Total Quality Principles - Literature review Example

Total Quality Principles Student’s Name Institutional Affiliation Course Name Date of Submission Executive Summary Quality management is an important factor for the success of any company. In the modern competitive, complex and fast-changing business environment characterized by changing consumer needs, wants, tastes and preferences, companies that hope to succeed must put the customer first by ensuring that their needs are met through the provision of quality products and services. This report has delved on three topics related to quality management including the effects of quality on organization, with a focus on total quality management, the Six Sigma as a quality management tool and customer focus as an aspect of quality management. The report narrates that adoption of TQM as a quality management principle leads to organizational success by ensuring that there is continuous improvement in all functions of the business. The report has also demonstrated that properly application of Six Sigma tool can help a company improve quality of products and services delivered to customers as the tool ensures that defects or variations are eliminated. Additionally, it has emerged that, for a company to succeed, the customer must be seen as king and that decisions regarding product developments are made with the customer needs and wants on mind. Table of Contents Executive Summary 2 Table of Contents 3 1.0 Introduction 4 2.0 Quality on Organization 4 3.0 Six Sigma 6 4.0 Focusing on Customer 8 5.0 Conclusion 10 References 11 1.0 Introduction Quality management is an important factor for the success of any company and this applies to both product and service companies, large and small. Research has shown that quality is one of the most important features that consumers look for in a product or service when making buying decisions. Accordingly, it is only when the customer is satisfied with the quality of the service or product that they proceed to buy the product and even remain loyal to the company. Product quality is determined in terms of reliability, durability and performance. Therefore, because quality act as a differentiating factor for a company against rivals in an industry, a company must strive to ensure continual improvements to the product quality to ensure that the changing needs of consumers in a market is always met. This report will highlight three topics related to quality management, including importance of quality on an organization, quality in light of customer focus and Six Sigma quality management tool. 2.0 Quality on Organization Quality is regarded as one of the principal defining factor for the success of any company. Researchers have found that companies that promote total quality management in the organizations operations perform better than those that are complacent of quality. Quality acts as a differentiating factor because the majority of customers make their buying decisions based on the quality of the products offered by a company. Because of the increased recognition of the importance of quality on the performance of a company, there are bodies of research and literature dedicated to investigate the relationship between quality and company performance. Kaynak (2002) study is one such study that has investigated the link between quality and organizational performance. Kaynak’s study particularly focused on the relationship between total quality management (TQM) and organizational performance. The researcher defines TQM as the adoption of a holistic management philosophy that involves committing to continuous improvements in the entire organizational functions. According to Kaynak (2002) implementing TQM starts with cultivating the culture of quality management. In this respect, the researcher believed that the starting point to implementing quality in an organization requires the commitment of the leadership of an organization who also have the responsibility to plant the culture of quality by providing the employees with the right skills and the resources they need to ensure that they deliver consistently high quality products and services. The author argues that the management must ensure that the workforce is properly trained and that they are also provided with the tools and principles, as well as create a conducive work environment that allows the employees to be involved in the change process. However, the researcher also notes that implementing TQM goes beyond just offering the right training and availing the resources and tools; rather the author notes that the workers must be involve in the change process, which is affected by the creation of a work environment that promotes and facilitate open communication. In such an environment, the researcher argues, the employees work harder and come up with innovative ideas that promote change process. Additionally, the author suggested that the involving employees needs clear communication for quality improvement and that this can be enhanced by creating quality-based incentives and compensation rules. The importance of TQM in the success of an organization is also reported by Diamandescu (2014) who observed that quality management is a source of competitive advantage for a company. According to Diamandescu, quality management practice not only enables a company to respond to the changes in the business environment, but also ensures sustainability. In the article, the author extensively explored the principles of TQM (customer advocacy, leadership involvement, staff involvement, process approach, system approach to management, continuous performance improvement, management by fact and relationship with suppliers) by highlighted the pros and cons