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ISSN 1463-5771
Benchmarking
An International Journal
www.emeraldinsight.com
Benchmarking:
ISSN 1463-5771
Volume 13
Number 4
2006
An International Journal
Benchmarking in total quality management
Guest Editors
Professor Fiorenzo Franceschini and Dr Maurizio Galetto
396
431
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BIJ
13,4
392
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
p. 392
# Emerald Group Publishing Limited
1463-5771
Gopal Kanji
Sheffield Hallam University, UK
Archie Lockamy III
Samford University, USA
Kambiz Maani
University of Auckland, New Zealand
Professor Rodney McAdam
University of Ulster, School of Business,
Organisation and Management, Belfast, UK
Christian Madu
Pace University, USA
Jaideep Motwani
Grand Valley State University, USA
Richard Schonberger
Schonberger & Associates, USA
Dean M. Schroeder
Valparaiso University, USA
Roger G. Schroeder
University of Minnesota, USA
Joel D. Wisner
University of Nevada at Las Vegas, USA
Dr Yahaya Y. Yusuf
Business School, University of Hull, UK
Guest editorial
Introduction to the special issue on benchmarking in total quality
management
A world that is changing faster and faster forces companies to reinvent themselves and
their capabilities. In this competitive environment total quality management (TQM)
tools support organizations in managing strategic quality and decision processes. This
is an era of break-through management, which demands creativity and new thinking.
The organization competitive advantage is based on the ability to generate and
support new ideas quickly and that hinges on the capability to create. Benchmarking
can become a tool to sustain this new TQM paradigm, providing a means to increase
an organizations competitive performance by a comparison with the best-in-class.
The challenge is driving the change and not being driven. That is why
benchmarking in TQM can become the helm to drive the change. Changes can be
voluntary or not; may be big or small, but in all cases changes ensure that tomorrow
will be different than today. It is not necessary to agree with change or not, as it will
happen anyway. The question is do you want to be in the drivers seat, or to be
passengers? . . . Can benchmarking methodologies be the reply?
This special issue of Benchmarking: An International Journal explores some of the
latest research on the frontiers of this field. It investigates how benchmarking can
provide approaches, methods and techniques for the next TQM challenges we are
going to face this century. The papers in this issue were selected based on their new
contributions to theory and/or methodology or significant substantive findings, as well
as their fit with the organization of the issue. Taken together, these articles provide a
valuable collective snapshot of interesting benchmarking progress in recent research.
The announcement for this special was framed in very broad terms. Both theoretical
and empirical papers, as well as rigorous case studies, were invited. Cross-functional
studies as well as best practices experiences were particularly encouraged. Suggested
topics for the special issue included:
.
quality, innovation and benchmarking in manufacturing and service
organizations;
.
theory building and new paradigms in TQM;
.
advanced methods for benchmarking in TQM;
.
measurement issues in benchmarking quality management;
.
benchmarking analysis and strategic quality management; and
.
surveying on TQM and benchmarking.
Papers that were submitted for the special issue were subjected to a normal
double-blind review process to assess the compatibility of the topic addressed by the
paper with the theme and focus of the special issue. Papers that did not pass the screen
were, at the authors discretion, forwarded to the editor of BIJ to be included in the
normal review process for the journal. Of ten papers submitted, six passed the review
process.
Guest editorial
393
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 393-395
q Emerald Group Publishing Limited
1463-5771
BIJ
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394
It is our hope that the six papers in this issue will stimulate new, better, more
innovative and relevant benchmarking strategies, measurement and modeling. The
fields of benchmarking and TQM can greatly benefit from an infusion of new ideas,
methods and researches. Increased attention to these areas by management scientists
in academic institutions, industry and services will help their practice and establish it
as a valued core cross-disciplinary and global management discipline.
Fiorenzo Franceschini and Maurizio Galetto
Guest Editors
Guest editorial
395
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
BIJ
13,4
A benchmarking implementation
framework for automotive
manufacturing SMEs
396
Baba Md Deros
Faculty of Engineering, Universiti Kebangsaan Malaysia, Malaysia
Azhari Md Salleh
Academic Director, Akademi Tentera Malaysia, Malaysia
Abstract
Purpose The purpose of this paper is to present a conceptual framework for benchmarking
implementation in small medium-sized enterprises (SMEs) taking into consideration their characteristics.
Design/methodology/approach The paper begins with the review on the definition of SME and
a comparison of the characteristics of SMEs and large organizations. It presents the need for a
framework and its relationship with benchmarking and TQM. This is followed by reviewing the
benchmarking implementation frameworks proposed by researchers and discusses these frameworks
based on their strengths and weaknesses from SMEs perspective. The frameworks were categorised
into two broad types based on the different writers background and the approach on how they view
the benchmarking implementation process.
Findings The paper suggested a conceptual framework for benchmarking implementation dedicated
to the automotive manufacturing SMEs. This framework guides them through from the start to end of the
benchmarking process. The framework was validated at six pilot case study companies, which gave useful
comments and suggestions regarding the usefulness and applicability within the SMEs context.
Research limitations/implications The conceptual framework is still in the development stage
and research is undertaken to include the pilot study companies suggestions and comments into the
final version of the framework.
Practical implications This guidance and framework provides a useful guide for companies to
adopt and adapt before embarking on their benchmarking journey.
Originality/value This paper fulfils an identified knowledge gap and offers practical help to SMEs
starting out a benchmarking implementation effort.
Keywords Benchmarking, Competitive strategy, Small to medium-sized enterprises,
Automotive industry, Malaysia
Paper type Research paper
Introduction
In most countries, small and medium enterprises (SMEs) dominate the industrial and
commercial infrastructure. SMEs play a very important role in national economies,
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 396-430
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770610676272
The authors would like to thank the Ministry of Science Technology and Environment (MOSTE)
and Universiti Teknologi Malaysia for their support in providing the research grant for the
project entitle Development of an Integrated Quality Engineering Approach for Malaysian
Automotive Industry (IRPA 03-02-06-0060-EA254).
Benchmarking
implementation
framework
397
,500
Other measures
Sources: Anthony (1983), Hall (1995), SMIDEC (1998), SMI Business Directory (2002) and Sevilla and Soonthornthada (2000)
Manufacturing
Manufacturing
,100
,500
Usually , 100
,100
,300
,300
,150
,200
Number of employees
398
Manufacturing
Manufacturing
Varies with industry
Australia
Canada
Peoples Republic of China
Indonesia
Japan
Korea
Malaysia
Philippines
Singapore
Taiwan
Manufacturing
Manufacturing
Manufacturing
Sector
Table I.
Summaries of main
definitions for SMES in
selected economies
Country
BIJ
13,4
varies, however, in practice, most researchers and authors used both the quantitative
and qualitative methods to define a SME. In terms of the quantitative criteria, the
number of employees is the most frequently used yardstick to determine the size of a
SME in several countries (Hashim and Wafa, 2002; Yusof, 2000; Anthony, 1983).
The authors have used a similar set of criteria as adopted by previous researchers in
benchmarking to define the SMEs and considers SMEs as those firms, which employ
less than 250 employees (McAdam and Kelly, 2002; Jeffcoate et al., 2002; Hinton et al.,
2000). The authors have adopted this definition for the SME so as to provide fair and
effective comparisons between this study and past studies on benchmarking in SMEs.
In this study, monetary value based definitions, such as the amount of turnover and
paid-up capital were not used because monetary value varies wildly from one country
to another.
Comparing the characteristics of SMEs and large organizations
Welsh and White (1981) suggested that a small company is not a little large business
because there are many differences between SMEs and large business organizations in
terms of structure, policy making procedures and utilization of resources to the extent
that the application of large business concepts directly to SMEs may not be
appropriate. In the USA, as highlighted by Baumack (1988), many large corporations in
the Fortune 500 list actually started by small business entrepreneurs with very limited
capital. Examples include Ford Motors, Hewlett-Packard and Microsoft to name a few.
The differences of SMEs can be divided into structure, systems and procedures, culture
and behaviour, human resources, and also market and customers. Table II gives a
summary of the SMEs characteristics, its strengths and weaknesses versus large
organizations.
SMEs are in a more advantageous position in terms of structure because it facilitates
faster communication line, quick decision-making process, faster implementation, short
decision-making chain, higher contribution as a source of ideas in their operations and
innovation, unified culture and very few interest groups (Kraipornsak, 2002). A majority
of SMEs have simple systems and procedures, which allows flexibility, immediate
feedback, better understanding and quicker response to customer needs than larger
organizations (Kraipornsak, 2002). This is further enhanced by the SMEs corporate
mind-set, which is conducive for new change initiatives, provided that the
owner/management has the commitment to, and leadership of the change process,
together with a sound knowledge of it. In addition, SMEs employees are given the
authority and responsibility in their own work areas that can create cohesion and
enhance common purposes amongst the workforce to ensure that a job is well done.
Innovative environment, early employees and union involvement in change initiatives
such as benchmarking will provide higher job satisfaction among its workers, who
support the improvement culture and ensure its success compared to large business
organizations. SMEs have fewer employees and everybody seems to know almost
everyone, thus promoting a better relationship between employees.
On the other hand, SMEs have a number major weaknesses, which can result in a
disadvantageous situation such as majority of SMEs do not have adequate financial
resources and lack of access to commercial lending (i.e. difficult to obtain loans)
(Hashim and Wafa, 2002; Kraipornsak, 2002). As a result, SMEs do not have adequate
budget for staff training, which can stifle improvement efforts. In terms of human
Benchmarking
implementation
framework
399
Structure
Flat with very few layers of management, top
management highly visible and close to the point
of delivery
Less delegation.
Division of activities limited and unclear
Low degree of specialisation
Flexible structure and information flows.
Strategic process incremental and heuristic
(continued)
Weaknesses
400
Strengths
Table II.
SMEs characteristics,
strengths and
weaknesses versus large
organisations
SMEs characteristics
BIJ
13,4
Strengths
Weaknesses
Sources: Chee (1987), Salleh and Fichtner (1991), Huxtable (1995), Ghobadian and Gallear (1996, 1997), Yusof and Aspinwall (2000a, 2000b) and Hashim
and Wafa (2002)
Human resources
High personal authority and commitment of the
owner
Few decision makers
Dominated by pioneers and entrepreneurs
Individual creativity encourages and high
incidence of innovativeness
Modest human capital, financial resources and
know-how
Individuals normally can see the results of their
endeavours
Low incidence of unionisation
Low degree of resistance to change
More generalists, some staff may cover more than
one department
SMEs characteristics
Benchmarking
implementation
framework
401
Table II.
BIJ
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402
resources, SMEs are always faced with the shortage of skilled labour and they have to
compete with large companies for skilled workers (i.e. large companies able to offer
skilled workers better wages and working conditions) (Reed et al., 2001; Chee, 1987). In
addition, SMEs are also faced with frequent raw material shortages and have to pay
more, fluctuation in raw material price, unable to obtain credit terms, inadequate
inventory management and control of stock in raw materials and less bargaining
power compared to large companies (Kraipornsak, 2002; Chee, 1987). Majority of SMEs
entrepreneurs have low level of formal education and limited training in new
management principles and practices, which led to lack of managerial and technical
expertise (Hashim and Wafa, 2002; Chee, 1987).
Very often SMEs relied on one-person management, thus insufficient time and
attention is given to the various managerial functions (Hashim and Wafa, 2002). In
SMEs, the owner controls everything; poor management was attributed to the owners
lack of business experience, lack of management experience or know-how (Pickle and
Abrahamson, 1990; Baumack, 1988).
Furthermore, most SMEs lack of proper time management and cash flow
management system, which cause high variability in work outcome and difficulty to
ensure efficiency of work. Many important business decisions are often based on
gut-feeling and not on facts that may result in making wrong decisions. SMEs are also
faced with other problems such as lack of knowledge in marketing techniques, lack of
opportunities at both local and international levels, poor accessibility to the distribution
channels and market information, marketing constraints such as pricing, late payment
from customers, inability to provide quality product and lack of promotional strategies
(Kraipornsak, 2002). Very few SMEs owners prepare an adequate feasibility study of a
new enterprise and a sound marketing investigation (Meredith and Grant, 1982). In most
cases, marketing investigation by potential entrepreneurs tend to be low level and based
on general opinions rather than expert advice, lack of effective selling techniques and
market research (Hashim and Wafa, 2002).
As indicated by Kraipornsak (2002) and Chee (1987), a majority of SMEs rely on
outdated technology, labour intensive and traditional management practices. Some do
not trust new technology, while others are unable to afford it, which in many cases led
to inefficient, lack of information and inadequate in-house expertise (Hashim and Wafa,
2002). Thus, it is important to appreciate the differences that exist between SMEs and
large business organizations. In other words, it is crucial to try and understand SMEs
issues and characteristics before making any attempt to help them in implementing
TQM activities (such as benchmarking, 7 QC tools, SPC, quality assurance system,
etc.). It can be concluded that appropriate technology and efficient production system
plays an important role in explaining the comparative advantage and competitiveness
of the SMEs and large companies.
Defining a framework
In the past, many writers and authors have used the term framework without first
defining it appropriately. At present, there is no consensus on the definition of the
frameworks; some writers define it as a set of principles or ideas used as a basis for ones
judgement, decisions, while others portray the frameworks through diagrams, flowcharts,
and graphical or pictorial representations (Yusof, 2000). The Oxfords Advanced Learner
Dictionary of current English defines a framework as a structure giving shape and
support (Hornby, 1990). Meanwhile, Struebing and Klaus (1997) believed a sound
framework should define what the organisation does, what it is trying to do, how it is going
to do it and ensure that each step is done in the correct sequences. On the other hand,
Popper (1994) as quoted by Yusof (2000) defines a framework as a set of basic fundamental
principles, which can help to promote discussions and actions. In other words, a sound
framework can link-up between benchmarking concept and practical application because
it guides the organisation in adopting and implementing benchmarking activities in a
more systematic, comprehensive, controlled and timely manner.
Why need a framework?
The most frequent reason cited for change efforts (such as TQM, BPR, reengineering,
etc.) failure is wrong implementation approach. Aalbregtse et al. (1991), for example
cited the following reasons for having a framework to:
.
illustrate an overview and communicate a new vision to the organisation;
.
force management to address a substantial list of key issues which otherwise
might not be addressed;
.
give valuable insights into the organisations strengths and weaknesses, and its
overall strategic position in the market-place; and
.
support implementation and to improve the chance of success because it will
provide not only overview but also more detailed information describing the
content of each framework element and its relationship to other elements.
In the authors opinion, these reasons are also applicable and valid to the
benchmarking implementation, since benchmarking is one of the tools found in TQM.
In this paper, the authors have defined framework as a set of simplified theoretical
principles and practical guidelines to carryout benchmarking implementation and
adoption, which can enhance the chance of success that are easy to understand,
efficient and can be implemented at reasonable costs and time.
Framework design requirements
The SMEs characteristics, strengths and weaknesses against large organizations were
discussed in the preceding section. A question, which arises then, is how one can
characterise a good framework that really suits the SMEs. In general, the following
criteria can be considered as a guide in developing a good framework to suit the SMEs
characteristics (Yusof and Aspinwall, 2000a):
.
systematic and easily understood;
.
simple in structure;
.
having clear links between the elements or steps outlined;
.
general enough to suit different contexts;
.
represent a road map and a planning tools for implementation;
.
answers how to? and not what is?; and
.
implementable at reasonable cost and time.
Thus, it is important that these criteria are considered when developing a framework
for SMEs.
Benchmarking
implementation
framework
403
BIJ
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404
Meanwhile, Medori and Steeple (2000) summarised the design requirements for
developing a framework that include the following steps. They are:
.
procedures for selecting and implementing measures;
.
ability to identify whether existing measurement system is up to date and
measuring critical issues (i.e. audit capability);
.
selected measures should be congruent with company strategy and have strong
relationship with the six core competitive priorities (i.e. quality, cost, flexibility,
time, delivery and future growth); and
.
facilitates rapid selection of measures from a data bank; and workbook approach
(i.e. step-by-step methodology).
Benchmarking frameworks relationship with benchmarking and TQM
The relationship of benchmarking framework with benchmarking and total quality
management (TQM) can be summarised and shown in Figure 1. By referring to
Figure 1, it can be seen that the benchmarking framework is at the heart of the
benchmarking process and thus plays a very important role in ensuring the success of
benchmarking process. This in-turn, can lead to the success of the overall TQM
program.
Generally, companies need to first know their strengths and weaknesses before
embarking on adopting the benchmarking tool to improve their productivity, product
quality, process efficiency, services, etc. This leads to improvement in their overall
business performance and competitiveness. Without a suitable benchmarking
framework that provides the steps and guides what actions to be taken, which is
easy to use, the SMEs have to face many difficulties and problems in conducting
benchmarking to investigate and identify their strengths and weaknesses compared to
their competitors.
Review on previous benchmarking implementation frameworks
In this paper, the authors present some relevant benchmarking framework studies
reviewed, which represent the various frameworks developed and proposed by various
academics, researchers, consultants and experts in the field. It would be impractical to
cover all the available frameworks, however, as far as possible the authors would
TQM
Benchmarking framework
Figure 1.
Benchmarking
frameworks relationship
with benchmarking and
TQM
Benchmarking
Benchmarking
present the ones, which form the representative samples of the most common, relevant
and widely published. The various frameworks reviewed were categorised into two
broad types namely, consultant/expert and academic/research based on the author or
researcher background and in accordance to the approach how they view
benchmarking implementation process. For example, the approach taken by
consultant/expert towards benchmarking implementation is more practical
orientated (i.e. hands-on); meanwhile the academic/researcher look at it from
theoretical and conceptual aspect.
Consultant and expert based framework
In general, consultant based frameworks were derived from personal opinion and
judgement through practical experience in providing consultancy service to
organisations embarking on a benchmarking project.
Crow (1999) developed a generic framework for benchmarking best practices to
improve product development process that follows Deming PDCA cycle into five major
dimensions, which includes strategy, organization, process, design optimisation, and
technology. As shown in Table III, the five major dimensions are further subdivided into
28 best practices categories. He had used the product development best practices to
investigate competitive dimensions (such as time-to-market, low development cost, low
cost producer, high value product, innovation and product performance, quality,
reliability, ease of use, serviceability, and agility) associated with product development.
The framework provides a detailed example to conduct the evaluation process; it
described the strategic levers associated with each of the competitive dimensions or
strategies; it shows how to perform the product performance summary, strategic
alignment analysis, gap analysis for identifying implementation actions and priorities;
it enable the organization to develop an action plan for improving the product
development process. In addition, it can also be used to identify strengths and
weaknesses relative to a common framework in product development process.
However, it can be argued that the framework is very complex, categorise best
practices into 28 categories with more than 270 best practices and can only be used in
the product development process (i.e. not a generic framework) thus the framework is
not applicable in other areas of the business.
Meanwhile, Spendolini (1992) prescribed a generic five stages benchmarking model,
which is simple and incorporates essential elements in the benchmarking process. The
five stages benchmarking process begins with determining what to benchmark,
forming a benchmarking team, identifying benchmarking partners, collecting and
analysing benchmarking information, and finally, taking the appropriate action (i.e.
following the Deming PDCA cycle) as shown in Figure 2. In addition, Spendolini (1992)
proposed four general guidelines to conduct benchmarking process successfully, such
as: follow a simple, logical sequence of activity; give heavy emphasis on planning and
organization; use customer focused benchmarking; and make it a standardised process
for the whole organization. The model provides a structure, framework and common
language for planning and execution of benchmarking investigation. It is very flexible
where anyone (for example the benchmarking team) who wants to use the framework
can modify the process to suit their needs and requirement; it provides a new bench
marker with basic process map and set of benchmarking dos and do nots; and
specialists had validated it.
Benchmarking
implementation
framework
405
Product data
Design automation
Simulation & analysis
Computer aided
manufacturing
Support technology
Knowledge organization
Design for
manufacturability
Product cost management
Robust design
Integrated test design &
program
Design for operation &
support
Process management
Process improvement
Understanding the customer
Requirements & specifications
management
Development process integration
Supplier/subcontractor integration
Transition to production
Configuration management
Design assurance
Project & resource management
Management
leadership
Early involvement
Product development
teams
Organizational
environment
Technology
Design optimisation
Process
Table III.
Product development
best practices framework
Organization
406
Strategy
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Benchmarking
implementation
framework
I
Determine
what to
benchmark
V
Take
Action
IV
Collect
& analyze
benchmarking
information
The
Benchmarking
Process
407
II
Form a
benchmarking
team
III
Identity
benchmark
partners
However, it can be argued that the model has a few weaknesses because it only
represent the steps to be taken in implementing benchmarking in specific business
process and had not given a general outline of the overall benchmarking concept.
The Malaysian Benchmarking Service, NPC (1999) developed a generic approach for
benchmarking studies process following the Deming PDCA cycle. The benchmarking
study can be divided into three phases as shown in Figure 3. Each phase describe the
benchmarking processes conducted and their respected benefits. The first phase
provides awareness, understanding of key issues, establish key questions, learn the
methodology, review own process, and in-depth discussions for the benchmarking
study. In the second phase, the benchmarking activities carried out are preparing for site
visit, site visit, data collection, recommendations for improvement and share findings.
The benchmarking processes performed in third phase are planning, implementing best
practices, monitoring the result, standardisation and finally daily control of best
practices implementation. Adaptation and improvement resulting from the best
practices identified throughout the study only occur after the company had adopted and
implemented the recommendations from the benchmarking study.
The model provides for gap identification process that facilitates comparison of
apples to apples identify how improvement can be made, focuses on learning and
best practices transfer and maximise improvements achieved from benchmarking
implementation. The NPC (1999) approach to benchmarking process seems to be simple,
systematic and can be applicable to any benchmarking projects in any organizations.
Jenin (2000) had empirically tested this benchmarking approach in performing
functional benchmarking to manage customer complaints in a large government
Figure 2.
The five-stage
benchmarking model
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Phase 1
Phase 2
Start
408
1.0 Agree on
Benchmarking Topic
Phase 3
10.0 Implementation of
Best Practices
7.0 Recommend
Improvement?
12. Standardisation
Yes
Figure 3.
NPC approach for
benchmarking study
No
New Area
agency involved in the service sector and not in the SMEs for its applicability and
usability. However, it can be argued this benchmarking framework only described the
specific steps on how to perform the benchmarking implementation process but it did
not provide the overall roadmap and guidelines for companies to follow before
embarking on the benchmarking effort.
Academic and research based framework
On the other hand, academics and researchers mainly through their own research,
knowledge and experience in benchmarking developed the academic based frameworks.
Lee (2002) developed a generic model for assessing, implementing and sustaining
business excellence through structured approach in implementing best practices in
TQM (such as in operations, quality, customer satisfaction, and, etc.) found in the
Singapore Quality Award. The model consists of four major elements. They are core
values, goals, approaches and deployment and business excellence. It starts by
identifying a set of core values and its goals, and followed by a systematic
implementation of initiatives based on the PDCA cycle. The model provides a guiding
structure for organizations to systematically implement an effective TQM program
that targets a specific purpose. In the authors opinion, this model could also be use
effectively for implementing benchmarking because benchmarking has a very close
relationship with the TQM program. The model provides a systematic structure to
identify core values; easily adapted, proposed a list of best practices for each core value
at each stage of the benchmarking effort and it is generic for all applications. The
framework for excellence model seems to be simple and generic in terms of
applications but it has been designed and tested only in large organizations from past
Singapore Quality Award winners, meanwhile its applicability and usability in SMEs
is still unknown and yet to be empirically proven.
Fong et al. (2001) proposed a generic analytical framework, which is simple, systematic
and consists of both hard and soft measures for benchmarking the value management
process consisting of four basic steps. It starts by identifying the critical success factors
(CSFs), followed by determining the factors to be benchmarked, then establishing the
quantifiable performance metrics, and finally comparing the results and selecting the
practice with the best result for benchmarking. In addition, they investigated and
identified the CSFs for the value management process; objective measures (i.e. hard
analysis e.g. time, cost, and quality, etc); subjective measures (i.e. soft analysis e.g.
facilitator skills, teamwork, creativity, customers satisfaction, etc.); and benchmarking
results that reflect actual situation. On the other hand, the frameworks practicality,
applicability and usability in SMEs are yet to be validated empirically.
Davies and Kochhar (2000) developed a framework for selecting practices based on
relationship between practices and performance; and dependency relationships
between practices, which improves operational performance in manufacturing
planning and control function. The framework is divided into six steps starting
from identification of the need to improve the operational performance system;
identification of best practices for the areas of performance to be improved; prioritise
practices based on impact on specific measure of performance; assess the predecessor
practices for the practice to be implemented; implement desired practices; and results
improvement in operational performance. In addition, they proposed a structured
approach in identifying, selecting and transferring best practices; prioritise practices
based on dependency of relationships between practices and impact on performance;
predecessor practices sequence of implementation to gain maximum benefits; and
adverse effects of practices adoption on other measures of performance. Figure 4 shows
Benchmarking
implementation
framework
409
6. Clear responsibilities
of the supplier and buyer
7. Procedure for
carrying out supplier audits
3. Supplier
development
programs used
Figure 4.
