Quality definition

Quality management is an important subject in modern management, and quality is a crucial prerequisite of survival
of any kinds of businesses, it is one of the most important factors to lead a business’s success or failure.

Quality is a perception of class, excellence, a type of "referential" standard or (in definition) reflecting needs and
expectations of customer. (Chris Jarvis, 2000)

No matter what the definition of quality is, its importance to an organisation is obvious. No focus on quality means a
company would lose market share and reputation, and a good reputation is easier to lose than regain.

Quality has been identified as a key competitive weapon in the global market. Quality assurance and improvement is
not only the work of the Quality Control Department; everyone within the organization should implement it.

TQM

During the last few decades, the management literature saw a tremendous increase in the attention paid to the
concepts of quality management and total quality. Total Quality Management (TQM) is one of the important topics
in the field of quality management. It is an approach to improving the competitiveness, effectiveness and flexibility
of a whole organisation. It is a way of planning, organising and understanding each activity and it depends on each
individual at each level. TQM is a way of bringing everyone into the processes of improvement. (Chase, Aquilano,
Jacobs, 2001).

Tenner and DeToro (1992) advocate that TQM has three principles “customers focus, process improvement and
total involvement, and it has six elements “leadership, education and training, supportive structure, communication,
reward and recognition, and measurement.

A TQM program promotes "quality" as a strategic imperative. Comprehensive TQM program requires re-evaluation
how organisational members address the quality of their work and production /service processes. (Chase, Qauilano
and Jacobs, 2001)

Importance of quality at Executive Holloware

The quality is extremely important to Executive Holloware Ltd since:

1.Many of its products were aimed at supplying the top end of the market and commanded high prices.

2.Executive Holloware Ltd was engaged in producing home-used items, -- cutlery and tableware items, such as
silver-plated tea sets, candelabras, and small items of giftware. Customers’ flavour, interests and demands of these
products tend to be more changeable than of other products, which require the company to be flexible enough so
that they can respond to these changes and continuously satisfy customer demands. It is one of the objectives of an
effective quality assurance system -- assist a company to satisfy customer needs and expectations.

3.The quality problems have caused a profit decrease. Although the turnover in 2001 exceeded £18 million, the
pre-tax profit is only £160,000. The main reason of the poor performance was the production inefficiencies. The
company was on the period of transferring the traditional craft methods to a batch production, light engineering, type
system. Non-proficient workers and work system (such as quality control and quality assurance system) caused
quality problems, the reworking costs and customer returns cost the company more than £12,000 each month, which
didn’t include of the indirect costs it caused. As we all know that quality is essential for long-term financial success.

Quality problems and underlying causes at Executive Holloware

We can tell from the case that the profit of Executive Holloware was disappointing compared with the company’s
profit performance over the previous ten years. Quality problems were causing a serious loss. The underlying causes
of the quality problems at Executive Holloware were:

1.The Managing Director and other department’s supervisors were not involved in quality management.
2.Its quality management only focused on the managing of inspection results, the process control was very weak.
3.There were no internal quality audits planned and preformed.
4.The company’s products were dedicated-made and easily scratched, but there were no procedures controlled for
handling, storage, packaging and delivery.
5.The employees’ performance assessment and pay system were not quality-oriented, but quantity-oriented.
6.It had only quality control system implemented by QC Department, which was proven to be not sufficient and
efficient to keep a firm’s competitive advantage in nowadays-economic environment.

Suggestions and recommendation

The objective of total quality management is to assist a company to satisfy customer needs and expectations while,
at the same time, helping to protect the company's interests, ultimately "bottom line" profit.

According to the company’s situation, as the quality problems have caused the financial loss, the quality
improvement processes “total quality management and/or international quality standards (ISO 9000, Baldrige
National Quality Award, etc.) should be implemented.

Now, more and more companies make extensive use of international quality standards, like the ISO9000 series of
standards and the Malcolm Baldrige National Quality Award and so on. Quality certification is an ideal means to
improve quality performance. Besides quality improvement, it is also a competitive marketing tool.

ISO 9000 is a series of standards agreed upon by the International Organization for Standardization (ISO) and
adopted in 1987. More than 100 countries now recognize the 9000 series for quality standards and certification for
international trade. From a practical and useful standpoint for business, ISO 9000 is valuable to firms because it
provides a framework so they can assess where they are and where they would like to be. (Chase, Aquilano, Jacobs,
2001). It would be a sensible choice for Executive Holloware to embark on. The alternative choice was the Malcolm
Baldrige National Quality Award (MBQA).

MBQA was instituted in 1987 to help stimulate US companies to improve quality and productivity while obtaining
a competitive edge through increased profit. It also establishes the guidelines that can be used in evaluating quality
improvement efforts and in learning how to manage for high quality. There is also a series of criteria in this system;
Executive Holloware could implement its quality management practices following the categories:

·Management-based
·Employee-based
·Customer-based
·Information-based
·Product/process-based
·Supplier-based

TQM is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases
of operations, 100 percent accuracy in performing activities, involvement and empowerment of employees at all
levels, team-based work design, benchmarking, and fully satisfying customer expectations. (Thompson, Strickland,
2001) While TQM concentrates on the production of quality goods and the delivery of excellent customer service, it
also involves all other employees’ efforts in other departments “HR, R&D, engineering, accounting and records, and
information systems. TQM aims at instilling enthusiasm and commitment to doing things right from top to bottom
of the organization.

TQM has been a popular business strategy in many leading organizations in the world. There is now considerable
empirical evidence that has shown that the effective implementation of quality improvement practices leads to
improvements in organizational performance in terms of both productivity and profitability. (American Quality
Foundation, 1991; Gordon and Wiseman, 1995). The empirical evidence from these studies suggest that TQM has a
significant relationship with increased quality and productivity, along with improved customer and employee
satisfaction.

As a company without much sense about the quality among the managing team and shop floor employees,
moving towards the TQM paradigm is not a simple process for Executive Holloware. TQM is not a short-term
fix and hence a never-ending commitment is required. The shift from traditional management to TQM is therefore
revolutionary, and its implementation involves a fundamental change in the ways business is done. Those changes
include making customers a top priority, relentlessly pursuing of continuous improvement (Kaizen approach)
of business process and managing the systems of the organization through teamwork.

According to the situation and the difficult reality of implementing TQM, What Executive Holloware should do are:

1.Positive attitude towards quality. Managers at all levels and all staff must have a positive attitude towards
quality to ensure that there is organization-wide commitment to the TQM philosophy and the tools and techniques of
quality improvement. This implies that responsibility is not assigned only to a specialized quality department or
person. Everyone in the organization must integrate the TQM philosophy into his/her day-to-day activities
and decision-making.

According to the case, at one of the regular monthly meetings, Managing Director, Hugh Preston, asked Paul Stone
from Quality Assurance to look at the quality problem. It was a signal that he didn’t realize that it was a serious
problem and he should be personally involved. The Senior Shop Foreman, Jim Dyer didn’t seem to care about
quality much. What he thought about more were the output and the workers’ pay. Alan Jones, from the buffing shop
also said that the workers’ attitude was the sooner they get them out and on the worksheet the better. So, at
Executive Holloware Ltd, a lot of work needs to be done to change the attitude.

2.Leadership education and training. Managers in a leadership role must receive appropriate education and training
in quality management principles and techniques. Without this it is difficult to envisage that managers can provide
the vision and leadership necessary to change the culture of the organization. Leadership training must also be
provided to employees on the shop floor so that they can effectively lead improvement teams to continuously
improve processes.

3.Create awareness within the organization. Usually, companies start their quality initiative using a proven
methodology (such as the Crosby or Juran approach) and an external consultant to create an awareness of TQM
amongst the people at all levels. The senior management team should develop the vision and the mission
statement for the organization and made sure that this was effectively communicated to the rest of the
organization. The company could use the external consultants during the initial stages of the TQM program to
assist in providing some information and knowledge, but the company shouldn’t be totally dependent on them.

4.Employee training and empowerment. Employee training in quality-related concepts and tools are prerequisites for
the effectiveness of quality improvement activities. As we all know, human resources are the most important in
determining the long-term success of a quality management firm. In addition, the knowledge of basic quality
concepts and principles facilitates the understanding of quality relevant issues and provides a common language for
cross-functional teams to problem solving. The basic idea is all employees should be involved in controlling the
work and participating in the business, such as problem solving and decision-making. Empowerment motivates
workers to make their work better. Since people are the creative source for new ideas and innovation, more
satisfaction can be perceived.

5.Recognition and appropriate reward system. Recognition and reward play three important parts in a TQM
environment:
·An indicator of performance
·A feedback tool
·A way to show appreciation for effort by the organization
Executive Holloware didn’t do a good job in this aspect. The workers’ pay was only related to the output, which led
to a poor quality performance directly.
6.Set up quality information system. The traditional random management of quality information systems with
inaccurate, incomplete and outdated information is far from adequate for the competitiveness of the company. In
effect, the exact information on quality is a prerequisite for effective and efficient quality management practices.
External benchmarking is going out the organization to examine what industry competitors and excellent performers
outside the industry are doing. (Chase, Aquilano, Jacobs, 2001) Benchmarking is used by more and more
companies. When comparing the very best, the organization can make improvements in products and processes.
The accurate information system makes benchmarking possible.

