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Seminar on

The Role of Quality


In Business
SYNOPSIS
• Quality in business

• Basic Concepts

• Awareness

• Barriers in Quality

• Role of TQM Leaders

• Quality Statements

• Customer Perception of Quality

• Feedback

• Types of Problems

• The PDSA Cycle

• Achieving Higher Quality

• Problem Solving Methods

• Brain Storming

• Process Mapping

• Kaizen

• Bench Marking and Quality Management

• Caveat
QUALITY IN BUSINESS

In the competitive world of business, the most successful companies will be more
efficient, more responsive, produce and support the better products, and so on. In short,
the company which practices the best quality control will be successful. To aid in the
process of achieving better quality, the principle of Total Quality Management (TQM)
was invented. Refined to a dogma of business buzz words, the underlying concept is one
of commitment to the ideal of customer satisfaction through continuous improvement.

Total Quality Management (TQM) is an enhancement to the traditional way of


doing business. It is a proven technique to guarantee survival in world-class competition.
Only by changing the actions of management will the culture and actions of an entire
organization be transformed. TQM is for the most part common sense. Analyzing the
three words, we have

Total – Made up of the whole.


Quality – Degree of excellence a product or service provides.
Management – Act, art, or manner of handling, controlling, directing, etc.

TQM is defined as both a philosophy and a set of guiding principles that represent
the foundation of a continuously improving organization. TQM integrates fundamental
management techniques, existing improvement efforts, and technical tools under a
disciplined approach.

BASIC CONCEPTS

TQM requires six basic concepts:

1. A committed and involved management to provide ion-term top-to-bottom


organizational support.
2. An unwavering focuses on the customer, both internally and externally.
3. Effective involvement and utilization of the business and production
process.
4. Continuous improvement of the business and production process.
5. Treating suppliers as partners.
6. Establish performance measures for the process.

These concepts outline an excellent way to run an organization.


AWARENESS

An organization will not begin the transformation to TQM until it is aware that the
quality of the product or service must be proved. Awareness comes about when an
organization loses market shares or realizes that quality and productivity go hand-in-
hand. It also occurs if TQM is mandated by the customer or if management realizes that
TQM is a better way to run a business and compete in domestic and world markets.

BARRIORS TO QUALITY

It may not be easy to adopt an active approach to quality improvement for a variety
of reasons. Here are a few of the most likely obstacles:

• Apathy - Staff may feel that there is no need for change, particularly if the
business is already perceived to be successful in the wider world. There may
be room for improvement in a given process, but the employee attitude is 'it
isn't broken, so why fix it?’
• Cynicism - Even if everyone involved with the business agrees with the
need for change, the staff may see a structured approach as overly elaborate
and excessive. Worse, they may see it simply as an excuse for managers to
avoid dealing with problems immediately, on an ad hoc basis.
• Lack of resources - Change is a big commitment; and there may not be
enough time/staff/money to have peopled trained to administer quality
initiatives, or even just to pause to review the business effectively. This is
usually voiced as 'we are too busy to make changes', which, if true, would
not bode well for the future of the business.
• Abuse - Middle managers in the business, who have any of the attitudes
outlined above, may take the opportunity to assign staff or themselves to
quality work to avoid what they regard as more difficult front-line activity.
Also, staff may perceive benchmarking events as avoidance of 'genuine'
work.
• Lack of Management Commitment - In order for any organizational effort
to succeed, there must be a substantial management commitment of
management time and organizational resources. The purpose must be clearly
and continuously communicated to all personnel. Management must
consistently apply the principles of TQM.
• Inability to change organizational Behavior - Changing an organization’s
culture is difficult and will require as mush as five years. Individuals resist
change, they become accustomed to doing a particular process and it
becomes the preferred way. Management must understand and utilize the
basic concepts of change. They are:
1. People change when they want to and to meet their own needs.
2. Never expect anyone to engage in behavior that serves the
organization’s values unless adequate reason has been given.
3. For change to be accepted, people must be moved from a state of
fear to trust.
It is difficult for individuals to change their way of dong
things; it is much more difficult for an organization to make a cultural
change.
• Improper planning – All constituents of the organization must be
involved in development of the implementation plan and any modifications
that occur as the plan evolves of particular importance are the two-way
communication of ideas by personnel during the development of the plan
and its implementation.
• Lack of Continuous Training and Education – Training and education is
an ongoing process for everyone in the organization. Needs must be
determined and a plan developed and a plan developed to achieve those
needs. Training and education are most effective when senior management
conducts the training on the principles of TQM.
• Failure to Continually Improve – A lack of continuous improvement of
the processes, product, and service will even leave the leader of the pack in
the dust. Will Rogers say it best, “Even if you’re on the right track, you will
get run over if you just sit there.

These obstacles may be difficult to overcome, but not impossible. The key to
successful change is rigorous and enthusiastic management of the change process and
making sure every employee of the business is involved in some way. Communicating
with the whole business openly may result in some of those negative attitudes changing
for the better.

ROLE OF TQM LEADERS

Everyone is responsible for quality, especially senior management and the CEO;
however, only the latter can provide the leadership system to achieve results. For
instance, in the 1980’s, General Electric’s CEO, Jack Welch, instituted leadership
training courses at all levels of the organization. The General Electric training courses
taught leadership approaches and models and provided the opportunity for teams to
develop solutions to real problems Jack Welch supported the development of the
leadership system whereby quality control leaders were developed at all levels in all
functions of the organization, including resource, marketing, manufacturing, sales,
finance and human resources. Senior managers need to be provided with the skills to
implement quality control techniques and actively participate in the quality council.
Senior management has numerous responsibilities. Senior management must
practice the philosophy of Management by Wandering around (MBWA). Management
should get out of the office and visit customers, suppliers, departments within the
organization, and plants within the organization. That way, managers learn what is
happening with a particular customer, supplier, or project.
The idea is to let employees think themselves. Senior management’s role is no
longer to make the final decision, but to make sure the team’s decision is aligned with the
quality statements of the organization. Push problem solving and decision making to the
lowest appropriate level by delegating authority and responsibility.

QUALITY STATEMENTS

The quality statement includes the vision statement, mission statement, and quality
policy statement. Once developed, they are only occasionally reviewed and updated.
They are p [art of the strategic planning process.

• Vision Statement – The vision statement is the short declaration of what an


organization aspires to be tomorrow. It is the ideal state that might never be
reached but which you continually strive to achieve. Successful visions are
timeless, inspirational, and become deeply shared within the organization,
IBM’s service, Apple’s computing for the masses, Disney theme park’s the
happiest place on earth. These shared visions usually emerge overtime.
Ideally, visions are elevated to a cause.Succesful visions provide a succinct
guideline for decision making. Having a concise statement of the desired
end provides criteria for sound decision making. An example of a simple,
one-sentence vision statement is, “We will be preferred provider of safe,
reliable, and cost-effective products and services that satisfy the electric-
related needs of all customer segments.” – FLORIDA POWER & LIGHT
COMPANY.
• Mission statement – The mission statement answers the following
questions: who we are, who are the customers, what we do, and how we do
it. This statement is usually one paragraph or less in length, is easy to
understand, and describes the function of the organization. It provides a
clear statement of purpose foe employees, customers, and suppliers. An
example of a mission statement is “To meet customers’ transportation and
distribution needs by being the best at moving their goods on time, safely
and damage free.” – CANADIAN NATIONAL RAILWAYS.
• Quality Policy Statement – The quality policy is a guide for everyone in the
organization as to hoe they should provide products and service to the
customers. It should be return by the CEO with feedback from the work
force and be approved by the quality council.

CUSTOMER PERCEPTION OF QUALITY

An American Society for Quality (ASQ) survey on end user perceptions of


important factors that influenced purchases showed the following rankings:

1. Performance
2. Features
3. Service
4. Warranty
5. Price
6. Reputation

The factors of performance, features, services, and warranty are part of the product
or service quality; therefore, it is evident that product quality and service are more
important than price4. Although this information is based on the retail customer, it
appears, to some extent, to be true for the commercial customer also.

FEEDBACK

Customer feedback must be continually solicited and monitored. Customers


continually change. They change their minds, their exceptions, and their suppliers.
Customer feedback is not a one-time effort; it is an ongoing and active probing of the
customers’ mind. Feedback enables the organization to:

• Discover customer dissatisfaction.


• Discover relative priorities of quality.
• Compare performance with the competition.
• Identify customers’ needs.
• Determine opportunities for improvement.

TYPES OF PROBLEMS
There are five types of problems. They are

• Compliance
• Unstructured
• Efficiency
• Process Design
• Product Design

The first three are performance problems where an existing system is not
performing satisfactorily, and the last two are design problems that require a new or
improved design.

THE PDSA CYCLE

The basic Plan-Do-Study-Act (PDSA) cycle was first developed by Stewart and
then modified by Deming. It is an effective improvement technique. The four steps in the
cycle are exactly as stated. First, plan carefully what is to be done. Next carry out the
plan (does it). Third study the result. Finally, act on the results by identifying what
worked as planned and what didn’t.

ACHIEVING HIGHER QUALITY

What are the required changes? The simplest way to find out is by consulting staff
and customers. Ask if there is anything they can think of that would improve the business
or the service it provides. Are there any specific problems that need to be addressed? The
method of consultation can vary. It may be best to use a written survey, especially
dealing with large workforces or customers spread over a wide geographical area.
Alternatively, a forum could be held with a representative cross section of employees or
customers, which would allow development and discussion of any issues arising.
Once you have established that changes are necessary, how do you go about making
those changes? Regardless of the way the data was gathered, the issues will have to be
analyzed and addressed somehow.

PROBLEM SOLVING METHODS

Process improvement achieves the greatest results when it operates within the
framework of the problem-solving method. In the initial stages of a program, quick
results are frequently obtained because the solutions are obvious or an individual has a
brilliant idea. However, in the long term, a systematic approach will yield the greatest
benefits.
The problem solving method has many variations depending, to some extent, on the
use; however they are similar. There are seven phases. They are

• Identify the Opportunity


• Analyze the Current Process
• Develop the Optimal Solutions
• Implement Changes
• Study the Results
• Standardize the Solution
• Plan for the Future

BRAINSTROMING

The simplest method to generate ideas is brainstorming. It is ideally suited to the


forum situation mentioned earlier. Given a specific area to improve or problem to solve,
the idea here is to come up with as many ideas as possible to solve it, however silly those
ideas may be. Don't discuss or dismiss any suggestions. This method encourages
innovation, invention, and creativity; and it could produce solutions that logical thought
would not have produced. Once you are certain that the possibilities have been exhausted,
look through the list of suggestions and put them into broad categories if possible.
Generally, you will find that groups of suggestions are variations on the same approach.
At this stage, each suggestion can be evaluated to see if it is a feasible solution as it
stands, or if it requires further thought. Hopefully at this point, brainstorming will have
produced a number of options with which to make improvements or solve the problems at
hand.

PROCESS MAPPING
The process mapping technique involves the creation of flowcharts, which illustrate
the individual steps involved in a given process, and hence pinpoint where problems arise
and identify areas that could be improved. Mapping is particularly useful for spotting
'bottlenecks', points in a process where delays may occur. By taking a close look at the
process in this way, it may even be possible to remove unnecessary steps entirely. In its
simplest form, a flowchart looks like this:

Step 1... Step 2... Step 3... Step 4... Etc

Of course, not every process is as linear as this. Subsequent steps may differ
depending on the result of a decision made during a previous step. This can be
represented by multiple branches from the decision step, one each for the different
decision results. If the amount of branching is becoming too complex to illustrate using a
flowchart, the solution may be to create separate flowcharts for smaller sections of the
process.

KAIZEN

As the name suggests, Kaizen is a Japanese set of techniques which promotes


efficiency as a means to higher quality. One aspect of Kaizen is the concept of a 'blitz
event', where a small team is removed from normal duties for a week or so in order to
concentrate on solving a major problem with the business. Over the course of the week,
the team will receive basic training in many of the techniques described in this entry, and
then apply them to the problem at hand. Any aspects of the process concerned which are
deemed to be wasteful of resources are removed, and the process is refined. Towards the
end of the week, they will perform tests to see if the changes they have made are viable,
and then create an action plan to implement the changes. A month is usually the accepted
period for the plan to be effective. During that month, the situation will be monitored by
the team to ensure that changes are being adhered to, and that the situation has indeed
improved.
It should be stressed that this is only a selection of techniques. Others include
Pareto Analysis, Cause and Effect Diagrams, Solution Effect Analysis, the Six Thinking
Hats method, and Force Field Analysis. All of the techniques mentioned thus far work on
the same general principle of taking a sampling of data from the staff or customers and
breaking down the problems or suggestions into manageable pieces, which can be solved,
implemented, and later reviewed to test their effectiveness.

BENCHMARKING AND QUALITY ORGANIZATIONS

Assume some of these improvement measures have been implemented, and that
they have had a measurable positive effect on your business. As a manager, how do you
know whether the improvement is enough to make your business competitive? The
answer is to benchmark.
Benchmarking means comparing your business with others in relative terms. To
make this easier, various organizations have produced generic standards of quality, which
businesses can assess them against, regardless of whether they are in the same field.
Service providers can therefore compare quality with manufacturing companies, or
research laboratories, and so on.

Example Organization

The European Foundation for Quality Management (EFQM) was formed in 1988,
and includes over 600 member businesses and organizations from the private and public
sectors. EFQM have produced a model consisting of nine categories, corresponding to
key business areas. The nine categories are divided into two groups, as follows:
• The first five - Leadership, People (i.e., staff), Policy and Strategy,
Partnerships and Resources, and Processes - are known collectively as
enablers. These are the factors which allow businesses to create quality
products.
• The remaining four are the results which the business produces - People
Satisfaction, Customer Satisfaction, Impact on Society, and Key
Performance Results.
EFQM assists businesses to train their staff to objectively identify strengths and
weaknesses in their business and assign a score in each of the nine categories. Data for
the assessment is gathered and analyzed using the techniques discussed earlier, especially
staff and customer surveys. This assessment then provides a starting point from which
further improvements can be made and measured, and the scores recorded can be verified
by independent EFQM assessors and compared against scores from other member
businesses.
If the verified scores are sufficiently high, and have shown a significant
improvement over a short period, the business may enter itself into competition for the
European Quality Award, administered by the EFQM. The competition is run every two
years and includes categories divided by size of business and public or private sector
concerns. Achievement of the EQA would boost the profile of any business, to such an
extent that it would be a role model to other companies and organizations wishing to raise
the quality of their business.
There are, of course similar organizations, providing a comparable service to
businesses in other parts of the world.

CAVEAT

Another point worth considering is simply to apply common sense whenever and
wherever improvements are being made. There are very few, if any, organizations that
can afford not to make changes in order to remain at their most effective. On the other
hand, lack of resources may hinder the use of structured quality initiatives. Common
sense will tell just how far a business needs to go, and in many cases it will indicate just
what changes are needed to improve quality.
Some thought should also be given to the human component of business. Weighed
against the desirability of adopting the most streamline and efficient corporate profile is
the benefit to be gained by recognizing the psychological needs of staff and customers, of
understanding the discomfort naturally associated with imposed change and instability?
There are enormous rewards to be gained by treating people like people, with respect and
consideration. Similarly, respect and consideration is best earned by behaving like a
reasonable person. A successful manager, like a skilled craftsperson, is one who
understands his tools and wields them constructively and with discretion. One who is a
slave to jingoism and cults, on the other hand, is like an imbecile with a hammer... more
likely to make a mess of things and hurt people than produce anything of value.