Predecessor practices to
the practice supplier
development programs
used
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Stage 1.
Company
Success
Factors
Figure 5.
Diagram illustrating
framework structure
Stage 2
Performance
Measurement
Grid
Stage 3.
Selection
Of
Measures
Stage 4
Audit
Stage 5.
Implementation
of
Measures
Secondly, the checklist, which is a critical part of the framework may be outdated in time
and hence measures may need to be updated.
Voss et al. (1994) developed and tested a benchmarking framework based on
interaction between product and process innovation in the area of technology
management. The framework can be summarised into a generic six steps procedures.
They are:
(1) identify business processes to be benchmarked;
(2) use a top-down approach to develop an overall framework of the processes to
be benchmarked;
(3) use a bottom-up approach, based on literature and knowledge of best practice
to identify sub-processes and characteristics of best practice;
(4) develop metrics for each process;
(5) develop tools, self-assessment scorecards and benchmarking frameworks; and
(6) test the frameworks and tools for usability and usefulness.
They believed the framework could assist in developing new manufacturing and
business processes, assuring effective implementation of new process technology and
also improving continuously the production processes. The framework is robust
and generic, designed to support the assessing and benchmarking team, provides a
common focus, direction and designed to force companies management to ask relevant
questions during benchmarking and self-assessment process.
Zairi (1994) developed a generic step-by-step framework and classified the
benchmarking study process into two stages. The stages are:
(1) focus on internal comparison to increase effectiveness; and
(2) focus on external comparison to increase competitiveness.
The first stage is about controlling and managing all internal processes effectively by
adopting and adapting to a culture of never ending improvement through Demings
cycle of Plan-Do-Check-Act (PDCA) (Figure 6). Internal comparison can lead to
improved performance through reduced variability with the workforce. During the
first stage, best practices from high performers (i.e. department or areas) in the
organization are identified and shared with others to enable them to improve and
raise their overall level of performance.
The second stage is the conversion of internal standards of effectiveness into
external competitiveness through benchmarking effort (Figure 7). Internal
benchmarking need low resources requirement (i.e. financial, human, time), easy to
get cooperation from the workforce and able to prepare the organization for external
benchmarking. In addition, it recognises the importance of organisational culture
(i.e. committed to measurement and improvement) and also provides the problem
solving tools and techniques on how to conduct benchmarking process.
In the preceding paragraphs, the authors have described some previous
benchmarking implementation frameworks studies that are thought to be significant
and relevant to this research. At this point, the authors would like to caution readers
that these frameworks would not form a definitive list of all the currently available
Benchmarking
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Understand internal
process
Control and
manage process
PLAN
412
7
1
Set internal
standards
Effectiveness
Evaluating current
performance
2
3
5
Identifying
process limitation/
Opportunities
for improvement
Measure and
evaluate
ACT
Figure 6.
Benchmarking stage 1
effectiveness
Improve
processes
CHECK
Select
process
sultable for
benchmarking
DO
Apply
benchmarking
to all
processes
PLAN
Repeat experience
with same/
new partners
on regular basis
16
15
9
Competitiveness
Compare
standards
ACT
Figure 7.
Benchmarking stage 2
competitiveness
10
14
13
Change
relevant practices
for improving
performance
Identity
suitable
partners
12
Agree on
measurement
strategy
11
Understand
why difference
in performance
Compare
standards
CHECK
benchmarking frameworks. However, the authors felt that those described are
sufficient to highlight the major issues in benchmarking framework studies.
Discussions on previous frameworks
All the frameworks described have been summarised according to certain important
issues as shown in Table IV.
Most of the frameworks have been developed and tested in various industries and
organisations such as electronics, healthcare, automotive, aerospace, components
manufacturers,, etc. which are large in size, except those frameworks developed by
Medori and Steeple (2000) and Voss et al. (1994), which were also tested in SMEs for
their applicability and usability.
Medori and Steeple (2000) frameworks was tested only in operational area of the
manufacturing function in the automotive parts and components manufacturing
industry. Meanwhile, Voss et al. (1994) frameworks was tested in industries, which are
not related to the automotive sector. The other four frameworks reviewed such as Fong
et al. (2001), Crow (1999), Zairi (1994) and Spendolini (1992) were still in the
hypothetical stage because they did not indicate the research methodology used and
business size in testing the validity and applicability of their frameworks empirically
by using actual field data.
The nine previous benchmarking frameworks reviewed had various numbers of
steps, ranging from four to sixteen steps to perform the benchmarking activities or
processes. Although, these benchmarking frameworks have different number of steps,
one major similarity between the frameworks is that they can be condense into four
major elements of the Deming PDCA cycle. This is in line with the findings by previous
authors on benchmarking methodologies such as APQC (2001), NPC (2001), Sarkis
(2001) and Ahmed and Rafiq (1998). In this context, PDCA means planning what to do,
doing what has been planned, checking results or effects of what has been done and
finally acting upon those results, in terms of standardisation, further improvement or
feedback.
Although the various authors had used different terms, however, they actually
represent the same meaning for each element (Yusof, 2000). For example, the terms
determine what to benchmark, establish goals for core values, identify needs carry the
same activity in the planning stage. The activities, elements, ideas in the frameworks
were analysed and categorised into PDCA format and shown in Table V. The PDCA
format is effective because this general approach allows for incorporation of change
characteristics.
Some of the frameworks, such as Crows (1999) and Davies and Kochhar (2000) are
too complex and complicated in nature for SMEs to apply. For example, Crow (1999)
developed a complicated framework that can only be used for benchmarking best
practices to improve product development process. It is complicated because its five
major benchmarking dimensions is further subdivided into 28 best practices categories
and comprise of more than 270 best practices. Davies and Kochhar (2000) developed a
framework that could only be used for selecting practices based on dependency
relationships between practices and performance. Fongs (2001) analytical framework
could only be used for benchmarking value management process. Medori and Steeple
(2000) themselves believed that their framework has two critical weaknesses; first, it is
difficult to relate the company success factors for manufacturing strategy with
Benchmarking
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Lee (2002)
Table IV.
Comparison to similar
framework studies for
SMES and large
organizations
Objective
Medium
large
Large
Multiple case studies
A focus group
Mail survey
(continued)
Use Deming
PDCA cycle
Use Deming
PDCA cycle
Not
Use Deming
indicated PDCA cycle
Not indicated
Step
approach
Four steps
Use Deming
PDCA cycle
Business
size
Similarities
Large
Multiple case studies by
using in-depth, face-to-face
interviews
Framework
structure
Research methodology
Industry
414
Author/researcher
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Use Deming
PDCA cycle
Use Deming
PDCA cycle
Large
Small
Medium
Large
Not
Use Deming
indicated PDCA cycle
Not
Use Deming
indicated PDCA cycle
Case study
Not indicated
Not indicated
Step
approach
3 phases
14 steps
Step
approach
3 phases
6 steps
To develop a generic
benchmarking model that
provides a framework for a
successful benchmarking
process
Step
approach
2 phases
16 steps
Applicable to all industries Step
and organizations
approach
5 phases
Spendolini (1992)
Zairi (1994)
Not
Use Deming
indicated PDCA cycle
Business
size
Similarities
Not indicated
Framework
structure
Research methodology
Applicable to all
organizations but tested
only in a government
agency involved in the
service sector
Petrochemicals, electrical
To develop and test
benchmarking/self-assessment fittings, system integrator,
fibres, chemicals, adhesive
frameworks/tools in process
and paper industries
technology innovation and
management
To develop a generic model for Applicable to all types of
conducting benchmarking
industries and
organizations
To develop a generic
framework for benchmarking
best practices to improve
product development process
To develop a generic model to
perform benchmarking
process
Crow (1999)
Industry
Malaysian
benchmarking service,
NPC (1999)
Objective
Author/researcher
Benchmarking
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framework
415
Table IV.
Table V.
Similarities of framework
using PDCA elements
Step
approach
3 phases
14 steps
Step
approach
5 stages
Step
approach
4 phases
Step
approach
Four steps
Step
approach
3 phases
Six steps
Step
approach
6 stage
plan
Malaysian
benchmarking service,
NPC (1999)
Lee (2002)
Spendolini (1992)
Step
approach
Crow (1999)
Selection of measures
using checklist
(continued)
Implement practices to
Prioritise practices based Assess predecessor
on impact on performance practices for the practice to improve operational
performance
be implemented
Continuous improvement
Monitor implementation
effectiveness
Identify CSFs
Form a benchmarking
team
Identify benchmark
partners
Select and implement best
practices to achieve goals
Determine what to
benchmark
Action
Check
Doing
Framework Planning
structure
416
Author/researcher
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Step
approach
2 phases
16 steps
Step
approach
3 phases
6 steps
Identify business
processes to be
benchmarked
Select process to
benchmark
Identify suitable partners
Agree on measurement
strategy
Framework Planning
structure
Zairi (1994)
Author/researcher
Measure and evaluate
Understand process
Evaluate current
performance
Identify process
limitations/ opportunities
for improvement
Action
Check
Doing
Benchmarking
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framework
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Table V.
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performance measurement; second, the checklist, which a critical part of the framework
may be outdated with time and thus need to be constantly updated. Meanwhile, the
frameworks developed by Spendolini (1992), NPC (1999), Lee (2002) and Zairi (1994)
describe the steps on how to perform benchmarking for specific business process. In
short, these frameworks only provide the steps to perform benchmarking but did not
describe the overall outline or road map and guidelines for SMEs to follow before
embarking on the benchmarking activities. In addition, majority of the frameworks
requires many people to execute the various tasks of implementing benchmarking
initiatives such as establish close and long term relationships with suppliers, supplier
audits and collection of data on supplier capabilities, process improvement,
understanding the customer, and, etc. again resembling a large company situation
and not the SMEs.
To suit the SMEs context, the implementation framework developed for them
should be simple to understand and followed. As had been discussed in the preceding
section, SMEs are constrained by resources (such as financial, technological, human
and time), so implementing benchmarking initiatives based on these complicated
frameworks can be ridiculous and disastrous. In addition, besides being complex, some
of the framework assumed that certain systems are already in place before embarking
on benchmarking implementation and adoption. For example, Crow (1999), NPC (1999),
Fong et al. (2001), Davies and Kochhar (2000) and Medori and Steeple (2000), suggested
that TQM systems are already in place. This may not be true of all SMEs but could be
true of large organizations because SMEs may not have similar systems as large
organizations. Self-assessment and TQM practices, which are pre-requisites
to benchmarking adoption, must be implemented first, since they form the
foundation of a successful benchmarking process.
From the literature it can be seen that benchmarking framework, suitable and
relevant for SMEs to adopt is found to be lacking. The literature review had also shown
that there is no framework dedicated for the SMEs. Manufacturing SMEs are faced
with four major problems if they wish to benchmark, which includes:
(1) no generally accepted instrument for benchmarking of manufacturing
practices;
(2) no tools available to support benchmarking (such as a framework,
self-assessment tool, etc.);
(3) not enough resources to collect the necessary data for benchmarking; and
(4) no adequate databases of manufacturing practices for companies to benchmark
themselves against (Sarkis, 2001; Haksever, 1996; Voss et al., 1994).
This represents a gap in the current research at developing benchmarking framework
for SMEs. Therefore, there is a need for further research in developing a benchmarking
framework for SMEs to fill the gap, to compliment and to enrich the existing literature
on benchmarking frameworks.
The authors will propose a new benchmarking framework for the SMEs which
hopefully be suitable, effective, suits their characteristics and help them in their effort
to become more effective and competitive at national, regional and international
markets. The authors believe without a suitable framework and guidelines many
SMEs shall be struggling in their efforts towards achieving more efficient and
competitive performance.
A framework for benchmarking implementation in automotive
manufacturing SMEs
In this section, the authors proposed a conceptual framework, which represent the
authors initial idea and based on the shortcomings of previous frameworks studies
found in the literature. It will be used to guide and aid in the process of developing an
implementation framework believed to be suitable for benchmarking implementation
in SMEs. The literature review showed that most of the frameworks were too
prescriptive or too complicated in nature, provide the steps to be taken (i.e.
tool-oriented) for benchmarking implementation in specific functional area such as
manufacturing, innovation and technology management, product development,
customer satisfaction, etc. rather than being a general outline for benchmarking
implementation on wholesale basis and developed based on large company structure,
thus not suitable for SMEs. The criteria that one needs to consider when developing a
framework that suit the SMEs characteristics had been explained in the preceding
section.
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419
TOP MANAGEMENT
VISION FOR
BUSINESS
COMPETITIVENESS
(Company Level)
Provide
Goals
Critical Success Factors
Top management leadership
Resources Management
& Business Results
Systems & Processes
Creativity & Innovation
Human Resource Management
Policy & Strategic Planning
Customer Satisfaction
Employee Satisfaction
Organizational Culture
Work Environment
PLAN
ACT
General Methodology
Planning
Analysis
Integration
Action
CHECK
DO
Figure 8.
Proposed conceptual
framework for
benchmarking
implementation in SMEs
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a benchmarking unit or task force at the company level. The four major roles of the
benchmarking unit are to:
(1) assists top management in making benchmarking policy decisions;
(2) identify and select key business performance measures to be benchmarked from
a spectrum of performance measures depending upon the objectives, priority set
by the company;
(3) decides on the benchmarking techniques to be adopted; and
(4) to review all the activities with respect to the benchmarking effort.
In terms membership, the unit must comprise of representatives from the managerial,
supervisory and operator level from the majority of business functions in the company
(such as manufacturing, quality, engineering, finance, and sales). In other words, the
unit must include a cross section of employees, so that everybody could contribute
their share to the companys effort of becoming more efficient, profitable and
competitive. Subsequently, the companys top management should empower this unit
with the appropriate authority and responsibility; and also provide the CSFs that shall
act as enablers in achieving the benchmarking objectives.
The crucial role of the benchmarking unit is to assist the companys top management
in formulating short (e.g. 1 year) and long term (e.g. 3 years) benchmarking strategies
and translate them into action plans, monitor their implementation progress, provide
follow up actions to ensure the benchmarking efforts achieved its previously set goals. In
short, the top management and benchmarking unit should ensure the company adopt
and practice the continuous business process improvement philosophy in every aspect
of their daily operations.
The next major role of the top management and benchmarking unit is to
communicate the companys benchmarking vision, mission and the required changes
in working culture to all levels of the organisation. It is important to get employees
involvement at the early stages of the benchmarking effort to ensure they understand
and receptive, why the company needs to perform the benchmarking process. In
addition, the companys top management should encourage the employees to be
involved by giving their comments and suggestions with respect to the benchmarking
effort plans. In short, effective two-ways communications link should be in-place before
embarking on the benchmarking effort. As discussed in the preceding section, SMEs
has a corporate mind-set that top management or owner act as the role model for any
change initiative, employees tend to copy, emulate, or imitate their actions and
behaviours. Therefore, it is important that top management or owner portrays the
positive thinking towards continuous business process improvement and also
towards achieving higher quality products and services at competitive price through
their actions and behaviour to give employees the right and consistent message.
Finally, in order to carry out the action plans, the top management and
benchmarking unit must first assess the level and amount of resources (i.e. financial,
human, technical and time) available for the benchmarking effort within the
organisation. In other words, there must be enough funds, human resources, time and
technical tools available for conducting the benchmarking effort and ensure its success.
In addition, employees must be coaxed and not forced in performing the benchmarking
activities because the success of the first few benchmarking projects could determine
the sustainability of benchmarking effort in the long run. In short, the main purpose of
conducting a benchmarking effort is to produce, offer and deliver high quality products
and services at competitive prices that are able to satisfy or exceeds customer
expectations, which in turn will bring profit to the company.
Critical success factors
Having established the prerequisite key elements, vision and mission for business
competitiveness, the companys top management must then establish the CSFs that
can lead towards successful benchmarking implementation. These CSFs (Figure 8)
represents a range of enablers which, when put into practice will enhance the chance
for successful benchmarking implementation and adoption in the organization. The list
of CSFs presented is not meant to be a definitive of all CSFs available but just to
highlight the ones, which are commonly used. Additional CSFs should be added into
the list and used whenever it is necessary and appropriate. With regards to the SMEs
characteristics and constraints, it is important to ensure that the CSFs be implemented
gradually and progressively in stages according to the companys needs and available
resources. In other words, the benchmarking adoption and implementation should
eventually lead to improvement in the business process performance measures
(i.e. hard and soft measures), which in turn will enhanced the companys overall
business competitiveness.
Key performance measures
The first group of key performance measures (KPMs) commonly gathered in
benchmarking studies, which comes under the hard or tangible measures includes
work-in-progress (WIP) levels, lead-time, delivery-time, reject (per cent), rework
(per cent), product quality, product reliability, process cycle time, employees skill level,
and, etc. However, the authors would like to highlight and recognise that these
hard measures are the ends or the objectives of the benchmarking effort. The
tangible KPMs targets or goals could be achieved through conducting and
implementing change effort such as TQM, business process redesign or reengineering
(BPR), quality function deployment (QFD), self-assessment, benchmarking, etc. In
practice, the application, adoption and implementation of these hard or tangible
measures shall depend upon the company needs and their applicability in the SMEs
environment. The main objectives for monitoring these hard or tangible measures are
towards continuously improving the business process performance and efficiency,
products quality, and also in the companys overall management systems.
For example, high WIP levels may indicate large amount of the companys money is
sitting on the shop floor, if not properly monitored and controlled may lead to cash flow
problems. Meanwhile, high reject levels would show that the companys
manufacturing or production processes are not performing very well and thus
resulted in a lot of wasted resources. Therefore, the use and application of the hard
measures in the company for monitoring business performance must be geared
towards continuous product and service quality improvement, reduced costs and also
100 per cent on-time delivery.
The second group of KPMs can be termed as soft or intangible measures. They
are more difficult to quantify in terms of numbers, dollars and cents. However, they
play very important role in ensuring the success of benchmarking initiatives. In short,
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before comparing them with others. Once, this is achieved and when it is no longer
possible to improve against internal performance, the company can then progress to
conduct external benchmarking. In general, external benchmarking is more difficult to
perform as compared to internal benchmarking, however it can discover new
innovations and produce significant returns. External benchmarking partners may
come from other companies within the same industry or any other industries that share
similar business processes. Eventually there comes a point when it is no longer
possible to improve against external partners using similar business processes, the
company could then proceeds to perform the best practice benchmarking against
external partners regardless of business processes, industry sector or location. In this
case, the most important factor is the process being benchmarked. Best practice
benchmarking is more difficult to perform when compared internal and external
benchmarking, however it could bring breakthrough innovation and significant
business process improvement.
Benchmarking
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423
1. Planning
4. Action
2. Analysis
3. Integration
Figure 9.
General benchmarking
methodology
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detail, calculate the processes metrics and define their performance gaps, identify
comparative best practice partners, determine data collection method and collect data.
The person who is responsible for drafting the benchmarking implementation plan
should have a certain level of knowledge, experience and technical know-how in
benchmarking concepts, its practical implementation and application. For example,
one should understand what internal benchmarking means, where to implement it,
how to implement it; what are their associated CSFs; are they quantifiable, measurable
and auditable; is it easy to obtain the data; which specific data to collect; is the data
integrity reliable; is the resulting CSFs measures can be easily calculated; who should
be trained; what preparatory work that should be carried out; how to interpret the data;
and, etc. All these questions need to be addressed in the early part of the benchmarking
process. In short, proper planning requires a detailed study to prevent a lot of problems
that might crop-up later on during the benchmarking implementation process.
Having established the detailed plan, the company can then proceed to the analysis
step. In this step, the data collected in the benchmarking study is analysed thoroughly
to find out and provide a basis for comparison. The key questions to be answered in
this step are: what is the performance of the best practice partners; what is our
performance compared to them; why they are better; what can we learn from them; and
how can we apply the lessons to our company. In other words, this step involves
analysing the benchmarking data to determine current performance gap project
future performance levels, identify and understand the practices which contributes to
the best practice partners strengths.
The objective of the third step is to develop goals and integrate them into the
benchmarked process so that significant performance improvements are made. The key
questions to be answered in this step are: has top management accepted the
benchmarking teams findings; based on the findings do the company need to modify
its benchmarking goals; and also have the goals been clearly communicated to all the
relevant parties. In step four, develop the action plans needed to achieve the goals
decided upon in step three. The key questions that need to addressed in this step are:
will the plans allow the achievement of the stated goals; how will benchmarking
progress be tracked and what is the schedule for recalibration of the benchmarks. In
short, this step involves the implementation of the necessary actions, monitor their
progress and finally recalibrate benchmarks.
Benchmarking goals
In general, the benchmarking goals could be in the form of higher customer satisfaction
(i.e. product quality, on-time delivery, lower costs, etc.); better financial performance
(i.e. profitability, growth, return on investments, return on assets, etc.); efficient
business processes (i.e. cycle time, cost, productivity, etc.); competitiveness (i.e. product
cost, product selling price, etc.); and innovative and committed human resources
(i.e. employees satisfaction, effectiveness, safety, health, absenteeism, etc.). These
benchmarking goals may differ from one company to the other and depends on the
company objectives in performing the benchmarking effort.
Validation of the conceptual framework for benchmarking
The proposed conceptual framework for benchmarking implementation was validated
and tested in SMEs. In this section, the authors discuss the general and specific
comments, criticisms and suggestions made by the pilot case study companies
respondents concerning the frameworks strengths and weaknesses. All the six pilot
case study companies gave very positive comments on the proposed conceptual
framework. Their comments are: it is feasible, easily understood and can be
implemented with ease, a comprehensive approach that covers all the major aspects of
the benchmarking implementation and it provides a straight forward guide, which
could simplify the benchmarking process even to someone who is new to the
benchmarking concept. In short, the framework could be used as a base for conducting
the benchmarking process even to beginners. Apart from that, most of them agreed the
framework is a sensible approach towards conducting benchmarking initiatives in
SMEs particularly that involves in the manufacturing sector. In addition, with some
modifications the framework can be made applicable to other types of industries. Most
of them highlighted the top managements roles and responsibilities in the key areas of
the framework should be in-place first before embarking on the actual benchmarking
implementation effort in achieving the vision towards business competitiveness.
For example, developing benchmarking strategies, policies, vision and mission for
competitiveness should form an integral part of the business planning in an
organisation.
All of them agreed that top management must not only give their full commitment
in providing sufficient resources but they must also be committed to implement the
recommendations made by the benchmarking team. Meanwhile, five of the pilot study
companies agreed that the frameworks overall structure is sensible and suitable
approach for SMEs to adopt while implementing benchmarking effort. In addition, four
of them perceived the framework as practical, realistic and uncomplicated, which can
easily be used in real working environment. Other positive comments raised by at least
one of the pilot study company are the framework could give a clear and effective way
of presenting the overall benchmarking concept; and it is a simple approach for
incorporating benchmarking effort into a SME.
The pilot study companies also provide a few suggestions and constructive
criticisms that could further enhance the frameworks applicability and usability in
SMEs. They are:
.
The vision and goal section should also include competitiveness advantages in
the area of product quality, cost and delivery (i.e. QCD).
.
It is difficult to evaluate costs incurred against the improvement achieved
especially the soft measures in benchmarking implementation.
.
A target to be achieved should also be included in the general methodology
section while conducting the review step because a target will drive the
company to practice continuous improvement.
.
Add continuous improvement and equipment utilisation in the KPMs section
because idle equipment and machineries did not produce any output. A high
equipment utilisation indicates the company is maximising the usage of its
available facilities, meanwhile, a low utilisation values indicates the machinery
and equipment are under utilise.
.
Human resource development and training should be focussed on educating the
employees to improve their usage and practices of positive work cultures.
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In addition, majority of pilot study respondents agrees with the authors that the
different types of benchmarking techniques and initiatives may be implemented
according to the needs of the company and also depends on the resources availability
and not applied wholesale.
Discussions and conclusions
The implementation of benchmarking is not, and has not been an easy task for many
organisations. Majority of the frameworks proposed by previous researchers and
consultants tend to be prescriptive in nature and seems to provide the steps to be
taken to implement benchmarking in specific area of the business process such as the
operational performance in manufacturing function, value management process,
innovation and technology management, evaluating the organizations quality related
performance in operations and customer satisfaction, product development process,
rather than being a road map or general outline for implementing benchmarking as a
whole.