associated with applying the principles. According to Diamandescu (2014), customer advocacy is one of the most critical principles of TQM. The author argues that quality management required seeking to meet the needs of customer. To achieve this, Diamandescu (2014) suggests that an organization must start by identifying its customers both internal and external followed by the identification of their needs, requirements and expectations, which is achievable through market research. Diamandescu (2014) argues that, one the customers and their needs have been identified, the management must then ensure that the right technology and processes are implemented to ensure that customer needs are met through the provision of quality products at reasonable prices. Satisfying the needs of customers help attract and build customer loyalty and, increase market share, thus competitiveness. This view is supported by Seth 2004et al. (2004) who noted that quality services help build customer loyalty, which in turn facilitates business growth. Diamandescu (2014) argues that TQM requires active involvement of the leadership. In line with Kaynak (2002) suggestions, Diamandescu (2014) argues that leaders must be actively involved to ensure effective implementation of quality management in an organization. According to Diamandescu (2014), managers have a responsibility to exert positive influence on the employees and systems to ensure that they become quality-focused. These include providing the employees with the tools, resources and skills to ensure the delivery of quality products and services to customers in an organization. The other TQM principle identified by Diamandescu (2014) is staff involvement in decision making. According to the author, the only way to promote and build a quality management in an organization is to ensure that the employees are involved in the decision making process. This is supported by Singh (2000) who noted that the empowering frontline employees and giving them the right tools, as well as involving them in decision making motivates the employees to work hard and to deliver quality products and services to customers. 3.0 Six Sigma Six Sigma is one of the most powerful quality management tools. As earlier indicated quality is critical to the success of an organization and also plays a role in the failure of an organization. Any company that neglects quality is bound to fail and collapse in the long run. To ensure that high quality standards are achieved in an organization, Six Sigma is one of the right tools to use, according to Antony (2006). Antony (2006) argues that six sigma is a very powerful quality tool that helps organizations achieve continuous quality improvement. Six sigma as a quality management too helps a company achieve superior quality of products by eliminating defects in the systems and processes. In a study conducted by Antony (2006) on the implication of six sigma to product, service and process improvement in a service industry, it was found that six sigma tool played a key part in quality improvement by helping in the identification and elimination or defects or variations in the process, products or services. In other words, Antony (2006) states that the main focus of six sigma tool is not to count the variations/defects; rather to identify the opportunities with the processes that has the potential or causing defects in the processes o product. Once the possible causes of variations in the processes have been identified, the six sigma is then used in developing process improvement strategies to ensure that defects are eliminated or prevented from developing, thus ensuring an improvement in the overall experience of a customer. Antony (2006) position on six sigma as a quality management tool has been supported by Linderman et al. (2003) who noted that six sigma is a powerful quality management tool that helps in ensuring the delivery of quality products and services to customer by eliminating defects and variations in the processes. Linderman and colleague identifies General Electric as one of the modern companies that have benefited greatly from the use of six sigma to eliminate defects and to ensure that customers are provided with consistently high quality products and services, which in turn results in business growth and success. According to Linderman et al. (2003), Jack Welch of General Electric invested about half a billion in six sigma in 1999 and made more than two billion in returns during the same year following the implementation of six sigma that helped the company minimize defects, thus resulting in minimal defects and high quality products. Klefsjo et al. (2001) also observed that six sigma is a tool that organizations use to achieve operational excellence. Although Klefsjo (2001) recognizes the Six Sigma as powerful tool for achieving operational excellence, the authors are quick to state that it cannot be used as an alternative to TQM. Garrido-Vega et al. (2015) went further to investigate the impact of Six Sigma in small and medium enterprises. Like the previous authors, Garrido-Vega and colleagues recognizes that Six Sigma is an important quality improvement tool that most organization has implemented or has it as part of their agenda. However, of concern to Garrido-Vega et al. (2015) is the fact that its usage in SMEs has not been adequately documented. For this reason, the researchers went to length by investigating how best to implement Six Sigma tool in SMEs in terms of success factors and risks involved. According to the authors, implementing the tool in SMEs presents a challenge because of the size of these businesses, production volumes involved, level of employee training and the fact that the resources of these