Professional Documents
Culture Documents
Aireen Y. Clores,
M.B.A
Visayas State
University
TOTAL QUALITY
SERVICE
MANAGEMENT
2007
VISAYAS STATE UNIVERSITY
Preface
In the last few decades, business competitiveness has become an area of
increasing interest as a consequence of economic globalization, increasing
economic integration and market liberalization. A review of theoretical
models of business competitiveness reveals the significance of two kinds of
factors in regard to this area — internal factors pertaining to the actual firm
and external factors related to the structure of the industry in which the firm
operates, as well as the economy of the country as a whole. These models
Quality of service has been one the most widely investigated factors among
those strictly related to business. In this context, business competitiveness is
positively related to matching the characteristics of the service to the ideal
preferences of clients, i.e. their level of satisfaction. This fact reveals the key
role of service quality on the improvement of business competitiveness, and
how this has an effect not only outside the actual firm, but also on the
variables within it. The most relevant research on this issue deals with the
theoretical study of the relationships that exist between quality and business
competitiveness or with partial empirical relationships between variables.
Nevertheless there is little empirical evidence to verify the complex
relationships between quality and economic measures.
W hile Total Quality Management has proven to be an effective process for improving
organizational functioning, its value can only be assured through a comprehensive and well
thought out implementation process. The purpose of this chapter is to outline key aspects of
implementation of large-scale organizational change which may enable a practitioner to more
thoughtfully and successfully implement TQM. First, the context will be set. TQM is, in fact, a
large-scale systems change, and guiding principles and considerations regarding this scale of
change will be presented. Without attention to contextual factors, well intended changes may
not be adequately designed. As another aspect of context, the expectations and perceptions of
employees (workers and managers) will be assessed, so that the implementation plan can
address them. Specifically, sources of resistance to change and ways of dealing with them will
be discussed. This is important to allow a change agent to anticipate resistances and design for
them, so that the process does not bog down or stall. Next, a model of implementation will be
presented, including a discussion of key principles. Visionary leadership will be offered as an
overriding perspective for someone instituting TQM. In recent years the literature on change
management and leadership has grown steadily, and applications based on research findings
will be more likely to succeed. Use of tested principles will also enable the change agent to
avoid reinventing the proverbial wheel. Implementation principles will be followed by a review of
steps in managing the transition to the new system and ways of helping institutionalize the
process as part of the organization's culture. This section, too, will be informed by current
writing in transition management and institutionalization of change. Finally, some miscellaneous
do's and don’ts will be offered.
M embers of any organization have stories to tell of the introduction of new programs,
techniques, systems, or even, in current terminology, paradigms. Usually the employee, who
can be anywhere from the line worker to the executive level, describes such an incident with a
combination of cynicism and disappointment: some manager went to a conference or in some
other way got a "great idea" (or did it based on threat or desperation such as an urgent need to
cut costs) and came back to work to enthusiastically present it, usually mandating its
implementation. The "program" probably raised people's expectations that this time things would
improve, that management would listen to their ideas. Such a program usually is introduced with
fanfare, plans are made, and things slowly return to normal. The manager blames unresponsive
employees, line workers blame executives interested only in looking good, and all complain
about the resistant middle managers. Unfortunately, the program itself is usually seen as
worthless: "we tried team building (or organization development or quality circles or what have
you) and it didn't work; neither will TQM". Planned change processes often work, if
conceptualized and implemented properly; but, unfortunately, every organization is different,
and the processes are often adopted "off the shelf" "the 'appliance model of organizational
change': buy a complete program, like a 'quality circle package,' from a dealer, plug it in, and
hope that it runs by itself" (Kanter, 1983, 249). Alternatively, especially in the underfunded
public and not for-profit sectors, partial applications are tried, and in spite of management and
employee commitments do not bear fruit. This chapter will focus on ways of preventing some of
these disappointments.
In summary, the purpose here is to review principles of effective planned change
implementation and suggest specific TQM applications. Several assumptions are proposed:
P A R T
7 Total Quality Service Management
I
INTRODUCTION
TO TOTAL
QUALITY
QUALITY
It is never and accident: it is always the result of high retention, sincere effort,
intelligent direction, and skillful execution; it presents the wise choice of many
alternatives, the cumulative experience of many alternatives, the cumulative
experience of many masters of craftsmanship. Quality also marks the search for an
ideal after necessity has been satisfied and mere usefulness achieved.
Wilma A. Foster
In this chapter we will introduce you to the basic principles of total quality.
Specifically, we will:
• Provide reasons why attention to quality should be a part of every
organization’s culture and management systems;
• Provide a brief history of the “quality revolution”;
• Provide an overview of the key principles of total quality;
• Compare and contrast quality – focused management with traditional
management practices, and;
• Discuss relationships of total quality with organizational models in
management theory.
Some of the companies who have implemented TQM include Ford Motor Company,
Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.1
TQM Defined
This shows that TQM must be practiced in all activities, by all personnel, in
Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.2
Total Quality Management differs from other management styles in that it is more
concerned with quality during production than it is with the quality of the result of
production. Other management styles have different concerns. Some major styles are
compared with TQM as follows.
Total Quality Management is very different from these and other management systems. It
recognizes that quality as determined by the service provider might be much different from
quality as perceived by the service receiver. If the customer is not satisfied with a service,
then the service does not have quality and the processes that produced the service have
failed.
Principles of TQM
The key principles of TQM are as following:3
11 Total Quality Service Management
• Management Commitment
1. Plan (drive, direct)
2. Do (deploy, support, participate)
3. Check (review)
4. Act (recognize, communicate, revise)
• Employee Empowerment
1. Training
2. Suggestion scheme
3. Measurement and recognition
4. Excellence teams
• Fact Based Decision Making
1. SPC (statistical process control)
2. DOE, FMEA
3. The 7 statistical tools
4. TOPS (FORD 8D - Team Oriented Problem Solving)
• Continuous Improvement
1. Systematic measurement and focus on CONQ
2. Excellence teams
3. Cross-functional process management
4. Attain, maintain, improve standards
• Customer Focus
1. Supplier partnership
2. Service relationship with internal customers
3. Never compromise quality
4. Customer driven standards
History of TQM
Total Quality Management was developed in the mid 1940s by Dr. W. Edward Deming who
at the time was an advisor in sampling at the Bureau of Census and later became a
professor of statistics at the New York University Graduate School of Business
Administration. He had little success convincing American businesses to adopt TQM but his
management methods did gain success in Japan.