An insight has been gained into the strengths, weaknesses, similarities and
differences that exist between the frameworks reviewed by classifying them into two
major types (i.e. consultant/expert and academic/research based). The
consultants/experts benchmarking implementation frameworks were actually
founded based on practical experience. Meanwhile, academic/research frameworks
were based on conceptual and theoretical background. The literature review showed
that both these types of frameworks suffer from similar weaknesses such as being
complicated and prescriptive in nature. Furthermore, most of the frameworks found in
the literature were not specifically developed for the SMEs sector and thus were not
suitable for SMEs. Even if they appear to be suitable, they still suffer from certain
problems such as being complicated and prescriptive, which need addressing. In
addition, as has been shown from the review, the frameworks developed to date have
been dominated by large company approaches. The problem highlighted, indicate that
current benchmarking implementation framework still suffer from many weaknesses
that need improvements and are far from suitable for SMEs to apply. SMEs are
different in terms of their structures, processes, resources and culture, which need to
be taken into account when developing a framework that fits them. Therefore, the
weaknesses of the currently available frameworks, which have been highlighted in the
review, need to be considered when developing an implementation framework to suit
the SMEs needs and environment. In other words, the literature review has provided
the authors with a lot of information on the shortcomings of currently available
benchmarking frameworks. However, on the positive side, these shortcomings from
previous benchmarking frameworks could be use as a baseline in formulating the
conceptual benchmarking implementation framework for SMEs. The authors believes,
what is important in any change effort or initiative, such as benchmarking, is the
ability to do it right the first time.
In summary, the literature review had also shown that there is still lack of
benchmarking framework that was dedicated specifically to the SMEs in the
manufacturing sector. Thus, a new benchmarking implementation framework is
needed to fill the gap in the existing literature and to help the SMEs in their effort to
become more effective, productive and improve their competitiveness level in national,
regional and international markets through benchmarking implementation and
adoption.
The concepts within the proposed framework have been developed to be simple in
nature and structure, not prescriptive, provide a systematic approach, present a
general outline for benchmarking implementation on wholesale basis and encompass
most of the pertinent issues with regards to benchmarking implementation. The
framework does not suggest that all the concepts should be taken wholesale at-one-go,
but rather one-at-a-time according to a companys needs and available resources.
Due to their limited resources, SMEs actually need to start the benchmarking and
improvement initiatives in tangible measures (such as reject per cent, rework per
cent, WIP levels, lead-time, etc.) rather than intangible measures, which are difficult
to quantify in the form of numbers or percentages. This is important because positive
results at the early stages of the benchmarking implementation would provide future
motivation and thrust in the benchmarking technique, which in turn, help to sustain
the use of benchmarking practice in improving business and management processes.
The use and implementation of hard and soft KPMs for benchmarking purposes must
be geared towards continuous business processes performance improvement in the
organisation. Past experienced showed that sustainable benchmarking efforts require
motivated employees, thus soft performance measures must go hand-in-hand with
the hard performance measures. Above all, relevant training must be provided first
before embarking on the benchmarking process to ensure its successful
implementation and adoption.
The conceptual benchmarking implementation framework was empirically tested
and validated at six pilot study SMEs in the automotive manufacturing sector. Future
research is underway to include the pilot study companies suggestions and comments
into the final version of the framework. Having done that the framework will then be
widely deployed in SMEs in the automotive manufacturing sector. Finally, the authors
hope the framework would be of benefit to the SMEs in their pursuit towards
enhancing their business competitiveness and excellence.
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Corresponding author
Shari Mohd Yusof can be contacted at: shari@fkm.utm.my
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
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Terry R. Collins
Department of Industrial Engineering, Texas Tech University, Lubbock,
Texas, USA
James R. Oldham
Whirlpool, Inc., Fort Smith, Arkansas, USA
Abstract
Purpose To investigate the application of multi-attribute utility theory (MAUT) to aid in the
decision-making process when performing benchmarking gap analysis.
Design/methodology/approach MAUT is selected to identify the overall best-in-class (BIC)
performer for performance metrics involving inventory record accuracy within a public sector
warehouse. A traditional benchmarking analysis is conducted on 14 industry warehouse participants
to determine industry best practices for the four critical warehouse metrics of picking and inventory
accuracy, storage speed, and order cycle time. Inventory and picking tolerances are also investigated
in the study. A gap analysis is performed on the critical metrics and the absolute BIC is used to
measure performance gaps for each metric. The gap analysis results are then compared to the MAUT
utility values, and a sensitivity analysis is performed to compare the two methods.
Findings The results indicate that an approach based on MAUT is advantageous in its ability to
consider all critical metrics in a benchmarking study. The MAUT approach allows the assignment of
priorities and analyzes the subjectivity for these decisions, and provides a framework to identify one
performer as best across all critical metrics.
Research limitations/implications This research study uses the additive utility theory (AUT)
which is only one of multiple decision theory techniques.
Practical implications A new approach to determine the best performer in a benchmarking study.
Originality/value Traditional benchmarking studies use gap analysis to identify a BIC performer
over a single critical metric. This research integrates a mathematically driven decision analysis
technique to determine the overall best performer over multiple critical metrics.
Keywords Benchmarking, Performance measures, Utility theory, Sensitivity analysis, Gap analysis,
Best practice
Paper type Research paper
Introduction
For decades, practitioners in the public and private sector have adopted the
benchmarking approach as a useful tool for performance and quality assessments.
Landmark benchmarking studies have been performed and the results widely
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q Emerald Group Publishing Limited
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DOI 10.1108/14635770610676281
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publicized over the years (Camp, 1989; Kolarik, 1995; McNamee, 1994; Yasin, 2002).
Benchmarking has many benefits to the organization; however, the data analysis
aspect of the process is an area in need of further refinement. For example, how can it
be proven that the best practices realized are actually the best? How can the relevance
of best practices be assessed by an organization? And finally, what is the best method
for determining the best practices?
A recent study discovered difficulties in determining the best-in-class (BIC)
performer because of dissimilar reporting statistics and varying analysis techniques
(Roider, 2000). Another study finds that the adopting best practices are related to
resource constraints, size of organization, and the comparability of data (Hinton et.al.,
2000). Classic benchmarking analysis tools of flow charts, matrix analysis, spider
charts, and Z-charts have no structured means to evaluate the data, characterize and
measure performance gaps, and project future performance levels (Barr and Seiford,
1996). Therefore, a benchmarking group must identify a correct data analysis tool to
use.
This research utilizes and validates the decision-based analysis tool of
multi-attribute utility theory (MAUT) for the benchmarking gap analysis process.
This analytical approach provides a robust mathematical method to determine an
overall best performer for a selected best practice. MAUT is a relevant addition to the
benchmarking process for this method carefully evaluates the trade-off issues
associated with the risks and benefits of considering multiple criteria at the same time.
A warehouse benchmarking study in the public sector is used as a case study to
compare the mathematical decision method of MAUT against traditional
benchmarking practices. The case study first presents the traditional process
benchmarking approach, which focuses on sampling other warehouses across multiple
industries to identify BIC performance metrics for warehouse management. Next, a gap
analysis is performed to compare general industry results to the public sectors current
operating procedures to identify opportunities for adaptation. The results of the gap
analysis identify the BIC performer. The gap analysis results are compared with the
MAUT technique to evaluate the applicability and fit of MAUT as a more quantitative
decision making approach for benchmarking. Utility values and relative weights
are assigned using the benchmarking data. Finally, sensitivity analysis is performed to
determine the outcome effects of varying the relative weight values.
Multi-attribute utility theory
MAUT provides a comprehensive set of quantitative and qualitative approaches to
justify a decision between alternatives (Canada and Sullivan, 1989), such as identifying
the BIC performer in a benchmarking study. A specific type of multi-attribute decision
theory MADT, called MAUT, is evaluated for its applicability to benchmarking
analysis. Utility theory takes into account a range of the consequences of a particular
decision and the risks of this decision, just as probability theory does for uncertainty.
MAUT is selected as a viable method for improving benchmarking analysis due to its
relative ease of both formation and computation. The MAUT approach enables the
decision maker to incorporate preference and value trade-offs for each metric and
measure the relative importance of each (Keeney and Raiffa, 1993). While other MAUT
studies have been performed, there still exists a need for documented applications of
this type of analysis (Walls, 1995). Bordley (2001) describes the use of MAUT to
perform gap analysis for service research. The resulting gap analysis discounts the
gap between performance and expectations, providing more empirical inferences than
conventional gap analysis (Bordley, 2001). It is expected that applying MAUT to
benchmarking will yield the same benefits.
Multi-attribute utility theory
The basic goal of MAUT is to substitute information with an arbitrary measure called
utiles so that the information can be compared. The utile values range from a low of
0 to a high of 1, with intermediate values decided upon by the decision maker. The
identified critical metrics are plotted on a graph from 0 (worst case) to 1 (best case).
Then, a utility curve is plotted to model the subjective value of each outcome
(Daellenbach, 1994).
The end result of MAUT is simply to maximize the combined utility value (Keeney
and Raiffa, 1993). Each metric is assigned a utile value and is combined with other utile
values to assess an aggregate utility value according to set mathematical procedures.
These procedures are explained in detail in the next paragraph. MAUT allows the
decision maker to develop reasonable preference criteria, determine which assumptions
are most appropriate, and assess the resulting utility functions (Lindey, 1985).
For this research, additive utility theory (AUT) is chosen for the following two
reasons:
(1) AUT provides a more practical methodology due to easier computational
analysis.
(2) AUT is easier to understand and explain to decision makers.
AUT allows the benchmarking party to assign priorities to certain metrics and allows
stratification of all critical metrics. Also, AUT can be applied using common spreadsheet
software, which is readily available in most business settings. No components of the
formulation require complex iterative solutions. This analysis method uses subjectivity
in formulating the relative weight factors (ki), which therefore requires sensitivity
analysis to be conducted to ensure the robustness of the assessment.
For i alternatives with j attributes, the additive utility model is expressed:
U xi
n
X
kj*uj xij
j1
n
X
kj 1:0
j1
where: kj is a relative weight factor of the jth attribute, uj(xij) is the utility of the
outcome xij for the jth attribute, All attributes are independent of each other.
Sensitivity analysis and additive utility theory
AUT requires personal subjectivity. Because of this, extensive and thorough
sensitivity analysis is necessary for justifying the end objective scores. The purpose of
this analysis is to determine how sensitive the outcome is to changes in the variable
values. This step is crucial because small changes in assigned values could produce
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very different results. Sensitivity analysis identifies these small changes and allows the
decision maker to decide if the values need to be adjusted. Also, sensitivity analysis
can identify user bias and help the decision maker to re-evaluate the original criteria
used (Daellenbach, 1994).
A least squares method of sensitivity analysis for AUT was developed by Barron
and Schmidt (1988). For known single attribute value functions uj(xij), this method
computes, for two independent alternatives, new kj (noted as wj in the equation) values
required to make the total utility value of alternative xi exceed the total utility value of
alternative xb by an amount D whose value is decided upon by the researcher. The least
squares method is expressed as:
minimize:
n
X
wj 2 kj 2
wj aj D
j1
subject to:
n
X
j1
n
X
wj 1
j1
wj $ 0
aj uj xij 2 uj xbj
xb is the BIC performer discovered for initial relative weights bj; i j. (Barron and
Schmidt, 1988)
After the wj values are found, sensitivity analysis can be performed. For example, if
attribute A is deemed twice as important as attribute B, all wj values violating this can
be ruled out. Also, varying levels of D in the above formulation allows sensitivity
analysis for the implied relationship between alternatives i and b, and the
corresponding effect on all other alternatives (Barron and Schmidt, 1988).
In essence, a formal MAUT analysis forces the benchmarking party to clearly define
its priorities and measure the attractiveness of a discovered best practice. This is
especially crucial in benchmarking studies, as the effects of the study are far-reaching
throughout the organization (Forger, 1998). As benchmarking studies continue to
become more complex, traditional benchmarking tools do not apply to new research
(Ammons, 1999), and the need for more powerful benchmarking techniques increases.
Research methodology and procedures
The research methodology is broken down into a two-stage process. First, existing case
study data will be presented from the warehouse benchmarking study. Next, a MAUT
comparison will be conducted using the gap analysis results of the benchmarking
study. In each stage of the research process there are several steps or procedures. Steps
1-4 are related to the case study, while the remaining steps are procedures for the
MAUT comparison.
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with experts associated with the study to assign the utility values. It should be noted
that most benchmarking studies would deal with several groups by varying utility
values for each metric. This research is not directly concerned with combining group
utility values, but primarily examines the difference utility assignment has on the
identification of the BIC for this data set. For case studies regarding group utility
values, see Eyrich (1991) and Korpela and Tuominen (1996).
Tables I and II show the utility assignments used for picking and inventory
accuracy utility assignments. To allow all pertinent data to be evaluated, the lower
bounds of the utility curve had to be set. The lowest possible performance for both
picking and inventory accuracy, 0.0 percent, is assigned a 0 utility value so that any
possible picking or inventory accuracy can be represent by a utility value. This allows
all responses for a particular question to receive a utility value for each metric
regardless of other responses. However, the same method does not work for storage
and order cycle time lower bound assignments. After multiple discussions, it was
determined that any times equal to 120 hours or more should be assigned a 0 utility
value. This lower bound is chosen for its application in the sponsoring organizations
own warehouse procedures. Cycle times above 120 hours are unsuitable for this
operation. For inventory and picking tolerances, it was determined that any tolerance
level of 5 percent or more should be given a utility value of 0. This limit is chosen due to
the fact that a decrease in 5 percent of actual accuracy severely affected BIC
identification and the validity of the best practices identified.
After calculating the lower bounds, the upper bounds are calculated. The theoretical
BIC is designated as a 100 percent level for picking and inventory accuracies and 0 time
units for storage and order cycle times. Although these values are virtually unattainable,
they provide an upper bound for these metrics. Also, inventory and picking tolerances
set at 0 percent are considered BIC. Therefore, inventory and picking accuracies are not
assumed under any tolerance and are interpreted as absolutes. To assign intermediate
utility values, judgment on the relative difficulty of increasing accuracy or decreasing
Top
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Level
Level
Level
Level
Top
Level
Level
Level
Level
Level
1
2
3
4
5
1
2
3
4
5
Utility value
100
99.9
99.5
99.0
95.0
0.00
1.00
0.80
0.60
0.40
0.20
0.00
Utility value
100
99.5
99.0
98.0
95.0
0.00
1.00
0.80
0.60
0.40
0.20
0.00
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Table I.
Picking accuracy utility
assignment
Table II.
Inventory accuracy
utility assignment
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Table III.
Storage time utility
assignment
Table IV.
Order cycle time utility
assignment
time must be determined. For example, an increase from 90 to 95 percent may be easier to
achieve than an increase from 99 to 99.5 percent. A close breakdown of each basic metric
will identify which levels of performance mark an increase in capacity and thus a higher
utility value. To create the utility curves, the performance criteria for picking and
inventory accuracies are analyzed first. It is determined that accuracy values increase
rapidly from 95 to 100 percent, with increases in this range doubling every 1/2 percent.
The graph becomes asymptotic (relative to 1 utile value) as the accuracy approaches
100 percent. It should be noted that the configurations around the extreme values for
these curves is debatable. The utility values as they approach the highest level could
suggest less utility gain. For example, if someone received a donation of $100, then
received another $100, their utility value would be favorable. However, if someone
received a donation of $100,000, then $100 more, their utility value would not be as
favorable as in the first condition. This scenario existed in the utility curves for accuracy
levels and cycle times. The expected utility gain in these curves continues to be high,
even as inventory accuracy increases from 99.99 to 100.00 percent. However, the
formulated curve represented the preliminary reasoning that examined how difficult
change above a certain level became.
Next, the sponsoring organization and research team analyzed the utility
assignments for storage and order cycle times. The utility assignments used for
storage and order cycle times are presented in Tables III and IV. It is decided that any
times less than one complete day (24 hours) or less would determine the bounds from a
utile value of 0.2. This is chosen to allow time ranging from 8 to 5 hours to have a
marked improvement in utility assignment. This line would again break at 2 hours,
allowing even more value to be assigned to shorter cycle times.
Finally, the utility assignments to use for the tolerance levels used in reporting
accuracies are analyzed. Tables V and VI show the resulting utility assignments used for
inventory and picking tolerances. As stated earlier, the lower bound for tolerance limits
is assigned as 5 percent. It is decided to construct the utility curve as a linear relationship
Top
Level
Level
Level
Level
Level
Top
Level
Level
Level
Level
Level
1
2
3
4
5
1
2
3
4
5
Utility value
0
2
5
8
24
120
1.00
0.80
0.60
0.40
0.20
0.00
Utility value
0
2
5
8
24
120
1.00
0.80
0.60
0.40
0.20
0.00
between the best possible (0 percent) and worst possible (5 percent). This decision is
made to allow an equal penalty to be assigned as inventory tolerance increased.
The utility curve could now be plotted and all associated utility values for each
response can be calculated. Because the methods for fitting curves to the utility
assignments are most commonly done by hand, it is decided to use a linear relationship
between each pair of data points to set intermediate utility values. Also, this linear
relationship allows the easiest interpolation of intermediate metric values.
Calculation of relative weights. To evaluate the total utility for each warehouse, all
six metrics must be compared. However, one metric may be favorable over others due
to the design of the survey and from the responses acquired. The following list outlines
the reasoning for choosing a relative ranking scale:
.
Which metrics are more important: picking accuracy, inventory accuracy,
storage time, or order cycle time? How does inventory and picking tolerances
relate to these metrics?
.
Why is one metric more important and how much more important (in terms of kj
values)?
Use of
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utility theory
439
The selected relative weights can deal with these problems and help justify the
identification of the BIC across all metrics, which adds robustness to the results.
The relative weights are used in calculating the total utility for each participant. The
sponsoring organization and the research team discussed the priorities of the current
warehouse policies. It is deemed that the benchmarking best practice metrics should be
arranged in the following order of importance:
.
picking accuracy;
.
inventory accuracy;
.
storage time; and
.
order cycle time.
Top
Level
Level
Level
Level
Level
Top
Level
Level
Level
Level
Level
1
2
3
4
5
1
2
3
4
5
Utility value
0.0
1.0
2.0
3.0
4.0
5.0
1
0.8
0.6
0.4
0.2
0
Utility value
0.0
1.0
2.0
3.0
4.0
5.0
1
0.8
0.6
0.4
0.2
0
Table V.
Inventory tolerance
utility assignment
Table VI.
Picking tolerance utility
assignment
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Inventory and picking tolerances are not considered warehouse performance metrics,
but this study wanted to investigate the relationship between the four metrics mentioned
above and the inventory and picking tolerances which are set by management.
From this original examination, it is determined that picking and inventory
accuracy rates identified BIC more than storage and order cycle times and tolerance
values. Therefore, the following relative weight assignments are formulated. Table VII
shows the initial relative weights assigned to this data.
Sensitivity analysis. A sensitivity analysis is then performed to justify the relative
weights, which are ultimately affecting the identification of the BIC performers. With
the initial utility value for each participant calculated, sensitivity analysis is conducted
for each relative weight used in this calculation. Each weight factor is altered to
identify the critical weights that will change the identity of the BIC performers. This
step is crucial in the analysis of each weight factor to ensure a top performer is not
eliminated or created by marginal changes in each relative weight.
To perform sensitivity, the least squares method described by Barron and Schmidt
(1988) in equations 6-9 is used. The BIC participant (xb) is identified and used for the
associated calculation. A pair-wise comparison is then made to each participant to calculate
the associated kj values necessary to have equivalent total utility values (D 0). Then, the
cumulative utility values for all participants are calculated to discover if BIC identification
has changed. Once tested for sensitivity and justified weight factors are found, the best
overall performer is identified and recommendations are gathered from this respondent.
Data analysis of MAUT results. After sensitivity analysis, the participant with the
highest combined utility value is identified. Then, their associated responses are analyzed.
The specific operating procedures for the entire warehouse accuracy process are evaluated
and recorded. Gap analysis is performed from this data to the home processes to develop
recommendations for improvements. Once this gap analysis is complete, the
recommendations realized through MAUT are compared to the previous analysis.
Comparison of results. Using the previously obtained data, a pair-wise comparison
is made to identify the different suggestions made for each question. A comparison is
made between what suggestions the original study provided compared to the
suggestions provided by MAUT. For each question, a pair-wise comparison is made to
identify the different suggestions realized for the four critical questions posed during
the previous research:
(1) How does industry set tolerance levels for inventory accuracy reporting?
(2) How does industry handle errors during a picking operation?
(3) Does industry perform cycle counting or 100 percent wall-to-wall inventories?
(4) What is the typical inventory and picking accuracy rate that can be expected?
Metric
Table VII.
Relative weight
assignment
Picking accuracy
Inventory accuracy
Storage time
Order cycle time
Inventory tolerance
Picking tolerance
Symbol
Relative weight
kp
ki
ks
ko
kit
kpt
0.45
0.35
0.10
0.05
0.025
0.025
It is anticipated that the suggestions identified through MAUT are similar for some
questions, while others may be very different.
However, the careful consideration of applying MAUT is to add robustness to the
decision criteria that identified these critical metrics. The purpose of this analysis is to
examine the additional information MAUT provided for this data set.
Use of
multi-attribute
utility theory
Discussion of results
Case study data
After completing the questionnaires, the 14 participants responses to the basic
warehouse metrics are recorded. Table VIII shows the raw data recorded for these
fourteen warehouses. With the data recorded, a quick comparison is warranted to
ensure the previously formulated utility assignments are valid for this data set. Picking
accuracy ranged from a low of 85.000 percent to a high of 99.999 percent. Inventory
accuracy ranged from a low of 82.000 percent to a high of 99.900 percent. Storage speed
ranged from just under one hour up to 48 hours. Order cycle time ranged from
10 minutes up to 120 hours. Inventory accuracy tolerances ranged from 0.0 to
5.0 percent; the majority of warehouses did not use inventory tolerances for calculating
accuracy. Picking tolerances ranged from 0.0 to 5.0 percent; again, the majority of
warehouses did not use picking tolerances for calculating accuracy.
From the original assignments presented in the methodology section, the research
team felt the original utility assignments would work for this data set. The original
ranges allowed both extremes of each metric to be evaluated using MAUT. The next
step is to convert each warehouse metric into its new utility value and evaluate the data
using the relative weight factors.
441
Picking
accuracy
Inventory
accuracy
Storage
speed
Order
cycle time
Inventory
tolerance
Picking
tolerance
0.991
0.994
0.990
0.999
0.981
0.900
0.995
0.996
0.950
0.990
0.998
0.997
0.980
0.850
0.973
0.924
0.970
0.980
0.982
0.820
0.950
0.999
0.850
0.985
0.976
0.997
0.970
0.900
10.417
21.600
3.000
48.000
24.000
3.000
24.000
1.500
8.000
6.000
35.280
8.000
4.000
1.000
8.283
26.400
1.000
0.167
0.100
0.133
120.000
3.000
1.670
0.083
24.000
6.000
4.000
0.500
0.050
0.000
0.010
0.000
0.000
0.030
0.000
0.000
0.100
0.000
0.046
0.000
0.000
0.000
0.050
0.000
0.000
0.000
0.000
0.010
0.000
0.000
0.010
0.000
0.046
0.000
0.000
0.000
Table VIII.
Raw data
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442
value. The combined utility values are derived from equation 1. Table IX shows the
results of the initial utility value assignments for these data and the relative ranking of
each warehouses combined utility.
From this analysis, Warehouse 8 has the highest additive utility value of 0.807.
Warehouse 9 has the lowest additive utility of 0.254. The next step is to use sensitivity
analysis to check if slight variations in relative weight factors would affect the
identification of BIC status.
Sensitivity analysis
Sensitivity analysis is performed according to the method presented by Barron and
Schmidt (1988). This method calculated the required change in relative weight factors
to make a particular warehouses additive utility value equal to the original BIC
additive utility value using the least squares principle. The utility data are re-evaluated
using the new relative weight factors to produce the corresponding additive utility for
all participants. Table X shows the results of the sensitivity analysis, the relative
weights calculated, and the corresponding warehouse deemed BIC for this set of
relative weights. The BIC column for each warehouse ID denotes the particular
warehouse that is identified as BIC under the calculated wj values.
This sensitivity allowed the calculation of new relative weights and evaluation of
these new values. The sensitivity analysis proved that marginal changes in the original
relative weights would not alter the identification of BIC. Also, one warehouse is
unable to converge to a solution, as all metrics are below that of the BIC performer.
That is, the least squares procedure will not converge with this series; the BIC would
always have a higher utility for any and all relative weights greater than or equal to
zero.
Finally, five warehouses calculated a least squares solution of 0.50 and 0.50
for inventory and picking tolerances, respectively. The result of this sensitivity
analysis produced multiple BIC rankings, as most warehouses did not use tolerances.
Table IX.
Calculated utility values
and relative ranking
Warehouse ID
kp
0.450
upick
ki
0.350
uinv
ks
0.100
ustore
ko
0.050
uoct
kit
0.025
uit
kpt
0.025
upt
Utility value
Relative ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
0.440
0.576
0.400
0.800
0.357
0.189
0.600
0.650
0.200
0.400
0.750
0.700
0.350
0.179
0.351
0.195
0.333
0.400
0.441
0.173
0.200
0.978
0.179
0.500
0.373
0.880
0.333
0.189
0.370
0.230
0.733
0.150
0.200
0.733
0.200
0.850
0.400
0.533
0.177
0.400
0.667
0.900
0.396
0.195
0.900
0.983
0.990
0.987
0.000
0.733
0.833
0.992
0.200
0.533
0.667
0.950
0.000
1.000
0.800
1.000
1.000
0.400
1.000
1.000
0.000
1.000
0.080
1.000
1.000
1.000
0.000
1.000
1.000
1.000
1.000
0.800
1.000
1.000
0.800
1.000
0.080
1.000
1.000
1.000
0.378
0.410
0.460
0.614
0.434
0.298
0.410
0.807
0.254
0.508
0.500
0.740
0.424
0.334
11
9
6
3
7
13
10
1
14
4
5
2
8
12
1
2
3
4
5
6
7
8
9
10
11
12
13
14
0.000
0.244
0.527
0.318
0.215
0.000
0.450
0.099
0.333
0.858
0.561
0.000
0.176
0.000
0.000
0.204
0.011
0.000
0.000
0.350
0.000
0.032
0.142
0.285
0.000
0.000
0.000
0.088
0.000
0.000
0.208
0.000
0.100
0.000
0.000
0.000
0.000
0.000
0.243
No solution
0.000
0.449
0.157
0.386
0.527
0.000
0.050
0.750
0.380
0.000
0.000
0.000
0.326
0.500
0.037
0.056
0.143
0.000
0.500
0.025
0.000
0.128
0.000
0.077
0.500
0.128
0.500
0.182
0.056
0.143
0.050
0.500
0.025
0.152
0.128
0.000
0.077
0.500
0.128
N/A
Multiple
4
4
4
8
Multiple
8
4
4
8
8
Multiple
13
However, it was noted that these five warehouses all had metric values that are less
than that of the BIC performer. Therefore, convergence is dependent only on the
tolerance levels used, eliminating all other metrics. Therefore, the sensitivity analysis
provided adequate proof that marginal changes in relative weights would not change
the identification of the best overall performer.
Comparison between methodologies
Both analysis types revealed the best performers did not use tolerance levels. This
implied accuracy levels are accurate as given and no allowances were used to
calculate accuracy levels. For errors that occurred during picking, the process of
flagging the error by the actual picker and filling a partial order and shipping
remaining items later or per the customers instructions is identified. The analysis
did not identify whether or not nearby locations are checked for reconciliation of
the error. Both analysis techniques revealed that a second party is sent to re-check
for the error. For cycle counting, the MAUT analysis identified random sample
cycle counting and not conducting 100 percent wall-to-wall inventories. In contrast,
the traditional benchmarking analysis identified different types of cycle counting,
and 100 percent wall-to-wall inventories are conducted. Table XI shows the gap
analysis for the four key questions posed in the original study.
Conclusions and implications for use in the benchmarking process
This research followed a comprehensive application of MAUT and sensitivity analysis
to a benchmarking study. This analysis differed from the classis benchmarking
approach where recommendations are made based on traditional benchmarking tools.
Comparing the suggestions of each method showed some similarities as well as some
differences. However, because of the various benchmarking methods existing today, a
careful consideration should be taken to determine if MAUT is useful for a particular
study.
Advantages of using MAUT
MAUT proves to be effective in establishing priorities of several critical metrics and
provides a method to compare these metrics across several participants. The most
Use of
multi-attribute
utility theory
443
Table X.
Sensitivity analysis
results
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Question
Table XI.
Gap analysis for original
question set
Old analysis
powerful advantage to using MAUT for this research is its ability to consider all
critical metrics and define a best overall performer for these data. Also, MAUT allows
the comparison of different types of data to be directly compared. For example,
accuracy percentages and cycle times are converted into identical units, making
comparison easier. In addition, the use of MAUT allows further investigation of the
data gathered and provides a different look at the best practices discovered. The data
used in classical benchmarking methodologies is easily re-used for the MAUT
analysis, providing even more information. Finally, MAUT provides a framework to
identify one performer as best across all critical metrics. Because the questions
sampled are affected by multiple metrics, this fact became critical for best practice
identification.
Contributions
In this research, the application of MAUT is analyzed for its applicability to
benchmarking analysis. This research is successful in proving the following points for
this comparative study:
.
MAUT provides stratification of all critical metrics chosen and allows for direct
comparison between them.
.
MAUT allows the research team to assign priorities and analyze the subjectivity
of these decisions.
.
MAUT provides a mathematical method for comparing trade-offs and
identifying BIC.
.
MAUT adds robustness to the decision criteria and is suspected to increase
robustness as the amount of critical data increased.
A formal MAUT application to benchmarking is recommended for any party who
requires a method to compare several metrics simultaneously. The MAUT model
works best for small benchmarking efforts where the research team can clearly define
priorities within the study. Also, the tests for sensitivity allow the benchmarking party
to evaluate its choices for weight factors and to adjust them if necessary. It should be
noted that the MAUT method finds a best overall performer for all critical metrics,
rather than a best-in-class performer for each critical metric. Therefore, the proper
method to employ depends on the end result desired. This research used the same data
set for both analysis methods. MAUT could be used in addition to the previous
methodology to gain even more insight on the information. Through the initial
investigation of MAUT on benchmarking, some suggestions for future research were
formulated at the conclusion of the study.
References
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Barron, H. and Schmidt, C. (1988), Sensitivity analysis of additive multi-attribute value models,
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Canada, J.R. and Sullivan, W.G. (1989), Economic and Multi-attribute Evaluation of Advanced
Manufacturing Systems, Prentice-Hall, New York, NY.
Daellenbach, H.G. (1994), Systems and Decision Making, Wiley, New York, NY.
Eyrich, H.G. (1991), Benchmarking to become the best in breed, Manufacturing Systems, Vol. 9
No. 4.
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International Journal of Benchmarking, Vol. 7 No. 1, pp. 52-62.
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Jossey-Bass Publications, San Francisco, CA.
Keeney, R.L. and Raiffa, H. (1993), Decisions with Multiple Objectives: Preferences and Value
Tradeoffs, Wiley, New York, NY.
Kolarik, W.J. (1995), Creating Quality: Concepts, Systems, Strategies, and Tools, McGraw-Hill,
New York, NY.
Korpela, J. and Tuominen, M. (1996), Benchmarking logistics performance with an application
of the analytical hierarchy process, IEEE Transactions on Engineering Management,
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McNamee, D. (1994), Reinventing the Audit: Frameworks for Change, Mc2 Management
Consulting, California.
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Rodier, M.M. (2000), A quest for best practices, IIE Solutions, Vol. 32 No. 2, pp. 36-9.
Walls, M.R. (1995), Integrating business strategy and capital allocation: an application of
multi-objective decision making, The Engineering Economist, Vol. 40, pp. 247-66.
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Journal of Benchmarking, Vol. 9 No. 3, pp. 217-34.
Corresponding author
Terry R. Collins can be contacted at: terry.collins@coe.ttu.edu
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
Role of human
factors in TQM
Sandeep Grover
Department of Mechanical Engineering, YMCA Institute of Engineering,
Faridabad, India
447
V.P. Agrawal
Department of Mechanical Engineering, Indian Institute of Technology Delhi,
New Delhi, India, and
I.A. Khan
Department of Mechanical Engineering, Faculty of Engineering and
Technology, Jamia Millia Islamia, New Delhi, India
Abstract
Purpose To represent the effect of human factors in total quality management (TQM)
environment in terms of a single numerical index by considering their inheritances and interactions.
Design/methodology/approach Various human factors affecting the TQM culture in an
organization are identified and discussed for the sub factors affecting them. These factors are
interacting with each other and their overall effect helps an organization in attaining TQM enabled
needs. The paper attempts to represent the overall effect of human factors quantitatively by
developing a mathematical model using graph theoretic approach. In this approach, interaction among
identified human factors is represented through digraph, matrix model and a multinomial.
Findings The extent of human aspects present in an organization, conducive to TQM culture is
represented in terms of the human index. It provides an insight into the human factors at system and
subsystem level. The developed procedure may be useful for self-analysis and comparison among
organizations.
Research limitations/implications Since, human behaviour is difficult to predict, so are the
human factors. The paper considers general factors, which may vary depending on type of
organization, size of organization and geographical location. There is a scope of research in factor
specific organizations.
Practical implications It provides a useful methodology for organizations to assess human
aspects and improve upon therein. Procedure for stepwise application of methodology is given with
example that may help an industry to implement it.
Originality/value The paper attempts to quantify the intangibles through systematic approach
and is of value to industries to improve upon their work environment.
Keywords Total quality management, Employee behaviour, Graph theory
Paper type Research paper
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 447-468
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770610676290
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448
Dr Deming and Dr Juran were the pioneers in the field of TQM, who gave valuable
guidelines on quality systems. Since, then, TQM has been revisited and revitalized by
various authors. Extensive literature available on TQM reveals the various facets of
TQM covered by various authors and researchers across the globe. Sila and
Ebrahimpour (2003) analyse and compare various TQM factors and their impact on
various performance measures across countries. Mehra et al. (2001) conducted a
literature survey on TQM and identified 45 elements that affect TQM implementation.
Apart from these various studies (Tamini, 1995; Ahire et al., 1996; Dalu and Deshmukh,
2002) refer to factors affecting TQM.
Literature on TQM advocates the influence of human factors more as compared to
other factors on implementation of TQM and business performance.
Saad and Siha (2000) feel the visible (or tangible) variables such as technology,
structure and strategy have a relatively small impact on TQM effectiveness compared
with largely hidden and intangible variables such as values, attitudes and perception.
These factors have also been classified as hard and soft elements or hardware and
software determinants. Improvement in the soft elements is important since there is
adequate research proving that business performance is more heavily influenced by
these elements of TQM. (Gotzamani and Tsiotras, 2001).
An important key issue for any productivity improvement program is management
of people (Gunasekaran et al., 2000).
Lakhe and Mohanty (1994) presented a conceptual model to judge the effectiveness
of TQM in an organization. The importance of human factors is also depicted in the
variables affecting TQM effectiveness.
Badiru (1990) identifies the utilization of human resources as most important while
applying the concept of triple C communication, cooperation and coordination to
TQM. Brenda Weeks et al. (1995) identify seven critical organizational characteristics
that must be assessed to judge an organizations readiness to implement a successful
TQM programme. Most of the factors relate to human behaviour.
Taveira et al. (2003) examined hypotheses regarding influence of TQM on work
environment and concluded that most TQM elements were significantly related to
work environment scales viz. supervisor support, task orientation, task clarity and
innovation. Testa et al. (2003) did regression analysis to suggest national and
organizational cultural congruence has positive effect on job satisfaction. Specific
dimensions of human factors have been covered by various other studies (Legge, 1995;
Taylor, 1997; Axelsson et al., 1999). However, the authors have not come across any
literature on mathematical modeling of different human aspects in TQM leading to
single numerical index.
The interdependencies and overall impact of human aspects on TQM is discussed in
this paper using a mathematical model by applying graph theoretic approach.
Graph theoretic approach is a systematic and logical approach that has been applied
in various disciplines to make and analyse systems (Gandhi and Agrawal, 1996).
The procedure of quantification looks at human aspects in TQM from a different
angle and as an improvement over present practiced procedure of studying them. The
main advantage is that it not only takes into account the amount of human behavioural
factors but also their interdependencies. This is desirable in the present case as the
human aspects have interactive complexity leading to TQM environment in an
organization.
Role of human
factors in TQM
449
B2
TOP MANAGEMENT
INVOLVEMENT
B3
WORK
CULTURE
Resource
Allocation
MOTIVATION
Individual belief
Quality of
Work life
Leadership
Satisfaction
Perception
Commitment
Management
Style
Education
Positive
Thinking
Desired
Human
Aspects.
Communication
Team Work
Responsibility
Economic
Condition
INNOVATION
Job
Security
Leadership
Discipline
Urge to learn
B6
Empowerment
Managerial values
Skill
Training
Remuneration
Trust
Awareness
ATTITUDE
CHANGE
B5
COORDINATION
B4
Figure 1.
Cause and effect
diagram human aspects
in TQM
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Attitude change
This behavioural aspect refers to change in way of thinking of an employee about
organizational aspects. TQM is a way of thinking broadly about stakeholders. It is
bringing in the positive attitude towards work. Changing attitude is considered as more
difficult and time taking as compared to ones knowledge. Attitude change is highly
affected by personals traits education, background and age group. If change is
perceived by an employee as threat to position and a signal of danger then it requires
through knowledge, awareness and benefits to be known to an employee. Sometimes
giving more responsibility to an employee in the process of change may click. It is the
culture that can change the attitude and vice-versa.
Innovation
Developing a new and better way of doing existing work enables TQM culture. It is
search for creativity through research and development applied by knowledge
updating and skill improvement through training and continuing education. Apart
from individual factors, innovation is to be encouraged by openness of management.
Rewarded and recognized innovative ideas boost other employees to experiment.
The economic condition of an organization has also influence on innovative culture in
an organization. Innovation helps in fulfilling organizations quest for continuous and
breakthrough improvement.
To achieve the desired organizational goals through TQM environment, it is
necessary to understand, analyse and evaluate the contribution critical human
factors and sub factors for improving competitiveness, work culture and profitability.
This is achieved through quantification of effect and interdependency among these
factors discussed in next section.
Development of graph theoretic model
Graph theoretic and matrix model consists of digraph representation, matrix
representation and permanent representation. Digraph representation is useful for
visual analysis. Matrix model is useful for computer processing. Permanent multinomial
function characterizes abstract TQM environment uniquely. Permanent value of
multinomial represents the effect of human factors on environment uniquely by a single
number/index, which is useful for comparison, ranking and optimum selection. The
systematic application of graph theoretic methodology is discussed further in this paper.
Behavioural digraph
A Behavioural digraph is prepared to represent the behavioural factors of the TQM
environment in terms of nodes and edges. Let nodes represent behavioural factors and
edges represent their interactions. It represents TQM environment behavioural
measure of characteristics or factors (Bis) through its nodes and dependence of factors
(bijs) through its edges. Bi indicates the inheritance of factors and bij indicates degree of
dependence of jth factor on ith factor. In the digraph bij is represented as a directed
edge from node i to node j. The digraph permits to show the proposed behavioural
factors and interactions between factors. In particular six factors identified form the
behavioural digraph. The six behavioural factors top management involvement (B1),
work culture (B2), motivation (B3), coordination (B4), attitude change (B5) and
innovation (B6) and interactions amongst them are shown in Figure 2.
Role of human
factors in TQM
451
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B1
B4
B2
452
B3
Figure 2.
Behavioural digraph
B5
B6
A brief reasoning of interactions (i.e. edges shown in the digraph) is given below.
Involvement of management through commitment, resource allocation and providing
leadership influences other factors. Thus, directed edges from node 1 to all other nodes.
However, work culture and motivated workforce may also force the involvement of
management to some extent. Thus, a directed edge from node 2 and node 3 to node
1.The extent to which one factor is dependent on other may vary from one organization
to another.
Work culture (B2) is dependent on management, motivation of employee, attitude of
employee and innovation. Thus, a directed edge from node 1, 3, 5, and 6 to node 2.
However, there is no directed edge from node 4 to node 2 as it is the coordination that
will result from proper work culture (thus node from 2 to 4). Similarly work culture
may motivate and employee will be encouraged to innovate (node from 2 to 3 and 6).
Similarly other factors can be visualized from the digraph (Figure 2).
Behavioural matrix
Since, digraph is a visual representation, it helps in analysis to a limited extent only.
To establish an expression for behavioural effect, the digraph is represented in matrix
form, which is convenient in computer processing also.
Let us consider a general case of n factors leading to n th order symmetric (0,1) matrix
A [bij]. The value bij represents the interaction of i th factor with the j th factor:
bij 1
0
Generally bij# bji as behavioural effect is directional and bii 0 as factor is not
interacting with itself. Behavioural matrix is square and non-symmetric and is
analogous to adjacency matrix in graph theory (Narsingh, 2000). The behavioural
matrix representing the digraph shown in Figure 2 is written as:
6
61
6
61
A 6
6
60
6
6
60
4
0
Role of human
factors in TQM
Factor
3
7
17
7
17
7
7
07
7
7
17
5
0
1
2
3
4
5
6
453
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1
2 B
1
6 2b
6 21
6
6 2b
31
H 6
6
6 0
6
6
6 0
4
0
2b12
2b13
2b14
2b15
B2
2b23
2b24
2b32
B3
2b34
2b35
2b43
B4
2b45
2b52
2b53
2b54
B5
2b62
6
2b16 3
2b26 7
7
7
2b36 7
7
7
0 7
7
7
2b56 7
5
B6
Factor
1
2
3
4
5
6
The matrix provides a powerful tool through its determinant called variable
characteristic behavioural multinomial (VCBM). This is a characteristic of the system
and represents the behavioural effect of the system consisting of behavioural effect of
factors and their interactions.
Determinant of matrix equation (3), i.e. VCBM carries positive and negative signs
with some of its co-efficient. Hence, complete information on behavioural effect will not
be obtained as some will be lost due to addition and subtraction of numerical values
of diagonal and off diagonal elements (i.e. Bis and bijs). Thus, the determinant of
VCM behavioural, i.e. matrix equation (3) does not provide complete information
concerning behavioural effect. For this, another matrix, behavioural variable
permanent matrix (VPM-B) is introduced.
Behavioural variable permanent matrix
Overall behavioural effect is maximum when the behavioural effect of all the factors is
maximum. Since, total quantitative information is not obtained in VCM-B, VPM-B
is defined for the system in general (assuming interactions among all factors) as
B E D
1
2
3
4
5
6
Factor
3
2B b
b13 b14 b15 b16
1
1
12
7
6b
2
6 21 B2 b23 b24 b25 b26 7
7
6
7
6b
b32 B3 b34 b35 b36 7
3
31
4
B 6
7
6
6 b41 b42 b43 B4 b45 b46 7
4
7
6
7
6
6 b51 b52 b53 b54 B5 b56 7
5
5
4
b61 b62 b63 b64 b65 B6
6
Where E and D have meaning as in matrix equation (3).
The permanent of matrix equation (4) is multinomial and is called variable
permanent behavioural function (VPF-B), also known as permanent of B (per B).
This permanent function is a standard matrix function and is used and defined in
combinatorial mathematics. This is evaluated by standard procedures and is same as
determinant of VCM but with all signs positive. The permanent for matrix equation (4)
in general form is written as:
VPF 2 B per B P Bi
XXXXXX
bij bji Bk Bl Bm Bn
i1
Role of human
factors in TQM
XXXXXX
bij bjk bki bik bkj bji Bl Bm Bn
20
4@
XXXXXX
i
XXXXXX
i
455
13
2
XXXXXX
4
bij bji bkl blm bmk bkm bml blk Bn
i
XXXXXX
i
bij bjk bkl blm bmi bim bml blk bkj bji Bn 5
2
XXXXXX
4
bij bji bkl blm bmn bnk bkn bnm bml blk
i
XXXXXX
i
XXXXXX
XXXXXX
i
The permanent function defined above, i.e. equation (5) is the complete expression for
behavioural effect as it considers presence of all attributes and their interdependencies.
A close look at multinomial, i.e. equation (5) reveals presence of behavioural effect in
a systematic manner. The expression contains terms arranged in n 1 grouping. Here
n 6, therefore seven grouping are there.
The first grouping contains only one term and is a set of behavioural effect of six
factors, i.e. B1B2. . .B6.
In general second grouping is absent in absence of self-loops.
The third grouping contains set of two behavioural factor interdependence, i.e. bijbji
and measure remaining n 2 2 (i.e. 4 here) behavioural factors.
Each term of fourth grouping represents a set of three behavioural factor
interdependence bijbjkbki or its pair bikbkjbji and measure of remaining n 2 3 (i.e. 3 here)
behavioural factors.
The terms of fifth grouping are arranged in two subgroups. The first sub-grouping
is a set of two, 2 behavioural factor interdependence, i.e. bijbji and bklblk and measure
of remaining n 2 4 (i.e. 2 here) behavioural factors.
BIJ
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456
Table I.
Quantification of human
factors
S.No
1
2
3
4
5
6
7
8
9
Exceptionally low
Very low
Low
Below average
Average
Above average
High
Very high
Exceptionally high
measured directly and values can be assigned only after proper interpretation through
a team of experts. It is suggested to use Table II for value of interdependencies.
Human index
Human aspects in an organization, which help it to create TQM culture, are a function
of inheritance of behavioural factors and their interdependencies. Quantification of
human factors, i.e. exact amount of human aspects present (conducive to TQM
environment) is very difficult to calculate under actual interactive conditions.
All possible combination of factors in equation (5) represent different states of human
behaviour. Variable permanent function (equation (5)), which thus represents
structural complexity, effect of characteristics and their interdependence, is a useful
tool for developing an index for human aspects. This is the permanent of VPM-B,
which is given by equation (5). Thus, human index is given by
H* Permanent
value
of
Role of human
factors in TQM
457
VPM 2 B:
The numerical values of various factors and dependencies required for H * can be
determined using the procedure already explained. The features of human index are
highlighted below:
.
This index is a means to evaluate the content of human factors needed for an
environment in an organization conducive to TQM.
.
Human aspects in an organization are represented by single numerical value.
A higher value of index is an indicator of more conducive environment to TQM.
.
The value may be used for self-analysis of an organization and by this procedure
the permanent value can be increased by varying (increasing in particular) the
human factors identified.
Methodology
The graph theoretic approach helps to model TQM environment in terms of inheritance
of factors and their interdependencies. The methodology discussed earlier helps to
focus the role of human behaviour in TQM environment and is presented in terms of
salient steps.
(1) Identify various factors that effect behaviour of human being in an environment
conducive to TQM culture.
(2) Identify the sub factors affecting human factors in step (1).
(3) Develop sub factor digraph considering attributes affecting each sub factor.
The nodes in the digraph represent attributes identified in each sub factor. The
interaction among attributes is represented by edges.
S.No
Bij
1
2
3
4
5
Very strong
Strong
Medium
Weak
Very weak
5
4
3
2
1
Table II.
Quantification of human
factor interdependencies
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458
(4) Develop sub factor matrix. This will be of size M M, with diagonal elements
representing attributes and the off diagonal elements representing interactions
among them (equation (4)).
(5) At the sub subsystem level use Tables I and II. This will provide numerical
values for inheritance of attributes and their interactions.
(6) Find the value of permanent function for sub factor (equation (5)).
(7) Repeat steps (3)-(6 )for each sub factor.
(8) Develop behavioural factor digraph and behavioural matrix at system level as
explained in steps (3) and (4).
(9) At system level, the permanent value of each sub factor (obtained in step (7))
provides inheritance of TQM environment of each factor (i.e. diagonal elements
in equation (4)). The quantitative value of interactions among factors (i.e. off
diagonal elements in equation (4)) are obtained from Table II through proper
interpretation by experts. This will form behavioural matrix at system level
similar to equation (4).
(10) Find the value of permanent function for the system (equation (5)). This is the
value of the human index.
Based on the above-discussed methodology, the organization can evaluate the extent of
human behaviour involvement/presence in TQM environment.
Example
For demonstration the proposed methodology, an organization is taken as an
example. It is proposed to find the value of human index. For determining the
index we require numerical values of all human factors and their interdependencies,
i.e. all values in Behavioural variable permanent matrix (equation (4)). The value of
diagonal elements in the VPM-B, i.e. the value of behavioural factors B1,B2. . .B6
are evaluated by applying graph theoretic methodology. Step by step
methodology discussed in previous section is used to evaluate human index in
this example.
(1) Step 1. The various factors affecting behaviour of human being for TQM
environment are identified in Figure 1.
(2) Step 2. The sub factors affecting the human factors are discussed earlier in this
paper and are listed in Table III.
(3) Step 3. The dependencies of factors at subsystem level are visualized through
digraphs shown in Figures 3 8. Superscript denotes the subsystem and
subscript indicates the factors affecting the subsystem. As explained the nodes
in the digraph represent attributes identified in each sub factor. The interaction
among attributes is represented by edges.
(4) Step 4. Variable permanent matrix for digraph for each subsystem is
written.At subsystem level, variable permanent matrix for digraph for
subsystem 1 (Figure 3) in general form is considered. Similar to equation (4),
VPM-B1 is given by
Motivation
Coordination
Attitude
change
Innovation
4
5
Top mgmt.
involvement
Work culture
S.No Aspects
Factors
1, 3
1
1, 5
1
2
Strong
(bij 4)
3, 5
Degree of influence of
behavioural aspect j on i
5
3, 4
Medium
(bij 3)
2, 3
Weak
(bij 2)
Very weak
(bij 1)
Role of human
factors in TQM
459
Table III.
