6 Organizational Innovations: Total Quality Management Just-In-Time Production System PDF

CHAPTER 6
ORGANIZATIONAL INNOVATIONS:
TOTAL QUALITY MANAGEMENT;
JUST-IN-TIME PRODUCTION SYSTEM
TOTAL QUALITY MANAGEMENT
What is Quality?
Although people often view quality differently because of differences in their roles in the
production-marketing-consumption chain and their expectations for the products or services.
The ultimate test of a quality product or sehvice is whether the product or service meets or
exceeds customers ' expectations. The requirement to meet or exceed customers' expectations
then serve as specifications for Operations throughout the organization. Each individual,
department or Subdivision throughout an organization needs to strive for conformity to
SPeciflcations that meet and improve upon customer satisfaction.
Core Principles of TQM
As aptly described by Procter and Gamble, "Total quality (management) is the Unyielding and
continually improving effort by everyone in an organization to
Understand, meet and exceed the expectation of customers." This description of TQM points
out that the core principles of TQM are processes that
Focus on satisfying the customer
Strive for continuous improvement

Involve fully the entire work force
Support and involve top management actively
Use clear and measurable objective
Recognize quality achievements in a timely manner Provide training on TQM continuously
Focus on the Customer
TQM begins by identifying the firm's customers, external and internal; determining their needs,
requirements, and expectations; and then doing whatever it takes to satisfy them. External
customers are the Ultimate recipients ofthe firm's products or services. Internal customers
areindividuals or subunits within the involved in manufacturing the product or providing the
services. At some stage, everyone in a process or organization is a customer or supplier to
someone else, either inside or outside the organization.
These requirements and expectations become the bases for specifications for internal
customer/suppliers and external suppliers to the firm. They are then translated into
specifications for each successive internal customer/supplier, including design requirements,
part characteristics, and manufacturing operations, and requirements for external vendors. A
firm can serve its ultimate, external customer better if the firm fully meets all requirements of
each internal customer.
Strivefor Continuous Improvement (Kaizen)
The Coca-Cola Company believes that quality is not a destination; it is a way of life. Coca-Cola
Company states: "We know we will never arrive; there is no finish." Quality is a moving target.
Without continuous improvement, quality disappears.
Taguchi and Wu believe that continuous quality improvement and cost reduction (kaizen) are
necessary to remain competitive in today's global marketplace. "With competitors forever trying
to outperform us and customers exhibiting ever-changing expectations, a firm can never reach
the ideal quality standard." Firms need to continuously update specifications for both internal
customers/suppliers and external suppliers to better serve external customers.
Full Involvement ofthe Entire Workforce
The requirement of the firm's external customers can only be met if each of the internal
customers/suppliers in the process satisfies the requirements of the downstream process or
customer. Any breakdown in the process no matter how insignificant can lead to a defective
product or service and unsatisfied customers. Top management must encourage everyone in
the firm, from the lowest level employees, office clerks, factory workers, accountants, and
engineers to upper echelon professionals and managers, to be actively involved and to
participate in the firm's efforts to continuously improve quality. Employee involvement can range
from simple information sharing, dialogue, or group problem solving, all the way to total
self-direction. One proven effective approach for employee involvement is quality (control)
circles or quality circles (QCs for short). A quality circle is a small group of employees from the
same work area that meets regularly to identify and solve workrelated problems and to
implement and monitor solutions to the problems.
Active Support and Involvement of Top Management
Most companies have found that successful implementation of TQM requires unwavering and
active leadership from the CEO and senior managers. However, the CEO or top management
alone cannot bring forth all the desired benefits of TQM. Only with support from all managers in
the top echelon can TQM attain the most desirable results. Also, tlfey need to demonstrate their
dedication to total quality to employees at every level, all vendors and suppliers to the firm, all
customers and the community at every opportunity so that everyone is aware of the primary
importance of total quality in every aspect of the firm's operations.
Use Clear and Measurable Objectives
Progress can easily be seen if objectives are clear. Measurable objectives forge efforts toward
the common goal. To ensure success of total quality management, a firm must set unambiguous
and measurable objectives. Effective measurement can help to ensure and facilitate quality
improvements and supporting systems.
Timely Recognition of Quality Achievement
Quality achievement of people and subunits when recognized timely is the best way to
emphasize the firm's continuous struggle for better quality and to ensure efforts toward total
quality at every level.
Efforts and progress will most likely be short-lived if the firm makes no change to its
compensation / appraisal / recognition system.
Continuing Education and Training
Employee training programs serve as a communication link to convey månagement commitment

