MNZAVA, J.A.

JANUARY, 2011

TABLE OF CONTENTS

Abstract................................................................................................................................ i

1.0 Introduction.............................................................................................................. 11.1 Defining Quality........................................................................................... 11.2 Why is Quality Important............................................................................. 11.3 Total Quality Management........................................................................... 21.4 Quality Assurance Vs Quality Control......................................................... 21.5 Total Quality Management Vs Six Sigma.................................................... 31.6 Background of Japan’s Quality Movement.................................................. 31.7 Deming’s Fourteen Points Plan for TQM..................................................... 4

2.0 Differences Between traditional and Total Quality Management Views................. 72.1 Definition of Quality..................................................................................... 72.2 Productivity Vs Quality................................................................................. 72.3 Quality Measurement.....................................................................................72.4 Quality Achievement..................................................................................... 82.5 Responsibity for Quality............................................................................... 82.6 Organizational Structures.............................................................................. 82.7 Role of People............................................................................................... 92.8 Participation in Quality Improvement Processes.......................................... 92.9 Quality Assurance and Checking.................................................................. 92.10 Thoughts and Decision Making..................................................................... 102.11 Decision Making Tools..................................................................................102.12 Leadership and Performance Control............................................................ 102.13 Acting Proactively rather than reactively...................................................... 102.14 Focus on Profit.............................................................................................. 112.15 Perception on Technology and Global Quality............................................. 112.16 Supplier relationship...................................................................................... 11

3.0 Requirements for Quality Improvement Strategy.................................................... 123.1 Customer View Point................................................................................... 123.2 Personnel responsibility for Quality............................................................. 123.3 Information for Plan, Control and Evaluation in implementing strategy..... 14

4.0 Benefits of Total Quality Management.................................................................... 155.0 Challenges facing TQM........................................................................................... 156.0 Conclusion................................................................................................................. 167.0 Reference.................................................................................................................. 17

Appendix-Total Quality Management Implementation Model

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ABSTRACT

Total Quality Management (TQM) realizes that the key to improving quality is to improve

processes that define, produce and support an organization’s end product or service. TQM

involves a change from a traditional attitude toward quality. Thus, this paper focuses on

identifying the difference between traditional and TQM views of quality.

The first part of the paper gives an introduction of TQM and quality as a whole. The second

part states the difference of TQM from traditional views of quality. The third part identifies

the three requirements for quality improvement strategy. The next part states the benefits of

TQM, Challenges of TQM and Conclusion.

With management commitment, employees’ involvement and customer focus, TQM will

enhance quality of goods or services, and hence improving customer satisfaction and

delighting them.

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1.0 INTRODUCTION

1.1 Defining Quality

Definitions of quality fall into several categories. Some definitions are said to

be user-based: they propose that quality “lies in the eyes of the beholder”.

Marketing people like this approach, and so do customers. To them, higher

quality means better performance, nicer features, and other (sometimes costly)

improvements.

To production managers, quality is manufacturing based. They believe that

quality means conforming to standards and “making it right the first time”.

Yet, a third approach is a product-based definition, which views quality as a

precise and measurable variable.

Generally, quality of a product or service is the degree to which a product or

service meets specifications or meets the customers, needs (Heizer, J. And

Render, B., 1993)

1.2 Why is Quality Important

Quality goods and services are strategically important to the company. In

particular, quality affects a firm in four ways;

Company’s Reputation

An organization can expect its reputation for quality – be it good or

bad- to follow it. Quality will show up in perception about the firm’s

new products, employment practices and supplier relations.

Costs and Market share

Improved quality can lead to increased market share and costs savings.

Improved reliability and conformance means fewer defects and lower

service costs, thus affecting profitability as well

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Product Liability

The courts increasingly hold everyone in the distribution chain

responsible for a product. Additionally, organizations that design and

produce faulty products or services can be held liable for damages or

injuries resulting from their use.

The International Implications

In this technological age, quality is an international, as well as

corporate concern. For both a company and a country to compete

effectively in the global economy, its products must meet quality and

price expectations.

1.3 Total Quality Management

Total Quality Management refers to a quality emphasis that encompasses the

entire organization, from suppliers to customer. It emphasis a commitment by

management to have a company-wide drive toward excellence in all aspects of

products and services that are important to the customer.

It is an integrative management concept of continually improving the quality

of delivered goods and services through the participation of all levels and

functions of the organization.