7.Set up a formal structure for implementing TQM within the company. The establishment of a formal structure
within the company for the implementation of TQM was also a major factor contributing to success. The structure
should include a steering committee at the top of the company and a strong team of trainers at the bottom, both
providing the necessary environment and support to the improvement teams that had been established throughout the
firm.

8.Improve the product design, process design and control. The quality assurance of product design affects internal
quality performance and competitive capabilities through its effect on the manufacturability, complexity, reliability
features and serviceability of the products. (Qingyu Zhang, 2000). The quality assurance of work process design is
believed to be a crucial practice with the flexibility, reliability, and maintainability of a process.

9.Integrate the voice of the customer and the supplier. In a customer-oriented organization, total customer
satisfaction becomes the goal of the entire organization. TQM is organized for the purpose of customer satisfaction “
what customers expect is they have the most important job the company has. Furthermore, customers are not only
sources of market information, but also providers of key resources including technology, knowledge, skills and other
essential services necessary for the competitiveness of the manufacturers. They help manufacturers to make
decisions. On the other hand, the quality of products depends to a large extent on the quality of the components and
because a company needs full cooperation from its suppliers to design and develop new products with higher
reliability in shorter time, the relationship with suppliers becomes critical for a company’s success. So, continuous
customer and supplier feedback is sought to improve the quality of products and processes. Strategic alliances
developed with key customers and supplier can provide significant improvement in the system.

10.Develop appropriate performance indicators and rewards. Quality and customers-related performance indicator
must be developed as part of the performance review system (reviewing both processes and individuals) at all levels
of the organization. Appropriate rewards must also be provided and these should be aligned with quality
performance indicators.

11. Build unimpeded communication channel throughout the company. Sharing information throughout the
organization is absolutely critical for an organization to survive in today’s competitive business world. A supply of
consistent, accurate and timely information across all functional areas facilitates a better organizational response to
rapidly changing customer needs. With a comprehensive information strategy, different departments can work
together with customers and suppliers to reduce cost, improve products and processes, and shorten cycle times. For
example, new product development requires coordinated information from marketing, design and engineering,
manufacturing and sales.

The adoption of TQM is a major task for organizations that will take a number of years. There is not a single best
approach to implementing the TQM philosophy. An approach unique to the needs and culture of the organization
must be developed. The implementation must be supported at all levels and training and education must include both
hard and soft skills. Besides it, the management team should keep in mind that product and process improvement is
a never-ending process, which is called continuous improvement, an important management philosophy.

Continuous improvement seeks continual improvement of machinery, materials, labor utilization, and production
methods through application of suggestions and ideas of team members. This philosophy is often contrasted with the
traditional approach of relying on major technological or theoretical innovations to achieve big win improvements.
(Chase, Aquilano and Jacobs, 2001).

There are a lot of tools that a company can take to continuous improvement such as:
·Generic problem analysis
·Process flow charting
·Brainstorming
·Cause and effect analysis
·Reverse engineering and value analysis
·Pareto analysis
·Statistical process control

Another approach is the PDCA (plan “ do “ check “ act) cycle, which is also called Deming Wheel. (See the exhibit
below). It expresses the sequential and continual nature of the continuous improvement.

The plan phase of the cycle is where an improvement area and a specific problem with it are identified. It is also
where the analysis is done, for example, using 5W2H method. (5W2H stands for what, why, where, when, who, how
and how much) (Chase, Aquilano, Jacobs, 2001).

The do phase of the PDCA is about implementing the change. The check phase is about evaluating data collected
during the implementation. During the act phase, the improvement is codified as the new standard procedure and
replicated in similar processes throughout the organization. (Chase, Aquilano, Jacobs, 2001).

Conclusion

Employees in an organization tend to resist any changes. So it is inevitable that several obstacles will appear when
the quality management is adopted, especially when in short run, the benefits from the adoption of quality
management is less than the cost. As the resistance towards change is mainly stem from the lack of understanding
of quality management, it could be sorted out by having extensive trainings among the employees.

The development, maintenance and improvement of quality depends on the building of quality infrastructure,
changes in quality culture, transfer of technology, skills and management, integration of quality management
practices, and so on. They are a series of complex skills and a full objective of quality management will take time to
achieve.

Bibliography:

1.Chase, Aquilano, and Jacobs, (2001) Operations Management for Competitive Advantage
2.Thompson Strickland (2001) Strategic Management
3.Yingqu Zhang (2000) Quality Dimensions, perspectives and practices, a mapping analysis
4.Chris Jarvis (2000) Quality Management Systems from The Business of Operation
5.Lindsay Tully, Graham Thomas and David Logan Operations Management (Napier University)