Organizational QUALITY Management

1.1     Evolution of Quality

1.1.1  Introduction to Quality

Quality has gone through several phases of evolution – the meaning of the word ”Quality” itself has changed significantly over ages, and especially over the past century.

If I were to give an example of how a word changes its meaning over time, the first thing that comes to my mind is the word “phone”. In India of the 80s, a phone was a static device and a rare sight in homes, used by a privileged few, and, clearly a luxury. In 90s, while it was still a static device, it became more common and had moved up the value chain, thus becoming a ‘comfort’ by utility. In the late 90s, mobile phones came into being and by the turn of the century, the word “phone” triggered two visual images – a static wired telephone set and a heavy lackluster mobile handset. A decade and a half later, however, the “phone” has gone miles up on the utility ladder. Today, it is almost synonymous with a Smartphone that has everything – an internet device, a music gadget, a calling device, a camera and what not! This is an example of how the meaning of a word changes as it goes up the value chain, from being a luxury to becoming a necessity.

For organizations, QUALITY has traversed the same journey to becoming a necessity, albeit over a century. From a purported fad in the early 20th century to becoming a way of life for efficient organizations, the journey of Quality is a story to tell. From ‘Quality’ meaning ‘inspection’ in early 20th century to ‘Quality Assurance’ in mid-century, it now means ‘Organizational Quality Management’ and covers every aspect of an organization – Productivity, Quality, Cost, Delivery, Safety, Morale, and Environment! To understand the story of Quality, we need to delve into the depths of time and recognize the motivations that have driven the evolving meaning of the word.

1.1.2  The History of Quality

The recorded history of Quality goes back to the second millennia BC. It has been archived in documents of the Babylonian civilization, the ancient Egyptian, Indian and Chinese manuscripts that Quality of skill and supplies were measured and rewarded (or punished) for! Also, in ancient Egypt, the pharmaceutical drugs manufacturing promised the usage of the concepts of Quality (measurement and control). Whether it was the Mauryas of India or the Zhou dynasty of China, Papyrus of Egypt or Hammurabi of Babylonia, there have been institutional caretakers of the concept of Quality – and unmistakably, all of them aimed at organizational excellence. But yes, the scope of Quality, then, was limited to measurement and metrics only.

Possibly that’s the reason why the word ‘Quality’ has been almost consistently associated with craftsmen and tradesmen, until the beginning of the last century. Of course, use of Operating Instructions or Procedures (SOPs) in the ancient times has one mention – in the first century BC, the Roman genius Vitrivius who wrote several books on architecture had used systematic documented procedures and work instructions of how the Roman engineering units used to function. Notwithstanding that, the scope of Quality expanded only gradually over the past two millennia from trade, skill-craft to niche products and processes.

Later, it was progressively towards the Middle Ages that the scope of Quality started expanding beyond raw material testing (and measurement) and trade; it went on to the organized production processes and architecture. Empirical rules started getting established to guide the process of trading and guilds to govern them. But it was as late as the 13th century when the formal processes of recording data and establishing procedures (SOPs) were being taken up in the evolving economies, primarily the west. This continued up to the 19th century by when Quality control measures had started getting documented for important processes. On a different note, and taking a diverse view altogether, we would say that the definition of Quality in an era has been what was intended of it. If you look into the evolution of mankind (Figure-1.1) from the ‘gathering and hunting’ to the ‘agrarian’ to the ‘industrial’ and then to the current ‘knowledge’ economy, Quality has always served the desired purpose.

In the agrarian economy, it served craftsmen and guilds to measure and control uniformity (read repeatability and reproducibility). And possibly, that is why the concept of Quality did not evolve further during the medieval ages. In the industrial economy, when the needs moved up the utilitarian ladder, the scientific management came into being and the concept of Quality started evolving towards the present-day structure. In the current knowledge economy that thrives on harnessing intellectual capability and use of optimization and improvement tools, the organization is the key!

Organizational capability is what today economy focuses is on. That is why the scope of QUALITY has transcended conventional boundaries and now aims at organizational excellence rather than just products’ or process excellence.

Having said that, one needs to take a deeper look into the progressive evolution of Quality in line with the needs of the 20th century organizations.

1.1.3 Evolution of Quality in the twentieth century

In the early twentieth century, emergence of ‘manufacturing’ was the most major economic development. Organizations paid attention to productivity and manufacturing costs. Ford created the assembly line with the help of Taylor’s scientific management. We consider the concept of assembly line to be one of the most important industrial innovations of the past century because that is what laid the foundation for mass scale manufacturing and the volumes of production in the world rose dramatically. We also consider this to be the first important milestone in the journey of Quality. Yet, the ‘product quality control’ remained an unavoidable issue.