Interdependency of
human aspects in TQM
environment
BIJ
13,4
B12
B11
B13
460
Figure 3.
Digraph for subsystem 1
B14
B22
B21
Figure 4.
Digraph for subsystem 2
B23
B25
B24
1
2
Bss1
B11
6 1
6b
21
6
6
6 b1
6 31
4
b141
b112
b113
b114
B12
b123
b124
b132
B13
b142
b143
Factor
3
7
7
7
7
1 7
b34 7
5
B14
1
2
3
4
Similar to equation (6) variable permanent matrix for each subsystem are
written.
Role of human
factors in TQM
B33
B32
461
B34
B31
B35
B37
Figure 5.
Digraph for subsystem 3
B3
B42
B43
B41
Figure 6.
Digraph for subsystem 4
B44
B52
B51
B53
B54
Figure 7.
Digraph for subsystem 5
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B62
462
B61
B63
Figure 8.
Digraph for subsystem 6
B64
(5) Step 5. At the sub subsystem level Tables I and II are used to determine
numerical values for inheritance of attributes and their interactions. The
variable permanent matrices for different subsystems (based on their digraphs)
are written through equations (7.1)-(7.6). For subsystem 1, the values taken from
Table I are B11 7; B12 5; B13 6; B14 5: The values taken from Table II are
b112 4; b113 3; b114 4; b121 3; b123 3; b124 2; b134 4; b142 2:
Substituting these values in equation (6), VPM-B1 is given as
1
7
6
6
VPM B1 6 3
6
60
4
0
Sub factor
3
7
27
7
7
47
5
5
7:1
3
4
6
63
6
VPM B2 6
60
6
6
60
4
0
2
5
3
0
4
0
5
0
Sub factor
3
07
7
7
07
7
7
07
5
5
1
2
3
4
5
7:2
6
60
6
60
6
VPM B3 6
60
6
6
60
6
6
60
4
4
1
2
8
6
VPM B4 6
60
6
60
4
0
1
2
7
37
7
07
7
7
07
7
7
07
7
7
07
5
7
2
3
4
7:3
5
6
7
1
2
7:4
3
4
Sub factor
3
7
07
7
7
07
5
6
Sub factor
3
8
6
VPM B6 6
64
6
62
4
0
4
7
27
7
7
37
5
6
6
6
VPM B5 6
60
6
60
4
2
Role of human
factors in TQM
Sub factor
1
2
7:5
3
4
Sub factor
3
7
07
7
7
07
5
5
1
2
7:6
3
4
(6) Step 6. The permanent of matrix (6) Per Bss1, which will lead to inheritance of
behavioural factor 1, is evaluated on the lines of equation (5). The complete
expression for the Per Bss1 is given as:
463
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464
6b
6 21
6
6b
31
VPM B 6
6
6 0
6
6
6 0
4
0
b12
b13
b14
b15
B2
b23
b24
b32
B3
b34
b35
b43
B4
b45
b52
b53
b54
B5
b62
6
b16 3
b26 7
7
7
b36 7
7
7
0 7
7
7
b56 7
5
B6
Factor
1
2
3
4
5
6
As explained, the values of diagonal elements are to be taken from step 7 and
the values of off diagonal elements are taken from Table II. Table III also
Role of human
factors in TQM
465
(9) Step 9. To obtain variable permanent matrix-behavioural for this example,
values are substituted as per step 8.
1
2 1; 962
6
6
6
6
VPMB 6
6
6
6
6
6
4
3
4
4
5
5
4
6
4
14; 130
438; 120
3; 408
2; 156
1; 600
Factor
3
7
7
7
7
7
7
7
7
7
7
5
1
2
3
10
4
5
6
(10) Step 10. Value of permanent function for the system is evaluated as per
equation (5).
The value of permanent of above matrix (equation (10)) is 1.42792 1023, which
indicates human index for the case considered. By carrying out similar analysis human
index for different organization can be obtained. As suggested, this will help an
organization to access itself and improve. For a particular period of time, similar
organizations may be compared and rated.
It is also suggested to find hypothetical best and hypothetical worst value of human
index. Human index is at its best when the inheritance of all its factors is at its best.
Since, inheritance of factors is evaluated considering sub factors and applying graph
theoretic approach at the subsystem level, it is evident that human index is at its best
when inheritance of sub factors is at its best. Since, Table I is used at subsystem level,
maximum value of Per B1 is obtained when inheritance of all the sub factors is
maximum, i.e. value taken from Table I is 9. Thus, equation (7.1) may be rewritten for
the maximum value of Per B1 as
1
2
9
6
VPM B1 6
63
6
60
4
0
2
4
3
3
4
4
Sub factor
3
7
27
7
7
47
5
9
1
2
11
3
4
The value of the permanent of the above function is 8361, i.e. max. Per Bss1 8,361.
BIJ
13,4
Similarly human index is at its worst when the inheritance of all its factors and sub
factors is at its worst. This is the case when inheritance of all the sub factors is
minimum, i.e. value taken from Table I is 1. Thus, equation (7.1) may be rewritten for
the minimum value of Per B1 as
1
466
1
6
6
VPM B2 6 3
6
60
4
0
2
4
3
3
4
4
Sub factor
3
7
27
7
7
47
5
1
1
2
12
3
4
The value of the permanent of the above function is 137, i.e. min. Per Bss1 137.
Similarly maximum and minimum values for each subsystem are evaluated and
different values of permanent of subsystem matrices are summarized in Table IV.
Maximum value of human index at system level is evaluated by considering maximum
values of all subsystems and minimum value of human index at system level is
evaluated by considering minimum values of all subsystems.
The value of per B indicates the value of human index. Thus, the maximum and
minimum value of human index indicates the range with in which it can vary.
Experts can use this range to decide a threshold value for a given set of similar
industries.
Monitoring at regular interval may be carried out by third party to assess TQM
environment in an organization. Moreover, the values may be used for self-assessment
of industry, i.e. the internal audit of TQM environment may be carried out at regular
intervals.
Conclusion
The paper endeavours to quantify the overall effect of human factors in TQM
environment through systematic approach. The human factors not only help an
organization to achieve intangible objectives better quality, customer satisfaction,
goodwill, and responsiveness through continuous improvement but also have long
lasting effect on tangible objectives profitability through productivity.
System/Subsystem
Table IV.
Values for
maximum/minimum
human index
Per
Per
Per
Per
Per
Per
Per
B1
B2
B3
B4
B5
B6
B
Current value
Maximum value
Minimum value
1,962
14,130
438,120
3,408
2,156
1,600
1.42792 1023
8,361
78,732
5,756,350
8,613
7,209
7,209
1.69614 1027
137
28
730
61
9
9
1.45711 1010
The proposed structural approach based on digraph and matrix method for the
evaluation of human aspects in TQM environment has the following features:
.
It identifies factors pertaining to human aspects in TQM environment.
.
It permits modeling of dependence among factors.
.
Application of graph theoretic approach makes it convenient for visual analysis
and computer processing.
.
The presence of human aspects in TQM environment is indicated by a single
numerical index.
.
It permits self-analysis and comparison of organizations.
.
Cause and effect analysis is useful in improving the environment.
.
The method permits to consider different factors in alternative environment.
.
Systematic methodology for conversion of qualitative factors to quantitative
values and mathematical modeling gives an edge to the proposed technique over
conventional methods.
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factors in TQM
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Prentice Hall of India Private Ltd, New Delhi.
Corresponding author
Sandeep Grover can be contacted at: grover2212@sancharnet.in
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
Tourism services
quality in Egypt
469
Mohammed I. Eraqi
Tourism Studies Department, Faculty of Tourism & Hotels,
Cairo University, Egypt
Abstract
Purpose This research paper aims is to evaluate the customers views related to tourism quality in
Egypt. It attempts to measure the extent to which tourism business environment is creative and
innovative as necessary conditions for internal customer satisfaction.
Design/methodology/approach The objectives of this research have been achieved through
reviewing a number of literatures in the fields of services quality management and tourism quality
measurements. The papers outcomes have been obtained through two surveys, one to measure the
satisfaction of the internal customer (employees) and the second to measure the external customer
satisfaction (tourists).
Findings The main conclusions of this research paper are: quality can be considered as a
philosophy for guiding tourism organization/destination when taking decisions related to tourism
services; tourism business environment in Egypt does not support the internal customer satisfaction
because the absence of a suitable system for encouraging people to be creative and innovative; and in
the area of the external customer satisfaction there is still a need for things to be done such as the
environmental conditions improvements, internal transport quality enhancement, increasing people
awareness, and improving the level of safety and security conditions.
Research limitations/implications There is a number of limitations which faced this paper
research they are: the sample size is small, compared with the size of total population, that was
reflected on the level of reliability of the research results; and the limited time allowed to the
respondents was reflected on the validity of the research outcomes, because they interviewed at the
last time of their journey by the time they are ready for departure.
Practical implications A useful source of information about total quality management (TQM)
and how practitioners can measure it. It provides wide guidelines for improving the quality of tourism
services in total manner in Egypt.
Originality/value This paper provides useful information that are needed for tourism services
quality improvement. It offers a practical help to tourism planners and marketers in Egypt to
understand the concept of TQM and how they can improve their services continually.
Keywords Tourism, Quality, Customer satisfaction, Egypt
Paper type Research paper
Introduction
The complexity and globalisation of todays competitive business environments have
made quality as one of the most important sources of competitive advantage for the
tourism business enterprise/destination. Many leading quality organisations have
started to exploit opportunities to face this situation and recognized the importance to
have systematic processes to manage quality to gain and maintain this competitive
position. Each business management is aware of the fierce competition in every sector
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 469-492
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770610676308
BIJ
13,4
470
and customer expectations have never been greater. It is no longer sufficient just to
maintain a business; it is necessary to move forward if a business wants to achieve a
sustainable future. Customer care, improvements in efficiency, effective marketing,
benchmarking, staff training and development are all vital for survival and
competitiveness in a changeable business environment.
To improve, means to change, and change can be stressful. There is no magic formula
that can be applied to every business, but there are proven systems, such as quality
management that can bring great benefits if it is applied in the right way. For business to
be successful, the motivation to develop and implement a quality management system
must be based on a clear understanding of the business aims and objectives. Whatever
the size of the organisation and whatever the type of business, management will
appreciate just how important quality is to the organization/destinations continued
success.
After all, the term quality frequently leads to misunderstanding. A better
understanding of the term is essential, particularly if the quality has been seen from a
strategic viewpoint. However, the term quality has come to take on a broader meaning
in the management of organisations. The total quality management (TQM) movement
and other management philosophies have focused on the fitness of final products and
services for stakeholders, have emphasised not only the product quality, but also the
need to build quality into the production and delivery processes of the organisation and
have stressed the importance of employee involvement in process redesign and
commitment to the improvement of the final tourism product or service.
Tourism as a business is asserting itself as the engine of Egypts economic
development. In 1982 Egypt hosted about one million visitors. By 2003, that figure has
risen to 6.0 million visitors and it has continued to rise, despite the political turbulence
of the last few years. Egypts tourist facilities and destinations are able to compete well
by following tourism quality standards and sustainable tourism models.
Owing to the customer-oriented service endeavours, tourism enterprises, either
private or public, need to improve service offerings by determining the needs of their
target groups. Exploring the current ratings of customer expectations and customer
perceptions on specific service attributes provides a tool for management in order to
improve the service quality of the firm. Within this context, this study aims at
determining the current service quality level of tourism services in Egypt.
This paper endeavors to evaluate the customer overview related to tourism quality
in Egypt. Also, measuring the extent to which tourism business environment in Egypt
is creative and innovative.
Quality definitions and implication
Quality in service industries has both static and dynamic dimensions (Day and Peters,
1994). The static dimension represents the expectation of the customers, that always
changes over time as extra facilities such as in-flight meals become the rule rather than
the exception. Dynamic dimension of quality occurs during service delivery and offers
opportunities for the customer to be delighted by the extra efforts of staff to, for
example, address the customer tangible product which is a primary cause of customer
dissatisfaction, but dynamic quality is not achieved easily. By definition, spontaneous
acts of dynamic quality, cannot be pre-arranged or scripted, but are nevertheless an
important means of customer satisfaction (Ingram et al., 1997).
There are many definitions and implications for the quality as a concept. The main
definitions and implications are summarised in Table I.
Whatever the definition of quality is, for success in a highly competitive tourism
market, a tourism enterprise/destination has to make sure it is providing the goods or
services that the customer wants; it gets its quality right; and that it delivers on time. This
leads to customer satisfaction and achieving a suitable level of profits. Quality in service
delivery leads to more repeated visits and greater sales revenue. This enables serving staff
on performance-related pay to earn more and enhance the quality of their service to the
customer. In addition, the extra profit generated enables tourism enterprise/destination
management to invest in upgrading facilities to the customer and in training schemes
beside creating innovative business environment for tourism services improvement.
The philosophy of quality
Deregulation and globalization have increased competitive pressures, helping to bring
down prices and to improve the quality of services provided by professional tourism
enterprises/destinations. From this standpoint, what it is needed is to enforce compliance
with safety and environmental regulations and new working conditions. The 1980s
witnessed many service industries placing increased emphasis on managing quality.
Traditional ideas of quality, which had evolved from manufacturing industries and had
been based on the conformance to the standards defined by operation management, began
to be replaced by customer-focused notions. This required close consideration of what the
customer wanted and how their needs could be met. Different dimensions of service were
defined and customer satisfaction, considered to be the gab between perceived and
expected service, was assessed. Quality management began to be viewed as an overall
process which involved everybody from top management down to junior staff rather than
just to do with concentrating on the employee-customer interaction. New approaches such
as TQM and the continuous improvement programmes began to be applied by an
increasing number of service industries (Souty, 2003; Lockwood and Guerrier, 1989).
However, the source of competitive advantage is found firstly in the ability of the
organization to differentiate itself, in the eyes of the consumer, from its competitors and
secondly by operating at a lower cost and hence at greater profit. This requires
examining consumer service under three conditions (Lalonde and Zinszer, 1976):
(1) pre-transaction elements;
(2) transaction elements; and
(3) post-transaction elements.
Quality of service attracts new customers and ensures consumer retention. Consumer
retention provides a higher profit contribution and has to grow in terms of the value
and frequency of purchases. The importance of customer retention is underlined by the
concept of the lifetime value of a customer. The life time value of a customer is
calculated as follows (Christopher, 1998):
Life time value average transaction value yearly frequency of purchase
customer life expectancy
A successful business would better serve its shareholders needs by focusing
on customers, employees, suppliers and the wider community (Mann et al., 1999).
Tourism services
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471
Table I.
Quality definitions and
implications
Definition
Eraqi (2002)
Implications
472
Source
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The SERVQUAL model consists of 22 items on service attributes, which are grouped
along the five dimensions of tangibles, reliability, assurance, responsiveness, and
empathy. On the other hand, the SERVPERF model developed by Cronin and Taylor
(1992) includes these 22 items of SERVQUAL. What are additional in the SERVPERF
model are the overall ratings of satisfaction, perceived service quality and purchasing
intention. The main difference between SERVQUAL and SERVPERF is the focus of
SERVPERF underlying the fact that customer satisfaction is the result of (mostly)
service quality. As the case is based on public services and firms/institutions, the
current structure mainly bureaucratic is not compatible with the implementation
of quality. The centralized organizational structure of public firms retains new
incentives to be conducted. Thus, the efforts of managers of these firms play important
roles in applying service quality incentives.
Tourism product quality
Tourism is a highly competitive industry, and tourism enterprise sector can no longer
compete on the basis of cost alone. Quality is, therefore, a key element for the
competitiveness of the tourism industry. It is also important for the sustainable
tourism development of the industry and for creating and improving jobs. Therefore,
promoting quality in tourism and tourist products is a priority in different tourism
activities.
However, the main reasons behind the complexity of measuring quality in tourism
could be summarized as follows (CEC, 2001):
.
First there is the continuation of significant growth in tourism demand and the
volume of tourism in tourist destinations, along with diverging developments in
the various types of tourism. An appropriate response to these changes may be
found only through the emergence of new types of tourism and control mass
tourism for the sake of quality.
.
The lack of skilled manpower for certain jobs, mainly because of the working
conditions that may not encourage creative and innovation; the development of
transport and its effect on flows, service quality, sustainable development and
environmental protection; and the adoption and incorporation of new
information and communication technologies as a factor of competitiveness.
.
Tourism is a service sector with a particularly complex product which depends
on an extremely fragmented supply. Each link in the tourism value chain (travel
agencies, tour operators, carriers, hoteliers, restaurateurs, etc.) offers one element
in the overall product. Together, these components determine tourists
experiences and their appreciation of the quality of the service. The tourist
destination is the main place of consumption of tourist services and, therefore,
the location and place of activity of tourist businesses. Tourists identify the
product with both the businesses providing a service and the destination visited.
.
For a big number of people tourism activity does not meet a vital need, tourist
behaviour is particularly volatile and subject to psychological and social
influences, personal sensitivities and short-term reactions. If the image of just
one link in the chain is affected, it is the whole tourism value chain that suffers
the consequences. The foot-and-mouth epidemic and the various oil slicks that
have affected European coastlines in the recent past have already shown
For tourism organization, to deal with these challenges successfully and to be able to
measure quality in tourism, it is necessary to take the following factors into
consideration when deciding tourism quality strategy:
.
the fundamental role of information, knowledge and its dissemination;
.
the need for competent human resources motivated by medium and long-term
prospects;
.
the integration of environmental policy and the promotion of sustainable
tourism;
.
recognition of the need for European harmonization of the concept of quality of
tourism services and infrastructures, and its assessment and monitoring;
.
the need to speed up the integration of information society tools and services in
all tourism activities and businesses, in particular SMEs;
.
the need for a network of the stakeholders involved and a generalized
partnership, particularly between those in the field to ensure implementation of
all the recommendations; and
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overall, the quality and satisfaction levels are average. Education for managers
and service personnel is the main proposal for the improvement in service
quality and consumer satisfaction.
The analysis of each term used in this definition suggests concrete actions which can
be evaluated from the perspective of quality criteria (Myburgh, 2001; WTO, 1991, 1993,
1995):
.
Result implies that quality is attained and perceived at a given time. It cannot
be in place without harmonious and active engagement of all the factors
intervening in tourism experience. The result can be measured by consumer
satisfaction as well as by social, environmental and economic effects of the
tourism activity concerned.
.
Process means that a single undertaking is not sufficient to attain quality.
Work towards quality always has to be in place, it cannot discontinue because of
the temporarily attained quality result. It also implies a seamless or flawless
process in which it is possible to identify and do away with the constrains of a
supply which spoil the tourism product and are responsible for direct and
indirect losses to the company or destination. Also it is necessary to note that
because the customer is a participant in the service delivery, improvement in
process quality must be acceptable to customers.
.
Satisfaction introduces the elements of subjectivity in quality perception.
According to their characteristics, customers have different requirements and
expectations. Informed quality-driven marketing caters to these characteristics
and attempts to identify consumers according to the different types and levels of
perceived quality. This should be achieved with suitable prices levels.
.
Legitimate brings into the analysis the elements of rights and entitlement.
Consumers cannot expect to receive more than what they remunerate by
payment or what has been determined by social and environmental limits. The
role of tourism planners and entrepreneurs is to relate quality types and levels to
remuneration and external limitations, taking into consideration the private and
social costs relating to providing or offering tourism services.
The notion of needs follows on the concern for legitimacy and looks for
satisfying peoples basic and vital needs which should never be overlooked while
bringing into tourism projects and programmes the other aspects with a view to
introducing attractions, strengthening experiences, etc. The needs are primarily
related to the underlying quality determinants, although over time the
expectations related to the type and volume of basic needs change and usually
increase. Basic needs of the past are not exactly the basic needs of today.
The notion of product requirements emphasizes the need to relate a single
service and facility use to the whole product and the total tourism experience.
One good quality service is not sufficient to give rise to tourism product quality
perception, although an excellent service may positively impress the consumer to
make him or her close their eyes to shortcomings and defects experienced
elsewhere in the tourism product.
The term service requirements relates quality to its human, personal and
personnel dimensions which are often intangible and apparently difficult to
measure, evaluate and quantify in contrast with the physical attributes of
tourism facilities which are used primarily in facility classifications or grading.
However, certain service elements are quantifiable, for example, waiting time,
frequency of service (e.g. cleaning), the number and type of services included in
the basic price, etc.
The term expectations relates to the requirement of positive communication
and perception of the product characteristics to the potential consumer. There
should be no negative surprises at the time of delivery of a service or supply of a
product, the consumer must receive what has been promised (or even more).
Expectations should also be legitimate, there are limits to expectations, some
expectations cannot be fulfilled even at a very high price which can be offered.
The term consumer relates to individual (end) consumers, who may include
groups of people (e.g. a family), corporate consumers (e.g. a company purchasing
an incentive trip) and commercial intermediaries (e.g. a tour operator). The latter
may request that the product quality be assessed and certified by its own
representative or a recognized external third party.
Acceptable price suggests that the clients expectations reflected in the price
cannot be attained at any cost, and that positive surprises should not be too
generous, otherwise this may imply excessive allocation of resources which do
not receive adequate remuneration. If quality is guaranteed and the product is
exceptional, there should be no expectation that it should be sold cheap.
The underlying quality determinants suggest that there should be common,
irrevocable criteria of quality which are vital for the consumer independently of
category or class of the product, establishment, facility or service sophistication.
They establish the minimum level of consumer protection under which quality,
or total quality, is impossible to achieve, or when failing to meet any of such
determinants will significantly reduce the quality of tourism experience.
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.
.
secure adequate inputs and close the tourism quality perception gap;
develop an advanced, comprehensive and consistent quality-management
process that converts the inputs into outputs (total quality tourism products);
and
manage effectively the relationships with the external environment and the
suppliers in particular with the result of bridging the tourism quality control gap.
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Table II.
Internal customer
satisfaction indicators
descriptive statistics
Meana
Std
deviation
2.7400
1.1467
2.3700
1.2555
3.4800
3.7000
3.5800
3.0800
0.9755
1.0735
1.0982
1.1732
3.0200
1.1145
2.9900
1.4121
2.5300
1.1627
C. Offering suitable opportunities for training and a fair mechanism for performance measurements
10. The tourism organization/destination has a systematic approach to
identify training and development needs for all levels of employees, taking
into account skills requirements and current skills inventory
3.2400
1.2351
11. The tourism organization/destination has a systematic approach to assess
the effectiveness of training and development undergone by employees
2.8000
1.1325
12. The tourism organization/destination has a systematic approach to
measure employee satisfaction, obtain feedback from employees, and act on
issues arising from such feedback
2.4600
1.1964
13. The tourism organization/destination has a fair and effective system to
measure employee performance
2.5800
1.2597
14. The tourism organization/destination has a wide variety of reward and
recognition schemes that support high performance, innovative and creative
behaviour, and are linked to the corporate objectives and values
3.1000
1.1544
15. The tourism organization/destination regularly evaluates and improves on
its HR planning process, employee participation, training and development
process, employee satisfaction approach, and recognition and reward systems
2.9000
1.3392
Note: aLikert scale: 1-5 (strongly disagree-strongly agree)
Strongly agree
(per cent)
16
13
33
36
5
11
12
50
25
14
45
18
15
56
18
17
15
18
11
15
33
13
19
Agree
(per cent)
37
31
22
35
33
29
16
15
18
38
51
Disagree
(per cent)
20
15
(continued)
20
7
9
28
Strongly disagree
(per cent)
Tourism services
quality in Egypt
485
Table III.
Internal customer
satisfaction indicators
Table III.
Agree
(per cent)
C. Offering suitable opportunities for training and a fair mechanism for performance measurements
10. The tourism organization/destination has a
systematic approach to identify training and
development needs for all levels of employees, taking
into account skills requirements and current skills
inventory
17
33
14
11. The tourism organization/destination has a
systematic approach to assess the effectiveness of
training and development undergone by employees
10
19
19
12. The tourism organization/destination has a
systematic approach to measure employee
satisfaction, obtain feedback from employees, and
act on issues arising from such feedback
7
15
18
13. The tourism organization/destination has a fair
and effective system to measure employee
performance
8
20
17
14. The tourism organization/destination has a wide
variety of reward and recognition schemes that
support high performance, innovative and creative
behaviour, and are linked to the corporate objectives
and values
16
22
20
15. The tourism organization/destination regularly
evaluates and improves on its HR planning process,
employee participation, training and development
process, employee satisfaction approach, and
recognition and reward systems
18
18
13
Average (C)
13
21
17
General average
12
28
16
Strongly agree
(per cent)
7
7
23
23
13
12
12
45
37
32
40
38
37
32
Strongly disagree
(per cent)
29
Disagree
(per cent)
486
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Tourism services
quality in Egypt
487
Figure 1 shows the percentage of general average of the internal customer satisfaction
indicators.
External customer satisfaction
External customer satisfaction as dependent variable of equality, from the viewpoints
of tourists, has been measured depending upon a number of criteria such as:
.
the general evaluation of tourism services in Egypt;
.
the extent to which tourists are satisfied with hotels services;
.
customer value related to tourism services prices;
.
level of services at accommodations;
.
internal transport quality;
.
the extent to which tourism services prices at suitable levels; and
.
tourist desire to repeat his/her visit to Egypt.
The next tables explains the tourists points of view related to these criteria, based on a
survey distributed among 700 tourists whom are interviewed at International Cairo
Airport and the Egyptian Museum.
Agree
Neither agree
nor disagree
Disagree
Strongly
Disagree
Strongly Agree
Strongly
Disagree
12%
Strongly
Agree
12%
Disagree
32%
Agree
28%
Neither
agree
nordisagree 16%
Figure 1.
Likert scale indicators of
the internal customer
attitudes
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Table IV.
External customer
satisfaction indicators
descriptive statistics
Meana
Std deviation
2.7400
2.5200
2.6000
2.6600
2.2700
2.4600
2.4600
0.5941
0.7813
0.7354
0.6671
0.9265
0.8058
0.8303
Table V.
External customer
satisfaction indicators
Good
(per cent)
Fair
(per cent)
Weak
(per cent)
82
70
75
77
60
66
68
71
10
12
10
12
7
14
10
11
8
18
15
11
33
20
22
18
Conclusions
This paper has tried to examine the concept of quality as a philosophy that guides
tourism organization management when taking decision related to tourism services as
well as determining TServQual improvements requirements applied to tourism
services in Egypt.
The main conclusions of this paper can be summarized as follows:
(1) For improving tourism service quality it is necessary to achieve three
requirements:
.
internal customer satisfaction (employee satisfaction);
.
external customer satisfaction (tourists satisfaction); and
.
the efficiency of processes.
(2) For quality improvements it is necessary to be a creative and innovative
business environment which support the employee new ideas and their
participating in making decision processes.
(3) It is important to be a wide range of empowerment to give the employee the
opportunities to behave positively according to the condition he/she faces in
tourism competitive markets.
(4) In the case of Egypt it is necessary to restructure tourism business sector to be a
kind of cooperation between tourism enterprises such as strategic alliances in
the field of information technology, strategic marketing, etc.
(5) Business environment in the Egyptian tourism sector still has a number of
weaknesses that do not support the internal customer satisfaction for the
following reasons:
.
there is no suitable system for encouraging people to be creative (or to be
innovative) and participate in decision making processes;
.
the weakness of empowerment levels within tourism business enterprises;
and
.
the style of family business management overwhelmed tourism business
sector in Egypt and this put obstacles in the way of creativity and innovation.
(6) Tourism services levels are quite suitable, in general, from the viewpoints of
tourists (external customers).
(7) There is a lot of efforts need to be done for TServQual improvement in Egypt in
areas of infrastructure services, the environmental conditions, the safety and
security conditions, increasing people awareness, and the internal transport
quality.
Tourism services
quality in Egypt
489
Weak
18%
Good
Fair
Weak
Fair
11%
Good
71%
Figure 2.
The grade of the external
customer satisfaction
indicators
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490
Fitzsimmons, J.A. and Fitzsimmons, M.J. (2001), Service Management Operations, Strategy, and
Information Technology, 3rd ed., McGraw-Hill Higher Education, New York, NY.
Hamel, G. and Prahalad, C.K. (1993), Strategy as stretch and leverage, Harvard Business
Review, March/April, pp. 75-89.
Horner, M. (1997), Leadership theory: past, present and future, Team Performance
Management Journal, Vol. 3 No. 4, University of North Texas, University Press, USA.
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Ingram, H., Tear, R., Ridley, S. and Ferrone, L. (1997), Strategic competitive advantage through
structure, quality and teamwork, in Teare, R., Farber Canziani, B. and Brown, G. (Eds),
Global Directions: New Strategies for Hospitality and Tourism, Cassell, London, pp. 133-64.
Juran, J.M. (1964), Managerial Breakthrough, McGraw-Hill, New York, NY.
Juran, J.M. (1980), Quality Planning and Analysis, McGraw- Hill, New York, NY.
Kinnear, T.C. and Taylor, J.R. (1991), Marketing Research, an Applied Approach, McGraw-Hill,
New York, NY.
Lalonde, B.J. and Zinszer, P.H. (1976), Customer Service: Managing and Measurement, National
Council of Physical Distribution Management, Chicago, IL.
Lockwood, A. (1994), Managing quality in food and beverage operations, in Bernard, D. and
Lockwood, A. (Eds), Food and Beverage Management: A Selection of Readings,
Butterworth-Heinemann, Oxford, pp. 172-86.
Lockwood, A. and Guerrier, Y. (1989), Flexibility working in hospitality industry: current
strategies and future potential, International Journal of Contemporary Hospitality
Management, Vol. 1 No. 1, pp. 11-6.
Mann, R. et al., (1999), An assessment of management systems and business performance in the
UK food and drinks industry, British Food Journal, Vol. 101 No. 1.
Moore, L.G., Hopkins, W.E. and Hopkins, S.A. (1998), Quality and empowerment programs: dual
paths to customer satisfaction?, Managing Service Quality, Vol. 8 No. 1.
Myburgh, A. (2001), Quality management in the chief directorate: Economic Statistics and
Surveys and National Accounts at States SA, June.
Oakland, J.S. (1989), Total Quality Management, Butterworth-Heinemann, Oxford.
Pallant, J. (2001), Spss Survival Manual, a Step by Step Guide to Data Analysis Using SPSS for
Windows Ver. 10, Open University Press, Buckingham.
Parasuraman, A., Zeithaml, V. and Berry, L. (1990), Delivering Quality Service, The Free Press,
New York, NY.
Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985), A conceptual model of service quality
and its implications for future research, Journal of Marketing, Vol. 49, pp. 41-50.
Souty, F. (2003), Passport to Progress: Competition Challenges for World Tourism and
Global Anticompetitive Practices in the Tourism Industry, World Tourism Organization,
Madrid.
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Terms, Part 2 National Terms (ISO 8402, 1986), The British Standards Institution,
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Tourism services
quality in Egypt
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BIJ
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Further reading
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EC (1990), EC Directive on Package Travel, Package Holiday and Package Tours, EC Commission,
Brussels.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
Quality
management
493
Alan Smith
Department of Mechanical and Manufacturing Engineering,
The University of Melbourne, Melbourne, Australia
Abstract
Purpose To develop a quality management (QM) measurement instrument that has sound
psychometric properties and recognizes a key feature of the field, i.e. QM is currently characterized by
three competing approaches: standards-based; prize-criteria; and, elemental implementation approaches.
Design/methodology/approach The three disparate approaches were analyzed to identify sets of
key constructs and associated items. The assembled instrument was empirically validated through a
survey of 418 Australian manufacturing organizations. A full set of reliability and validity tests were
performed. Wherever applicable, confirmatory approach using structural equation modeling was used.
Findings The results of psychometric tests suggest that the constructs of the three approaches
have good empirical support. In the manner in which the instrument is presented, it is possible to
separately measure constructs related to each of the three approaches.
Research limitations/implications The measurement instrument has been validated with
manufacturing organizations from Australia. It is applicability to other industry sectors or country
contexts needs to be verified.
Practical implications Practitioners and consultants can use the measurement instrument for
conducting QM benchmarking exercises within and across organizations. Researchers can use the
instrument in future studies for, inter alia, theory development in the area.
Originality/value The measurement instrument overcomes the shortcomings of the existing
instruments by explicitly including all three practical approaches to quality management. Also, a
rigorous psychometric validation process is adopted that provides credible outcomes.
Keywords Quality management, Performance measures, Psychometric tests, Australia
Paper type Research paper
Introduction
To hasten the rate of knowledge consolidation in the quality management (QM) area,
there needs to be greater consensus on its ontological bases and epistemological
principles among researchers. Measurement instruments that have sound
psychometric properties can make important contribution towards this end. These
instruments would provide confidence to users that the information they obtain are
reliable and valid. Further, if these instruments get universally accepted, then this will
prevent the continual reinvention of the wheel facilitate congruence in research, and
eventually, impact positively upon the intellectual development of the field (Filippini,
1997; Amundson, 1998; Wacker, 1998).
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 493-522
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770610676317
BIJ
13,4
494
The QM literature shows that several measurement instruments have been published.
Table I provides a summary of four such instruments. These four were selected for
analysis because psychometric details are provided. The researchers developed these
instruments with the intention of measuring organizational QM practices. Some other
researchers (Black and Porter, 1996; Zeitz et al., 1997) have used QM measurement
instruments, but have not provided details of how they were developed.
As Table I shows, all of these instruments attempt to ensure that good quality
information can be collected. However, these instruments have a number of shortcomings.
Firstly, none of these instruments reflects the current state of practice in the area. The QM
area has evolved to the stage where three major approaches dominate: the standards-based
approach in which the ISO 9000 is the most prominent; the prize-criteria approach which
comprises the various business excellence and quality awards; and, the elemental approach
promoted by various academicians and practitioners. None of the published instruments
truly reflect the three-pronged approach that currently dominates: Saraph et al.(1989)
instrument reflects the modus operandi of the 1980s when the ideas of quality gurus such as
Deming and Juran were popular; Flynn et al.(1994) instrument is too broad-based (i.e.
addressing the concepts of World Class Manufacturing); and, Ahire et al.s (1996) and
Grandzol and Gershons (1998) instruments are narrowly focused on TQM only.
Secondly, there is significant disparity in the types of analyses used to demonstrate the
ability of the instruments to collect good quality information. Saraph et al.(1989), Flynn
et al.(1994) and, Grandzol and Gershon (1998) use exploratory approaches which have a
number of limitations. Saraph et al.s (1989) instrument has been used in other studies
(Quazi et al., 1998; Joseph et al., 1999), but the statistical procedures used to show reliability
and validity are limited to simple exploratory techniques. Only Ahire et al. (1996) use the
preferred confirmatory approach. Finally, many organizational theories, including those on
QM, have low universal applicability due to cultural, economic, political and social
differences that exist between countries (Shenkar and Glinow, 1994). Except Saraph et al.
(1989), the other existing QM instruments have been validated in organizations in the USA
and Japan. As a result, it is unclear if these instruments are suited for studies in other
countries. In sum, owing to differences in the subject areas emphasized, analysis tools used
and the domains in which the instruments are validated, there are significant differences in
the instruments, leading to low universal acceptance.
Whilst we understand the calls made for not reinventing the wheel and using
existing instruments, we feel the limitations outlined above are serious and warrant the
development of a new instrument. In this paper, an empirically validated QM
measurement instrument is presented. In order to ensure that the instrument reflects
the state of art in the field, the content is based on a review of literature and practice.
Also, a scientific process that comprehensively tests the psychometric properties of the
instrument is used. The outcome is a QM measurement instrument that has sound
reliability and validity that researchers and practitioners can use for benchmarking
within and across organizations.
The next section of this paper provides details of the instrument development and
psychometric validation process that was used. Within this section, details of the tests
performed are provided. The paper concludes by summarizing the characteristics of
the instrument, identifying the contributions it makes to the QM body of knowledge,
and describing the implications of the instrument to research and practice in the area.
QM as prescribed by quality
gurus and eminent academics
Companies in Minneapolis/St
Paul area in the USA
Areas emphasized
Instrument
Cronbachs a
(continued)
Comprehensive literature
review
No
Qualitative improvements
Yes
TQM
TQM
Quality
management
495
Table I.
Comparison of four
published QM
measurement
instruments
Final instrument
constructs (number of
items)
Predictive
(criterion-related)
validation
Convergent validity:
confirmatory factor analysis
(Chi-square difference between
all pairs of constructs)
discriminant validity:
Bentler-Bonnett coefficient
Canonical correlation between Structural equation modelling
Correlation between QM
(correlation between QM
QM scales and measures of
constructs and measures of
constructs and measures of
quality performance
quality performance
quality performance)
1. Top Management
Dimension I: Top
1. Role of divisional top
Commitment (6)
Management Support
management and quality
2. Customer Focus (4)
1. Quality Leadership (5)
policy (13)
3. Supplier Quality
2. Quality Improvement
2. Role of the quality
Management (6)
Rewards (6)
department (5)
4. Design Quality
D II: Quality Information
3. Training (8)
Management (6)
3. Process Control (3)
4. Product / service design (6)
5. Benchmarking (4)
4. Feedback (7)
5. Supplier QM (8)
6. SPC Usage (4)
D III: Process Management
6. Process management /
7. Internal Quality
5. Cleanliness &
operating procedures (10)
Information Usage (6)
7. Quality data & reporting (8) Organization (5)
8. Employee
D IV: Product Design
8. Employee relations (8)
Empowerment (5)
6. New Product Quality (4)
9. Employee Involvement (8)
7. Inter-functional Design
10. Employee Training (5)
Process (4)
D V: Workforce Management 11. Product Quality (4)
8. Selection for Teamwork 12. Supplier Performance (6)
Potential (3)
9. Teamwork (4)
D VI: Supplier Involvement
10. Supplier Relationship (4)
D VII: Customer Involvement
11. Customer Interaction (3)
Construct validation
Table I.
Saraph et al. (1989)
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Instrument
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Quality
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498
required to have systems to deal with customers complaints. Suitable feedback from
customers should be obtainable. Also, organizations need to systematically capture
customer requirements and satisfaction levels. The elemental approach includes all of
prize-criteria approach, with the addition of viewing customer satisfaction as an
important measure of quality.
Employees. All three approaches recognize employees as an important construct of
QM. The focus is on the organization enabling employees to contribute meaningfully to
quality of work. The standards-based approach concentrates on employees being aware
of and empowered to act on quality-related matters and being suitably trained for the
jobs they do. The prize-criteria approach focuses on having an open culture, teamwork,
and continuous improvement. The human resources management and remuneration
systems are required to be in place to support these. The elemental approach shares with
the standards-based approach the requirement that employees be aware of their roles
and goals and are trained for their jobs. It also shares with the prize-criteria approach the
need for open culture and teamwork. In addition, the elemental approach suggests
employees be engaged in continuous improvement of work output.
Suppliers. QM promotes the idea that long term, stable, cooperative and mutually
beneficial relationships with a few suppliers is preferable to having multiple suppliers
that are dealt with in an overly formal, competitive, contractual and arms-length
manner. The standards-based approach focuses on ensuring that misunderstandings
with suppliers are avoided, materials from customers are treated in the same way as if
they are from other suppliers and subcontractors are suitably pre-qualified. The
prize-criteria approach strongly emphasizes the need for mutually-beneficial
collaborative relationships. In addition, organizations are expected to have systems
in place to ensure quality of incoming goods and services, share relevant information
with suppliers, pass on some of the cost-savings to suppliers and make quality an
important criterion for selecting suppliers. The elemental approach is similar to the
prize-criteria in terms of developing long-term relationships, quality being the main
criteria for selecting suppliers and ensuring quality from suppliers. In addition to these,
the elemental approach expects organizations to involve suppliers in the development
of new products.
Information and communication system. All three approaches recognize that
an efficient and effective information and communication system forms the bedrock
upon which many quality initiatives and activities take place. However, the extent
to which each of the approaches addresses this construct differs considerably. The
standards-based approach has a rather narrow focus with emphasis on ensuing that
practices relating to documentation are sound, and that goods and services, whether
they are in-process or finished form, are traceable. The prize-criteria approach focus on
ensuring that the information and communication system outputs are used for
measuring performance and thus are of very high quality. The elemental approach
requires that the information and communication system enable data to be collected in
a timely fashion, transparently shared, and used to provide feedback to employees.
All three approaches require that information relating to quality is readily available.
Processes. All three approaches have strong emphasis on the business processes
that impact upon quality of products. The standards-based approach has a very
practical outlook to processes. A planned and systematic approach to quality is
required. Regular reviews of all aspects of operations are expected, and, if problems are
detected, remedial actions are required to be taken in a timely manner. Systems need to
be in place to ensure that defective products are not produced. The prize-criteria
approach takes a broader approach to processes and emphasizes the key role of
innovation, suggesting that high degree of innovativeness is required for continuous
improvement of processes. Also, there is recognition that a focus on quality needs to
start at the design stage. The elemental approach also recognizes this last point. In
addition, this approach requires that processes be safe, constantly monitored and
formal methods such as statistical process control are used when appropriate.
Wider community. Only the prize-criteria approach formally addresses the issue of
organizations needing to meaningfully engage with their wider community.
Organizations are expected to address their societal responsibilities and where
possible, provide support to relevant community groups. There is also an expectation
to reduce risks posed to society as a result of organizations activities, as well as share
best practice information where possible.
Competitors. All three approaches favor quality (ahead of cost, flexibility and
delivery) as the basis for competition. However, it is only the elemental approach that
seems to require specific actions. Organizations are required to assess the impact of
competition by benchmarking themselves against leading competitors, as well as
developing understanding of the competition they face.
Business conditions. The prize-criteria approach is the only one that explicitly requires
organizations scan their business environments as part of the strategic planning process
in order to assess the conditions they face. The scanning involves understanding the state
of the industry, macro-economic conditions, the rules and regulations that are in place, and
the rate at which changes take place in products, processes and customers.
Product quality. The standards-based and prize-criteria approaches both predict that
organizations can expect improvements in the quality of products that are produced.
Specifically, organizations can expect reductions in quality costs, defective and
wastage rates, as well as improvements in perceived product quality. The elemental
approach does not appear to make any explicit predictions in terms of direct product
quality performance outcomes. Instead, it appears to imply that product quality would
inherently improve once other aspects of QM are in place.
Customer satisfaction. Similar to the product quality construct, the standards-based
and prize-criteria approaches suggest that organizations can expect to generate high
levels of customer satisfaction. Organizations can expect to offer higher levels of
customer service, achieve greater consistency in documentation, have fewer
second-party audits and generate higher perceived quality by customers.
Business performance. The prize-criteria approach is the only one that makes explicit
predictions that its implementation will lead to financial and other organizational
performance outcomes. These are in the form of greater demand for products, better
operating efficiency levels, improved employee satisfaction levels, and better relationships
with suppliers. All of these culminate in improved profitability and market share levels.
Community relations. As with the business performance construct, the prize-criteria
approach is also the only one that suggests this approach will generate greater positive
involvement of organizations in community activities. This will enable greater levels of
community goodwill to accrue to organizations.
These QM constructs and the final sets of associated items in the form of a
questionnaire are shown in the Appendix. As can be seen, the three approaches have
Quality
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499
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a number of constructs that share the same labels. However, the items for these
constructs are quite different for all three approaches, with only a handful being
common across two or three of the approaches. Also shown in the Appendix are the
scales used to measure the items. The rest of this section provides details of
psychometric analyses performed on the constructs of the three QM approaches.
500
Measurement scales
The Likert scale was used throughout to measure all the items. This scale is able to deal
with the conceptual nature of the subject area, large number of items and difficulties
with eliciting specific information from respondents. A five-point scale was used since
reliability does not improve further with higher-resolution scales (Forkeret et al., 1997).
Also, it was deemed not necessary to force respondents to choose a position by using an
even numbered scale. This is because it was felt that respondents might sometimes
genuinely arrive at a neutral position. Finally, a not applicable option was provided.
For the QM constructs, respondents were requested to indicate their level of
agreement with the items that most closely reflected the situation at their work site. For
the business conditions construct, managers perceptions of how their organizations
were affected by business environmental factors were gauged. As for the
organizational performance items, managers perceptions of the degree of
satisfaction their organizations had with their performance levels were assessed.
Pretesting
Independent third-party advice to fix possible tautological problems and improve the
clarity of the statements was obtained. A panel of eight people (experts in QM,
statisticians, and linguists) were asked to examine the draft questionnaire and suggest
possible improvements. Many useful suggestions were made and these were incorporated
into the instrument.
Pilot testing
The instrument was sent to quality managers of 50 manufacturing organizations in
Victoria, Australia in order to obtain feedback on the questionnaire. Useable responses
were received from 22 organizations. A range of statistical tests for reliability and
validity was performed. However, the small sample size meant that some tests were not
meaningful. As a result, the items that violated the statistical tests that could be
performed were modified, instead of being eliminated from the instrument, as is
recommended (Hair et al., 1998).
Data collection
The empirical data for this study was obtained from Australian manufacturing
organizations. A total of 1,053 organizations were randomly selected from the
JAS-ANZ register (1999) and requested to take part in this study. This register lists all
organizations that are accredited to quality, environmental, safety and other standards.
About 418 organizations responded. After accounting for non-deliverable
questionnaires, a final response rate of 42 percent was achieved.
The level of analysis for this study was limited to the plant level. Only one
registered site per organization was included in the sample. Managers in charge of
quality-related activities were specifically asked to complete the questionnaires
because it was felt that they were best qualified to answer the questions. It was also
necessary to ensure that the sample consisted of organizations that were practicing
QM. Several indicators suggested that this was the case: all the organizations were
registered to QM standards; 31 percent claimed to have formally implemented TQM
programs; and, some had applied for national and other quality awards.
Checks were performed to ensure that the sample of responding organizations was
representative of the broader population of manufacturing firms. First, the
demographic characteristics of the sample were compared to the general population
of manufacturing organizations. The distributions in terms of location, type of
manufacturing and size of organizations were similar in proportion. Second, the
possibility that non-response bias could have resulted in a non-representative sample
was investigated. A sub-sample of organizations that had not taken part in the study
was contacted by telephone cited time, resource and confidentiality constraints. Also,
the survey was conducted in two phases and a comparison of responses between these
phases showed no significant differences. This suggested that the late respondents
(who could have been non-participants) were not significantly different to the
responding organizations. Together, these two tests suggested that there were no
systematic biases. Overall, it was possible to assume that the sample was
representative of the total manufacturing sector.
Statistical tests
A range of statistical tests was performed on data obtained from the survey to assess
the reliability and validity of the instrument. The essence of these analyses was to
ensure that the constructs had acceptable psychometric properties. Since, a
confirmatory approach was adapted, most of these analyses depended on the output
of structural equation modeling analysis for each construct. The asymptotically
distribution free (ADF) estimation procedure was used because all the variables were
measured with ordinal scales. Prior to performing these tests, missing data were
replaced with values obtained through the expectation-maximization iterative
algorithm (Hair et al., 1998) since this method has been shown to be better than other
substitution and elimination techniques (Jamshidian and Bentler, 1999).
The set of statistical tests for validity and reliability is shown as a flow chart in
Figure 1. These involved tests for multicollinearity, unidimensionality, reliability, item
assignment, construct validity and predictive validity. The results of tests for
unidimensionality, reliability and construct (convergent) validity is provided in this
paper. Tests for multicollinearity, item assignment, construct (discriminant) validity
and predictive validity involve a number of large correlation matrices. Owing to space
constraints, these are not shown in this paper. These matrices are available from the
authors on request.
Test for multicollinear-ity. Multicollinearity occurs when two or more items measure
the same entity and are therefore identical (Ahire et al., 1996). Highly collinear items
can distort the results substantially or make them unstable and not generalizable (Hair
et al., 1998). If inter-item correlations, measured as polychroic correlations (Joreskorg,
1993) in this case because of the ordinal data type of the items, are greater than 0.9, then
the possibility that multicollinearity exists is high (Hair et al., 1998). For all the items of
the constructs of this study, none of the inter-item correlations was greater that 0.9.
Hence, multicollinearity type problems did not appear to be present.
Quality
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501
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502
Y
Are all items assigned
to constructs one
dimensional?
Y
Are all items assigned
to constructs reliable?
Y
Are the assignment of
items to constructs
proper?
Y
Do items (representing
alternative measures),
measure the same
construct?
Y
Do the constituent
items estimate only one
construct?
Figure 1.
Statistical analysis
procedure used in the
validation of the
measurement instrument
N
Modify and/or
delete items
Y
INSTRUMENT
Quality
management
503
Suppliers
Employees
2.574, 2, 0.276
93.6, 50, 0.000
26.836,7, 0.000
5.141,2, 0.076
Standards-based
Prize-criteria
Elemental
Standards-based
Prize-criteria
Elemental
14.299,5, 0.014
Elemental
Elemental
46.905,18, 0.000
Prize-criteria
Standards-based
Top
management
leadership
Standards-based
Prize-criteria
3.874, 2, 0.144
QM approach
Construct
Table II.
One-factor congeneric
confirmatory
measurement models for
constructs of quality
management
Customers
Measures of fit
504
0.976
0.964
0.991
0.927
0.995
0.981
0.959
0.96
0.942
0.992
0.948
0.892
0.956
0.887
0.973
0.942
0.92
0.92
0.902
0.958
0.031
0.042
0.022
0.051
0.015
0.029
0.039
0.046
0.060
0.017
0.039
0.082
0.061
0.046
0.026
0.067
0.044
0.062
0.045
0.048
0.914
0.671
0.855
0.74
0.981
0.824
0.887
0.775
0.770
0.914
0.947
0.847
0.952
0.803
0.994
0.912
0.921
0.855
0.837
0.971
1.623
3.834
2.571
1.871
1.287
2.86
1.8
2.606
1.835
1.937
51.097
54.836
21.141
149.565
18.574
34.299
85.404
82.905
125.562
19.874
T5-T6, T7-T8,
T7-T9, T9-T11,
T11-T12
T14-T15,
T20-T21
C4-C5, C4-C8,
C6-C9, C7-C11
No covariances
needed
No covariances
needed
E5-E9, E6-E8,
E10-E11,
E12-E13
E4-E18
S5-S6, S7-S8
No covariances
needed
(continued)
No covariances
needed
Covariances of
error terms
allowed in the
final one-factor
Root
Root mean
Akaike
mean-square square error of
Adjusted
Comparative Normed information congeneric model
2
representing
Chi-square(x , df, Goodness-of-fit goodness-of-fit
residual
approximation Tucker-Lewis
criteria
fit index
Chi-square
each construct
(RMR)4
(RMSEA)5
(AIC)9
(AGFI)3
(CFI)7
(x2/ df)8
p-value)1
(GFI)2
index (TLI)6
Absolute Fit Indices
BIJ
13,4
QM approach
Wider
community
Competitors
Business
conditions
Processes
Prize-criteria
Elemental
Prize-criteria
Elemental
Prize-criteria
0.949
0.992
0.93
0.996
0.904
0.978
13.5. 7, 0.061
1.829,1, 0.176
88.0, 39, 0.000
0.981
11.711, 7, 0.110
Elemental
Standards-based
Construct
0.916
0.968
0.821
0.96
0.838
0.935
0.942
0.046
0.023
0.096
0.011
0.065
0.022
0.035
Measures of fit
0.048
0.036
0.098
0.045
0.055
0.047
0.040
0.881
0.921
0.593
0.966
0.739
0.911
0.937
0.916
0.969
0.787
0.994
0.815
0.958
0.971
1.941
1.553
5.021
1.829
2.258
1.93
1.673
178.781
28.211
89.234
(continued)
BC2-BC3,
BC5-BC9,
BC6-BC7,
BC6-BC9,
BC7-BC12,
BC8-BC9,
BC9-BC10,
BC9-BC12,
BC10-BC12
IC9-IC10,
IC10-IC12
IC12-IC12
P1-P2, P3-P5,
P3-P9, P6-P11,
P8-P9
P12-P18,
P14-P16, P15-P17
P11-P19
41.51
19.829
142.046
IC1-IC2, IC2-IC3
39.711
Covariances of
error terms
allowed in the
final one-factor
Root
Root mean
Akaike
Adjusted
Comparative Normed information congeneric model
mean-square square error of
Chi-square(x2, df, Goodness-of-fit goodness-of-fit
representing
fit index
Chi-square
residual
approximation Tucker-Lewis
criteria
each construct
(AGFI)3
(CFI)7
(x2/ df)8
(RMR)4
(RMSEA)5
(AIC)9
p-value)1
(GFI)2
index (TLI)6
Absolute Fit Indices
Quality
management
505
Table II.
0.944
0.976
11.331, 2, 0.003
0.990
5.319, 2, 0.070
0.893
0.880
0.951
0.074
0.037
0.018
0.04
0.106
0.063
0.783
0.673
0.897
0.86
0.891
0.966
2.395
5.666
2.659
121.469
27.331
21.319
No covariances
needed
No covariances
needed
PF1-PF8,
PF4-PF7,
PF5-PF6,
PF6-PF10,
PF8-PF9,
PF8-PF10
Notes: 1Chi-square (x2, df, p-value): p-value . 0.05 (good fit); 2Goodness-of-fit (GFI): 0.95 , GFI , 1.00 (good fit); 0.90 ,GFI , 0.95 (acceptable fit); 3Root mean-square residual (RMR): RMR , 0.05
(good fit); 4Root mean square error of approximation (RMSEA): RMSEA , 0.05 (good fit); 0.05 , RMSEA , 0.08 (acceptable fit); 5Adjusted goodness-of-fit (AGFI): 0.95 , AGFI , 1.00 (good fit);
0.90 , AGFI , 0.95 (acceptable fit); 6Tucker-Lewis Index (TLI): TLI . 0.95 (good fit); 0.90 , TLI , 0.95 (acceptable fit); 7Normed Fit Index (NFI): 0.95 , NFI , 1.00 (good fit); 0.90 , NFI , 0.95
(acceptable fit); 8Normed Chi-square (x2/df): 1.0 , (x2/df) , 2.0 (good fit); 2.0 , (x2/ df) , 3.0 (acceptable fit); and 9Akaike Information Criteria (AIC): Model with smallest AIC is most parsimonious
Prize-criteria
Standards-based,
Prize-criteria
Standards-based,
Prize-criteria
Prize-criteria
Product
quality
Customer
satisfaction
Business
performance
Community
relations
QM approach
Table II.
Construct
Measures of fit
506
Covariances of
error terms
allowed in the
final one-factor
Root
Root mean
Akaike
mean-square square error of
Adjusted
Comparative Normed information congeneric model
Chi-square(x2, df, Goodness-of-fit goodness-of-fit
representing
residual
approximation Tucker-Lewis
criteria
fit index
Chi-square
each construct
(RMR)4
(RMSEA)5
(AIC)9
(AGFI)3
(CFI)7
(x2/ df)8
p-value)1
(GFI)2
index (TLI)6
Absolute Fit Indices
BIJ
13,4
Construct
Top management leadership
Customers
Employees
Suppliers
Information & communication systems
Processes
Wider community
Competitors
Business conditions
Product quality
Customer satisfaction
Business performance
Community relations
Not
Not
Not
Not
Not
0.7585
0.5574
0.7918
0.5921
0.8659
0.8538
applicable
applicable
applicable
0.7922
0.6450
applicable
applicable
0.8675
0.8625
0.9056
0.8297
0.9128
0.8382
0.8578
Not applicable
0.9342
0.7922
0.6450
0.8325
Not applicablea
0.9056
0.8194
0.8745
0.7286
0.8853
0.6293
Not applicable
0.9665
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
validity of all the constructs, as suggested by Ahire et al. (1996) Table II shows the TLI
statistics for the final models representing the constructs of QM. Seven out of the
20 constructs had TLI values that indicated acceptable fits. A further four were close to
the threshold, with values between 0.824 and 0.9. Overall, the TLI values in Table II
indicated that a reasonable number of constructs had acceptable levels of convergent
validity. In terms of discriminant validity, a construct exhibits this validity if items
assigned to it estimate only one construct (Ahire et al., 1996). If an item of one construct
reflects heavily on another construct, then the correlation between these constructs
would be high (Ahire et al., 1996). Based on this logic, constructs were tested for
discriminant validity using a chi-square difference test suggested by Ahire et al. (1996)
Results for all pairs of constructs yielded chi-square differences to be statistically
significant at p-values of less than or equal to 0.01. Thus, all the constructs that could
be tested were distinct constructs with good discriminant validity levels.
Test for predictive validity. Predictive validity assesses the extent to which items are
related to their independent measures (Flynn et al., 1990). In this research, truly
independent measures of the items were not available. As is the case with other similar
studies (Ahire et al., 1996; Saraph et al., 1989), managers assessments of performance
were used in place of truly independent items. Since, performance was measured as
18 individual items with a Likert ordinal scale and the constructs of QM were
composite constructs measured on continuous scale, polyserial correlation coefficients
were calculated. Results showed that all these coefficients were positive and
statistically significant at 0.01 levels. The correlation coefficients suggested support
for predictive validity of the constructs.
Discussion and concluding remarks
This study has shown that most of the constructs of the three QM approaches have
been well measured. The constructs as defined by their items generally have sound
psychometric properties, i.e. errors were within tolerable range and levels of reliability
and validity were higher than conventionally acceptable in most cases.
Quality
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Table III.
Results of reliability
analysis
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508
Treating the Likert scale as being of ordinal data type and calculating the more
appropriate above-mentioned correlation, reliability and structural equation modeling
fit coefficients allows them to more closely estimate the actual values and therefore
minimize type I error level. This has improved the confidence in the results obtained.
Given that this measurement instrument has sound psychometric properties, it could
be of interest to several parties. Practitioners, consultants and researchers could use it to
conduct self-assessments, audits, and survey-type research in organizations. All parties
can be confident that the data they collect with this instrument are reliable and valid.
One of the major reasons for the lack of consistency in research in the QM area is the
absence of standard and universally accepted measurement instruments. For the
proposed instrument in this paper to make a contribution in this respect, considerable
additional work remains. These include further validation of the instrument in a
longitudinal sense over several time intervals, testing of the instrument in several other
geographical domains, using it in other industry settings and triangulating the
instrument with other research methods. All of these will generate greater consensus
on its acceptance as a universally applicable QM measurement instrument.
In sum, the process that was used to develop the QM measurement instrument
provides ample confidence that high quality data can be collected and that the three
QM approaches can be measured well. If used consistently, this should contribute to
accelerated empirical research in the area, leading to knowledge consolidation,
increased levels of paradigm consensus and maturity of the QM field.
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the case of China to Illustrate national contingency, Management Science, Vol. 40 No. 1,
pp. 56-71.
Wacker, J.G. (1998), A definition of theory: research guidelines for different theory-building
research methods in operations management, Journal of Operations Management, Vol. 16,
pp. 361-85.
Werts, C.E., Rock, D.R., Linn, R.L. and Joreskog, K.G. (1978), A general method of estimating the
reliability of a composite, Educational and Psychological Measurement, Vol. 38, pp. 933-8.
Zeitz, G., Johanneson, R. and Ritchie, J. (1997), An employee survey measuring total quality
management practices and culture, Group & Organisational Management, Vol. 22 No. 4,
pp. 414-44.
Further reading
Australian Quality Council (2001), Australian Business Excellence Awards, AQC.
Standards Australia (1999), Joint Accredited System Australia and New Zealand (JAS-ANZ)
Register, Standards Australia, Homebush.
Appendix
Items assigned to constructs of the three approaches to QM (Table AI)
Top
management
leadership
Construct
Strongly
Please circle the degree of
agreement that most closely Agree
reflects the CURRENT
situation at your local
organization
1
T1: Q Manager ensures
quality system is
continually improved
1
T2: Quality system
regularly reviewed by
management
1
T3: Internal quality audits
verify effectiveness of
quality system
1
T4: Statistical thinking
reflected in
policies/processes/reporting
system
T5: CEO plays key role in
1
creating values
T6: Values converted into
1
practical policies and plans
T7: Customers contribute to
1
development of values
T8: Suppliers had input in
1
developing values
T9: Employees contribute
1
to development of values
1
T10: Culture that CEO is
creating is consistent with
values
1
T11: Employees are
responsible/exercise
leadership
T12: Employees know their
1
roles and goals
Items
3
3
3
3
3
3
3
3
3
3
3
3
2
2
2
2
2
2
2
2
2
2
2
Neutral Disagree
Agree
Strongly
Disagree
Not
Applic-able
(continued)
Quality
management
511
Table AI.
Table AI.
Customers
Items
2
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
(continued)
512
Construct
BIJ
13,4
Employees
Construct
Items
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
(continued)
Quality
management
513
Table AI.
Table AI.
Items
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
(continued)
514
Construct
BIJ
13,4
S1: Misunderstandings
about orders placed with
suppliers are rare
S2: All subcontractors
suited to tasks they perform
S3: Materials from all
customers/suppliers treated
same
S4: Quality of supplied
products/services are
assessed
S5: Suppliers receive
information to improve
quality/responsiveness
S6: Gains from cooperation
with suppliers shared with
them
S7: Quality is the main
criterion for choosing
suppliers
S8: Organization seeks
assurance of quality from
suppliers
S9: Long-term stable
relationships with suppliers
is sought
S10: Suppliers involved in
development of new
products
IC1: Quality manual cover
all requirements for quality
IC2: Obsolete documents do
not cause confusion with
new versions
IC3: Possible to establish
details of finished products
Suppliers
Information and
communicat-ion
system
Items
Construct
2
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
(continued)
Quality
management
515
Table AI.
Table AI.
Processes
Items
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
(continued)
516
Construct
BIJ
13,4
Construct
Items
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
(continued)
Quality
management
517
Table AI.
Table AI.
Competitors
Wider
community
Items
2
2
1
1
(continued)
518
Construct
BIJ
13,4
Business
conditions
Construct
Items
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
Positively
Very
Positively
3
3
4
4
Neutral Negatively
5
5
Very
Negatively
0
0
Not
Applic-able
p
p
(continued)
Quality
management
519
Table AI.
Table AI.
Business
performance
Customer
satisfaction
Product quality
p
p
p
p
p
p
p
p
(continued)
1
2
3
4
5
0
BC12: The rate of change in
taste and preferences of
customers
Very
Satis-factory Neutral Dissatis-factory
Very
Not
Please circle the degree of
Satis-factory
Dissatis-factory Applic-able
satisfaction of the
organization that most
closely reflects the
CURRENT situation at the
local organization:
p
PQ1: Costs relating to
1
2
3
4
5
0
quality of products
p
PQ2: Defective products
1
2
3
4
5
0
rate
p
PQ3: Perceived product
1
2
3
4
5
0
quality by customers
p
PQ4: Wastage
1
2
3
4
5
0
p
CS1: Perceived product
1
2
3
4
5
0
quality by customers
p
CS2: Consistency in
1
2
3
4
5
0
documentation
p
CS3: Customer service
1
2
3
4
5
0
p
CS4: Quality audits by
1
2
3
4
5
0
customers
PF1: Inventory levels
1
2
3
4
5
0
PF2: Profits
1
2
3
4
5
0
PF3: Cashflow
1
2
3
4
5
0
PF4: Demand for products
1
2
3
4
5
0
made at the registered site
PF5: Downtime
1
2
3
4
5
0
Items
520
Construct
BIJ
13,4
Items
2
2
2
2
2
2
1
1
1
1
1
1
Noet: 1 This item was stated negatively and required reverse coding
Community
relations
Construct
3
3
3
3
4
4
4
4
5
5
5
5
0
0
0
0
p
p
p
p
Quality
management
521
Table AI.
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522
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
Analysis of ISO
9000 standard
diffusion
523
1. Introduction
Since, the early eighties, a proliferation of ideas for enterprises management according
to Quality principles has been taking place. Quality assurance models (Military
Standards Mil, 9859A:1963, 1963; ISO, 9000s:1987, 1987), first, and total quality
management (TQM), lean organization and benchmarking models, afterwards, have
constituted a basis for involving and integrating all the factory competencies which
can contribute to the competitiveness enhancement.
In such a context, International Standardization Organization (ISO) 9000
certification has acted as a catalyst of the existing tendencies, in order to induce
organizations towards a structural model based on the logic of strategic quality
management (ISO 9000-1:1994, 1994; ISO 9001:1994, 1994; ISO 9002:1994, 1994;
ISO 9003:1994, 1994).
Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 523-541
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770610676326
BIJ
13,4
524
The first attempt to draw a series of guidelines for applying quality principles in
industrial sectors dates back to fifties in USA, initially in the military sector, subsequently
in the nuclear, pharmaceutical and automotive ones. Originally this was done in order to
ensure that products matched technical requirements defined by contracts. Later, these
rules have been adopted by British Standard Institution, which broadened the application
field to the whole company system by the introduction of BS 5750 Standard.
As from the end of seventies, even though the most developed countries were
possessing their own internal standardization bodies, at least for specific sectoral
applications, the need of giving a unique and coherent international configuration to
the quality assurance standardization structure and to the related activities
(certification, accreditation, laboratories, etc.) began to be even more impelling.
The International Standardization Organization (ISO), at first only interested in the
regulation of measurement activities in the different industrial sectors, took its cue
from these standards, and in 1987 published the first edition of ISO 9000 series. This
was fated to become in a few years the leading reference for Quality System
Organization all over the world.
The expectation was to facilitate the international commerce and improve the
competitiveness of European and North-American companies in an ever more selective
market, characterized by a strong penetration of far-eastern products, by harmonizing
terms, systems and methodologies. This could only be done by acquiring competitive
advantage in terms of customer satisfaction and product reliability (Withers and
Ebrahimpour, 2000).
ISO 9000 family standards specify organization requirements for giving a formal
evidence of the capability to organize resources and processes with respect to
regulation, prescriptions and customer requirements. The aim is to ensure
stakeholders satisfaction (Franceschini, 2002).
ISO 9000 standards represent a benchmark for company management in its whole.
They are not focused on the intrinsic product/service quality, but on the related
processes, enlarging their action to the entire network of interactions in which the
factory is acting. The extension of the application field originates from the awareness
that quality is a strategic variable to be planned and managed through the whole
network of the value-chain (Romano and Vinelli, 2001).
Nowadays, quality certification is steering towards a new frontier which is
represented by the Vision 2000 project, aimed to the reorganization of the whole
quality standard structure. The leading philosophy results from the need of aligning
factories growth opportunities towards market dynamics in order to redefine their
strategies and their industrial/commercial targets.
The past approach of conformity to requirements which has largely conditioned
the application of 1994 and earlier editions, is now trimmed in order to promote a
review of the organizational order, coherent with a quality-oriented model. Still
preserving its bargaining power and connotation of commercial visibility media in
terms of credibility, the certification becomes a tool for integrating factory
management, performance and process verification according to a scheme of
continuous improvement (ISO 9000:2000, 2000).
ISO 9000 standard series represents a special category of horizontal standards of
general application, aimed to guarantee product quality through an adequate
management of resources and processes (quality system management). These
standards define the criteria for quality evaluation and the guidelines for the
implementation of related tools and methodologies (ISO 9000:2000, 2000; ISO 9001:2000,
2000; ISO 9004:2000, 2000; ISO 19011:2002, 2002).
Up to the end of December 2002 more than 560,000 certificates had been issued in
159 countries all over the world, still persisting a significant growing rate (about 10
percent on annual average over the end of December 2001) (ISO, 2003). On the other
hand, a drastic reduction of growth in the last year (Table I) is evident.
In the present paper, the ISO 9000 quality standard diffusion and its impact on
industrial system is analyzed. Particular attention is dedicated to future trends and
evolution.
Five main aspects are discussed:
(1) the correspondence between ISO 9000 standards and TQM strategy;
(2) the effects of ISO 9000 certification on business performance;
(3) the ISO 9000 certificates diffusion in the world, with particular attention to
actual trends, geographic share, and most involved industrial sectors;
(4) the comparison among economical and entrepreneurial structure of different
countries and certificates diffusion; and
(5) the proposal of a prediction model for the diffusion of ISO 9000 certificates.
Analysis of ISO
9000 standard
diffusion
525
In the rest of the paper, case by case, it will be specified if the analysis refers to the new
or the past standard edition.
2. ISO 9000 standards and TQM
The standard reassessment which led to the Vision 2000 project can be interpreted as
an effect of a reorientation of factory management principles, induced by the increasing
diffusion of TQM philosophy (Laszo, 2000; Conti, 2000).
The similarity to TQM can be easily found in many aspects of the new standards.
Basic concepts such as customer centrality and satisfaction, continuous improvement,
employees valorization and involvement, process-organization-results integration,
customers-suppliers-competitors connection, which represent the basis of TQM, have
been assimilated and emphasized in the new ISO 9000 architecture.
Year
World total
Table I.
Worldwide total of ISO
9000 certificates since
1993
BIJ
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526
Referring to the efficacy of the two models, the scientific literature is disagreeing and
there is no common interpretation so far. Many empirical researches reveal in ISO 9000
standard application a potentiality for valorization of TQM (Beattie and Sohal, 1999;
Ismail and Hashimi, 1999; Lee and Palmer, 1999), some others interpret the ISO 9000
implementation as the starting point for the construction of a factory model for TQM
(Parr, 1999; Kanji, 1998). Recent researches characterize the ISO 9000 standards as a
tool for facilitating and implementing the adoption of TQM (Sun et al., 2004), but not as
a necessary precondition (Sun, 1999; Brown and van Der Wiele, 1996) or as the signal of
a natural migration towards its implementation (Sun, 1999; Wiele et al., 1997). They
only give a set of general/generic guidelines, but they do not guarantee that the process
is durable, capable and mature in the application of related constructs.
Although the 2000 series of ISO 9000 standards is closer to TQM principles,
the cultural gap between the two models still remains large and not easily fillable
(Laszo, 2000; Conti, 2000).
3. The effects of the ISO 9000 certification on business performance
Currently, a common point of discussion concerns the effectiveness of ISO 9000
certification on business performance. Many researches tried to find an empirical
evidence of the relationship between these two aspects.
A cross-sectional study undertaken on the Australian market showed that the
motive for adopting ISO 9000 certification and the maturity of the quality culture are
significant factors for determining the benefits derived from ISO 9000 certification
(Terziovski et al., 2003). The style of the auditor, on the other hand, does not appear to
have a significant and positive effect on the benefits derived from ISO 9000
certification. According to that, the natural conclusion is that certification contributes
to business performance when the quality culture in the organization is well developed
and the managers motivation to gain certification is to improve business performance
and not to conform to a standard.
Furthermore, many empirical evidences show that ISO 9000 certification is a
necessary condition to support competitive and marketing objectives. Attention must
be given in assuring that the company and its customers obtain the maximum benefits
by the integration of the certification process in the marketing program (Stevenson and
Barnes, 2002).
To confirm the influence of ISO 9000 certification on marketing results, a recent
study, performed on a set of Spanish companies, analyzed the stock markets reaction
to a publicly announced winner of a quality award (Nicolau and Sellers, 2002). Results
show that the stock market reacts positively to such a certification. Quality
certification can be considered as a useful tool for reducing the information asymmetry
between buyers and sellers, as well as a strategic element for the companies to
distinguish themselves in the business competition (Nicolau and Sellers, 2002).
4. A cross-section of ISO 9000 certificates diffusion in the world
The starting point of the analysis is The ISO survey of ISO 9000 and ISO 14001
certificatesdocument (ISO, 2001, 2002, 2003). Available data concur to trace a synthesis of
what has happened and what is in process all over the world. It must be highlighted that
the surveys do not claim to be completely exhaustive and the reported data should be
considered with care. In some cases undercounting has occurred, elsewhere accredited and
non-accredited certificates are added together without distinction, and the certificates
mentioned may either cover single or multiple site certifications (ISO, 2001, 2002, 2003).
A main goal of the present paper is to provide an analysis of the world certification
dynamics over time.
4.1 The saturation effect
Comparing different nations, the evolution of certification over time is not a synchronous
phenomenon. In some countries ISO certification has been deeply practiced since
standards introduction (see, for example, UK, France and Germany), in some others it met
with maximum interest only in the last years (China and other eastern countries).
Looking at those countries in which the certification diffusion is a long-standing
phenomenon, we see that the number of certificates is close to arrive at a saturation
level. This effect is particularly evident for UK, Germany and France (Figure 1). In
these countries the certification market is coming to saturation. The saturation level
represents only a limited fraction of the total number of Corporation Companies (C.C.).
The empirical saturation values for UK, Germany and France are, respectively, 9, 8 and
2 percent of C.C. in each country (Franceschini et al., 2004).
Quality certification diffusion began when some companies, with the aim of
distinguishing themselves in the business competition, manifested a wish to give
Analysis of ISO
9000 standard
diffusion
527
60,000
Number of certificates
50,000
40,000
30,000
20,000
10,000
0
1986
1989
1992
France
1995
Year
Germany
1998
2001
2004
United Kingdom
Sources: ISO (2001, 2002, 2003); Comite Franaise d'Accrditation (2003); TGA Accreditation
Body and DQS GmbH (2003); United Kingdom Accreditation Service (2003)
Figure 1.
Time evolution of the
number of certificates in
some European countries
with the highest number
of certificates in 2002
(since 1986)
BIJ
13,4
528
an external and formal evidence of their organizational efforts towards quality practice.
Achieving success in a more and more careful market, their number has progressively
grown up according to an almost exponential trend. This dissemination was promoted by
central governments and by quality national bodies, reducing administrative features and
supporting the diffusion of the certification bodies in the countries. As a result of these
joint actions, an increasing attention of the enterprises towards the certification was
caused: inside of the organization, in order to increase the resource involvement; outside, to
give customers the evidence of excellence achievement. But the increasing process does
not go on without end. Caught up the interest apex, the driving push slowly begins to
attenuate under the effect of some concomitant factors: the reduction of the competitive
gap between certified and not certified companies, and the limited number of enterprises
potentially interested to certification. So, the growth slowly tends to a gradual saturation
(Franceschini et al., 2004).