businesses are quiet smaller compared to large firms. In particular, Garrido-Vega and colleagues argue that implementing Six Sigma in SMEs presents a challenge because such businesses lack the degree of repeatability for which the tool is created because of reasons, such as low production volumes involved in SMEs, continuous changes in products and greater customization satisfaction. In other words, the authors suggest that Six Sigma only works best in large organizations that involve high production volumes and minimal customization. Garrido-Vega et al. (2003) suggested several key success factors that need to be considered when adopting Six Sigma tool for product improvement. The factors include management involvement, culture change, organizational infrastructure, training, project management skills, project prioritization and selection, understanding the methodology, techniques and tools for Six Sigma, aligning Six Sigma to business strategy, aligning Six Sigma to customer needs, aligning Six Sigma to employees and suppliers and attaching success to financial outcomes, clear performance metrics, as well as employee involvement in the implementation of the Six Sigma. However, the researchers also highlighted a number of obstacles to the successful implementation of Six Sigma in an organization that they suggest managers should take into account. The obstacles include lack of understanding of Six Sigma in terms of how it works and its perceived benefits, insufficiency of the existing quality system, lack of leadership, poor training an d coaching, internal resistance, poor project selection, rejection by customers, lack of adequate resources, lack of tangible benefits and where team is too large. This implies that, to successfully implement Six Sigma and achieve its perceived benefits, managers must ensure that these obstacles are overcome; otherwise its benefits cannot be achieved. 4.0 Focusing on Customer In the previous discussions, it has been demonstrated that quality is a critical factor for the success of a company because quality is an important factor considered by customers when making purchasing decisions. In the modern complex and dynamic business environments, successful companies are those that put the interest, preferences and wants of customers ahead of everything. However, merely attractive customers to a particular brand are not enough to win customers. Instead, studies show that successful companies are those that are able to attract and retain the customers by making them become loyal and repeat customers. This implies that companies must strive to ensure that they build a large base of loyal customers so as to ensure business sustainability and success. In the recent years, there has been an increased study on the relationship between quality and customer loyalty. A large body of research indicate that quality is positively related to customer satisfaction, which is also related to customer loyalty. In this respect, it is noted that the provision of quality products increases the satisfaction level of customers, which makes them to become loyal to a particular brand. However, the influence of gender on service quality and loyalty has not been adequately studied. Iqbal et al. (2006), however, happens to be one of the researchers to study the influence of gender on service quality and loyalty. Out of the 175 respondents who took part in the study, it was found that the male managers had more influence on service quality and loyalty than their female counterparts. The low association of female and service quality and customer loyalty was linked to factors, such as cultural issues in some of the countries, especially in Attock and Peshawar, where the residents culturally do not interact with female. The study by Iqbal et al. (2006) has significance to the bank industry as it demonstrates the there is a direct impact of service quality on customer loyalty. This, therefore, implies that banks need to ensure that customers are provided with quality services to ensure high satisfaction that will translate to loyalty, which is good for the competitiveness and the survival of a company. Additionally, the fact that men have a high influence on service quality and customer loyalty indicates the need to use male employees in societies, where men are culturally barred from interacting with women to deliver banking services as this would ensure quality services and customer loyalty. Awan et al. (2016), however, sought the opinions of the Chinese and Saudi Arabian people about the quality of online banking. Because online banking is increasingly becoming a trend worldwide due to the advancements in technologies, the population increasingly prefer online banking services that give them the opportunity to transact anytime of the day and anywhere without limit. From the study, Awan et al. (2016) observed that quality is a determining factor in consumer choice of online banking. In particular, the perceived value and privacy ranks among the top issues that customers are bothered about when using online banking services. Accordingly, this study suggests that there is an increased need for bank managers to focus on enhancing the quality of services to online banking customers through value additions, as well as ensuring that privacy is assured as these factors increases the level of customer satisfaction and loyalty to a bank. Stone et al. (2003) study, on the other hand, focused on how firms plan and manage customer data. According to the researchers, customer data management has become a critical success factor for companies. Effective management of customer data not only help companies understand the needs, wants, preferences and tastes that they can use to better the quality of services and products delivered, but also ensures that customer data are safe and security, which enhances customer satisfaction. Unfortunately, the Stone et al. (2003) study found that the majority of companies are not adopting the best practices to manage customer data profitably. The researchers noted that there was a lack of best practices being applied across the model of customer management and the researchers were concerned that this exposes companies to the risk of not meeting customer expectations, such as data privacy and data security. Therefore, to succeed in the modern day technology world, where customer data management is critical to company success, the authors suggested various strategies to manage customer data. Among the strategies is the use of data analytics, such as the use of IBM data analytics that help companies get value from their customer data. Cristiano et al. (2000) study on quality focused on the use of quality function deployment to deliver quality products to customers. According to the authors, companies are increasingly adopting customer-driven product development. Customer driven product development ensures that customer has a say about the product being developed in terms of features, attributes and wants. This is important because it ensures that the final product developed is that which suits the needs of customers in the market. This view is supported by Schlossberg (1993) study that found that for companies to succeed in the modern business environment, they must focus on the satisfaction of customer needs. At the same time, the author noted that companies that are more customer-focused perform better than those that do not put the interest of its customers first. Schlossberg (1993) provides Ritz-Carlton as an example of a company whose success is linked to its commitment to maintaining high customer satisfaction. The company does this by not only training its staff, but also encouraging them to leave everything they are doing to assist customers. In other words, at Ritz-Carlton, the customer comes first and this has resulted in high customer satisfaction and customer loyalty, thus the company’s success. 5.0 Conclusion The report has shown that quality is an important factor that customers consider when making buying decisions. It has also emerged that customers are driven to a quality brand while those products that are perceived not to meet the quality standards are avoided by customers. These finding highlights the need for companies that hopes to succeed to ensure that products and services delivered to customers are of high quality as quality products not only attract customers to a brand, but also influence them to remain loyal to the brand, which is critical for organizational competitiveness and long-term success. The report has also highlighted some of the important quality principles and tools that companies can use as guide to fostering quality management, which include total quality management (TQM) and Six Sigma tool. TQM is a principle that involve adopting a holistic approach to quality management while Six sigma is a tool that a company can employee in promoting quality through identification and elimination of defects in products, services and processes, which is critical not only in managing costs, but also ensures high customer satisfaction. References Abrueller, D., S., & Carmeli, A. (2011). Linking capacities of high-quality relationships to team learning and performance in service organizations. Human Resource Management, 50(4), 455 – 477. Antony, J. (2006). Six sigma for service processes. Business Process Management Journal, 12(2), 234 – 248. Awan, M. A., Khan, H. U., & Chiang, H. H. (2016). Online banking: A comparative study of Chinese and Saudi customers’ perceptions of service quality. Journal of Internet Banking and Commerce, 21(5), 1-31. Cristiano, J. J., Liker, J. K., & White, C. C. (2000). Customer-driven product development through quality function deployment in the U.S. and Japan. J Prod Innov Manag., 17,286–308. Diamandescu, A. (2015). The Significance of Total Quality Management Principles in Industrial Organizations. Nicolae Titulescu University, Bucharest, Romania. 1-8. Dileep, G., Rau, S.S., & Satish, R. (2014). Cultural Challenges in Implementing Six Sigma with Reference to Medium Scale Hospitals. BVIMR Management Edge, 7(1), 31-38. Garrido-Vega, P., Sacristán-Díaz, M., & Magaña-Ramírez, L. M. (2015). Six Sigma in SMES with low production volumes. A successful experience in aeronautics. Universia Business Review, 13(3), 1-21. Iqbal, Q., Ahmad, B., & Nasim, A. (2016). A Gender-Based Approach: Service Quality and Customer’s Loyalty. International Journal of Management, Accounting and Economics, 3(12), 822-836. Kaynak, H. (2003). The relationship between total quality management practices and their effects on firm performance. Journal of Operations Management 21, 405–435 Klefsjo, B., Wiklund, H., & Edgeman, R. L. (2001). Six sigma seen as a methodology for total quality management. Measuring Business Excellence, 5(1), 31-35. Linderman, K., Schroeder, R. G., Zaheer, S., & Choo, A. S. (2003). Six sigma: a goal-theoretic perspective. Journal of Operations Management 21, 193–203. Seth, N., & Deshmukh, S. G., & Vrat, P. (2004). Service quality models: a review. International Journal of Quality & Reliability Management, 22(9), 913-949. Singh, J. (2000). Performance productivity and quality of frontline employees in service organizations. Journal of Marketing, 64, 15-34. Stone, M., Foss, B., Henderson, I, Irwin, D., O’Donnell, N., & Woodcock, N. (2003). The quality of customer information management in customer life cycle management. Journal of Database Marketing, 10(3), 240-254. Read More