Let us understand the structure of the Quality organization back then. The designers and process engineers laid the specifications’ attributes of the products to be produced and the processes that would produce them, thereby setting up the standards of manufacturing processes and the operations thereof (SOPs). Staff and employees were asked to carry out operations as per the specifications and standards. The role of Quality was very simple. Quality, then, was synonymous with the quality inspector who checked the dimensions and characteristics of products, detected the errors and failures, and suggested necessary actions to improve quality.

Inspection was costly, since it had to be done for all products and no representative control methods existed for control of product or process quality. When Dr. Walter Shewhart’s control charts came in, they provided some relief and the concept of sampling inspection got discussed. SPC started getting practiced and established in some organizations in Japan. We consider the advent of Control charts to be the second important milestone in the journey of Quality.

When Juran came with the concept of “Cost of Quality”, he differentiated them into prevention, appraisal, internal failure and external failure costs. It was thus understood that losses due to defects were more than the costs of quality control, especially the costs caused by internal failures and external failures. Many thinkers in the field, including Feigenbaum, thought that only SPC could not control the costs of quality effectively and that is why came this intervention on Quality Costs. We consider this as the third important milestone. This introduced an unflinching new dimension to Quality, and thus, paved the way to its current day utilitarian form.

While the concept of Cost of Quality was gaining wide acceptance in organizations, another thought on Quality Assurance (QA) started becoming relevant. The concept of QA was most importantly pro-active and was ‘user-oriented’. So far, Inspection and Quality Control had been reactive in nature. Feigenbaum reiterated that QA could not be achieved by the control just on production process and proposed the concept of Total Quality Control (TQC). TQC meant that quality was to be determined and controlled at all stages of the product’s life-cycle starting with product design, incoming quality, the process quality control, product reliability, inventory, and should go upto delivery and customer service.

In quick succession, came in associated and advanced concepts like Quality Engineering and developments on FMEA and Design of Experiments. Application of high-end statistical tools like Multi-variate analysis, Hypothesis testing, Modeling & Simulations, etc. had started being practiced in organizations for complex and inter-related problem solving. This journey of Quality through evolving Quality concepts is explained in Figure-1.2.

However, these were not the next big break in the journey of Quality. The big break came when the term “Total Quality” got understood. In a paper presented by Dr. Feigenbaum in the first international conference on Quality Control in Tokyo in 1969, he used the term “Total Quality” for the first time, and referred to organization level issues such as Management responsibility & control, planning, customer and new products etc. Soon after, Dr. Ishikawa presented another paper on how “total quality control” in Japan meant companywide quality control and spanned across to Productivity, Quality, Cost, and Delivery alike. This gave birth to the concept of organization wide ‘Quality Management System’, which became a part of Japanese lexicon by mid-70s. We consider the emergence of the concept of ‘Quality Management’ as the fourth major milestone in the evolutionary journey of Quality.

Japan’s role in the journey of Quality

Post WW II, the determination of the Japanese people to arrive at high levels of quality for their products was plentifully evident. Most managers in Japan at that time believed that it was the only way to resurrect a ravaged nation like theirs. This resulted in a colossal capability building exercise through which the entire executive to supervisory ladder in most Japanese organizations improved their know-how about quality. The exercise established the KPI improvement methodology across industries, right from defining the problem to analysing it and then improving and sustaining improved levels.

When the Allied forces were occupying Japan in 1947, Dr Deming was asked by the US Army department to help in planning for the 1951 Japanese Census. The JUSE (Japanese Union of Scientists and Engineers) members had studied Shewhart's techniques and were appreciative of Dr. Deming’s ongoing reconstruction efforts for Japan. When they sought an expert to teach statistical control, Dr. Deming was asked to help them out. In mid-50s, he trained hundreds of managers, engineers and researchers on Quality concepts and SPC (Statistical Process Control). During the course of his capability building exercise, he conducted senior management workshops for various Japanese top industry executives. Dr. Deming used to conduct his training courses in statistical methodology, and some follow-on courses were also conducted by JUSE. Several Japanese manufacturers started using his techniques to improve quality and productivity and reduce cost. However, for some time, there actually existed an overemphasis on use of statistical tools for quality and an under-emphasis of use of managerial tools.

Truly speaking, what catapulted Quality to the fore-front was World War-II. Mass scale manufacturing of critical components for warfare became the motto of nations for those few years. And, not surprisingly, the capital and businesses followed suit. During the War, it required for a component manufactured in one state of US to fit another mating component manufactured elsewhere while being assembled in a third country. Bullets manufactured in one place had to fit into rifles manufactured elsewhere and consistently so. In my opinion, if the world war has done one benefit to humanity, it is that it made quality or consistency of products the centre-piece of manufacturing. Possibly Quality would have taken a few more decades (or a century) to naturally evolve to this stage, had World War II not happened. Of course, the importance of Quality got raised to the current level of importance due to the contribution of several Quality Gurus who brought out the current utilitarian and relevant form of it. Few of the significant contributors are listed in Figure1.3. Also, it was this time in history that we consider important because organizations felt Quality Management was a necessity for them now.

By then, Japanese organizations that wanted to do better had understood the utilitarian value of Quality Management beyond the conventional use of improving product Quality.

Foreign importers were becoming increasingly aware that quality competitiveness of Japanese products was growing. The experiments that Japan, as a nation, did with the emerging concepts of Quality started paying off. By the mid-70s, Japanese industries had developed deep insights on Quality and customer focused strategies and were marching Japan towards “world-class Quality”. Soon, various types of Japanese industrial goods started challenging world’s quality leadership. Through creation of leaner-manufacturing and customer-centred practices, they created competitive advantages and quickly entered the western markets.

While the US was still flooded with its swanky fuel-guzzling cars that it was proud of, Japan started penetrating its markets with sleek and fuel-efficient automobiles. The same was the case with white goods, electronics and most of other commodities. The world-wide markets started enjoying the high-quality products at lower prices and domestic shares of these countries started getting eroded by Japanese competition. The once proud US that always shunned Japanese products in its supermarkets as ‘cheap’ till early 70s, woke up to the reality and so did Europe. We are reminded of the famous NBC prime time debate in early 80s in the US that said – “If Japan can, why can’t we?” Their industries started benchmarking the Japanese performance and it was then that TQM started gaining relevance in the world.

1.2   Defining Quality

“Change as the only constant thing”. Changes in Technology, customer’s needs and likings, innovations, economic, social and environmental issues have forced organizations to re-orient/ re-organize themselves towards ever changing business scenario. Many organizations have achieved higher levels of performance by adopting new ideas/ concepts. In this era of continuous change, confidence to customer that the product/service delivered shall meet the intended need is of utmost importance. Therefore, “Quality” means those features of products which meet customer needs and thereby provide customer satisfaction. In this sense, the meaning of quality is oriented to income. The purpose of such higher quality is to provide greater customer satisfaction and increase income. Therefore, “Quality” is defined as “conformance to requirements”.

As already discussed in the section 1.1.1, the word QUALITY has metamorphosed in its intended meaning from the primitive understanding of ‘inspection’ in the early 20th century to ‘Quality Assurance’ in the mid- century and finally evolving into ‘Organizational Quality Management’ today. Section 1.4 discusses in detail about the ‘Organizational Quality Management Systems’. However, from the perspective of products and processes, the quality management system of any organisation is analysed by three key elements of quality viz. (1) Product Quality, (2) Process Quality, (3) Social Quality. Product quality refers to the conformance of product or service to the customer’s requirements. Process quality is the effectiveness and efficiency of series of jobs carried out to manufacture and supply a product or service. Social quality is the impact of factors such as noise, vibration, emission, pollution, etc. generated at the time of production and use of a product or service on a third person. Next section discusses of using quality as a strategic framework to transform how organizations should use different dimensions of quality to ensure customer satisfaction and increase margins.

1.2.1 Adopting Quality as Strategic Framework

To achieve quality gains, it is necessary to adopt a new way of thinking which uses quality as a strategic framework to leverage value and gain competitive edge between competitors. Product designers should shift focus from product costs to product lifecycle costs that includes expenditure on service and maintenance, which constitute the customer’s total costs. It is therefore, essential to stratify quality to manageable parts and take up initiatives to achieve them. David R Garvin proposes the eight critical dimensions or categories of quality that can serve as a framework for strategic analysis: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality.

1. Performance: Performance refers to a product's primary operating characteristics. For an automobile, performance would include traits like acceleration, handling, cruising speed, and comfort. Since this dimension of quality involves measurable attributes, brands can usually be ranked objectively on individual aspects of performance. Overall performance rankings, however, are more difficult to develop, since every customer evaluates performance differently.

2. Features: Features are usually the secondary aspects of performance, the "bells and whistles" of products and services, those characteristics that supplement their basic functioning. The line separating primary performance characteristics from secondary features is often difficult to draw. The crucial aspect here is to identify the objective individual needs of each customer; which differentiates the product from the rest.

3. Reliability: This dimension reflects the probability of a product malfunctioning or failing within a specified time period. Among the most common measures of reliability are the mean time to first failure, the mean time between failures, and the failure rate per unit time. Because these measures require a product to be in use for a specified period, they are more relevant to durable goods than to products or services that are consumed instantly.

4. Conformance: Conformance is the degree to which a product's design and operating characteristics meet established standards. The two most common measures of failure in conformance are defect rates in the factory and, the incidence of service requirements, once a product is in the hands of the customer. These measures neglect other deviations from standard, like misspelled labels or wrong dispatches, which do not lead to service or repair.

5. Durability: A measure of product life, durability has both economic and technical dimensions. Technically, durability can be defined as the amount of use one gets from a product before it deteriorates. Alternatively, it may be defined as the amount of use one gets from a product before it breaks down and requires replacement.

6. Serviceability: Serviceability is the speed, competence, and ease of repair of sold products or services. Consumers are concerned not only about a product breaking down but also about the time before service is restored, the timeliness with which service appointments are kept and the frequency with which service calls or repairs fail to correct outstanding problems. In those cases where problems are not immediately resolved and complaints are filed, a company's complaints handling procedures are also likely to affect customers' ultimate evaluation of product and service quality.

7. Aesthetics: Aesthetics is a subjective dimension of quality. It concerns about the look and feel of the product and is highly subjective in nature. It is a matter of personal judgment and a reflection of individual preference. On this dimension of quality, it may be difficult to please everyone. Therefore, using this as a critical dimension may not be as effective as the other dimensions.

8. Perceived Quality: Consumers do not always have complete information about a product or service attributes; indirect measures may be their only basis for comparing brands. A product's durability for example can seldom be observed directly; it must usually be inferred from various tangible and intangible aspects of the product. In such circumstances, images, advertising, and brand names - inferences about quality rather than the reality itself - can be critical. Therefore, perception of quality is also a key indicator to differentiate quality from its competitors.

The most traditional notions- conformity and reliability remain important, but they should be subsumed with a broader strategic framework to explore the opportunities to distinguish its product from other companies.

1.2.2 Managing Quality

Quality has been simply defined as “fitness for use” from the customer’s perspective from quite a long time, and it is a common understanding that if an organisation produces goods that is “fit for use” from the customer’s perspective, it is of higher quality. Joseph M. Juran defines management of quality as a set of managerial methods that organizations should use if they want to assure their products & services meet customer requirements.

The Juran Trilogy (Figure-1.4) is one such conventional method to manage quality. It is based on three aspects namely, Quality Planning, Quality Control and Quality Improvement. Together, they are used to manage quality to ensure products being produced are in conformance with the end user requirements.

Quality Planning (Figure-1.5)

Quality planning as the name suggests, is a structured process for developing products and services that ensures that the customers’ requirements are met. It is one of the three basic aspects used in managing quality. All the activities involved in this step are aimed at ensuring that the final quality gap is at a minimum. It is the most important step of all the three steps, since this provides clear goals, direction and the infrastructure required to achieve desired quality. Intrinsically, it is the process of establishing quality objectives and developing “means to achieve those objectives”.

Quality Control

This refers to the process used to control existing processes so as to keep them stable and prevent changes. As improvement processes take place in stable systems the control shifts to a new zone and requires new controls at this new performance level. However, this should not be misunderstood as quality assurance, as both these have much in common; both evaluate performance, compare performance to goals, both work on reducing the deviation. Here, the feedback is received from the operating forces and this process is used to maintain control in the existing processes, with the entire system working during operations. While, quality assurance’s main purpose is to check whether the control is being maintained, performance is being monitored after operations, gaps are minimized, and any customer issues are being resolved properly. The feedback here is received from both the operating forces and the customers. Quality control focusses more on detection whereas; quality assurance focusses more on prevention of defects. Refer Figure-1.6 for clear distinctions between quality assurance and quality control.

Quality Improvement

As the product goals are already in place, the processes required to achieve them are also available. However, the resulting processes do not provide the intended results. Therefore, quality improvements need to be undertaken to improve product characteristics or produce products free from deficiencies. The case in point here is that improvement initiatives can be undertaken to improve existing products from the current level or to remove chronic problems.

Quality improvement activities which add value to existing offering may include actions such as:

-New Product development activities to create new features, thereby increasing the customer satisfaction and increase income,

-Undertaking business process improvements to reduce cycle time for improving process cycle efficiency and enhance customer satisfaction,

-Improving equipment availability,

-Creating avenues for faster complaint resolution to reduce service times,

Quality improvement to reduce deficiencies may consist of actions like:

-Increasing the overall Yield.

-Reducing error rates.

-Reducing process abnormalities and controlling variations.

Quality improvement initiatives can be undertaken by (1) PDCA Methodology (2) Seven tools of Quality Control (3) Quality Function Deployment. These techniques have already been discussed in different sections of this book.

