OVERVIEW OF TOTAL QUALITY APPROACHES:The Future of Quality Management

<< COSTS OF QUALITY AND RETURN ON QUALITY:Total Quality Costs

BUSINESS EXCELLENCE MODELS:Excellence in all functions >>

Total Quality Management MGT510

Lesson # 19

OVERVIEW OF TOTAL QUALITY APPROACHES

"A company that claims that it cannot standardize and must rely on experience is a company without

technology."

Kaoru Ishikawa

The Total View of Quality

The concept of customer value represents a dramatic improvement over the traditional approach to

quality, the "conformance to specified standards" approach. It extends the concept of quality to include

user perceptions and use consequences. However, it still falls short of the concept of Total Quality,

which stresses the importance of quality in every aspect of an organization.

Perhaps the Japanese best express this broader and more holistic view of quality, Ishikawa states:

"Narrowly interpreted, quality means quality of product. Broadly interpreted, quality means quality of

work, quality of service, quality of information, quality of process, quality of division, quality of people

including workers, engineers, managers, and executives, quality of system, quality of company, quality

of objective, etc.'" This view of quality may at first seem to be too idealistic. However, managers who

are committed to this view of quality have pragmatic solutions for translating the word "quality" into

organizational realities.

As Imai suggests, it all begins with the "quality of people." He states:

There is very little agreement on what constitutes quality. In its broadest sense, quality is

anything that can be improved. When speaking of "quality" one tends to think first in terms of

product quality. When discussed in the context of kaizen strategy nothing could be further off

the mark. The foremost concern here is with the quality of people. The three building blocks of

a business are hardware, software, and "human ware." Only after human ware is squarely in

place should the hardware and software aspects of a business be considered. Building quality

into people means helping them become kaizen conscious.

This total view of quality includes all of the above quality themes we have already seen, integrating

them into a comprehensive approach to continuous improvement.

The Future of Quality Management

In an article for Quality Digest, another quality pioneer Armand Feigenbaum explains several trends

that will shape the future of quality management. Those trends are as follows:

♦ Demanding global customers. The provision of quality begets an ever-increasing demand for

quality. Today's customers share two common characteristics: (a) they are part of regional trade

alliances such as the Americas, Europe, and Asia: and (b) they expect both high quality and

added value.

♦ Shifting customer expectations. Increasingly, today's global customer is interested not just in

the quality of a product provided but also the quality of the organization that backs it up.

Customers want an excellent product or service from an organization that also provides accurate

billing, reliable delivery, and after-purchase support.

♦ Opposing economic pressures. The global marketplace exerts enormous, unrelenting pressure

on organizations to continually improve quality while simultaneously reducing the prices they

charge for goods and services. The key to achieving higher quality and lower prices for

Total Quality Management MGT510

customers is the reduction of the expenses associated with satisfying unhappy customers

expenses that amount to as much as 25% of the cost of sales in many companies.

♦ New approaches to management. Companies that succeed in the global marketplace have

learned that you manage budgets, but lead people. The old approach of providing an occasional

seminar or motivational speech for employees without making any fundamental changes in the

way the organization operates will no longer work.

The total in total quality indicates a concern for quality in the broadest sense what has come to be

known as the "Big Q." Big Q refers to quality of products, services, people, processes, and

environments. Correspondingly, "Little Q" refers to a narrower concern that focuses on the quality of

one of these elements or individual quality criteria within an individual element.

Which Q Approach?

QMS implementation has to be a systemic approach but which system to choose depends where are you

and how far the management is committed for quality. Each QMS requires companies to deploy various

quality tools for the improvement of quality.

International Quality Awards

A focus on total quality has permeated organizations throughout the world. Numerous countries and

regions of the world have established awards and award criteria.

The Malcolm Baldrige National Quality Award (MBNQA) has been one of the most powerful catalysts

of total quality n the United States, and indeed, throughout the world. More importantly, the Award's

Criteria for Performance excellence establishes a framework for integrating total quality principles and

practices in any organization. Many other award programs are similar in nature to the Baldrige criteria.

The Deming Prize

The Deming Application Prize was instituted in 1951 by the Union of Japanese Scientists and Engineers

(JUSE) in recognition and appreciation of W. Edwards Deming's achievements in statistical quality

control and his friendship with the Japanese people. The Deming Prize has several categories, including

prizes for individuals, factories, and small companies, and the Deming application prize, which is an

annual award presented to a company or a division of a company that has achieved distinctive

performance improvements through the application of Company-wide Quality Control (CWQC). As

defined by JUSE, CWQC is

A system of activities to assure that quality products and services required by customers

are economically designed produced and supplied while respecting the principle of

customer-orientation and the overall public well-being. These quality assurance

activities involve market research, research and development, design, purchasing,

production, inspection and sales, as well as all other related activities inside and outside

the company. Through everyone in the company understanding both statistical concepts

and methods, through their application to all the aspects of quality assurance and

through repeating the cycle of rational planning, implementation, evaluation and action,

CWQC aims to accomplish business objectives.23

The judging criteria consist of a checklist of 10 major categories: policies, the organization and its

operations, education and dissemination, information gathering, communication and its utilization,

analysis, standardization, control/management, quality assurance, effects, and future plans. Each major

category is divided into subcategories, or "checking points." For example, the policy category includes

policies pursued for management, quality, and quality control; methods for establishing policies;

appropriateness and consistency of policies; utilization of statistical methods; communication and

Total Quality Management MGT510

dissemination of policies; checks of policies and the status of their achievement; and the relationship

between policies and long- and short-term plans. Each category is weighted equally.

