European Foundation for Quality Management - Term Paper Example

 «Implementation of TQM in an organization» Abstract Quality management is a core management function in every organization irrespective of whether it is a manufacturer or service provider. The success of an organization mainly depends on the quality of the product or service it provides. Any compromise on quality may lead to the downfall of the organization. The implementation of quality standards is also difficult in an organization especially in manufacturing unit. This paper discusses the main eight concepts of Total Quality Management (TQM) as per the European Foundation for Quality Management (EFQM) standards and the implementation of these concepts in a tire manufacturing unit which I am familiar with. Introduction “Quality is never an accident, it is always the result of high intension, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives” (William A. Foster quotes). Customers have increased their quality demands markedly in recent years. This tendency will most likely increase in years to come because of the continual technological advances, the increase in quality consciousness, on the part of the customers and the intense competition that is inevitable. This can be accomplished only by having a sound quality management set up based on up-to-date quality program aimed at prevention rather than correction. University Number: 379710 TQM 3 “Quality leaders reinforce a customer focus by investigating their own time in improving customer relationships”.( Stephen George, Arnold Weimerskirch, 1998, Page 18) Quality management today requires an understanding of the business as an economic system, its product technology and proper management techniques. Total Quality Management is the overall management function that develops and implements a quality program designed to achieve the organization’s quality and reliability objectives in a profitable manner and in keeping with the overall quality policy of the organization. Total Quality Management (TQM) “Total Quality Management is an approach to the art of management that originated in Japanese industry in the 1950's and has become steadily more popular in the West since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with things being done right first time, and defects and waste eradicated from operations” TQM is a management function to meet or exceeds customer requirements.(John Stark,1998) The customer satisfaction is the ultimate aim of any kind of quality management. It is always better to think in terms of the perception of customers rather than the perception of the manufacturer. A customer will always consider the serviceability factor of the products before the purchase. An expensive luxury car without proper service University Number: 379710 TQM 4 centers are difficult to sell out. The workers also should be given participation in the decision making or policy making bodies. They also must be properly rewarded for the exceptional performances. The manufacturing process must be modified continuously based on the technological advancement and innovations to keep the pace with the rapidly changing customer needs. “TQM Principles are; Customers Satisfaction, Customer Perception of Quality, Customer Complains Service Quality, Customer Retention, Employee Involvement, Motivation Empowerment, Team Work, Recognition and Reward, Performance Appraisal, Benefits, Continuous Process Improvement “(Total Quality Management) The statistical analysis of engineering and manufacturing facts is an important part of TQM. Facts and analysis provide the basis for planning, review and performance tracking, improvement of operations, and comparison of performance with competitors. To achieve customer satisfaction, the company has to respond rapidly to customer needs. TQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed. TQM has a customer-first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company's highest priority. “It's not easy to introduce TQM. An open, cooperative culture has to be created by management. Employees have to be made to feel that they are responsible for customer satisfaction. They are not going to feel this if they are excluded from University Number: 379710 TQM 5 the development of visions, strategies, and plans. It's important they participate in these activities. They are unlikely to behave in a responsible way if they see management behaving irresponsibly - saying one thing and doing the opposite. TQM team Product development in a TQM environment is customer-driven and focused on quality. Teams are process-oriented, and interact with their internal customers to deliver the required results. Management's focus is on controlling the overall process, and rewarding teamwork. A successful TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities. Such participation is reinforced by reward and recognition systems which emphasize the achievement of quality objectives”. (John Stark, 1998) Quality Assurance It is defined as the process through which we measure actual quality performance, compare it to a standard and act on the difference. The process of quality assurance involves; Identifying the characteristics to be controlled Choosing a unit of measurement Setting a standard Selecting a measuring device Measuring actual performance Comparing actual to standard University Number: 