1.2.3 Quality and Costs

The concept of identifying costs associated with various functions like product development, marketing, personnel and production has always been prevalent in organizations. However, the concept of analysing quality costs arising out of poor quality have been accommodated lately. Ever since the inception of the concept of “quality cost” it has different meanings for different people. Some have equated quality costs with the cost of attaining superior quality. Others have equated the quality cost owing to stringent inspection and testing norms. The emerging interpretation equates it with the cost of poor quality. It primarily consists of the following elements:

1.    Internal Failure Costs

2.    External Failure Costs

3.    Appraisal Costs

4.    Prevention Costs

The traditional cost of quality model emphasizes for an optimum quality; as appraisal and prevention costs increase, the failure cost decreases. However, with the advancement of design, production and quality technologies not only the basic manufacturing cost but the quality control cost has also changed. The emerging cost of quality model (refer Figure 1.7) emphasizes on increasing the optimum quality level so that prevention and appraisal costs reduce, reducing the total cost of the product.

The first two are caused by quality defects and are divided into internal failure costs (i.e. the cost caused by manufacturing defects like scrap, rework and salvaging) and external failure costs are incurred due to defects passed on to the customers which deems it unfit for usage, together they are categorized as failure costs or cost of non-conformance. Appraisal cost is the cost of measuring quality i.e. costs incurred to avoid defect outflow to the customers (inspection and testing) and prevention cost is the cost of preventing quality defects including activities like cost of training the operators, equipment control, measurement control and standardization. These costs are costs of conformance or quality costs. When failure costs are high, investing greatly on control cost reduces the overall non-conformance, but when the failure costs are low, investing more on control cost does not yield substantial results.

 1.3 Evolutionary effect of Quality on Organizations

Having read through the history of Quality, its development through changing concepts led by various Gurus, the contribution of Japan to experiments in Quality, let us now re-discuss the evolution of scope of Quality in the 20th century. Certain points would be reiterated here to bring about the broad-based understanding on evolution of Quality (Figure-1.8).

In early days, the challenge for manufacturing units was to identify a defect before its control. This is where the word Inspection was born. In those days, the term “Quality” conjured up the image of the quality inspector doing rounds of the shop floor to find defective products and finding faults with the ‘ever hard-working’ operational work-groups! As industrial production set-ups started waking up to the call of reducing defects and improving compliance, Quality started getting broad-based. Thus, the scope started maturing from only inspection and fault finding to Quality Control and then to Quality Assurance. Philosophically, Quality had a phase change here. The ‘purpose of work’ of Quality changed from reactive (corrective) to preventive. 

This is where concepts of reliability, repeatability etc., started getting built in the design of processes. Thereafter, Quality has seen no phase change; it has only been expanding in scope or areas of work. It started to work on identification of defects, then their elimination and finally assuring defect free processes. Thus, Quality was also indirectly working on improvement of productivity and cost through its improvement. However, in later part of 20th century, the scope started getting expanded formally to aspects of productivity improvement, cost reduction, improving delivery parameters, ensuring safety, etc. (P,Q,C,D,S,M,E). Quality Management methods or systems that begun to take shape in various industries or organizations started to expand their ambit depending on the type of requirement. LEAN emerged out of Toyota’s quest for world class quality and was very assembly line focused. It dealt with elimination of every element of waste that would creep into their production systems. 

Also, the ‘control of quality’ changed hands with evolution in time. Let us look at the evolution of control ownership (Figure-1.9).

As you can see, the ‘control of Quality’ moved hands from that of an unwilling supervisor to a raging inspector to a ‘Statistical Process Control’ guy before finally moving to an Organizational Quality Management set-up. While all this was happening, the Japanese organizations at the middle of the century learned from the Americans and went ahead to teach the rest of the world.

1.4   Organizational Quality Management

1.4.1  Elements of Organization Quality

Let us now re-examine Quality from the Organizational Quality Management standpoint. As explained earlier, at the beginning of the twentieth century, the meaning of quality was ‘conforming to the standards and specifications of a product‘, and needed the quality practices like standardization, inspection, and reduction of rework (through correction).

Through his early tenure in Japan, Dr. Deming emphasized that the purpose of Quality was “to fulfil the requirements of customers and satisfy them” and thus, the meaning of ‘quality’ gradually changed towards becoming ‘customer-focused’. Organizations, therefore, started paying attention to satisfying customers and bring about customer loyalty. Organizations also started working on developing methods to find out the customers’ needs and expectations, through customer needs surveys, and market research. Entering the twenty first century, the quality concepts changed radically. ‘Innovation’ and ‘customer delight’ became the central essentials of quality concepts and reflected as ‘attractive quality’ and ‘innovative quality’, thus urging organizations to re-engineer their existing Quality Management Systems.

There is intense global competition and every country’s economic performance and trade deficits largely depend on its reputation for quality through performances of its companies and other products & services. Organizations adopt Quality Management practices to institutionalize improved Quality at workplace and lower costs to be able to deliver products in the marketplace with good quality and price. But these management practices are ever evolving, and it is important for these organizations to be able to perceive and adapt to the changing needs. Let us look at what the evolution needs of Quality were that have progressively led to the emergence of the current state of Quality Management practices.

