Much-in-Demand Excellent
Business Ventures Now Rely on
Total Quality Management
by Marlon Gunasekera
Senior Lecturer
Department of Business Administration, University of Sri Jayewardenepura.
(Sunday observer 28th of December 2003)
The unbiased, impartial,
balanced and objective stance
taken by the 'Daily News"
Business Sections of November
25 and 27 (last month) as
evidenced by its 'Business and
Finance' news and comments
is, indeed, an encouragement
to medium and small-scale
industrialists who foresee
Budget 2004's Economic
Service Charge as a burden on
them and bound to have a
negative impact on their future
production plans, While stating
that the business community
has commended the Budget as
growth-oriented and forward-
looking, "in the end", states its
fortright Business editorial
comment, (Nov.25), "the
success of the Budget will be
measured by how it affects the
man on the street" and quite
rightly so, because whether it is
the imposition of unified Value-
added Tax or an Economic
Service charge on the business
sector, the adverse after-effects
will be most felt by the
consumer, to whom the shrewd
businessmen will undoubtedly
pass on part of the tax burden
in some disguise or another.
There has been regular public
concern in the past that whether
it be the large, medium or small
industrial manufacturer, the
majority of these three
categories are committed to
mass-scale production, least
concerned about the "Quality"
of such products and services
and the adoption of Quality
Management Measures to
ensure at least minimal
international standards.
It is in this context that business
leaders have, for long, been
seeking the “magic formula” for
success in both global and local
markets, without paying
adequate attention to the
above-stated quality factors.
Over the past two decades, the
Quality crisis in many countries
in the world and the apparent
decline in international
competitiveness of many
reputed firms, have become
burning topics in vogue, rather,
the 'Economic Talk of the
Town'. Today, quality is not only
central to profitability, but crucial
to business survival. Quality
was initially seen as an
unacceptable expense and the
search for increased profits
tended to take the form of
reduced costs rather than
raising quality. The business
community throughout the
world, especially during this
past decade, has seriously
focussed on the real meaning of
"Quality" for their products and
has made a clarion call for
drastic attitudinal changes to
improve the Quality of their
goods and services.
It has to be established that
quality does not necessarily
mean exellence in the sense of
a 'Rolls-Royce Product'. Quality
basically refers to fitness for
purpose. According to Philip
Kotler, it is 'the totality of
features and chracteristics of a
product (good or service) that
bears on its ability to satisfy the
stated and implied needs of its
target customers. In this
respect, Quality reflects the
degree to which goods or
services meet the demands
and requirements of the
customers. However, Quality is
a relative concept, the definition
of which differs in terms
customers as well as producers
point of view based on the type
of organization and the nature
of the product involved. As an
example, for an Appliance
Manufacturer, Quality could,
perhaps, mean that a
substantial percentage of the
Appliances so produced, meet
predetermined specifications.
In the case of an Appliance
Repairs enterprise, Quality
might mean that the given
products are repaired
faultlessly and within the stated
cost and deadline. Likewise, to
a Food Service firm, Quality
applies to both the edible food
itself (taste, freshness etc.) and
the table service (time
consumed in serving, the ever
so friendly courtesy of service
staff, pleasant environment
within the dining room and
allied hospitable gestures etc.).
Traditional and Modern
Approaches to Quality
The Traditional Approach to
Quality relates more to the
extent to which the goods and
services are produced in
conformity with the exact
specifications laid down,
technically known as Quality of
Comformance. Under this
traditional thinking, Quality is
treated as secondary to Profit
motivation, thereby perceiving
that enhancement in Quality
essentially increased costs and
reduced profits. The key role
assigned to Quality staff is to
minimise Quality defects to a
bare minimum. This approach
generally adopted a reactive
stance and most of the time,
managers believed that Quality
problems should be identified
and remedied. Managers who
operate under this Quality
paradigm are of the view that
most Quality problems arise as
a result of poor workmanship
and tended to pass the blame
on to the employees as regards
Inferior Quality.
The Modern Approach to
Quality relates more to the
extent to which goods and
services are produced,
according to the specific
requirements of the
users/customers, technically
referred to as Quality of Design.
Under this modern approach,
Quality is treated as the primary
objective to ensure profits
through customer satisfaction.
This approach perceives that
enhancement in Quality leads
to increase in Productivity and a
concomitant decrease in costs.
Quality is treated as a
competitive and strategic tool to
build up markets. Any
expenditure on Quality is
treated as a future investment
and more preventive measures
are initiated to avoid
unneccessary Quality defects
at all stages of the Production
Process. Managers who
operate under this Quality
paradigm treat Quality as an
organisational-wide
phenomenon which, in effect, is
the responsibility of all
members in the organisation.