379710 TQM 6 Taking action where required It is impossible nearly impossible to perform the same task and obtain the same result time after time. For example no now writes his/her name in exactly the same way each time. The differences are small, but present. Variation means the difference between what is expected to happen and the actually happens under similar conditions. For a process there are two types of variations; random variations and systematic variations. Random variation is always present which may be due to the random fluctuations in manufacturing process, equipment, environment, materials etc. controlling such natural or random variables is extremely difficult. On the other hand systematic variations can have a definite cause which can be eliminated. Such systematic variations are normally contributed by man, materials, machine, environment and tools. European Foundation for Quality Management (EFQM) “In 1988, The Presidents of 14 European companies came together to create the European Foundation for Quality Management. EFQM was formally established on 15 September 1988 in Brussels. (The Story of EFQM) The EFQM has wide influence on the business activities in Europe. Their standards are widely accepted and implemented in Europe. The importance of EFQM lies in the fact that it succeeded in providing a unique quality standards to all the business activities in Europe. They have designed an University Number: 379710 TQM 7 eight point concept of TQM which is accepted as the manifesto for TQM in Europe. These concepts are explained below taking a tire manufacturing unit as example. 1. Customer Focus techniques:- The most common customer focus techniques are; Customer surveys, Focus groups, Structured interviews, Representative Body reports, Customer analysis, segmentation, etc. “Quality must be designed into the product, not inspected into it. Quality can be defined as meeting customer needs and providing superior value. This focus on satisfying the customer's needs places an emphasis on techniques such as Quality Function Deployment to help understand those needs and plan a product to provide superior value” (Kenneth Crow, 2002) In a tire manufacturing industry, the customers are the vehicle owners. The customers can be of different types like Light Motor Vehicle owners and Heavy Motor Vehicle owners, based on the vehicles they are using. The tires are made based on the load carrying capacity. Heavy load carrying vehicles need much stronger tires than the LMV. So the customer survey should focus all such aspects. The surveys and interviews are conducted among the customers and different focus groups. The company will provide such survey forms to all the retail and wholesale outlets. The customers, who approach the outlets for purchasing, will be requested to complete the survey. The survey forms are different for different types of customers and focus groups. The feed backs obtained through such surveys will be analyzed weekly in the top executives meeting. The reports from the representative bodies such as the authorized University Number: 379710 TQM 8 sellers will also be analyzed. Based on the usage of different types of tires of the company the customer feedbacks are segmented and analyzed. Most of the times, the management will consider only the practical suggestions from the customers. Suggestions which are complicated to implement, will usually neglected. The management will usually focus more on their best selling product feedback reports. 2. Results Orientation through a concentration on areas such as: Data gathering and analysis, Trend review and interpretation, Pareto, etc. analysis, Benchmarking, The Balanced Business Scorecard The data gathered in the first step is analyzed and interpreted in this step. From the evaluation of such data the TQM team can conclude the orientation of the results. The market trends can be accurately predicted through such analysis. “The Pareto Principle states that only a "vital few" factors are responsible for producing most of the problems. This principle can be applied to quality improvement to the extent that a great majority of problems (80%) are produced by a few key causes (20%). If we correct these few key causes, we will have a greater probability of success” (Pareto Analysis, 1998). University Number: 379710 TQM 9 “The Pareto principle suggests that most effects come from relatively few causes. In quantitative terms: 80% of the problems come from 20% of the causes (machines, raw materials, operators etc.); 80% of the wealth is owned by 20% of the people etc. Therefore effort aimed at the right 20% can solve 80% of the problems. Double (back to back) Pareto charts can be used to compare 'before and after' situations. General us;- to decide where to apply initial effort for maximum effect”. (TQM Tools) Benchmarking is the process of comparison between the organization and the competitor regarding the cost, time or quality. The evaluation process through Pareto analysis and bench marking can help the TQM team in calculating the balance business scorecard. In a tire manufacturing company, understanding of the result orientation is important. It is important to know the trends in the market. For example, the introduction of radial tire and tubeless tire made majority of the customers aligned towards such new products. It is essential for the company to know