It involves a change from a traditional attitude toward quality (Lysons K. &

Farrington B., 2006)

1.4 Quality Assurance versus Quality Control

1.4.1 Quality Assurance

Quality assurance is defined as all those planned and systematic

activities implemented within the quality systems and demonstrated as

needed to provide adequate confidence that an entity will fulfil

requirements for quality. It is concerned with defect prevention, and

thus involving a number of approaches.

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1.4.2 Quality Control

Quality control is defined as the operational techniques and activities

that are used to fulfil requirements for quality. It is concerned with

defect detection and correction and relates to such activities as

determining where, how and at what intervals inspection should take

place, the collection and analysis of data relating to defects and

determining what corrective action should be taken.

1.5 Total Quality Management versus Six Sigma

Six Sigma is relatively new concepts as compared to Total Quality

Management (TQM). However, when it was conceptualized, it was not

intended to be a replacement for TQM. While TQM has helped many

companies in improving the quality of manufactured goods or services

rendered, 6 Sigma has the potential of delivering even sharper results.

The basic difference between 6 Sigma and TQM is the approach. While TQM

views quality as conformance to internal requirements, 6 Sigma focuses on

improving quality by reducing the number of defects, cycle time and cost

savings.

1.6 Background of Japan’s quality Movement

TQM was not invented in Japan, it was invented in the U.S., but it was used by

the Japanese very effectively in the 1980's and the term has subsequently

become associated with Japanese management principles.

In the 1940s, Japanese products were perceived as cheep, shoddy imitations.

Japanese industrial leaders recognised this problem and aimed to produce

innovative high quality products. They invited a few quality gurus, such as

Deming, Juran, and Feigenbaum to learn how to achieve this aim.

Deming suggested that they can achieve their goal in five years; not many

Japanese believed him. However, they followed his suggestions. Maybe the

Japanese thought it was rude to say that they did not believe Deming. Or

maybe they thought it would be embarrassing if they could not follow his

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suggestions. Whatever reason it was, they took Deming’s and other gurus’

advice and never looked back.

In the 1950s, quality control and management developed quickly and became

a main theme of Japanese management. The idea of quality did not stop at the

management level. Quality circles started in the early 60s. A quality circle is a

volunteer group of workers who meet and discuss issues to improve any

aspects of workplace, and make presentations to management with their ideas.

In the 1980s to the 1990s, a new phase of quality control and management

began. This became known as Total Quality Management (TQM). Having

observed Japan’s success of employing quality issues, western companies

started to introduce their own quality initiatives. TQM, developed as a catchall

phrase for the broad spectrum of quality-focused strategies, programmes and

techniques during this period, became the centre of focus for the western

quality movement (http://www.allbusiness.com accessed on 27thDec, 2010).

1.7 Deming’s 14 Point Plan for TQM

1. Creating consistency of purpose

Create constancy of purpose toward improvement of the product and

service so as to become competitive, stay in business and provide jobs.

2. Adopting New Philosophy

We are in a new economic age. We no longer need live with

commonly accepted levels of delay, mistake, defective material and

defective workmanship, thus need to promote change.

3. Cease dependence

Cease dependence on mass inspection; require, instead, statistical evidence

that quality is built in. Build quality into product.

4. Improve the quality of incoming materials and services

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End the practice of awarding business on the basis of a price alone.

Instead, depend on meaningful measures of quality, along with price.

5. Continuous Improvement

Find the problems; constantly improve the system of production and

service. There should be continual reduction of waste and continual

improvement of quality in every activity so as to yield a continual rise in

productivity and a decrease in cost.

6. Institute Training

Institute modern methods of training and education for all. A modern

method of on-the-job training use control charts to determine whether a

worker has been properly trained and is able to perform the job correctly. 

Statistical methods must be used to discover when training is complete.

7. Emphasize Leadership

Institute modern methods of supervision. The emphasis of production

supervisors must be to help people to do a better job. Improvement of

quality will automatically improve productivity. Management must prepare

to take immediate action on response from supervisors concerning

problems such as inherited defects, lack of maintenance of machines, poor

tools or fuzzy operational definitions.

8. Drive out Fear

Fear is a barrier to improvement so drive out fear by encouraging effective

two-way communication and other mechanisms that will enable

'everybody to be part of change and to belong to it'. Fear can often be

found at all   levels in an organisation: fear of change, fear of the fact that

it may be necessary to learn a better way of working and fear that their

positions might be usurped frequently affect middle and higher

management, whilst on the  shop-floor, workers can also fear the effects of

change on their jobs.