After World War II, General MacArthur took 200 scientists and specialists, including Dr.
Deming, to Japan to help rebuild the country. While working on the Japanese census, Dr.
Deming was invited by the Japanese Union of Scientists and Engineers to give lectures on
his statistical quality techniques. One of the attendees was a past professor to many of
Japan’s CEOs. After attending the lectures, the professor told his CEO students that, if they
wanted to turn Japan’s economy around in five years, they should attend Dr. Deming’s
lectures on using statistics to achieve quality at a reduced cost. Many of the CEOs took the
professor’s advice and attended the lectures. Eventually, many Japanese manufacturing
companies adopted Dr. Deming’s theories and were able to produce quality products at
reduced costs.
While the Japanese business world was concentrating on producing quality products,
businesses in the United States were more concerned with producing large quantities of
products. Their emphasis on quantity at the expense of quality let the Japanese, with their
inexpensive, high quality products; gain a substantial foothold in American markets.
In the 1970s and 1980s, many American companies, including Ford, IBM, and Xerox, began
adopting Dr Deming’s principles of Total Quality Management. This gradually led to their
regaining some of the markets previously lost to the Japanese. Although Total Quality
Management gained its prominence in the private sector, in recent years it has been
adopted by some public organizations.
So far, this chapter has defined Total Quality Management, explored its origin, and
explained how it emphasizes quality during production. Since quality is so important to any
discussion of TQM, the next section explores this key element in detail.
FREDERICK TAYLOR
KURT LEWIN
• Provided us with an understanding of how to make large scale
organizational change.
Douglas McGregor
• Has tremendous impact on what later became Total Quality Management.
• Detailed the Theories of Management (Theory X and Theory Y). Theory X
states that employees will not work if left to their own devices; employees
are inherently bad and must be forced and coerced into work. Theory Y
states that employees find work as natural as play and will work diligently
to the firm’s aims if assumptions follow later.
Fred Emery
• Australian disciple of Lewin and Eric Trist.
• Apply open systems thinking to social change, pointed out that optimal
results could be achieved only when social systems, which obey the laws of
biology, psychology, and sociology are designed integrative with technical
systems following the laws of physics, chemistry and engineering.
• The social technical approach required that those who do not work get a
great deal more authority, control, skills and information than is customary
under scientific management.
JOSEPH M. JURAN
• Introduces the managerial dimension of planning, organizing and
controlling and focused on the responsibility of management to
achieve quality and the need for setting goals.
• Defines quality as fitness for use in terms of design, conformance,
availability, safety and field use.
• Promotes concepts known as Managing Business Process Quality – a
technique for executing cross functional quality improvements.
PHILIP CROSBY
• Author of the popular book Quality is Free.
• Argues that poor quality in the average firm costs about 20% of revenues;
most of which could be avoided by adopting good quality practices.
Definition of quality:
1. Perfection
2. Consistency
3. Eliminating waste
4. Speed of delivery
5. Compliance with policies and procedures
6. Providing a good, usable product
7. Doing it right the first time
8. Delighting or pleasing customers
9. Total customer service and satisfaction
Today most managers agree that the main reason to pursue quality is to satisfy
customers. The American National Standards Institute (ANSI) and the American
Society for Quality (ASQ) define quality as “the totality of features and
characteristics of a product or service that bears on its ability to satisfy
the given needs.”
Quality in Manufacturing
Quality dimensions:
Manufactured products have several quality dimensions including the
following:
Quality in Services:
Airline Pricing
Food & Cleanliness of
Beverage Transportation Airport facilities aircraft
Service & flight Safety in-flight
Ticket entertainment service
Baggage
Handling
Table 1.3 COMPONENTS OF SERVICE: Some Industry Example:
DIMENSIONS OF SERVICE:
The important dimensions of service quality include the following:
Advantages of TQM
Long-term benefits that may be expected from Total Quality Management are higher
productivity, increased morale, reduced costs, and greater customer commitment.
These benefits may lead to greater public support and improvement of an
organization’s public image.
Total Quality Management may be a "profit generator," even for public organizations.
It does not actually create profit for the organizations, but if implemented properly, it
may identify costly processes and cost-saving measures. Once fully implemented,
the only expense of TQM is the cost of routine operations. In public organizations,
saved resources may be viewed as "profits."
Total Quality Management does have some detractors who have pointed out some of the
disadvantages of TQM.
Disadvantages of TQM
Long-range plans advocated by TQM may limit an organization’s flexibility and
agility.
TQM teaches that a long-term plan is required to achieve a complete quality
transformation, but a long-term plan that has been pursued for a long period
may become an end unto itself. Completion of the plan becomes the ultimate
goal. Objectives the plan was designed to accomplish are forgotten; achieving
the transformation becomes the most important objective. Instead of
maintaining continuous change, the organization may reach a stable point
and stagnate. To produce continuously high quality services, an organization
must react quickly to changes in the community and not be restricted by its
management style.
TQM detractors also argue that although Total Quality Management calls for
organizational change, it does not demand radical organizational reform.
Real quality improvement requires radical structural change, such as
flattening organizational structures. It requires liberation of employees from
stifling control systems and the tyranny of functionalism, both of which stifle
teamwork.
Total Quality Management calls for the elimination of the goals and objectives
required by Management-by-Objectives.
Critics of TQM claim that this may negatively affect motivation. They claim
that having established production goals gives employees increasingly higher
goals to reach, which motivates them to find new ways to reach the goals.
When there are no established production goals, some employees will only
produce the minimum required to keep their job.
Some argue that the claims of success by TQM supporters are not supported by facts but by
anecdotes and stories. They argue that TQM proponents tell heart-warming stories about
how teamwork makes everyone happy, but that they cannot back up their claims with hard
data.