in advance about the market trends and what their competitors are doing. In some cases the competitors may reduce the cost or improve the quality of their products. It is essential that the top management team got all such information in advance for taking proper decisions. Market analysis and market trends must be analyzed by the competitive persons. A misinterpreted data can retard the growth of a company. University Number: 379710 TQM 10 3. Partnership Development through for example supply chain value-added initiatives “A focused savings initiative within a non-priority service that is performing poorly may result in a loss of value for the organization, even if stakeholder supported. This lost value is most aptly quantified by the exhausted time and effort of supply chain leadership on short-term gains instead of innovative and value added long-term improvements (e.g., strategic pricing, revenue enhancement, IT improvements, etc.). Even if difficult, executives and supply chain leaders must decide if their efforts will ultimately focus first on value and innovation or cost containment” (Neil B. Alexander,2004) Long term strategies must be given priority rather than going after short term benefits. Most of the organizations incorporated value added services to their products through their supply chains. It is an old custom that the product must be sold out under any cost and no further services to the sold out product. Most of the reputable companies are now offering warranties to their product for a limited period in order to ensure customer satisfaction. The defective product will be repaired or replaced during this period. 4. Leadership and constancy of purpose working on, for example: Critical Success Factor (CSF) analysis, Force Field analysis, SWOT, PEST, etc. reviews, Effective leadership techniques. “Critical Success Factors (CSF’s) are the critical factors or activities required for ensuring the success of your business. The term was initially used in the world of data University Number: 379710 TQM 11 analysis, and business analysis” (Mike Morrison 2008). The success of each business is connected to so many internal and external factors. For a tire manufacturing industry, along with the infrastructure facilities, the raw materials like, Rubber, Carbon black, Sulfur etc, availability is also important. The market requirement of the final product is also important. The strength of competition, government policies, availability of labor force etc are some other factors for the success of a tire manufacturing industry. “SWOT analyses are undertaken by businesses at the start of planning - to identify organizational strengths, weaknesses, opportunities and threats. A SWOT starts with an external analysis of the business environment, often called a PEST analysis, and then looks at the organization's internal strengths and weaknesses, relative to internal factors such as prior performance and also to external factors, which may have been highlighted in the PEST analysis. A PEST analysis looks at the external business environment. PEST stands for; Political, Economic, Socio-cultural and Technological (SWOT & PEST analysis, 2008) Both SWOT and PEST analysis are important before the establishment of a business. The internal as well as external factors determine the success of a business. For example even if all the internal factors are positive sometimes even a single external factor can spoil a project. The Indian business tycoon ‘Tata’ has recently experienced it. The prestigious ‘Nano Car (A car worth of $ 2000) project of Tata group, which has started its operation in Indian state, West Bengal, ruled by left parties, shifted University Number: 379710 TQM 12 to Gujarat because of political and cultural problems. In this example we can see that the leadership and constancy of purpose has failed drastically. The tire manufacturing industry which is focused in this article is also not an exception. External influences like political ideology and cultural differences can spoil them as well. The Indian state Kerala is better known for its failure to attract investors simply because of excessive unionism and strikes. The left wing parties are prominent there and hence labor problems are quite often. Though Kerala is the biggest rubber growing state in India, most of the tire manufacturing units are working outside Kerala, making use of the rubber produced in Kerala. So analysis of internal as well as external parameters is important in deciding the business possibilities and success. 5. People development and involvement requires a focus on concepts and techniques such as: Motivation, Empowerment, National standards,(e.g. Investor’s in People and IPD), Professional Standards, (e.g. Social Care, Mind and Clinical Governance), Sector standards and/or awards, (e.g. Charter mark). The success of a business depends on the co-operation of the people or consumers. The local inhabitants should be involved in the business activities. The consumers must be made aware of the national as well as international standards of the product. Awards and complements received by the product must be brought into the notice of the consumers and also the general people in order to improve the brand awareness and its ratings. Such awareness will motivate the consumers towards the product. University Number: 379710 TQM 13 6. Management of