Before trying to understand what an organization grapples with while dealing with implementation of Quality systems, let us probe into what QUALITY implementation requires of an organization (just as the tenets of Quality and the requirements thereof are well explained in Figure-1.10).

By the mid-1980s, Japanese industry had reaped good benefits from the QC culture and had embedded statistical thinking into its organizations. The QC culture and the QC story approach had matured while getting horizontally deployed across industries. Around that time, the business management in Japan was going through new challenges with issues of appreciation of the Yen. It was then that they started to think about building a more comprehensive Organizational management system that could improve the competitiveness to the next level. In 1993, the Japan Research Association of the QCC published the “subject-reaching-type QC story for QCC” (Kano) and the Japan Science and Technology Alliance published the “quality improvement procedure (QIP)” based on this type of QC story approach. In 1995, the Japan Science and Technology Alliance completely revised the QCC program and the Japanese TQC (Total Quality Control) started getting the name of Total Quality Management (TQM).

It is important, now, to understand what Organizational Quality is and why and how organizations adopt Quality systems. For that, we need to understand the basic requirements of “Organizational Quality” or “Total Quality”.

Through the Figure-1.10, one can clearly see ‘culture’ becoming the cornerstone of Quality.

It is apparent that it is about creation of a culture of a sustainable model of learning and continuous improvement. After looking at Japan’s history and cultural traditions, it is obvious that Japan’s adoption of quality control after the Second World War was a product of both their cultural tradition of improvements and the chance that it had some of the best American Quality thinkers then experimenting on its fertile soil. But it was because of the former reason (tradition of improvement) that the latter became a success story. We feel culture is not an impassable barrier to the adoption of quality control, but it does have some power that can be made to either help or hinder the efficacy of implementation.

Once Japan began to overtake the United States, many firms attempted to adopt Japanese quality control techniques, to varying degrees of success. Culture was the most commonly cited reason for the failure of Japanese quality control methods in America. Companies who struggled with its implementation would often give up, claiming that the work environment in America was too culturally different for these Japanese techniques to work. However, some organizations or industries were able to make these methods work quite well for them, which would indicate that social culture was not the determining factor in the situation. Rather, we consider an organization’s ability to create a culture of Continuous Improvement as the determining factor.

More empirically, implementation of “Total Quality” or “Organizational Quality” in organizations is about integrating the hardware and the software of Quality. While the hardware consists of the standardization, analytical & problem-solving tools, statistical tools, Quality governance mechanism, etc., the software comprises of philosophies of employee engagement, training & development, rewards & recognitions, continuous improvement culture, etc. The development of successful Quality Management methodologies like Six-Sigma (Motorola, GE), Lean (Toyota), etc. are examples of in-house developed organization specific systems that changed those organizations and became trendsetters for the rest of the world.

Once industries across countries realized this need, a host of Organizational Quality Management Systems sprouted up. The British Standard (BS) came up in 1979; the National Quality Campaign was launched in 1983 in UK to bring importance to quality for competitiveness and survival in the global market to the focus of the industry. Since then, the International Standardisation Organisation (ISO) has become the internationally recognised standard for Quality Management Systems. It comprises a number of standards that specify the requirements for the documentation, implementation and maintenance of a quality system.

1.4.2  Implementing Organizational Quality Management

Quality Management is now part of a much wider concept that addresses overall organizational performance and recognizes the importance of processes. There is also extensive research evidence that demonstrates the benefits from the approach. As we moved into the 21st century, Quality Management has further developed in many countries into holistic frameworks, aimed at helping organizations achieve excellent performance, particularly in customer and business results. In Europe, a widely adopted framework by the European Foundation for Quality Management (EFQM) is the “Business Excellence” model, and in the UK by the British Quality Foundation (BQF). Similarly, the US developed its robust response to the global Quality competitiveness through adoption of the Malcom Baldrige National Quality Award (MBNQA).

At a very fundamental level, each of these Quality Management Systems including TQM rely on three basic things:

1.    A Business System or Quality System framework: This helps them define their Continuous Improvement philosophy or approach to the various areas of business functions like Training & Development, Human Resource Management, Operations excellence, New Product Development & Technology, Supply Chain Management, Marketing & Sales, Safety, Environment, etc. Some companies like Toyota have a different Business system for different parts of the Value chain (example - TPS for Production System, TMSS for Toyota Marketing & Sales system, TDS or Toyota Development System for NPD, etc).

2.    A Tool-kit based problem solving approach: This helps them define the various generic improvement frameworks and the problem-solving techniques thereof. A formatted approach helped employees arrive at a common platform and use the same language and improve employee engagement (example – DMAIC for the Six Sigma methodology helps employees work on a common improvement project management format and use the analytical tools in a common way).