Critics maintain that TQM focuses manager attention on internal processes rather than on
external results. When this is taken to an extreme, managers may become too preoccupied
with internal issues, such as the documentation required by TQM methods, and ignore the
shifting perceptions of customers. Managers become so concerned with the process of TQM
that they neglect the needs of the customer, which was the initial reason for implementing
TQM.
Total Quality Management calls for its implementation to be immediate and complete. Some
contend it does not make sense to try to create quality improvement in the entire
organization from the very beginning. They argue that all processes are not equally good or
bad, all departments do not function equally well, and all services do not measure up to the
same quality standard. Because of this, they contend that quality should be introduced
incrementally and only in the specific areas that need it most.
Some critics claim Total Quality Management’s focus on setting and maintaining standards
makes work life unexciting and boring. When employees are bored, their poor attitudes may
cause customer dissatisfaction with the quality of service received from them. In addition,
when too much emphasis is placed on standardization it precludes the constant internal
changes needed to keep up with external changes.
Total Quality Management develops its own bureaucracy. TQM detractors contend its
statistical burden and committee structure is cumbersome, slows organizational momentum,
and consumes too much time and resources.
Opponents of Total Quality Management maintain that it appeals to egotism. After receiving
some TQM training, some employees consider themselves TQM "experts" who have the
answers to everyone else’s problems. They claim their department is doing everything right
according to TQM principles and find fault with every other department. Some managers,
instead of viewing achievement as a joint effort where every participant deserves praise,
apply for awards for self-gratification or to benefit the organization’s public relations image.
Some detractors posit that TQM is an emotionally cold way to manage people. Its analytical,
detached programs are often devoid of human emotion that inspires attachment to the
organization and its customers.
Total Quality Management calls for a cultural transformation. Some argue it creates a
process-crazed organization, similar to a cult, where the impression is that only total
commitment to TQM can save the organization from ruin. Just as in a cult, all the decisions
23 Total Quality Service Management
in TQM are related to the "vision." No one wants to claim individual credit for success;
instead, success is attributed to the TQM philosophy. Results become less important than
performing the proper TQM techniques. Just as in a cult, periodic evangelism by TQM
experts is used to maintain a missionary zeal for TQM. If an employee is not a TQM believer,
he or she considered an outcast who does not care about the organization’s success. Even
with its problems, Total Quality Management may still be the best choice as a successor to
the militaristic, authoritative management style.
Pauline Knowlton has worked for Matt Pantusa for nearly three months. Pauline
really likes Matt because he practices what he preaches and is a good supervisor.
But sometimes Matt can be a little overbearing, especially now that he is really sold
on Total Quality Management.
For example, Matt is the publicity person for the local Computer Enthusiasts
Club. He sends out 5,000 copies of a brochure each month that advertises the next
month’s meeting of the Club. Pauline usually is the one to make sure the flyers are
copied, folded, addressed, and mailed on time. The advertisement that Pauline
mailed a few weeks ago announced last week’s monthly meeting on quality
productivity tools for computers.
When Matt went into the office the morning after the meeting, he called
Pauline into his office. He told Pauline that over 600 people had attended the
meeting – a record crowd. Pauline congratulated Matt for such a successful
meeting. She was pleased that had had a part in making the meeting a success.
But Matt didn’t seem pleased as he gave her two copies of the flyer that had been
given to him by his friends who received his mailing. One flyer was folded a little
crooked and the other has a mailing label that was affixed at the slightly downward
angle. Matt asked her to be more careful with these details as she did future
mailings.
Pauline like her work and wants to please Matt. She thinks, however, that
he’s gone a little bit overboard with this TQM. Does anyone really care if a flyer is
perfectly folded or a label is a little askew? And having time to think about their
conversation, Pauline can’t understand why Matt is making such a big deal about
the mailing. After all, more people showed up at the monthly meeting than had
ever been there before.
DISCUSSION QUESTIONS
1. Summarize the service failures associated with this experience.
2. What might the travel agency have done to guarantee a better service
experience for Mr. Harrington? How do your suggestions relate to the TQ
principles?
Case 1.3
A Tale of Two Restaurants
Kelly’s Seafood Restaurant was founded about 15 years ago by Tim Kelley, who
has run it from the start. The restaurant is very profitable because of its excellent
food quality, but lately has been having problems with consistency because of
numerous suppliers. The restaurant operations are divided into front-end (servers)
and back-end (kitchen). The kitchen has notes to boost employee morale,
employees are cross-trained in all areas, and the kitchen staff continually seeks
improvements in cooking. Servers, however, have minimal wages and few perks,
and turnover is a bit of a problem. Tim’s primary criterion for selecting servers is
their ability to show up on time. There is little communication between and front-
end and back-end operations, other than fulfilling orders. Tim makes sure that any
complaints are referred to him immediately by the servers.
The restaurant has no automation, as Tim believes that it would get in the way of
customers’ special requests. “this is the way we’ve done it for past 15 years and
how we will continue to do it,’’ was his response to a suggestion of using a
computerized system to speed up orders and eliminate delays. Tim used to hold
staff meetings regularly, but recently they have dropped from each week to one
every five or six months. Most of the time is spent focusing on negative behavior,
and Tim has often said “You can’t find good people anymore.’’
Jim’s Steakhouse is a family-owned restaurant in the same state. Jim uses only
the freshest meats and ingredients from the best suppliers and gives extra large
portions of food to customers, who feel they are getting their money’s worth. Jim
pays his cooks high wages to attract quality employees. Servers get 70 percent of
tips, bussers 20 percent, and the kitchen staff 10 percent to foster team work. Many
new hires come from referrals from current employees. Jim interviews all potential
employees and ask them many pointed questions relating to courtesy,
DISCUSSION QUESTIONS
1. Contrast these two restaurants from the perspective of TQ. What conclusions can
you make and what advice would you give to the owners?
2. What type of management model (mechanistic, organismic, or cultural) do you
think each organization represents?