Hundreds of companies apply for the award each year. After an initial application accepted as eligible

for the process, the company must submit a detailed description o its quality practices. Based on review

of the written descriptions, only a few companies believed to be successful in CWQC are selected for a

site visit. The site visit consists of a company presentation, in-depth questioning by examiners, and an

executive session with top managers. Examiners visit plants and are free to ask any worker any

question.

The Deming Prize is awarded to all companies that meet the prescribed standard. However, the small

number of awards given each year is an indication of the difficulty of achieving the standard. The

objectives are to ensure that a company has so thoroughly deployed a quality process that it will

continue to improve long after a prize is awarded. The application process has no "losers." For

companies that do not qualify, the examination process is automatically extended up to two times over

three years.

European Quality Award

In October 1991, the European Foundation for Quality Management (EFQM) in partnership with the

European Commission and the European Organization for Quality announced the creation of the

European Quality Award. The award was designed to increase awareness throughout the European

Community, and businesses in particular, of the growing importance of quality to their competitiveness

in the increasingly global market and to their standards of life. The European Quality Award consists of

two parts: the European Quality Prize, given to companies that demonstrate excellence in quality

management practice by meeting the award criteria, and the European Quality Award, awarded to the

most successful applicant. In 1992, four prizes and one award were granted for the first time.

The award process is similar to the Deming Prize and Baldrige Award. The assessment is based on

customer satisfaction, business results, processes, leadership, people satisfaction, resources, people

management, policy and strategy, and impact on society. Like Baldrige, results including customer

satisfaction, people (employee) satisfaction, and impact on society constitute a high percentage of the

total score. These are driven by "enablers" constitute a high percentage of the total score. These are

driven by "enablers" the means by which an organization approaches its business responsibilities. The

categories are roughly equivalent to those in Baldrige. However, the results criteria of people

satisfaction, customer satisfaction, impact on society, and business results are somewhat different. The

impact on society results category focuses on the perceptions of the company by the community at large

and the company's approach to the quality of life, the environment, and the preservation of global

resources. The European Quality Award criteria place greater emphasis on this category than is placed

on the public responsibility item in the Baldrige Award criteria.

Canadian Awards for Business Excellence

Canada's National Quality Institute (NQI) recognizes Canada's foremost achievers of excellence

through the prestigious Canada Awards for Excellence. NQI is a nonprofit organization designed to

stimulate and support quality-driven innovation within all Canadian enterprises and institutions,

including business, government, education, and health care. The Canadian Awards for Business

Excellence quality criteria are similar in structure to the Baldrige Award Criteria, with some key

differences. The major categories and items within each category are:

Leadership: strategic direction, leadership involvement, and outcomes.

Customer focus: voice of the customer, management of customer relationships, measurement,

and outcomes.

Planning for improvement: development and content of improvement plan, assessment, and

outcomes.

Total Quality Management MGT510

People focus: human resource planning, participatory environment, continuous learning

environment, employee satisfaction, and outcomes.

Process optimization: process definition, process control, process improvement, and outcomes.

Supplier focus: partnering and outcomes.

Australian Business Excellence Awards

The Australian Quality Awards (now called Business Excellence Awards) were developed

independently from the Baldrige Awards in 1988. The awards are administered by the Australian

Quality Awards Foundation, a subsidiary of the Australian Quality council. Four levels of awards are

given.

The Business Improvement Level: encouragement recognition for "Progress Toward Business

Excellence" or "Foundation in Business Excellence";

The Award Level: representing Australian best practices; recognition as a winner or finalist;

The Award Gold Level: open only to former award winners; represents a revalidation and

ongoing improvement;

The Australian Business Excellence Prize: open only to former award winners; represents

international best practices evident throughout the organization.

As with Baldrige, the framework emphasizes the holistic and interconnected nature of the management

process. The criteria are benchmarked with the Baldrige criteria and the European Business Excellence

Model. One of the distinctive aspects of Australia's program is solid union support.

ISO 9000: what it is

The International Organization for Standardization (ISO) is a federation of the national standards bodies

of nations from around the world. ISO 9000 is about standardizing the systemic approach organizations

everywhere take to managing and improving the processes that ultimately result in their products and

services. Specifically, ISO 9000 establishes the requirements for quality management systems (QMS)

that must be employed by all organizations registered to the standard. Registered organizations should

enjoy:

Wider customer acceptance of products and services

Improved effectiveness and reliability of its processes

Improved quality of products and services

Improved organizational performance and competitiveness

Since ISO 9000 was first released in 1987 it has evolved through two revisions, the first in 1994 and the

most recent at the end of 2000. This evolution has aligned it more closely with the Total Quality

Management philosophy. It seemed to many observers, including the authors, that the 1987 and 1994

versions shied away from association with TQM, or from acknowledging its existence. Even the 2000

version, which borrows heavily from TQM, scarcely acknowledges it. The fact is, of course, that with

the tutelage of W. Edwards Deming and Joseph Juran, the Japanese started the development of the

management system we now know as TQM in 1950. Over the years several Japanese experts Kaoru

Ishikawa, Shigeo Shingo, Taiichi Ono, and others emerged, and by the early 1970s TQM had been

widely accepted in Japan. By 1980 the Western world began taking note. By the time ISO 9000: 1987

was released, TQM was a mature management system, well understood by many in the West. It is clear

that ISO's Technical Committee 176 (TC 176), which was charged with ISO 9000's development,

borrowed some TQM elements, most notably its documentation requirements. ISO 9000: 1994 moved a

bit closer to TQM, at least mentioning (though not requiring) continual improvement. But any

acknowledgement of TQM's influence or superiority seemed to be deliberately avoided. ISO 9000:2000

made a giant leap in comparison, especially in the area of continual improvement, which has gone from

receiving just cursory treatment to becoming a firm requirement.

Table of Contents: