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IILM Institute for Higher Education


Of Master of Business Admiration (M.B.A) By



What is Quality Management?

Quality Management is done when an organisation or product is consistent and can be considered to have four main components: quality planning, quality control, quality assurance and quality improvement. Quality management is focused not only on product or service quality, but also the ways and means to achieve it. Quality management therefore uses quality assurance and control of processes as well as products to achieve more consistent quality. A QMS can be defined as: A set of co-ordinated activities to direct and control an organisation in order to continually improve the effectiveness and efficiency of its performance.

A comparison of Quality Management in various categories

In todays world, organizations are facing the growing challenges from global competition and more sophisticated customers in terms of what they want and their changing needs. Most organizations are starting to apply the Japanese methods of production and philosophies in the hope of achieving the required growth in the markets increasing profit. One of the main ideas that came from the Japanese industry is TQM. It means that all workers within a given organization must participate in improving the product or service quality, an activity that was previously the concern of the quality control department employees. Feigenbaum defines TQM as An efficient system that aims to achieve total quality through the combined effort of all the employees within the organization in order to produce a product/service that will meet the needs and expectations of the customer with minimum cost


Comparison of Quality Management in Service Industries

Most of the large manufacturing firms have adopted TQM programs in order to gain competitive advantage in the global marketplace. Here I have considered three small scale service industries. Those are: I. II. III. Food Service Industry Financial Services Service Directed at People

Food Service Industry

Mandates by the FDA and the USDA such as HACCP procedures and ISO 22000-based food safety management systems are the basis for many quality and compliance programs in the food and beverage industry. Companies are aware of those improperly trained employees, substandard products or poor service can cost millions of dollars a year in lost sales and leave the door open to more severe consequences.

This category of service industry has direct connection to the health of the people. So this is one of the most critical services of the service industry. There are several kinds of customers who demands various combinations of nutrients and the definition of being healthy also differs from person to person as per age, sex etc.

This uniqueness leads to closer scrutiny, so for monitoring the above factors industry always checks up with local, state, and federal health agencies to ensure that certain standards that would otherwise have been voluntary in other sectors are observed.

The food service sector is majorly, the greatest employer as well as the contributor to gross domestic product in the U.S.A and other advanced economies. The stakes are especially high where the service act is directed at peoples bodies and minds for instance health care, food services, and beauty salons. Medical malpractice suits, litigation against restaurants, and liability suits for negligence are common and quite often do lead to bankruptcies. Hence quality and its deployment in services directed at people are even more crucial than in other types of services.

Leading food and beverage companies have benefited by implementing Metric Stream food quality management solution in the following ways:

Protect brand image and market share Ensure the highest quality and safety of products Limit liability of food-borne illness events Reduce materials and ingredients costs Improve supplier product quality Improve relationships with trading partners Reduce product waste and downtime Reduce costs of regulatory compliance Ensure currency and integrity of quality documents


Financial Services
Finance of people is hard earned money. So these kinds of service require more faith, trust, recognition, proper standards and have to be time bound. Moreover, global financial institutions face an increasingly complex market. They must manage customer expectations, meet regulatory demands, develop new products and contain operating costs in an environment of stiff competition. Confronted with the necessity to change, particularly in the aftermath of recession, financial institutions are now facing a new reality, after years of maintaining core platforms based on legacy technologies, they must now re-examine their technology strategy and road map. n financial service industry the word quality means customers expressed and implied requirements are met fully. Customers are more sensitive to service quality and service delivery than in manufacturing because they are always in contact with front-line service personnel as opposed to the case of factory workers Banks are now looking for financial technology and tools that will enable them to stay abreast of compliance, manage risk, display transparency, respond with agility to market changes and customize products even as they safeguard existing investments and maintain profitability. Banks should look upon their customers as their best salespeople because they are users of the products and their desire to recommend them to their friends and family come from the sincere delight and surprise. From a macro-perspective, financial institutions are moving to shed the transactional orientation of the past and focusing on improving efficiency and customer orientation of their operations. Financial service organizations are constantly striving to improve intricate business processes such as:

Managing lending transactions Attracting/Retaining customers Information and financial risk-management

Quality improvement can be done here by applying good data management services which are secured as well as employees awareness towards several products available which will lead to increase in number of customers.


Services Directed at People

Services which are directed to people are generally hospitality services. These are highly people focused which demands better communication skills, work force and non financial performance. The growing need to take initiatives by hospitals in countries like India and Iran to improve the service quality and reduce wastage of resources has inspired the hospitals to make total quality management as their basic necessity. An overview of the health scenario all over the world indicates that despite having numerous excellent health care facilities, there exists a sufficiently large gap between the demand and delivery. With increasing competition, advances in medical sciences, and rising patient expectations, the health care systems have become complex organizations. They need to obtain an optimum balance between the resources and patient satisfaction. It is a philosophy aimed at continuously improving the quality and process to achieve customer satisfaction. Performance excellence as an integrated approach to organizational performance management that results in: -Delivery of ever-improving value to patients and stakeholders, contributing to improved health care quality and organizational sustainability -Improvement of overall organizational effectiveness and capabilities as a health care provider, - Organizational and personal learning.


International Standards
According to my views Quality Management can reach International standards if number of key principles can followed:

Executive Management Top management should act as the main driver for TQM and create an environment that ensures its success. Training Employees should receive regular training on the methods and concepts of quality. Customer Focus Improvements in quality should improve customer satisfaction. Decision Making Quality decisions should be made based on measurements. Methodology and Tools Use of appropriate methodology and tools ensures that nonconformances are identified, measured and responded to consistently. Continuous Improvement Companies should continuously work towards improving manufacturing and quality procedures. Company Culture The culture of the company should aim at developing employees ability to work together to improve quality. Employee Involvement Employees should be encouraged to be pro-active in identifying and addressing quality related problems.

Service industry can be matched to international Standards by ISO 9001 - QUALITY MANAGEMENT STANDARD.ISO 9001 is the internationally recognised standard for the quality management of businesses. ISO 9001

Applies to the processes that create and control the products and services an organisation supplies

prescribes systematic control of activities to ensure that the needs and expectations of customers are met

Designed and intended to apply to virtually any product or service, made by any process anywhere in the world.


Implementing a Quality Management System will motivate staff by defining their key roles and responsibilities. As mentioned above quality of each service sectors differs and that has to be improved as per their own requirements. For example : FedExs worldwide ISO 9001 certification gives us a competitive advantage in the global market- place, especially as more countries adopt ISO standards FedEx Chairman and CEO Frederick W. Smith At IBM, the ISO 9000 standards have proven to be a template for the creation of a sound quality system, regardless of whether the target market is located in the United States or overseas. By embarking on the ISO 9000 journey, it is reasonable to expect lower costs, improved customer satisfaction, greater brand loyalty, and stronger market performance associated with this quality effort. The ISO 9000 quality process can be an important step on the road to total quality management. -IBM Director of ISO 9000Dr. Jack E. Small

Quality Management SCM

In order to improve customer satisfaction, greater emphasis is given to the aspect of quality in the supply chain. Supply chain operations within an organization should be constantly reviewed to identify where improvements can be made or deficiencies eliminated. One method to help do this is to perform a series of benchmarking tests on their supply chain processes. Supply chain management is usually seen as a way to improve competitive performance by combining the internal functions of a company and linking them with external operations of suppliers, customers and other chain members


This may lead to change the traditional structure of the organization. Therefore, the integration of TQM principles offers potential for broadening the perspective of SCM from its traditional narrow focus on costs and competitive relationship to a focus on cooperative relationships between members of the supply chain .TQM and SCM have a significant role in strengthening organizational competitiveness and share the same ultimate goal, which is customer satisfaction. Since, both TQM and SCM requires participation from all the internal functions and continuous collaboration with all external partners, therefore, they offers a unique framework to integrate participation and partnership. However, TQM focus more on internal participation, whereas SCM focuses more on external partnerships. TQM can enhance communication along the supply chain, partnership development, and customer relationship management, properly implementing TQM program could play a major role in developing an integrated organization through teamwork, cordial relationship, training and education, cultural change, and customer focus across the supply chain. Also, TQM practices which are very much effective in the implementation of TQM in the organization could also play a major role in promoting effective integration of TQM and SCM In some cases, there may be differences or conflicts arises between quality and supply performance and this can present problems in implementing an integrated TQM and SCM approaches.

Quality Management in Logistics

Due to increasing global competition, competitive priorities have shifted from simply cost to quality and flexibility as a result logistics is applied as one of the key business processes in delivering value and quality to the customer and in gaining a competitive edge. Although many organisations attempt to apply quality practices in logistics, lack of support from upper management, and being relatively new in application are the reasons to argue the importance of quality in logistics has not been fully realised.


The key areas of focus regarding TQM in logistics services for effective supply chains to manage the challenges of logistics economics and globalisation are:

TQM in logistics services management: excellence models in logistics management for local and global logistics management.

TQM in logistics management decisions: various Decision Support System (DSS), MultiCriteria Decision Models (MCDM) and models based on soft computing to aid logistics managers in decision making.

TQM implementation in logistics services: frameworks related to TQM implementation in logistics services.

TQM benefits in logistics: TQM benefits derived in terms of higher market share, customer satisfaction, customer loyalty, etc.

Cost control and service improvement: rapid and constant change is rocking this traditionally stable area and management must to adapt for growth.

Other Options for Logistics & SCM

Creating variety of services/products which can take over different situations Efficient design of multi plant networks which can reduce the cost. Transfer pricing can be used as it is used in efficient allocation of resources as well as motivates the one with better performance by rewarding them.

Other Options for Services

Various e-banking and e-commerce activities are to be updated. Customer are the important part of every service so standards to be kept by considering Customer needs and requirements. Increase in awareness among employees for improving service quality.

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