This saturation effect strongly depends on the economic and productive structure of
each country. For some European countries, with comparable entrepreneurial structures,
the obtained results show that the predicted average saturation level is around 10 percent
(number of certificates over the total number of C.C.) (Franceschini et al., 2004). Table II
reports the observed values for the top five European countries in 2002.
Date
December 1986
December 1988
December 1989
December 1990
December 1991
January 1993
September 1993
December 1993
June 1994
December 1994
March 1995
December 1995
December 1996
December 1997
December 1998
December 1999
December 2000
December 2001
December 2002
Table II.
Percentage of certificates
over the total number of
C.C. for the top five
European countries in
2002
France
Germany
0.00a
0.36
0.00a
0.00a
0.05a
0.05a
0.18
0.35
0.47a
0.79
0.45
0.59
0.86
1.26
1.50
1.70
1.82
1.33
2.32
2.94
4.67
5.44
6.82
7.35
Percentage of C.C.
Italy
Spain
UK
0.00a
0.11
0.17
0.00a
0.06
0.25
0.56
0.81
1.25
1.83
2.92
4.15
4.58
6.19
9.56
0.00a
0.00a
0.00a
0.01a
0.02
0.04
0.05a
0.07
0.10a
0.12
0.19
0.31
0.54
0.80
1.09
1.58
1.95
2.13a
2.83
4.28
5.60
6.71
8.00
8.08
8.63
8.97
9.40
9.70
Note: aData refer to ISO surveys, with the exception of the marked ones. These lasts have been
collected by each national accreditation body
Sources: ISO, 2001, 2002, 2003; Comite Francaise dAccreditation, 2003 (France); Ministe`re de
lEconomie de France, 2003 (France); TGA Accreditation Body and DQS GmbH, 2003 (Germany);
Deutsche Bundesbank, 2003 (Germany); Statistisches Bundesamt, 2003 (Germany); SINCERT, 2003
(Italy); Italian Ministry of Productive Activities, 2003 (Italy); Entidad Nacional de Acreditacion, 2003
(Spain); Instituto Nacional de Estadstica, 2003 (Spain); United Kingdom Accreditation Service, 2003
(UK); UK National Statistics, 2003 (UK); Eurostat, 2003)
The same saturation effect can be observed for many other non-European countries
(see, for example, Australia, Republic of Korea, and USA in Figure 2).
4.2 ISO 9000:2000 certificates geographic distribution
The number of ISO 9000:2000 certificates is 29.77 percent of the overall total at the end of
2002 (Figure 3). Considering that within the end of December 2003, the full transition to the
new standards is supposed to take place, this percentage does not represent an
encouraging result for the Vision 2000 project. Even if considering that this delay can be
ascribed to some inertial effect towards change (typical in industrial/social environments),
this percentage is too exiguous to give assurance of a complete transition.
Analysis of ISO
9000 standard
diffusion
529
Number of certificates
30,000
25,000
20,000
15,000
10,000
5,000
0
1988
1994
1991
1997
2000
Year
Australia
Republic of Korea
USA
2003
Figure 2.
Time evolution of the
number of certificates in
some non-European
countries with the highest
number of certificates in
2002 (since 1988)
ISO 9000:2000
(167 210)
ISO 9001,9002,9003:1994
(394 537)
Figure 3.
Portions of ISO 9000:2000
and ISO 9000:1994
certificates at the end of
2002
BIJ
13,4
530
Figure 4.
Growth of ISO 9000:2000
certificates at the end of
2001 and 2002 compared
to a hypothetical
exponential growth
100.00%
100%
80%
60%
40%
29.77%
20%
8.69%
0%
2001
2002
Year
2003
Total percentage
Africa and
Central and
Australia and
West Asia South America North America Europe Far East New Zealand
January 1993
September 1993
June 1994
March 1995
December 1995
December 1996
December 1997
December 1998
December 1999
December 2000
December 2001
December 2002
3.42
2.73
2.64
2.75
2.65
3.79
3.88
4.47
5.04
4.94
3.87
4.19
0.10
0.30
0.68
0.77
0.96
1.05
1.34
1.92
2.61
2.64
2.83
2.44
4.32
5.61
6.99
7.77
8.15
10.44
11.25
12.34
13.14
11.82
9.97
9.58
83.02
81.12
78.73
75.61
72.72
67.58
64.31
61.13
55.36
53.87
52.87
52.16
2.46
3.4
4.39
6.29
7.26
11.31
13.42
13.99
16.48
20.05
24.83
26.45
6.69
6.84
6.58
6.81
8.27
5.83
5.79
6.16
7.36
6.68
5.65
5.2
Analysis of ISO
9000 standard
diffusion
531
Table III.
Percentage values of the
regional share of
certificates in the world
(since 1993)
100
80
60
40
20
99
3
ne
.1
99
4
M
ar
.1
99
5
D
ec
.1
99
5
D
ec
.1
99
6
D
ec
.1
99
7
D
ec
.1
99
8
D
ec
.1
99
9
D
ec
.2
00
0
D
ec
.2
00
1
D
ec
.2
00
2
.1
Ju
pt
Se
Ja
n.
19
93
Year
Africa/West Asia
Europe
North America
Australia / New Zealand
Figure 5.
Time evolution of the
regional share of
certificates percentage in
the world (since 1993)
BIJ
13,4
80.00
Far East
532
70.00
60.00
50.00
40.00
30.00
20.00
10.00
2
00
1
ec
.2
00
D
0
.2
00
ec
D
9
D
ec
.2
99
8
.1
99
ec
D
7
.1
99
D
ec
6
.1
99
ec
D
ec
.1
99
5
.1
ec
D
ar
M
.1
.1
99
99
3
99
ne
Ju
Se
pt
n.
.1
19
93
0.00
Ja
Figure 6.
Time evolution of the
regional share of
certificates percentage in
the world. Detail for
European and Fare East
countries (since 1993)
Year
Sources: ISO (2001, 2002, 2003)
Japan
6%
Australia
5%
Spain
5%
France
4%
Korea
3%
Germany
6%
Others
29%
Usa
7%
Figure 7.
Share of certificates
referring to top ten
countries in 2002
United Kingdom
11%
Italy
11%
China
13%
whether the benefits of ISO 9000 registration were sufficient to offset costs and sheer
complexity (Stevenson and Barnes, 2002). This behavior was also supported by the
natural dynamism of USA market, which did not force companies in pursuing ISO
9000 certification as distinguishing element in business competition.
Nine countries of the top ten in 2002 (China, Japan, Italy, Germany, UK, Spain,
Australia, France, and USA) are also part of the top ten for ISO 9001:2000 (2000)
certificates.
4.5 ISO 9000 certificates share by industrial sectors
Certificates subdivided by industrial sectors are reported in Table IV (ISO, 2003).
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Agriculture, fishing
Mining and quarrying
Food products, beverages and tobacco
Textiles and textile products
Leather and leather products
Wood and wood products
Pulp, paper and paper products
Publishing companies
Printing companies
Manufacture of coke and refined petroleum products
Nuclear fuel
Chemicals, chemical products and fibers
Pharmaceuticals
Rubber and plastic products
Non-metallic mineral products
Concrete, cement, lime, plaster, etc.
Basic metal and fabricated metal products
Machinery and equipment
Electrical and optical equipment
Shipbuilding
Aerospace
Other transport equipment
1998
678
1,791
8,746
3,673
2,093
1,967
3,279
354
2,939
1,669
220
12,615
1,105
13,575
3,571
7,107
28,972
19,827
40,035
4,670
4,131
7,656
1999
1,745
2,028
11,440
5,178
926
2,225
4,785
445
3,299
1,929
115
14,790
1,451
18,036
4,209
6,467
40,713
23,027
38,148
589
924
9,072
2000
1,265
2,359
13,805
6,706
1,063
2,791
4,961
1,048
3,191
1,927
96
15,505
1,349
18,243
5,363
7,290
41,534
29,812
42,710
881
1,314
9,573
2001
112
131
1,317
593
115
197
420
68
378
127
4
1,232
137
1,315
454
544
2,912
2,146
3,558
50
58
599
Of which 9001:2000
2,381
2,423
17,038
9,071
1,490
2,910
5,693
1,212
3,630
1,620
192
19,612
1,697
21,517
5,753
8,218
50,234
35,047
43,839
689
866
10,561
2002
813
607
5,113
3,045
492
868
1,227
190
1,097
407
108
5,481
496
5,210
2,113
2,312
13,248
9,246
14,001
188
184
2,465
(continued)
Of which 9001:2000
Analysis of ISO
9000 standard
diffusion
533
Table IV.
ISO 9000 certificates
subdivided by industrial
sectors (since 1998)
30
31
32
33
34
35
36
37
38
39
Of which 9001:2000
2001
807
97
171
41
106
3,507
2000
1999
23
24
25
26
27
28
29
Table IV.
1998
30,280
1,840
20,356
7,195
7,777
15,089
21,270
1,932
4,544
5,807
3,111
6,914
966
1,503
584
874
51,093
2002
8,723
670
4,592
2,322
2,661
4,699
5,169
780
1,529
1,723
629
1,879
357
569
171
331
15,752
Of which 9001:2000
534
BIJ
13,4
The top five sectors in 2002 are construction (28), basic metal and fabricated metal
products (17), electrical and optical equipment (19), machinery and equipment (18), and
wholesale and retail trade; repairs of motor vehicles, motorcycles and personal and
household goods (29) (Figure 8).
This outcome reveals some particular aspects. The first position, held by the sector
construction (28), can be justified by considering a regulatory/legislation effect.
Many countries impose a ISO 9000 quality certification for participating to public-work
contracts. Certificates in this sector manifest a constant growth since 1998.
Till 2001 (except 2000) the first place was held by electrical and optical equipment
(19), currently holding third position.
The second position, held by the sector basic metal and fabricated metal products
(17), is due to the large influence of automotive industry, which is one of the most
involved in quality certification (QS-9000:1998, 1998; ISO/TS 16949:2002, 2002
standards are an evidence of this strong attention).
Looking at Table IV, a series of particular behaviors leaps out. In some cases, the
limited number of certificates is due to the small number of companies operating in a
specific sector (see, for example, nuclear fuel (11)); in other cases, sectors are still
immature towards the implementation of a quality system (see, for example,
agriculture, fishing (1)).
The common trend for most sectors is a regular growth over years till a saturation level
(maturity stage). However, some sectors reveal a reduction of the number of certificates in
the last years. This is a questionable aspect. Referring to sectors such as aerospace (21) and
shipbuilding (20) the causes can be found in the reduction of the number of companies
Analysis of ISO
9000 standard
diffusion
535
Number of certificates
50,000
40,000
30,000
20,000
10,000
0
1998
1999
2000
2001
2002
Year
Construction
Basic metal & fabricated metal products
Electrical and optical equipment
Machinery and equipment
Wholesale & retail trade; repairs of motor vehicles,motorcycles & personal& household goods
Figure 8.
Time evolution of the top
five sectors for number of
certificates in 2002
BIJ
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536
currently operating in these fields. In other cases, the causes must be ascribed to the
monopolistic conditions and to the low sensibility to the market competition (manufacture
of coke and refined petroleum products (10) and gas supply (26)).
Service sectors show a clear growth in the last two years (see, for example, financial
intermediation, real estate, rental (32), engineering services (34) and other services (35)).
On the other hand, after an initial booming period, the information technology (33)
sector is displaying a moment of stagnation.
5. ISO 9000 certification in developed countries and GNP
A comparison between economical and entrepreneurial structure of different countries
can help to better understand the ISO certificates regional share. A natural index for a
thorough analysis could be the ratio between ISO 9000 certificates and the total
number of potentially certifiable companies in each country (Franceschini et al.,
2004). Unfortunately this kind of information is not available for all the countries, as a
consequence of the different entrepreneurial classification.
Some authors tried to normalize the number of certificates for each country by
introducing the so-called ISO 9000 per capita index defined as the average number of
ISO 9000 certificates per inhabitant (Saraiva and Duarte, 2003). This approach can be,
at least, fairly hazardous. There is no direct correlation between the number of
companies in a country and the number of its inhabitant.
On the other hand, it is interesting to analyze the relationship between ISO 9000
certification and the economic development of a country. This can be done by
considering the number of certificates in a country and the corresponding gross national
product (GNP). A one-to-one comparison between the ISO 9000 ranking position and the
GNP is reported in Table V.
Eight of top ten countries for ISO 9000 certificates also appear in the first ten
positions in GNP ranking (i.e. China, Italy, UK, USA, Germany, Japan, Spain and
France). This shows a high correlation between the two sets of indicators.
To better understand the correlation between ISO 9000 certification and
socio-economic development of a country, the analysis has been enlarged to the human
development index (HDI) (see Table VI). HDI is a composite index that measures the
average achievements in a country in three basic dimensions of human development: a
Country
Table V.
Comparison between the
ISO 9000 ranking
position and the GPN for
the top ten countries in
2002
China
Italy
UK
USA
Germany
Japan
Spain
Australia
France
Republic of Korea
Certificates (2002)
(percentage of world total)
GNP (2002)
(billions US dollars)
GNP
ranking
13.49
10.90
10.85
6.93
6.37
6.05
5.11
4.83
3.54
2.58
1,234.157
1,100.713
1,510.771
10,207.039
1,876.340
4,323.919
596.469
384.075
1,362.077
473.050
6
7
4
1
3
2
10
14
5
13
long and healthy life, as measured by life expectancy at birth; knowledge, as measured by
the adult literacy rate and the combined gross enrolment ratio for primary, secondary and
tertiary schools; and a decent standard of living, as measured by GDP per capita in
purchasing power parity (PPP US dollars) (United Nations Development Program,
2004).
Considering HDI values in Table VI, Italy, UK, USA, Germany, Japan, Spain,
Australia, France, and Republic of Korea are considered high human development
countries. China is still classified as a medium human development country (United
Nations Development Program, 2004).
Analysis of ISO
9000 standard
diffusion
537
Country
China
Italy
UK
USA
Germany
Japan
Spain
Australia
France
Republic of Korea
N0 K
2 N0
N 0 K 2 N 0 e 2r0 t
HDI (2002)
13.49
10.90
10.85
6.93
6.37
6.05
5.11
4.83
3.54
2.58
0.745
0.920
0.936
0.939
0.925
0.938
0.922
0.946
0.932
0.888
94
21
12
8
19
9
20
3
16
28
Table VI.
Comparison between the
ISO 9000 ranking
position and the HDI for
the top ten countries in
2002
BIJ
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538
where the parameters have the following meaning: r0 is the population growth rate in
the absence of intra-specific competition; N0 is a constant to assure the initial condition
N 0 0;
N 1 K 2 N 0 is the certus-population saturation level, that is the total number
of companies that will be interested in the certification process.
Analyzing by this model the ISO 9000 top ten countries, a series of considerations
take rise. Consider, for example, the case of Germany, which has achieved the
saturation plateau (maturity stage see Figure 9). The prediction curve has been
derived by applying to the empirical data a first-order non-linear regression fit (Seber
and Wild, 1989). The estimated average asymptotic value N 1 is approximately
40,000 (about 8 percent of C.C.). These results show that the certificates growth has
come to the end.
It can be shown that this phenomenon is happening in many other countries, such
as, for example, United Kingdom (the first country to introduce the ISO certificates),
Australia, France, Republic of Korea, and USA, (see also Figures 1 and 2).
The modified-logistic-curve model can be applied to certus-populations only until
the plateau level is reached. After this point, other mechanisms drive the diffusion and a
more appropriate model should be individuated. At the moment many different scenarios
can be hypothesized for the evolution after the saturation plateau. Related mechanisms are
not clear yet (Figure 9). Some current behaviors let believe that a reverse mechanism is
taking place (see, for example, UKPPP and Germany curves in Figure 1).
Number of certificates
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
Figure 9.
Forecast of the German
ISO 9000 standard
certificates elaborated by a
modified-logistic-model
until 2012
0
1988
1993
1998
2003
Year
2008
2013
Note: The figure reports the empirical data (circles), the fit curve (thick line), and the
forecast confidence interval (95%) (dotted lines)
Source: Franceschini et al. (2004)
7. Conclusions
The paper presents a cross-section of the diffusion of ISO 9000 family certification in
the world. Many aspects which highlight the peculiarity of this framework have been
analyzed. Some main results are hereafter summarized.
By the analysis of the scientific literature a correlation among certification and
business performances is not univocally demonstrable. It is still a matter of discussion
if the increase of business is due to the management methodology prescribed by
quality standards, or if it is only a question of marketing (certification as a way for
distinguishing itself in a global market).
If we look at the evolution curve of the number of certificates over time in each country,
we can observe a kind of saturation effect. This means that after a certain period of
fast growth a physiologic break take places. This phenomenon can be explained by
interpreting the certification process as a distinction element. When the number of
certified organizations reaches a certain limit, certification loses its connotation and
becomes less attractive for the remaining companies.
This behavior has been analyzed by a diffusion forecasting model. The saturation
effect has been verified for those countries which are attaining the so-called maturity
level (i.e. the level in which no certification growth is registered).
The analysis of regional share certificates evolution evidences a sensible increase of
Far East countries.
On the other hand, referring to the new Vision 2000, the results do not seem to be so
exciting. Up to the end of 2002, the number of certificates issued for the revised
standard (ISO 9001:2000, 2000) seems too exiguous to give assurance of a complete
transition by the fixed term.
The analysis of ISO 9000 certificates share by industrial sector evidences a growth
for the most sectors; only a few of them show a negative trend in last two years.
A relationship between ISO 9000 certificates and socio-economic indicators of a
country (HDI, GNP) has been considered.
Looking at the obtained results, some questions come out about the future of
certification. Will the certification market go on? Will certified enterprises continue to
be interested to the certification process?
A possible future scenario will polarize the certification focus from the inside of
enterprises (internal quality systems) to the actual beneficiaries of their performances
(stakeholders). Some markets are already showing examples in this direction. Many
commodity associations are adopting their own quality standards. At this point, how
can international standardization authorities act for avoiding this new certification
Far-West?
References
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Australian organisations, Total Quality Management, Vol. 10 No. 1, pp. 95-106.
Brown, A. and van Der Wiele, T. (1996), A typology of approaches to ISO 9000 certification and
TQM, Australian Journal of Management, Vol. 21 No. 1, pp. 57-73.
Comite Francaise dAccreditation (2003), available at: www.cofrac.fr
Conti, T. (2000), Vision 2000: positioning the new ISO standards with respect to total quality
management models, Total Quality Management, Vol. 10 Nos 4/5, pp. 454-64.
Deutsche Bundesbank (2003), available at: www.bundesbank.de
Analysis of ISO
9000 standard
diffusion
539
BIJ
13,4
540
Parr, G.L. (1999), ISO 9000 drives TQM, Quality, Vol. 38 No. 7, pp. 23-35.
QS-9000:1998 (1998), Quality System Requirements QS-9000, ASQ, Milwaukee, WI.
Romano, P. and Vinelli, A. (2001), Quality management in a supply chain perspective. Strategic
and operative choices in a textile-apparel network, International Journal of Operations &
Production Management, Vol. 21, pp. 446-60.
Saraiva, P.M. and Duarte, B. (2003), ISO 9000: some statistical results for a worldwide
phenomenon, TQM & Business Excellence, Vol. 14 No. 10, pp. 1169-78.
Seber, G.A.F. and Wild, C.J. (1989), Nonlinear Regression, Wiley Series in Probability and
Mathematical Statistics, Wiley, New York, NY.
SINCERT (2003), Database query available at: www.sincert.it
Statistisches Bundesamt (2003), Steuerpflichtige und deren Lieferungen und Leistungen 1999
nach Wirtschaftsabschnitten und Rechtsformen, available at: www.destatis.de
Stevenson, T.H. and Barnes, F.C. (2002), What industrial markets need to know about ISO 9000
certification. A review, update, and integration with marketing, Industrial Marketing
Management, Vol. 31, pp. 695-703.
Sun, H. (1999), The patterns of implementing TQM versus ISO 9000 in the 1990s, International
Journal of Quality & Reliability Management, Vol. 16 No. 3, pp. 20-1.
Sun, H., LI, S., Ho, K., Gertsen, F., Hansen, P. and Frick, J. (2004), The trajectory of implementing
ISO 9000 standards versus total quality management in Western Europe, International
Journal of Quality & Reliability Management, Vol. 21 No. 2, pp. 131-53.
Terziovski, M., Power, D. and Sohal, A.S. (2003), The longitudinal effects of the ISO 9000
certification process on business performance, European Journal of Operational Research,
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UK National Statistics (2003), Size analysis of UK businesses, available at: www.statistics.gov.uk
United Kingdom Accreditation Service (2003), available at: www.ukas.com
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Further reading
Stevenson, T.H. and Barnes, F.C. (2001), Fourteen years of ISO 9000: impact criticisms, costs and
benefits, Business Horizons, Vol. 44 No. 3, pp. 45-51.
Corresponding author
F. Franceschini can be contacted at: fiorenzo.franceschini@polito.it
Analysis of ISO
9000 standard
diffusion
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Benchmarking: An International
Journal
Vol. 13 No. 4, 2006
pp. 542-544
q Emerald Group Publishing Limited
1463-5771
Book review
Benchmarking: A Guide for Educators
Sue Tucker
Corwin Press
Thousand Oaks, CA
1996
pp. 104
Paperback: $18.95
ISBN: 080396367X
Keywords Benchmarking, Education, Measurement
Review DOI 10.1108/14635770610676335
While the quality of education in the US higher education system undoubtedly leads
the world, the education in K through 12 grades admittedly demonstrated relative
weakness in quality compared to many Asian and European nations. As a result, the
issues of quality, quality standards, the measurement of quality and performance in
the public education system have been a matter of concern in the socio-political arena
of the nation. The governmental responses to these issues in the form of subjecting
institutions to a defined national standard (for measuring student competencies and
performances at various grade levels for funding purposes) have been controversial
and often led to partisan political rhetoric. Public schools and school districts in the
nation under pressures of compliance have begun to embrace the business model of
continuous improvement through benchmarking performance toward achieving world
class standards.
However, as the culture of continuous improvement and the adoption of best
practices through benchmarking are more readily accepted in the business community
for competitive advantage, the public school system with their elective governance
bodies and entrenched bureaucratic system find it quite difficult to change the
traditional culture. Sue Tucker of the NETWORK, Inc. a consultant for the public
education system for many years wrote this guidebook in nine sequential chapters as a
step by step manual for the educators who have been contemplating restructuring
and reform. The approach described in the book conforms to peer benchmarking
or competitive benchmarking methodology. The intended readers are primarily
the educators in the public institutions, an individual school or the school district in the
nation. In authors own words, This book provides step-by-step actions that
improvement teams can take . . . (p. x). Each chapter of the book contains a purpose
statement, limited background information on the step, a simple and illustrative
exercise aimed at empirical understanding of the step.
In the first chapter (ten pages), the book provides an introduction of terms, concepts,
benefits of benchmarking, and the existing methodologies of benchmarking drawing
from the successes in the business world. The level of explanation in this chapter is
generic and rudimentary with a focus on simple and empirical understanding of the
concepts by an ordinary individual. In Chapter 2, under a catchy question or phrase,
Should your school begin benchmarking, the author in seven pages discusses the
Book review
543
BIJ
13,4
544
methodology should address were listed. One wonders how the educators would
operationalize these questions and develop reliable and valid instruments. They would
definitely need and seek assistance of the consultants or professionals in the absence of
in-house expertise of the proposed team. There is also no discussion about the
composition of the benchmarking team or discussion of cases of success in locating a
peer institution. The reader may also become puzzled in handling the action
imperatives of Chapter 7 of the book. The author only affirms the need for analyzing
the findings and confirming and articulating performance gaps. But how would these
activities be accomplished? In an intuitive exercise of performance gap, the author
asked the readers to use the performance measurement technique developed in Chapter
4. But in Chapter 4, the author asks the reader to develop a process chart of existing
operation and analyzing the root causes of problems in the existing processes; but how
should the reader do these activities? In exercise 4.1: establishing performance
measures, the author implies gathering of subjective and global opinions to be listed on
a flip chart implying a sort of brainstorming exercise. Without quantifiable
outcomes, attempting a comparative analysis toward establishing the performance gap
is good for intuitive exercise and probably best for conceptual understanding but not
practical and useful in quantitative analyses of any benchmarking study. In the
absence of a discussion pertaining to a robust methodological model and empirical
exercises, this guide may be treated as an orientation workshop rather than actual
guide of benchmarking for best practices.
M. Ruhul Amin
Department Chairperson and Co-Coordinator of MBA Program,
Bloomsburg University, USA