processes and facts, or process control, monitoring and preventative activity requires an understanding of and willingness to use process tools and analysis techniques such as: a) Statistical Process Control (SPC) (Design of Experiments, Failure Mode, Effect Analysis, 6σ techniques) b) Process standards, (e.g. ISO 9000:2000) c) Business Process Re-engineering, d) Lean Manufacturing etc. ISO 9000 In order to be successful in the highly competitive global market, it is not only enough to depend only on in-company standards of control and quality, but also to comply with international standards and quality systems. This will ensure that the consumer all over the world get uniform products without sacrificing their quality or reliability requirements. International Standards Organization (ISO) has evolved a series of quality systems that will strengthen the competitiveness and achieve the needed product quality, in a cost effective way. Conformance to ISO 9000 is becoming almost mandatory for exporting products to European countries. It deals with quality systems that can be used for internal quality management purposes (ISO 9004) and for external quality management purposes (ISO 9001-ISO 9003) The process of manufacturing and the various technology and standards involved in it has a vital role TQM. The tire manufacturing process is different for types of tires like radial, tubeless and bias tires. For example some manufacturers use nylon treads and University Number: 379710 TQM 14 some others use steel treads for preparing the plies in tire manufacturing. Both technologies have their own evaluation methods and remedial measures. The classification of good, repairable and scrap tire is done through certain specific methods. But all the manufacturers keep the standards of ISO while manufacturing and segregation of the product. “When an organization's quality system has been assessed against ISO 9001, ISO 9002 or ISO 9003 by an accredited independent certification body, then the quality system is registered, and can be used as evidence of quality assurance in tendering for contracts. Quality systems produced in accordance with these quality system requirements are subject to regular third party assessment based on documented, objective evidence of compliance”. (John Stark, 1998) 7. Continuous learning, innovation and improvement using for example: Feedback loops, Communication, Training and education, Continuous review processes, Gap Analysis, Project management techniques.etc. Leadership in the industry can be obtained only thorough continuous Research and Analysis (R&D). Only followers stick to the conventional methods and they will wait till others develop new things to copy it. In tire manufacturing also the leading manufacturers study the feedbacks from market carefully and will be ready to change whatever the strategy going against their product movement. They will review the manufacturing process, sales and also the after sales feedbacks. The project management techniques are also designed based on the evaluation of the market trends. University Number: 379710 TQM 15 “Gap analysis is a very useful tool for helping marketing managers to decide upon marketing strategies and tactics. Again, the simple tools are the most effective. There's a straightforward structure to follow. The first step is to decide upon how you are going to judge the gap over time. For example by market share, by profit, by sales and so on” (Gap Analysis, 2000) The success of the business lies in closing down the Gap between “where are we now” and “where do we want to be”. The earlier trends in tire manufacturing were simply revolved around the bias tire and its modifications. But the invention of radial technology University Number: 379710 TQM 16 has made revolutionized the tire manufacturing industry. Now the industry is swinging around the radial and tubeless tire manufacturing. Who knows another innovation might change the strategy again? 8. Corporate Social Responsibility addressing the ‘hard’ issues such as waste elimination and standards such as ISO 14000 and EMAS, as well as the ‘softer’ matters of involvement with the community and the burgeoning concern of sustainability “The ISO 14000 family addresses various aspects of environmental management. The very first two standards, ISO 14001:2004 and ISO 14004:2004 deal with environmental management systems (EMS). ISO 14001:2004 provides the requirements for an EMS and ISO 14004:2004 gives general EMS guidelines” (ISO 14000 essentials, 2009). Environmental problems put a growing concern among all the manufacturing industries. The people are well aware of the pollution caused by the industries to the environment. So now even before the establishment of an industry, manufacturers evaluate the possible environmental problems may cause by their activities. They were forced to implement the ISO 14000 standards to minimize the problems, by the governments. The manufacturing of tire is also not an exception. Since the mixing and curing processes of tire manufacturing may cause environmental problems, it is controlled by ISO 14000 standards. An ISO implementation is a basis for a Total Quality Management implementation. Where there is an ISO system, about 75 percent of the steps are in place for TQM. (Dexter A. Hansen, 2005) University Number: 379710 TQM 17 I know a person who was working as a production manager in a tire manufacturing unit in India. This gentle man was a skilled worker earlier and he was promoted to such a higher post simply because of his skills in tire building. He was not much concerned with quality aspects when he was supervising his duties as a production manager because of his lack of education and awareness of the standards. He often forced the tire building workers to make maximum tires in his shifts at the expense of quality. Once some smart newly appointed quality people has joined the company in its TQM team and they were forced to hold majority of the tires manufactured under this gentleman’s supervision in a particular shift. Though the production manager tried to convince the new TQM team by explaining his experiences in tire industry for the last 30 years, the TQM team reported the issue seriously and the management forced to take action against this gentleman. So even a single executive, who lacks knowledge about the need of TQM in the competitive world can cause severe damages to the company. The leadership styles are important in the effective functioning of TQM. The leaders must be well aware of the standards and the necessity of such standards in the changing world. The leaders must educate the workers also about the necessity of keeping standards in producing quality products. The workers must be made aware that quality is as important as quantity. The quality assurance team headed probably by a general manager usually assists the implementation of the whole concepts of TQM discussed above in a tire University Number: 379710 TQM 18 manufacturing industry. Usually some managers and supervisors will help him in gathering data and the implementation of TQM concepts described above. “You can create feats of quality and productivity that appear miraculous when compared to the levels that others are achieving”.( Bill Creech, 1995, Page 83). Quality and productivity both though seemingly different, both can achieve at the same time if the management implements proper techniques. The organizational structure and culture also plays a vital role in the management of quality of the product. Some manufacturers will be highly focused on their profits rather than keeping the required expensive standards. In such cases the TQM team will be handicapped by the lack of support from the top management. Under such circumstances their effective functioning will always be in jeopardy. The organization must have a well designed quality policy or philosophy in order to ease the jobs of the Conclusion “TQM is a way of thinking about goals, organizations, processes and people, to ensure that the right things are done right first time. This thought process can change attitudes, behaviour and hence results for the better” (Total Quality Management, 2007) To be successful in today’s technologically advanced and competitive market, any manufacturing organization or service provider must be dedicated to continuous improvement in quality to meet the ever increasing customer expectations. The driving force to achieve improvement is management commitment. Market forces now ensure that organizations which do not practice never ending improvement will not stay in the University Number: 379710 TQM 19 market. This commitment of excellence can be achieved only by an effective quality management system designed by giving maximum stress on the voice of the customer. “Commitment from the management team is the only way to implement and maintain the culture necessary for total quality” (Peratec Ltd, , 2007,Page 19) University Number: 379710 TQM 20 References 1. Stephen George, Arnold Weimerskirch, (1998), Total Quality Management: Strategies and Techniques Proven at Today's Most Successful Companies, Retrieved January 16, 2009, Publisher: Wiley; 2 edition (February 1998) 2. Bill Creech (1995), The Five Pillars of TQM: How to Make Total Quality Management Work for You, Retrieved January 16, 2009, Publisher: Plume, December 1, 1995 3. Peratec Ltd (2007),Total Quality Management, Retrieved January 16, 2009, Publisher: Springer; 1 edition, August 21, 2007 4. John Stark, 1998, A few words about TQM, Retrieved January 16, 2009 < http://www.johnstark.com/fwtqm.html> 5. The Story of EFQM, Retrieved January 16, 2009 6. Kenneth Crow, (2002), CUSTOMER-FOCUSED DEVELOPMENT WITH QFD Retrieved January 16, 2009, University Number: 379710 TQM 21 7. Total Quality Management, Retrieved January 16, 2009 8. Pareto Analysis, 1998 Retrieved January 16, 2009 9. Neil B. Alexander, 2004, Supply Chain Success: Looking Beyond Savings to Value, Retrieved January 16, 2009 Accessed on 9/1/09 10. SWOT & PEST analysis , 2008, Retrieved January 16, 2009 < http://www.marketing-intelligence.co.uk/help/Q&A/question24.htm> 11. Mike Morrison,2008, Critical Success Factors - Determine the CSFs for your Company, Retrieved January 16, 2009 University Number: 379710 TQM 22 12. John Stark, 1998, A FEW WORDS ABOUT ISO 9001, Retrieved January 16, 2009 < http://www.johnstark.com/fwis9.html> 13. Gap Analysis, 2000 Retrieved January 16, 2009 14. ISO 14000 essentials, 2009, Retrieved January 16, 2009 15. William A. Foster quotes, Retrieved January 16, 2009 16. Dexter A. Hansen,(2005), Total Quality Management (TQM) Tutorial, Retrieved January 16, 2009, 17. Total Quality Management , 2007, Retrieved January 16, 2009 18. TQM Tools, Retrieved January 16, 2009 Read More