3.    A Top-down review mechanism: This is used to drive the processes of improvement, then embed and institutionalize them through various functions. This senior management sponsorship through robust tracking, review and control helps organizations speed up the improvement process. These mechanisms could also include those for training & development like a ‘Yellow Belt’ to ‘Black Belt’ structure for Six Sigma. Why I consider this as a top down structure is because of the inbuilt review & progress structure.

Having discussed the above, I feel organizations that have been successful in their Quality journey have to progressively evolve to be able to finally create organization wide improvement culture. At a generic level, I feel organizations undergo three phases of evolution in their implementation journey (as shown in Figure-1.11).

1.    Introduction: the initial years of the journey may be spent introducing and establishing the spirit of improvement through the organization. This is also referred to as “TQM promotion”. I’ve seen this through knowledge of various organizations around the first phase. While most take more than a decade to travel through the first phase, some might take just a few years through superior leadership.

2.    Establishing Business impact: having promoted the Quality philosophies adequately well, organizations grapple with the most common problem – how to establish that all of this is going to be useful? Here is where all training imparted during the first phase comes in handy and helps create those ‘quick-wins’ to establish that the usage of analytical tools can solve business problems and make KPI improvements. Hereafter, the organization starts enjoying the application of Quality improvement methods and tools and begins experimenting with it in many forms.

3.    Institutionalization: this is the phase where many organizations stop their journey. They are contended with the achievement of superior results through application of TQM and stop investing further towards continual improvement of systems. However, the institutionalization journey only begins here. Organizations need to embed the good practices, nurture them through continual improvements and make them a way of life. The practices thus developed serve as a fountainhead to train incumbent employees before becoming the culture of the organization.

Now let us take a view of this evolution through the other lens of how the set-up matures with progression of time. Here again, I would say that an organization matures through these stages of focus:

1. Stage I: focus on tools – as the workforce along with its senior leadership grapples with the implementation issues over the initial years of implementation, the organizational focus remains on application of tools or methods learned. Issues like Standardization, SOPs, Policies and procedures dominate discussions on Quality management.

2. Stage II: focus on initiatives – as the maturity moves up, the organization starts to assimilate knowledge of tools and methodologies through initiatives. People begin to talk about improvement initiatives and learn to differentiate one versus the other. The focus of discussions within an organization graduates from talking about learning specific tools to trying to ascertain impact of application of tools. It is now that the cost Improvement, productivity Improvement metrics, etc. become the delivery engines. People begin to engage with one another in problem solving and knowledge sharing forums. The focus subtly moves from initiatives to becoming a culture.

3. Stage III: focus on culture – finally, with sustained engagement through various initiatives, the spotlight moves to culture. The employees see the culture as the driver of improvement and not tools or initiatives. Here is where institutionalization starts taking roots.

Having said that, the challenge that most of senior managers and TQM practitioners face while implementing QUALITY at grass root level remains the same. The organization initially feels that such initiatives are fads – they just come and go!

The bigger challenge, therefore, is to convince the employees about the utility of practicing TQM; about how the exercise helps the line build problem identification and problem-solving capability and how it affects the top-line and the bottom-line. Some organizations like GE have dealt with it in a systematic manner. While running the Six Sigma Black Belt capability building program, they would ascribe a savings (cost savings or EBITDA improvement) targets for each project for completion of the program. This helped them build organizational bandwidth for the improvement journey and prove the utility of Quality Management practices. This kind of a top down focus on deriving business outcomes from a Quality Management exercise helps in better anchoring.

Understanding of Quality and then Quality Management Systems (and organizations that deploy them) is essential. But what is required next is to understand what enables improvement through these practices – i.e. what is Problem Solving and Task achieving? An organization can successfully practice Quality Management if it establishes a robust Problem-Solving framework to deliver utility out of it.

1.5   Impact of implementing TQM

1.5.1  What is TQM?

As per Japanese Union of Scientists & Engineers (JUSE), the official body that is responsible for TQM Promotion across the world, “TQM is a set of systematic activities carried out by the entire organization to effectively and efficiently achieve company objectives so as to provide products and services with a level of quality that satisfies customers at appropriate time and price”.

TQM is a management system that aligns and integrates all functions in an organization’s value chain towards effectively and efficiently managing its processes and deliver the right products & services to the end customer. A TQM culture helps the various functions or processes in value chain (inbound logistics & raw materials, operations, production planning & control, design & engineering, marketing & sales) to focus on identifying and meeting customer requirements. Also, TQM is an adaptable management system that is as applicable in the Service industry as much in manufacturing organizations. TQM as a philosophy gives adequate room for developing organization’s own set of practices customized to its culture & business need.