to total quality and provide employees with necessary skills to achieve total quality. Mandatory
continuing education and training of employees at all levels is necessary to achieve the culture
change and continuous focus required in a TQM environment.
TQM Implementation Guidelines
A firm cannot implement a successful TQM program overnight. It usually takes any organization
serious about achieving TQM several years of concerted and dedicated efforts by all its
members to become a world-class quality firm.
The implementation of TQM is not an easy task and is indeed time consuming. The Institute of
Management Accountants believes that a typical organization takes three to five years to make
from traditional management to TQM. Although some specific projects can quickly yield high
returns, a firm will most likely not see many tangible benefits in the early years of
implementation.
The Institute of Management Accountants (IMA) has devised an I I -phase process spanning
three years to establish TQM. It is recommended that full and genuine involvement of all
employees must be present to implement successfully TQM.
Year One --- Preparation and Planning

Create quality council and staff
Conduct executive-quality training programs
Conduct quality audits
Prepare gap analysis (determine the gap between the best in class and the firm's current
practice)
Develop strategy on quality improvement
Year-Two — Training and Implementation
Conduct employee communication and training program
Create a measurement system and set goals
Year Three Assessment, Review & Revise
Revise compensation / appraisal / recognition systems
Launch external initiative with suppliers
Review and revise
Types of Conformance
Quality involves conformance with specifications for product or services that meet or exceed
customer requirements and expectations. Conformance, however, can differ among individuals
or firms. The general types however are
1. Goalpost Conformance (zero-defects conformance)
This is conformance to a quality specification expressed as a specified range around the target.
The target is the ideal or desired outcome of the operations. This is also called zero-defects
conformance with the specified range allowed for variations. Management expects all outputs to
be within the specified range of variations. For example, a firm specifies a tolerance of ± 0.05
inch thickness of its products with a target of 0.5 thickness. This means that the firm meets the
quality of standard when the result shows that the thickness of its products is between 0.55 inch
and 0.45 inch.
2. Absolute qualüy confonnance (robust quality approach)

This is conformance which requires that all products or services to meet the target value exactly
with no, variation. For example, as absolute conformance requires that all sheet metal to have a
thickness of 0.50 inch, not 0.50 0.05 inch or even ± 0.0005 inch. Any variation from the target
values is less than ideal and can have economic consequences. Robustness in quality comes
withneeting the exact target consistently. Any deviation from the target is a quality failure and
weakness in the overall quality of the product or service. Generally, for firms desiring to attain
long-term profitability and customer satisfaction, absolute conformance is considered a better
approach that zero-defects conformance.
Each business function examines its own activities and works to meet impr0vement goals.
Accountants help operating Inanagers understand how decisions in product design affect quality
(and costs) in manufacturing distributi011 and CUStomer service. One of the tools used is
benchnvarking which involves studying organizations that are among the best in the world at
performing a Particular task. Identification of quality-related costs is also necessary if TQM is to
be applied.

6 Organizational Innovations: Total Quality Management Just-In-Time Production System PDF

Uploaded by

Copyright:

Available Formats

6 Organizational Innovations: Total Quality Management Just-In-Time Production System PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

6 Organizational Innovations: Total Quality Management Just-In-Time Production System PDF

Uploaded by

Copyright:

Available Formats

CHAPTER 6

TOTAL QUALITY MANAGEMENT;

JUST-IN-TIME PRODUCTION SYSTEM

TOTAL QUALITY MANAGEMENT

Core Principles of TQM

Focus on satisfying the customer

Strive for continuous improvement

Support and involve top management actively

Use clear and measurable objective

Recognize quality achievements in a timely manner Provide training on TQM continuously

Focus on the Customer

Strivefor Continuous Improvement (Kaizen)

Active Support and Involvement of Top Management

Use Clear and Measurable Objectives

Timely Recognition of Quality Achievement

Continuing Education and Training

Employee training programs serve as a communication link to convey månagement commitment

TQM Implementation Guidelines

Year One --- Preparation and Planning

Conduct executive-quality training programs

Conduct quality audits

Develop strategy on quality improvement

Year-Two — Training and Implementation

Conduct employee communication and training program

Create a measurement system and set goals

Year Three Assessment, Review & Revise

Revise compensation / appraisal / recognition systems

Launch external initiative with suppliers

Review and revise

1. Goalpost Conformance (zero-defects conformance)

2. Absolute qualüy confonnance (robust quality approach)

You might also like