9. Break down barriers between Department and Staffs’ areas

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People in different areas such as research, design, sales, administration and

production must work in teams to tackle problems that may be encountered

with products or service.

10. Stop haranguing workers

Eliminate work standards that prescribe numerical quotas for the

workforce and numerical goals for people in management. Substitute aids

and helpful leadership.

11. Remove barriers to pride in work

Remove the barriers that rob hourly workers, and people in management,

of their right to pride of workmanship. This implies, abolition of the annual

merit rating (appraisal of performance) and of management by objective.

12. Support, help and improve

Eliminate the use of slogans, posters and exhortations for the workforce,

demanding zero defects and new levels of productivity without providing

methods, support and help. Such exhortations only create adversarial

relationships.

13. Institute a vigorous programme of education

This goes with encouraging self-improvement for everyone. What an  

organization needs is not just good people; it needs people that are

improving with education.

14. Top management's permanent commitment

Top management's permanent commitment to ever-improving quality and

productivity must be clearly defined and a management structure created

that will continuously take action to follow the preceding 13 points.

(http://.educe.dabsol.co.uk/Quality/Q-Deming.html)

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2.0 DIFFERENCES BETWEEN TRADITIONAL AND TOTAL QUALITY

MANAGEMENT VIEWS

Some of the contrasting differences between modern Total Quality organizations and

traditional organizations that pre-dated the quality revolution are summarized below;

2.1 Definition of quality

In traditional management, quality is the adherence to internal specifications

and standards. The absence of defects, therefore, defines quality. Inspection of

people’s work by others is necessary to control defects. Innovation is not

required.

In Total Quality Management, quality is defined in the customers’ focus

(externally). So that ultimate decider of the quality is the customer. Fitting to

the customer requirement was the least requirement while delighting them is

the ultimate goal. Thus it is a system involving participation of all levels and

functions of the organization towards customers’ satisfaction and delight.

2.2 Productivity Versus Quality

The traditional view is that productivity and quality are always in conflict, you

cannot have both.

The total quality view is that lasting productivity gains are made only as a

result of quality improvement.

2.3 Quality Measurement

The traditional view is that quality is measured by establishing an acceptable

level of non conformance and measuring against that benchmark.

“Benchmarking is the practice of recognising and examining the best

performance in industry or in the world and using this knowledge as the basis

for improvement in all aspects of business. It involves internal and external

benchmarking. Internal benchmarking is used to identify best practices within

an organization, to compare best practices within the organization, and to

compare current practice over time. Competitive or external benchmarking

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involves using comparative data between organizations to judge performance

and identify improvements that have proven to be successful in other

organizations.”

The total quality view is that quality is measured by establishing high-

performance benchmarks for customer satisfaction and then continually

improving performance.

2.4 Quality Achievement

The traditional view is that quality is inspected into the product. The total

quality view is that quality is determined by product design and achieved by

effective control techniques.

2.5 Responsibility for Quality

Traditionally people thought bad quality products are due to the workers who

do not perform their job correctly. One of the major differences between total

quality management and traditional management style is the assignment of the

responsibility of the quality to the management. The total quality view is that

80 percent of quality problems are management's fault. Especially

responsibility of the quality goes into the middle level management in the

operational.

2.6 Organizational structures

Traditional management views an enterprise as a collection of separate, highly

specialized individual performers and units, linked within a functional

hierarchy. Lateral connections are made by intermediaries close to the top of

the provinces.

Total Quality Management views the enterprise as a system of interdependent

processes, linked laterally, over time, through a network of collaborating

(internal and external) suppliers and customers. Processes are connected to the

enterprise’s mission and purpose, through a hierarchy of micro and macro

processes. Every process contains sub processes and is itself contained within

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a higher order process. This structure of processes is repeated throughout the

hierarchy.

2.7 Role of people

Traditional management views people as a commodity, virtually

interchangeable, and to be developed based on the perceived needs of the

enterprise. People are passive contributors, with little autonomy, doing what

they are told and nothing more.

Total Quality Management views people as the enterprise’s true competitive

edge. Leadership provides people with opportunities for personal growth and

development. People take joy and pride through learning and accomplishment,

and enhance the capability of the enterprise to succeed. People are active

contributors, valued for their creativity and intelligence. Every person is a

process manager, presiding over the transformation of inputs to outputs of

greater value to the enterprise and to the consumer.

2.8 Participation in Quality Improvement Processes

Total quality management, unlike traditional management calls for high

amount of team working. It is a strategic system involving teamwork, which is

essential to the success of all businesses. This has caused businesses to work

together to improve their knowledge of recent technology and approaches to

training. These teams provide the necessary momentum to the implementation

process and will propel the system forward, with very less resistance. Total

Quality Management helps to competitively meet the demands of customers

by bringing organizations together with management enabling professionals to

improve customer quality.

2.9 Quality Assurance and Checking

Total Quality Management believes in quality assurance rather than checking

as in Traditional Management. Quality is inbuilt to the system, so that

products are assured to be in good quality. Some decision like narrowing

down the supplier base is total quality management concepts used for this

purpose, which is revolutionary still today.

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2.10 Thoughts and Decision Making

Unlike traditional Management, Total Quality Management pursues new

strategic thinking and depends on cyclic thinking. It is also continuous;

therefore improvements are small, stable and continuous in nature. This is also

known as Kaizen. These events are used in teambuilding, brain storming and

decision making

2.11 Decision Making Tools

Unlike in traditional management style, total quality management makes

decisions on facts and figures and uses various applicable models. Thus,

problems are identified correctly and therefore solutions are well planned.

2.12 Leadership and Performance Control

Unlike Total Quality Management, the traditional management model of

"management by objectives" emphasizes a chain of command in which

objectives are translated into work standards or quotas. Performance of

employees is guided and evaluated according to numerical goals. As a result,

workers, managers and supervisors get caught up in protecting themselves.

Looking good overshadows a concern for the customer or the organization's

long-term success. Employees, desperate to meet quotas, lose sight of the

larger purpose of work.

2.13 Acting Proactively rather than Reactively

Unlike Traditional Management Style, in Total Quality Management,

organization as a whole needs to work on prevention not correction. So

strengths and weaknesses need to be identified, eliminate chronic waste,

continual learning opportunities and improvement, and have a unity purpose.

These aspects should be applied to all levels of an organization from top to

bottom to the customer.

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2.14 Focus on Profit

Traditionally managers believed that the only way to increase profits and

decrease overheads was to cut costs at any and all phases of production. They

believed that this was the only way to achieve high profit margins, not taking

into account the added costs of rejects and servicing of faulty products that this

method brought about.

In Total Quality Management, companies are focused on the systematic

management of data of all processes and practices to eliminate waste and

pursue continuous improvement of goods and services to meet and exceed

customer requirements. Six Sigma, as a business strategy, involving

improving, designing, and monitoring process to minimize or eliminate waste

while optimizing satisfaction and increasing financial stability is normally

employed. This enables an organization to achieve a competitive edge over

other competing firms, and hence increasing customer loyalty, sales and profit

margin

2.15 Perception on Technology and Global Quality

Unlike the traditional organizations, organizations with Total Quality

Management get by the increasing speed of revolutionary technology such as

the use of internet and e-business, breaking down previously invisible barriers

hindering cross country trading and thus keeping up to date with global

standards and a worldwide view of quality, contrary to traditional

organizations which view quality on local basis.

2.16 Supplier Relationship

The traditional view is that supplier relationships are short term and cost

driven. The total quality view is that supplier relationships are long term and

quality oriented.

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3.0 REQUIREMENTS FOR QUALITY IMPROVEMENT STRATEGY

Quality improvement strategy is any intervention aimed at reducing the quality gap in

business practices. It involves the following aspects;

Use of formal models for quality improvement

Establish, monitor and evaluate improvement efforts and outcome

Obtain feedback from customers about their products and use

information for quality improvement

Ensuring customers, suppliers and employees are involved in quality

improvement activities

Optimizing use of information technology

It involves the following aspects;

3.1 A focus on Product Improvement from the Customer’s View Point

Since the organizations depend on their customers, therefore they should

understand current and future customer needs, should meet customer

requirements and try to exceed the expectations of customers. An organization

attains customer focus when all people in the organization know both the

internal and external customers and also what customer requirements must be

met to ensure that both the internal and external customers are satisfied.

The term customer in this context is associated with the concept of quality

chains, which emphases the linkages between suppliers and customers.

3.2 A recognition that Personnel at all levels share responsibility for Product

Quality

The concept of ongoing improvement affects everyone in an organization, at

all levels. It is therefore based on team rather than individual performance.

Thus, while top management provides leadership, continuous improvement is

also understood and implemented at shop floor level. Some consequences of

this principle include:

Provision of leadership from the top

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Leaders need to be committed and establish unity of purpose and

direction. They should go for creation and maintenance of such an

internal environment, in which people can become fully involved in

achieving the organization's quality objective.

Creation of ‘Quality Culture’ dedicated to continuous improvement

One of the permanent quality objectives of an organization should be

the continual improvement of its overall performance.

Team Work

People at all levels of an organization are the essence of it. Their

complete involvement enables their abilities to be used for the benefit

of the organization.

Adequate Resource Allocation

These include Human resources, Information, Technology and

Finance. In particular, adequate financial resources are required by

identifying sources of funds for training and purchasing and testing

innovative technologies.

Quality Training of Employees

Education and training of staff and leadership about the current

problem, quality improvement tools, the planned change in practice

intervention, and updates as the project progressed are key strategies.

Quality Feedback

Information sharing on implementation of the quality strategy is very

essential at all levels in the organization through ongoing monitoring

and feedback opportunities.

Employee Recognition

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The successful work of these strategies is dependent upon having

motivated and empowered teams. There are many advantages to basing

the work of the quality improvement strategies on the teamwork of

multidisciplinary teams that would review data and lead change.

Measurement and use of Statistical Concepts

Efforts to improve quality need to be measured to demonstrate

“whether improvement efforts lead to change in the primary end point

in the desired direction.

3.3 Recognition of the importance of implementing a strategy to provide

information to managers about quality processes that enable them to

plan, control and evaluate performance.

Total Quality Management processes, tools and techniques, people

development, teamwork, management system and performance measurement

in implementing and control quality improvement strategy.

Monitoring and controlling the implementation of the strategy includes a

periodic look to see if the organisation is on course. It also includes

consideration of options to get a strategy once derailed back on track.

The above detailed discussed components can be summarized into the

following Key Requirements;

It requires everyone in the company to be completely involved and it

covers all company activities.

It requires that the standards are set by customers, and that all practices

conform to these requirements.

It requires that quality is monitored and controlled for optimum results.

4.0 BENEFITS OF TQM

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Some benefits of claimed for TQM include:

Improved customer satisfaction

Enhanced quality of goods and services

Reduced waste and inventory with consequential reduced costs

Improved productivity

Reduced product development time

Increased flexibility in meeting market demands

Reduced work-in progress

Improved customer service and delivery times

Better utilisation of human resources.

5.0 CHALLENGES FACING TQM

Despite its importance, TQM has some objections, these include;

Overly zealous advocates of TQM may focus attention on quality even though

other priorities may be important, such as changes in the market.

It creates a cumbersome bureaucracy of councils, committees and

documentation relating to quality

It delegates the determination of quality to quality experts because TQM is a

complicated entity beyond the comprehension of the average employee

Some workers and unions regard TQM as management-by-stress and way of

de-unionising workplaces.

6.0 CONCLUSION

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Total Quality Management realizes that the key to improving quality is to improve

processes that define, produce and support an organizations end product or service.

Total Quality Management theory realizes that people and the processes in which they

operate are keys in optimal organizational functioning. It recommends that an

organization get processes in control and work with other employees and managers to

identify process problems and eliminate them. It also realizes that managers and/or

supervisors must work on processes by providing training and tool resources, by

measuring and reviewing process performance, and by improving process

performance with the help of those who use the processes. Total quality Management

is all about caring for people sincerely. To get people to care about quality you have

to care about them.

7.0 References

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Deming’s 14 Points Plan for TQM available at http://.educe.dabsol.co.uk/Quality/Q-

Deming.html accessed on 28th, Dec, 2010

Fraser, J. M. (1996, Jan. 1). Implementing Total Quality, available at

http://www.allbusiness.com/professional-scientific/architectural-engineering/548320-

1.html, accessed on 27th, Dec, 2010

Hunger, J. Davia and Thomas L. Wheelen (1993), Strategic Management, 4th Edition,

Addison-Wesley Publishing Compony Inc. New York.

Lysons K. & Farrington B. (2006); Purchasing and Supply Chain management, 7th

Edition, Prentice Hall, UK

Mnzava J.A, Strategic Business Management Manual (Dec, 2010)

Shojania KG, McDonald KM, Wachter RM, et al (2004). Closing the quality gap: a

critical analysis of quality improvement strategies, Volume 1–Series Overview and

Methodology Technical Review 9 , Rockville.

Stark J. (1998). A few words about TQM, available at

http://www.johnstark.com/fwtqm.html accessed on 27th, Dec, 2010

Thareja P (2008), "Total Quality Organization Thru’ People, Each one is Capable",

FOUNDRY, Vol. XX, No. 4, July/Aug 2008

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