CHAPTER 2
APPROACHES TO TOTAL QUALITY
TOTAL QUALITY PARADIGMS
Adopting a TQ philosophy requires significant changes in organization design,
work processes, and culture. Organizations use a variety of approaches.
Experimentation occurs to verify the anomaly and seek out new relationships
and causes. People who explore anomalies may be considered outcasts by those
who staunchly support the existing paradigm. Columbus was considered a "strange
and touched" sailor by many who were sure they would never see him or his ships
again. Paradigm shifts occur when the anomaly is perceived to be a violation of the
natural laws.
Improved quality
Costs decrease
because of less
rework, fewer
mistakes, fewer delays
and snags, and better
Productivity Improves
Stay in business
Systems
• A set of functions or activities within an organization that work together to
achieve organizational goals. For example, a McDonald’s restaurant can be
viewed as a system. It consists of the order-taker/cashier subsystem, grill and
food preparation subsystem, drive-through subsystem, and so on.
• Factors within a system that affect the individual performance of an
employee;
Training received
Information and resources provided
Leadership of supervisors and managers
Disruptions on the job
Management policies and practices
Variation
• It is the difference in the reproducibility of a particular action. It is the
difference between a particular action and the target outcome.
• Variation increases the cost of doing business
Theory of Knowledge
• It is a branch of philosophy concerned with the nature and scope of
knowledge, its pre-suppositions and bases, and the general reliability of
claims to knowledge.
• Theory establishes a cause-and-effect relationship that can be used for
prediction. Theory leads to questioning and can be tested and validated – it
explains why.
Psychology
• Helps to understand people, interactions between people and circumstances,
interactions between leaders and employees, and any system of
management. People differ from one another.
• We must understand how people are intrinsically motivated. It is through
intrinsic motivation that people find joy in work and excitement in application
of new knowledge. True innovation in a company only comes at the discretion
of the employees. Think about this saying: "you can lead a horse to water but
you cannot make him drink." A professor of
leadership/motivation/management once told a class, "you don't get paid to
get a horse to drink, and you get paid to motivate him to float on his back in
the pond!"
1. Management commitment
2. Adopt the new philosophy.
3. Understand inspection.
4. End price tag decisions
5. Improve constantly of production and service.
6. Institute training.
7. Institute leadership.
8. Drive out fear.
9. Optimize team efforts
10. Eliminate slogans, exhortations and targets for the work force.
11. Eliminate quotas and MBO
12. Remove barriers to pride of workmanship.
13. Institute education and retraining.
14. Take action to accomplish the transformation.
Deming’s Obstacles
Too often one department does not understand how its work is used by the
next, and thus cannot learn what things are important in carrying out its
tasks. The notion of internal customers lends relevance to each employee’s
job and is absolutely critical to quality transformation.
Juran defines quality as “fitness for use”. This is broken down into four categories:
Quality of Design -focuses on market research, product concept, and design
specifications
Quality of Conformance - includes technology, manpower and management
Availability - focuses on reliability, maintainability, and logistical
support.
Field service - comprises of promptness, competence, and integrity.
ISO 9000:2000
ISO 9000:2000
• Terms such as quality management, quality control, quality system, and
quality assurance acquired different, and sometimes conflicting meanings
from country to country, within a country, and even within an industry.
• ISO 9000 is a family of standards for quality management systems. ISO 9000
is maintained by ISO, the International Organization for Standardization and
is administered by accreditation and certification bodies. Some of the
requirements in ISO 9001 (which is one of the standards in the ISO 9000
family) would include:
a) a set of procedures that cover all key processes in the business;
b) monitoring processes to ensure they are effective;
c) keeping adequate records;
d) checking output for defects, with appropriate corrective action where
necessary;
e) regularly reviewing individual processes and the quality system itself
for effectiveness; and
f) facilitating continual improvement
During WWII, there were quality problems in many British high-tech industries
such as munitions, where bombs were exploding in factories during assembly. The
adopted solution was to require factories to document their manufacturing
procedures and to prove by record-keeping that the procedures were being
followed. The name of the standard was BS 5750, and it was known as a
management standard because it did not specify what to manufacture, but how to
manage the manufacturing process. According to Seddon, "In 1987, the British
Government persuaded the International Organization for Standardization to adopt
BS 5750 as an international standard. BS 5750 became ISO 9000."
1987 version
ISO 9000:1987 had the same structure as the UK Standard BS 5750, with
three 'models' for quality management systems, the selection of which was based
on the scope of activities of the organization:
• ISO 9001:1987 Model for quality assurance in design, development,
production, installation, and servicing was for companies and organizations
whose activities included the creation of new products.
• ISO 9003:1987 Model for quality assurance in final inspection and test
covered only the final inspection of finished product, with no concern for how
the product was produced.
• ISO 9000:1987 was also influenced by existing U.S. and other Defense
Standards ("MIL SPECS"), and so was well-suited to manufacturing. The
emphasis tended to be placed on conformance with procedures rather than
the overall process of management — which was likely the actual intent.
1994 version
• ISO 9000:1994 emphasized quality assurance via preventative actions,
instead of just checking final product, and continued to require evidence of
compliance with documented procedures. As with the first edition, the down-
side was that companies tended to implement its requirements by creating
2000 version
• ISO 9001:2000 combines the three standards 9001, 9002, and 9003 into one,
now called 9001.
• Design and development procedures are required only if a company does in
fact engage in the creation of new products.
• The 2000 version sought to make a radical change in thinking by actually
placing the concept of process management front and centre. ("Process
management" was the monitoring and optimizing of a company's tasks and
activities, instead of just inspecting the final product.)
• The 2000 version also demands involvement by upper executives, in order to
integrate quality into the business system and avoid delegation of quality
functions to junior administrators. Another goal is to improve effectiveness
via process performance metrics — numerical measurement of the
effectiveness of tasks and activities. Expectations of continual process
improvement and tracking customer satisfaction were made explicit.
Certification
ISO does not itself certify organizations. Many countries have formed
accreditation bodies to authorize certification bodies, which audit organizations
applying for ISO 9001 compliance certification. Although commonly referred to as
ISO 9000:2000 certifications, the actual standard to which an organization's quality
management can be certified is ISO 9001:2000. Both the accreditation bodies and
the certification bodies charge fees for their services. The various accreditation
bodies have mutual agreements with each other to ensure that certificates issued
by one of the Accredited Certification Bodies (CB) are accepted world-wide.
The applying organization is assessed based on an extensive sample of its
sites, functions, products, services and processes; a list of problems ("action
requests" or "non-compliances") is made known to the management. If there are no
major problems on this list, the certification body will issue an ISO 9001 certificate
for each geographical site it has visited, once it receives a satisfactory improvement
plan from the management showing how any problems will be resolved.
An ISO certificate is not a once-and-for-all award, but must be renewed at
regular intervals recommended by the certification body, usually around three
years. In contrast to the Capability Maturity Model there are no grades of
competence within ISO 9001.
Mary Matthews works for an airline as a reservation clerk. Her duties include
answering the telephone, making reservations, and providing information to
customers. Her supervisor told her to be courteous and not to rush callers.
However, the supervisor also told her that she must answer 25 calls per hour so
that the department’s account manager can prepare an adequate budget. Mary
comes home each day frustrated because the computer is slow in delivering
information that she needs, and sometimes reports no information. Without
information from the computer, she is forced to use printed directories and guides.
Discussion Questions:
1. What is Mary’s job? What might Deming say about this situation?
2. Drawing upon Deming’s principle, outline a plan to improve this situation.
CHAPTER 3
TOTAL QUALITY TOOLS AND STATISTICAL THINKING
2. Tree diagram
• Maps out the paths and tasks that need to be accomplished to complete a
specific project or to reach a specified goal.
• The planner uses this technique to seek answers to such questions as
“What sequence of tasks needs to be completed to address the issue?” or
“What are all of the factors that contribute to the existence of the key
problem?”
7. Arrow diagrams
• Used by construction planners in the form of CPM or PERT project planning
process.
• PERT/CPM for Program Evaluation and Review Technique. CPM stands for
Critical Path Method. The two systems, although developed separately,
have many similar features and today are blended together by most
people.
• A project consists of tens, hundreds or thousands of individual steps. Many
are dependent on other steps, some are independent. Charting the flow of
the project with a PERT/CPM diagram allows the manager to graphically
see the relationships of the elements, one to another. It shows which
steps are critical to the successful completion of the project in order that it
remain on schedule. Grouping of several steps or tasks yield sub projects
which may need additional care and supervision.
• PERT diagrams contain only one start and one end. All activity at an event
must wait until all succulents’ activity is complete. If activity can be
started prior, it represents a separate succulent.
Flow Chart
44 Total Quality Service Management
• A flow chart is a diagram showing the travel and interaction with people that
work entails.
• A flow chart is different than a decision chart. While decisions may be shown
on a flow chart the purpose is to show changes in direction of work.
• A flow chart documents the process, shows who is responsible for each step,
and who the internal/external customer is. Boxes, diamonds and lines are
used to show work flow.
Delay or wait
Input or output
Document
Scatter Diagrams
CONTROL CHARTS
• Shows visually whether a product or activity is within normal specifications.
One a process is operating in a controlled way; random samples are taken to
monitor it for a changed output.
120
100 East
80
XY(Scatter)
60
2
40 XY(Scatter)
20 3
0
0 5 10 15
E ast
4 6. 9 West
45 . 9 45 43 . 9
38 . 6 Nor th
34 . 6
3 0. 6 31 . 6
27. 4
20 . 4 20. 4
1s t Q t r 2 n d Qt r 3 r d Qt r 4 t h Qt r
RUN CHARTS
• A running tally of data points over a specific time reference.
• Used to find critical times or periods when various problems are prone to
occur.
• For example, some problems may occur on Mondays or Fridays (Friday car
syndrome) or at certain specific times of the day.
100
90
80
70
60
50
40
30
20
10
0
1st Qtr 2nd 3rd Qtr 4th Qtr
Qtr
HISTOGRAMS
• A commonly used graph.
• The number of products in each control category is displayed using a bar. By
placing the bars next to each other, comparisons can easily be shown.
Description
The plan–do–check–act cycle (Figure 1) is a four-step model for carrying out change.
Just as a circle has no end, the PDCA cycle should be repeated again and again for
continuous improvement.
STATISTICAL THINKING
• Statistical thinking is at the heart of the Deming philosophy and is the basis
for good management.
• Statistical thinking is a philosophy of learning and action based on the
principles that:
1. All work occurs in a system of interconnected processes
2. Variation exists in all processes, and
3. Understanding and reducing variation are keys to success.
John Dover just completed an intensive course, “Statistical Thinking for Continuous
Improvement,” that was offered to all employees of a large health maintenance
organization (HMO). There was no time to celebrate, however, because he was already
under a lot of pressure. Dover worked as a pharmacy assistant in the HMO’S pharmacy,
and his manager, Juan de Pacotilla, was about to be fired. Pacotilla’s dismissal
appeared imminent because of numerous complaints – and even a few lawsuits – over
inaccurate prescriptions. Pacotilla now was asking Dover for his assistance in trying to
resolve the problem.
“John, I really need your help,” said Pacotilla. “If I can’t show some major
improvement or at least a solid plan by next month, I’m history.”
“I’ll be glad to help,” replied Dover, “but what can I do? I’m just a pharmacy
assistant.”
“Your job title isn’t important. I think you’re just the person who can get this
done,” said Pacotilla. “I realize that I’ve been too far removed from day-to-day
operations in the pharmacy, but you work there every day. You’re in a much better
position to find out how to fix the problem. Just tell me what to do, and I’ll do it”.
“But what about the statistical consultant you hired to analyze the data\a on
inaccurate prescriptions?” asked Dover.
“To be honest, I’m really disappointed with that guy. He has spent two weeks
trying to come up with a new modeling approach to predict the mistakes, I want to
eliminate them. I don’t think I got through, however, because he said we need a month
of additional data to verify the model before he can apply a new method he just read
about in a journal to identify ‘change points in the time series,’ whatever that means.
But get this, he will only identify the change points and send me a list. He says it’s my
job to figure out what they mean and how to respond. I don’t know much about
statistics. The only thing I remember form my course in college is that it was the worst
course I ever took. I’m becoming convinced that statistics really doesn’t have much to
offer in solving real problems. Since you’ve just gone through the statistical thinking
course, maybe you can see something I can’t. I realize it’s a long shot, but I was hoping
you could use this as the project you need to officially complete the course.”
“I used to feel the same way about statistics, too,” replied Dover. “But the
statistical thinking course was interesting because it didn’t focus on crunching numbers.
I have some ideas about how we can approach making improvements in prescription
accuracy. I think it would be a great project. But we might not be able to solve this
problem ourselves. As you know, there is a lot of finger pointing going on. Pharmacists
blame the doctors’ sloppy handwriting and incomplete instructions for the problem.
Doctors blame the pharmacy assistants, who do most of the computer entry of the
prescriptions, claiming that they are incompetent. Pharmacy assistants blame the
Discussion Questions:
1. How do you think John should approach this problem, using what he has just
learned? Assume that he really did pick up a solid understanding of the concepts
and tools of statistical thinking in the course.
PART
2
OBJECTIVES:
Developing strong and positive relationships with customers and suppliers within
the supply chain is a basic principle of total quality. This chapter will:
Importance of customers:
• In view of customer as a buyer to increase profitability, to a view of the
customer as an active partner and the focus of all quality activities.
• Customer satisfaction translates directly into increase profits, thereby
achieving strong profitability and market share requires loyal customers –
those who stay with a company and make positive referrals.
• Quality is judge by customers. Thus, quality must take into account all
product and service features and characteristics that contribute value to
customers and lead to customer satisfaction, preference and retention.
• Poor quality leads to customer dissatisfaction.
Importance of suppliers:
• Suppliers are those companies that provide the organization with goods and
services that help them to satisfy the needs of their own customers.
• If a suppliers performance is of consistently high quality, its customer can
decrease or eliminate costly incoming inspections that add no value to the
products.
• Suppliers are viewed as partners with customers, because there usually is a
codependent relationship.
• The delivery of the service must be timely, accurate, with concern, and with
courtesy.
• All services are intangible and are a function of perception. They depend on
interpretation.
• By definition, service is perishable; it can backfire on the organization. This
relates to the acronym COMFORT.
C – CARING
O - OBERVANT
M - MINDFUL
F - FRIENDLY
O - OBLIGING
R - RESPONSIBLE
T – TACT
Feedback
Translation into product/service specifications
(Design quality)
Output
Customer perceptions
(Perceived quality)
Beneficiar
Benefit
y
Higher income (more sales, repeat business, referred business)
Recognition
Personal satisfaction & fulfillment
Less stress
Providers Higher self-awareness and self-control
Greater authenticity
Happier life at work
Stronger social networks, family ties
Happier life outside work
Organizati Quality sales (more add-ons, more service sales)
ons More repeat business
More referred business
2
Mason, Sean. Core Values Exercise. United Communication Unlimited.
[http://www.ucunlimited.com/
3
Frank M. Go. Et.al. Human Resource Management in the Hospitality Industry. John Wiley &
Sons, Inc. c1996. p3.
60 Total Quality Service Management
Fewer returns
Better reputation
Higher morale, happier employees
Lower employee turnover
Higher caliber of job applicants
Fewer complaints
Higher productivity
Better work environment
Higher inventory turnover
Higher profits
FIGURE 2 Benefit of Customer Service
Delighting Customers
4
Frank M. Go. Et.al. Human Resource Management in the Hospitality Industry. John Wiley &
Sons, Inc. c1996. pp 3-4.
61 Total Quality Service Management
It does not matter how much emphasis is put on delivering good or excellent
customer service; what matters at the end of the day is if people and especially
front-line people in an organization have the feelings, will and commitment to serve
the customers in a delightful way. It is said that ninety percent of unhappy
customers do not complain but they do tell at least ten people about their bad
experience or inadequate service.
Gitomer (1998) discussed that why customer service goes wrong. What
happen to unsatisfied customer? We can find out it from a variety of reliable
research.
91% customers who leave with angry feeling will never return to your
business
96% won’t tell you the real reason they left
80% will do business with you again if their problem is handled quickly,
and to their complete satisfaction.
When the incident is real bad and they leave, stories about what happened
will be retold for year. Also, here are the several basic reasons service is bad, which
Gitomer (1998) mentioned,
• Failure to start friendly- Give what you want to receive. The first few words
set the tone for the entire dialog. The single most important brick in the
foundation of customer service is "Friendly." It is also the least consistent
element of the experience.
• Failure to say it in a way that the customer wants to hear it - The first
tendency of the front-line person is to make an excuse or tell why something
occurred. But that’s the last thing the customer wants to hear. Customers
want answers started in terms of them and their needs. And that is rare or
missing from front-line communication.
• Companies allow employees to be rude to customers and tell customers
“No.”- When you deny a customer, their need still exists and they are mad.
Then you add to the fire by saying, “Don’t talk to me like that, sir.” Or “I don’t
have to take this.” A complaining customer is seen as a “hassle” rather than
an opportunity.
Perceptions are frequently developed over a period and reflect the ways that
we have been treated, our values, priorities, prejudices and sensitivity to others.
Two people could share with same experience and then describe it differently.
Unfortunately, perceptions are not necessarily based on rational ideas and may be
influenced by momentary frustration and anger. It is important for the customer
service staffs to anticipate customer resistance based on the customers’ prior
interactions and always to work at providing customers with excellent service, so
that their most current perception is a positive one. Customers may not remember
every detail of an experience, but they will retain an overall feeling about it. That
“feeling,” in combination with other experiences, will create their perception of
company. It is hard to erase customers’ negative perceptions that are based on
their prior interactions, but what customer service staffs can do is to show them,
through their genuine action, that their perception is not accurate.
In addition, Harris (2000) explained expectations are our personal vision of
the result that will come from our experience. Expectations may be positive or
negative. Expectations are usually based on our perceptions. If customer’ last
experience with a company was negative, he may approach a new situation with
the expectation that he will again be dissatisfied.
Expectations can be divided into two distinct categories: primary
expectations and secondary expectations. Primary expectations are the customers’
most basic requirements of an interaction. For example, when staying at the hotel,
customers’ primary expectations are to clean room, excise room and amenities, to
someone else clean the room, and pay a reasonable price. Secondary expectations
are expectations based on customers’ previous experiences and represent
Mark, Donna, and their children, along with another family, traditionally attend
Easter brunch at a large downtown hotel. This year, as in the past, Donna called
and made a reservation about three weeks prior to Easter. Because half the party
consisted of small children they arrived 20 minutes prior to the 11:30 reservation to
assure being seated early. When they arrived, however, the hostess said that they
did not have a reservation. The hostess explained that guests sometimes fail to
show that she would probably have a table available for them before long. Mark
and Donna were quite upset and insisted that had made a reservation and expected
to be seated promptly. The hostess told them, “I believe that you made a
reservation, but I can’t seat you until all the people on the reservation list are
seated. You are welcome to go to the lounge for complimentary coffee and punch
while you wait.” When Mark asked to see the Manager, the hostess replied, “I am
the manager,” and turned to other duties. The party was eventually seated at
11:45, but was not at all happy with the experience.
The next day, Mark wrote a letter to the hotel manager explaining the entire
incident. Mark was in the MBA program at the local university and was taking a
course on total quality management. In the class, they had just studied issues of
customer focus and some of the approaches used at the Ritz – Carlton Hotel, a 1992
Baldrige Award winner. Mark concluded his letter with the statement, “I doubt that
we would have experience this situation at a hotel that truly believes in quality”.
About a week later, he received the following letter:
Looking back at our records we did not show a reservation on the books for
your family. I have addressed your comments with the appropriate
department head so that others will not have to experience the same
inconveniences that you did.
Thank you once again for sharing your thoughts with us. We believe in a
philosophy of “continuous improvement”, and it is through feedback such as
yours we can continue to improve the service to our guests.
Discussion questions:
1. Were the hostess’s actins consistent with a customer-focused quality
philosophy? What might she have done differently?
2. How would you have reacted to the letter that Mark received? Could the
Total Quality Lead have responded differently? What does the fact that the
hotel manager did not personally respond to the customer tell you?
CHAPTER 5
DESIGNING ORGANIZATIONS FOR QUALITY
Not many people really do know how to design an organization that is not a machine.
OBJECTIVES:
• Describe the functional structure, the most common structure used at the
business unit level;
• Show how many aspects of the functional structure stand in the way of
quality and what changes are necessary to create organization structures
that support TQ;
• Compare organization design from a TQ point of view to more conventional
perspectives.
Organizational Behavior
• The way in which individuals and groups act in the organization and the
influences on these actions and behavior patterns.
• Takes account of people’s attitudes and beliefs and tries to examine the
reasons for them.
• Emphasis is on the impact of individual and group behavior on the
organization and vice versa.
Classifications of Organizations:
A. According to Type of AUTHORITY (By Weber)
1. Traditional Organization – where authority is established by custom
and long standing and unquestioned belief. (e.g. monarchy)
2. Charismatic Organization – where authority is derived from the
outstanding personal qualities of the leader.
3. Bureaucratic Organization – where authority is based on the
acceptance of formal rules and procedures. (e.g. military)
FORMS OF ORGANIZATION:
1. LINE ORGANIZATION
• Clear delineation of line authority from direct superior to direct
subordinates
2. LINE & STAFF FUNCTION
• Wider scope of work with multi-level departmentalized tasks structures
3. FUNCTIONAL ORGANIZATION
• Organized according to the nature & types of work functions in an
organization
Institutional Theory:
Based on the assumptions that organizations choose structures to help them
perform better – provide high quality, lower costs, and so forth.
Holds the organizations try to succeed by creating structures that will be
seen as appropriate by important external constituencies – customers, other
organizations in the industry, government agencies, and so on.
_____________________________________________________________________________
Exercise NO. _____
Designing Organization for Quality
Wow! That State University video was really cool. It has lots of majors; it’s close to
home so I can keep my job; and Mom and Dad loved it when they visited. I wish I
could know what it’s really like to be a student at State. Hmmm, I think I’ll ask mom
and dad to take a campus tour with me…..
I’m sure that we took our tour on the hottest day of the summer. The campus is
huge – it took us about two hours to complete the tour and we didn’t even see
everything! I wasn’t sure that the tour guide knew what he was doing. We went
into a gigantic lecture hall and the lights weren’t even on. Our tour guide couldn’t
find them so we had to hold the doors open so the sunlight could come in. About
three – fourths of the way through our tour, our guide said, “State University isn’t
really a bad place to go to school; you have to learn the system.” I wonder what he
meant by that?
This application is really confusing. How do I let the admissions office know that I
am interested in physics, mechanical engineering, and industrial design? Even my
parents can’t figure it out. I guess I’ll call the admissions office for some help…
I’m so excited! Mom just handed me a letter from State! Maybe they’ve already
accepted me. What? What’s this? They say I need to send my transcript. I did that
when I mailed in my application two weeks ago. What’s going on? I hope it won’t
affect my application. I’d better check with Admissions………..
You can’t find my file? I thought you were missing only my transcript. I asked my
counselor if she had sent it in yet. She told me that she sent it last week. Oh, you’ll
call me back when you locate my file? OK..
Finally, I’ve been accepted! Wait a minute. I didn’t apply to University College;
that’s a two – year program. I wanted physics, M.E., or industrial design. Well,
since my only choice is U. College and I really want to go to State, I guess I’ll send in
the confirmation form. It really looks a lot like the application. In fact, I know I gave
them a lot of the same information. I wonder why they need it again. Seems like a
waste of time…………..
Orientation was a lot of fun. I’m glad they straightened out my acceptance at U.
College. I think I will enjoy State after all. I met lots of other students. I saw my
advisor and I signed up for classes. All I have left to do is pay my tuition bill.
Whoops. None of my financial aid is on this bill. I know I filled out all of the forms
because I got an award letter from the state. There is no way my parent and I can
pay for this without financial aid. It says at the bottom, I’ll lose all my classes if I
don’t pay the bill on time….
I’m not confirmed on the computer? I sent in my form and the fee a long time ago.
What am I going to do? I don’t want to lose all of my classes. I have to go to the
DISCUSSION QUESTIONS
“Every organization of today has to build into its very structure the
management of change.”
Types of change
Cultural change
Continuous improvement
Breakthrough improvement
Organizational learning
Importance of Change
Needed in implementing TQ
Reengineering
o The process by which the organization operates are examined and
redesigned to provide higher quality at lower cost.
Resistance to change
Inertia - comfort with the status quo
Timing - conflicts with other initiatives and/or priorities
Surprise - proper groundwork has not been done so people are caught off
guard (need for change not established)
Misunderstanding - benefits not properly understood
Cultural pressure - some who may want to change are held back by others in
the organization
Self-interest - conflicting personal priorities
Differing assessment - conflicting agreement over the value of the benefits
associated with the change
INTERACTION
Organizational culture is the specific collection of values and norms that are
shared by people and groups in an organization and that control the way they
interact with each other and with stakeholders outside the organization.
Organizational values are beliefs and ideas about what kinds of goals
members of an organization should pursue and ideas about the appropriate
kinds or standards of behavior organizational members should use to achieve
these goals. From organizational values develop organizational norms,
guidelines or expectations that prescribe appropriate kinds of behavior by
employees in particular situations and control the behavior of organizational
members towards one another. (Strategic Management, Charles W. L. Hill, Gareth R.
Jones, Fifth Edition, 2001 Houghton Mifflin, MeansBusiness, Inc.)
CONTINUOUS IMPROVEMENT
Kaizen
Japanese for "continuous improvement" is a Japanese philosophy that focuses
on continuous improvement throughout all aspects of life. When applied to
the workplace, Kaizen activities continually improve all functions of a
business, from manufacturing to management and from the CEO to the
assembly line workers. By improving standardized activities and processes,
Kaizen aims to eliminate waste.
Kaizen was first implemented in several Japanese businesses during the
country's recovery after World War II, including Toyota, and has since spread
to businesses throughout the world.
Key elements of Kaizen are quality, effort, involvement of all employees,
willingness to change and communication.
Kai means literally; change (kai) to become good (zen)
Breakthrough improvement
Refers to discontinuous change, as opposed to the gradual, continuous
improvement philosophy of kaizen.
Result from innovative and creative thinking; often these are motivated by
stretch goals, or breakthrough objectives.
Benchmarking:
Benchmarking is the process of comparing the cost, time or quality of what
one organization does against what another organization does. The result is
often a business case for making changes in order to make improvements.
Benchmarking, originally invented as a formal process by Rank Xerox, is usually carried out by
individual companies. Sometimes it may be carried out collaboratively by groups of companies
(eg subsidiaries of a multinational in different countries).
Classification of Benchmarking
Competitive benchmarking – focus on the products and
manufacturing of a company’s competitors.
Types of benchmarking
Defining the customers for benchmarking information. This is the first step in
determining what to benchmark. To define the customers or users of the
benchmarking information one simply has to think of answers to the following
questions: who is requesting the information? and who will be using it.? If one
does not know who will be using the information, one will suffer from trying to
find the information because one does not know whom this information will be
serve. Therefore, the purpose of benchmarking might be blurring and later will
lead to failure of the process.
Identifying critical success factors. The last step of this stage is to identify the
factors that will have the greatest impact on the performance of one’s
organization. Benchmarking will have the greatest impact to organizational
performance when it has applied on the bottom-line results of business.
Intact work groups. These group members are usually located in a single
location reporting to a common manager. The manager may or may not play
the role of the team leader; usually every member participates as a
benchmarking team member. These groups are often the customers of their
own benchmarking process.
77 Total Quality Service Management
Cross-functional, interdepartmental, and inter-organizational teams. These
types of teams are brought together to work on a specific assignment.
Members of the team are been selected to represent their departments,
locations, or divisions.
Ad hoc teams. This type of team represents the flexibility of forming a team.
An ad hoc team can be formed by any number of employees who share the
same interests or responsibilities, which brought them together to do a
benchmarking investigation.
Identify information resource. This step can be easily implemented by asking three
questions :
(a) Who produces the information I want?
(b) Who else uses the information I want?
(c) Who accumulates the data I want?
By answering these three questions, one will discover the resources that are
available to support one’s process of benchmarking. Actually, the challenge
of this stage is to identify benchmarking partners that will provide useful
information to your benchmarking process.
Design list of benchmarking partner criteria. The list of criteria should express
the requirements an ideal benchmarking partner should satisfy, and can
cover most of the issues. These issues are such as geographical location,
size, structure and organization, products and technology. The criteria might
seem to carry away when the company has list too many variables and
forget to focus on important issues. Therefore, the company should assure
that all criteria set forward are relevant.
Identify potential benchmarking partners. Potential benchmarking partners
might not have to be best-in-class or world class. They can be only “best-in-
the local area” when the company draw the line to benchmark with
companies located in the same area. Benchmarking with these companies
Collect information.
The step of collection information can be done by many ways such as
telephone interviews, personal meetings, site visits, surveys,
publications, media and archival research.
Organize information.
The step can be done by (1) writing an outline of the information, (2)
put information in comparing matrix of each company, (3) analyze
matrix and the collected information in phases, and (4) summarize all
data.
Analyze information.
After the information has been collected and summarized, the next
step is data analysis. The steps toward information analysis are (1)
check for misinformation, (2) identify the patterns of the data, (3)
identify omissions or displacement, (4) check for data that do not fit,
and (5) draw conclusions.
5) Take Action. In this stage, all actions that are required to change the process
that the company chose to benchmark are implemented. These actions may include
making recommendations, conducting a report or preparing a presentation to apply
to the process.