Under this approach, the
managers try to introduce
innovative Quality Management
Systems and Practices for
continuous improvement in
Quality.
Total Quality Management
(TQM)
Total Quality Management
(TQM) is a modern approach
to Quality which endeavours to
create a customer-centered
culture which specifically
defines Quality for the
Organization as a whole. It
lays the foundation for all the
activities it plans to carry out quality in Japan. While
within a preconceived Japanese companies
framework towards attaining embraced Quality in production
Quality-related goals. TQM is and services, U.S. firms were
not merely a technique, but a more interested in Quality
philosophy based on the belief Control, an end-of-the-line
that any long run success evaluation orientation.
ultimately depends on a
uniform commitment to Quality During the 1950s and 1960s,
in all sectors of the Quality champions such as
organization. The essence of Joseph M. Juran and W.
TQM is that the responsibility Edward Deming, shunned by
for Quality lies with all American business leaders,
members in the organisation. spent considerable time in
It essentially commits the Japan. Many of their ideas,
organisation and its members such as building Quality into
towards continuous review production processes and
and improvement of all using line-workers to solve
activities relating to the Quality process-based problems
of input, process and output through the use of Applied
with the prime objective of Statistics enjoyed an
satisfying its customer's or overwhelming reception. U.S.
client's requirements. companies largely ignored
Juran’s and Deming’s concepts
The concept of TQM rests during that period of time,
largely on five principles: relying instead on quality-
Quality work - the first time, control departments as the
Focus on the customer, primary means of ensuring
Strategically holistic approach Quality. Under this quality-
to improvement, Continuous control approach, one
improvement as a way of life, department within an
and Mutual respect through organization inspected products
team work. TQM is an for Quality, while other inter-
outgrowth of an emerging related departments conducted
American perspective on their business as usual. This
Quality that can be traced to was the only form of quality
changes which occured in assessment that most
Japanese Management American managers felt their
practices immediately companies needed most to
following World War II. achieve quality objectives.
The Evolution of the TQM The Quality improvement
Concept systems of the 1970s were not
customer-oriented,
During World War II, many U.S. emphasizing only the
industries made a concerted manufacturing processes and
effort to minimize waste and embracing such techniques as
improve productivity for the war zero defects, or error-free
effort, changes that resulted in production, a manufacturing
a strengthening of the economy process consisting of
immediately after the war. maintaining machinery and
When Japan began its own equipment, quality inspection
post-war rebuilding process, checks, and well-trained
many of its companies had employees. Managers believed
been all but destroyed, and that Quality was more effective,
they were therefore forced to if their firm’s products were
adopt even more stringent suitable for shipment to
Productivity and Quality customers, even if the products
measures in a bid to be among did not meet the customers’
the survival of the fittest. This specific requirements. They
marked the beginning of a measured Quality by examining
newfound commitment to the costs absorbed by the
factory when it built defective companies applying TQM
products. However, these began to design both products
inwardly-focused Quality and the processes that produce
Management systems had and deliver them to meet
drawbacks of their own. While specific standards. They
they represented a greater concentrated and further focus
commitment to Quality by top their attention on the customer
Management, participation by through better product
non-management employees guarantees. Furthermore, they
was quite limited. Managers purposefully lent their ears to
were unwilling to relinquish consumers’ needs and wants
much of their authority in the and to deliver goods or services
pursuit of quality, and quality that fulfilled such requirements.
was still an end-of-the-line The definition of “customer”
measure. was even encompassed to
include any person within
By the 1980s, the Japanese (internal customer) or outside
concept of Quality had changed (external customer) the
for the better. Many customers Company to whom an
commenced purchasing employee passed on his or her
products manufactured in work.
Japan, because they perceived
Japanese products to have Total Quality and the
higher standards. Customer
Consequently, Quality became
more critical as American In developing TQM or any other
managers sought ways and Quality programme, it is
means to involve quality imperative that Companies
considerations in wider areas of understood how consumers
the Company to become more define Quality in both goods
competitive with Japanese and services offered. If the
companies. This perspective Company pays more attention
required all functional areas of to Quality in the Production
the organization responsible for Process, there will be fewer
providing goods and services to problems later on, when the
internal and external customers product is in the customer's
to be more concerned with hands. Besides, customers
Quality. Hence, the include not only those who
responsibility for Quality was purchase the final product
not merely confined to (external customers), but also
Production and Quality control suppliers and other employees
departments, but instead it within the Company (internal
became a concerted customers). One way to
responsibility of all the measure Product Performance
members in the organization and Quality is through
from Chief Executive to the Customer Surveys, which
shop floor worker. enabled managers to identify
Subsequently, the responsibility design or manufacturing
for Quality was also extended defects and deficiencies.
to all the internal and external
stakeholders including the According to Quality Consultant
suppliers, employees, Armand V. Feigenbaum, Quality
customers, competitors, is best defined by the end user.
government and the general Hence, the Concept of Quality
public etc. This new emphasis needs to be expanded so as to
on Quality Management include not only "objective"
provided the base for the measures of the goods or
development of a TQM culture services, but also the
within an organization. "subjective" interpretations of
buyers. Customer perceptions
Although changing the have to be reviewed, if a
workplace was not easy, Company desires to upgrade a
product's quality image. This
has often been accomplished
through extended service
programmes and improved
warranties. For example,
Whirlpool Corporation has
promised that parts for all their
models would be available for
15 years from the date of
purchase, while Mercedes-Benz
provides technical roadside
assistance after dealer service
hours, which is a renewed
customer-client relationship.
In the pursuit of customer-
based quality enhancement,
many companies have
developed customer-driven
quality programmes. Caterpillar,
for example, conducts two
customer surveys after the
purchase of a product, one after
300 hours of usage and the
other after 500 hours of usage.
By developing customer service
programs, companies can build
long-term business through
increased customer loyalty.
Hence, more techniques
leading to relationship
marketing has to be employed
by organisations to ensure
continuous improvement in
quality.
Toyota has integrated total
customer satisfaction into all of
its processes. The prime goal
and focus of its marketing
strategy are to satisfy
customers' needs and
expectations and to maintain
them with their constant
feedback. Toyota began with a
commitment from top
management, realizing that all
and sundry in the Company
must have the same goal of
customer satisfaction. The
company's "The Toyota Touch"
is a commitment towards
excellence, concern for superior
quality and caring for
customers. "Through this plan,
Toyota could ensure that the
customer is first and that the
Quality of its customer service
matches those of its products.
One means of ensuring a
commitment to "After Sales"
Quality is the Product or Service
guarantee. Wal-Mart is known
for its "no-hassles" return policy
for any product - with or without
a receipt. Mail-order house, LL
Bean, has replaced a pair of
hunting boots purchased ten
years earlier with a pair of new
boots. Saturn automobile
retailers provide total refunds
for vehicles within 30 days, if
the customer is not fully
satisfied. One of Saturn's
commercials features a additional labour are, more
representative travelling all the
way to Alaska to replace a
defective seat in a customer's
vehicle. However, many
Companies are conscientiously
reluctant to incur the short-run
costs associated with such
guarantees.
Obstacles to effectively
adopting TQM
To be viably effective, the TQM
philosophy must begin at the
top. From the board of directors
to the hourly line employees.
TQM must be supported at all
levels if the firm is to realize
continuous improvements in
quality. Specifically, if top
management does not fully
support it, other employees may
see TQM as mere symbolism
and not substance, and hence
would be misintepretted as
inclined to be supportive.
With the increased availability
of international goods and
services, Consumers have
more choices than ever before.
Such global pressures are
forcing more companies to
incorporate TQM into their
business strategies. Moreover,
those companies using TQM
successfully are realizing a
decrease in long-run costs by
building a more satisfied
customer base. However, since
short-term costs for new
equipment, materials, and
often than not, required to
implement TQM processes,
many companies are hesitant to
adopt TQM.
Constraints in time is another
deterrent to the adoption of
TQM. Many companies are
generally reluctant to prolong
period typically required to gain
initial benefits from TQM.
However, some payoffs can be
realized in arround a month's
time. For example, improved
customer service through
surveys and improved
employee relations with
management are two areas
where beneficial results could
be derived from the outset. The
example of a bamboo tree may
be cited to exaplain this time
constraint. A bamboo tree
initially takes a prolonged period
to get firmly rooted to the soil,
but once the shoots spring
fourth, it takes next to no time to
display its strenght of growth.
Likewise, to plant a TQM
philosophy within an
organisation needs
considerable commitment and a
period of time. If it had been
planted with the purpose in
view, then its lasting benefits
will be on hand, with hardly any
time lost.
TQM needs a complete
paradigm shift to created a
customer driven quality culture
and consiousness throughout
the organisation. The internal
relationships between
departments and work units
should be seen as supplier-
customer relatioships. A firm
commitment to quality and
personal involvement by the top
managment is a key element to
create a total quality culture
within an organisation. Training
and education should be carried
out to effect the necessary
changes in the knowledge,
attitudes and skills of the
employees.
A lack of visionary leadership is
another essential feature which
prevent the practice of TQM
philosophy in many
organisations. A performance
driven reward system along with
effective communicational
channels should be introduced
and maintained to influence and
inspire the behaviour of the
employees at levels to be more
committed to quality.