For deploying TQM in any organization, the TQM vehicles used are:

? Policy Management

? Cross-functional Management

? Daily Management

? Employee Engagement Activities or Small Group Activities (QCCs)

The linkages between the above is well explained in section 2.4 and that between DM and PM is explained in Section 4.5.

For organizational success, every function and every department must play their defined role in a team and move their KPIs to required levels, even without directions from eadership team. Under normal conditions, the Daily Management (DM) methodology helps to maintain and sustain the present pace of progress while keeping the employees motivated and engaged.

However, if there is a need for a major change in direction, in order to achieve any long-term strategic objective, the leadership team needs to adopt the Policy Management (PM) methodology. The leadership team should be strong enough be able to manage this transition whenever there is change in business direction or major changes in external or internal environment.

Thus, Policy Management is carried out for "major changes or improvements" whereas Daily Management is carried out for "stabilization and maintenance". Most manufacturing organizations have complex value chains with a set of interlinked input-output processes. Their processes are designed with inputs from the supplier (internal or external), keeping the outputs for the customers (internal or external) in view. Using the capabilities of the processes, the purpose is to deliver value to customers with minimum variation despite a continuously changing internal and external environment.

Given the inherent variability of input processes and that it is unavoidable, the focus of organizations should be towards developing mechanisms that deal with variability well and minimize their impact through process control.

Thus, the Daily Management must focus on ‘stabilization’ and ‘standardization’ while making small improvements.

1.5.2  Benefits of TQM on Organization’s Culture

A TQM organization has the following hallmarks:

?   Lower customer rejections,

?   Leadership vision and commitment,

?   Robust strategic planning & deployment,

?   Engaged employee base

?   Evolving new products with low NPD cycle time,

?   Process efficiency leading to improved QCD parameters,

?   JIT in supply chains,

More importantly, with adoption of a TQM approach, following significant benefits are seen in the organizational culture:

1. Development of analytical-thinking based decision-making culture

A good TQM system relies on making decisions based on facts to minimize errors in decision-making and consequently lowering errors in taking actions. With improved data capturing through measurements systems these days, most organizations have enough data to deal with. However, many of them lack a formal process of collection, analysis and interpretation of data towards organized problem solving and task achieving.

The TQM system helps develop systems of data collection - data analysis - data interpretations - developing countermeasures. An analytics-based problem solving and task achieving approach like this is the biggest benefit of implementing TQM.

2. Development of Process Approach

An organization’s value chain consists of various interrelated sub-processes or elements with their individual input-outputs, which convert inputs into outputs by using various resources.

Understanding these processes and their interactions with each other while effectively managing the inputs and outputs is known as a “process approach. A process approach helps analyse customer requirements. This requires the use of resources, e.g. - people, equipment, materials, technology, etc. These resources can be used as inputs (raw materials or information such as a customer specification) as well as for the value-adding conversion activity (e.g. use of machinery, equipment, computers, technology, people, etc.) to transform raw material (input) into finished product (output). The performance of all processes can be monitored and measured.

Performance data can be analysed to determine process effectiveness and whether any corrective action or improvement is needed. The performance of an organization can be improved using the process approach. The processes are managed as a system defined by the network of the processes and their interactions, thus creating a better understanding of added value. The consistent operation of this network is often referred to as the "system approach" to management. Often the outputs from one process can be the inputs to other processes and are interlinked to the overall network or system

The advantages of the process approach to an organization may be:

a) Alignment that it creates in the organization amongst processes of the value chain, while directing the focus to improving process efficiency,

b) Secondly, alignment makes information flow happens seamlessly,

c) Thirdly, the responsibilities are clarified and cascaded well through their managing and check KPIs, thereby creating an empowered workforce by it.

d) All the above leads to improved QA processes and hence, improvement in QCD parameters.

3. Development of Continuous improvement thinking

One of the key benefits of TQM deployment is that it inculcates a continuous improvement culture with a PDCA-SDCA based thinking.

The PDCA is an interactive, four step management method used for continual improvement and control. PDCA thinking, which is the basis is continuous improvement in TQM, is explained in Figure 1.12.

SDCA (Standardize Do Check - Act) cycle is used to sustain and maintain a process with gradual improvements. This cycle normally succeeds or precedes a PDCA cycle of improvement. SDCA is another form of PDCA cycle, which emphasizes on importance of Daily Management. Here the P (Plan) of PDCA is replaced by S (Standardization).

For continuous improvement of any KPI, the approach would be a mix of PDCA (large improvement through Plan Do Check Act cycle) and SDCA (Sustenance through Standardize Do Check Act cycle). Sometimes it is a mix of successive or alternate PDCA and SDCA processes. Typically, Policy management involves in carrying out large improvements through a PDCA cycle of improvement. If the desired new state of the KPI is high, the time taken to reach there through Daily Management would be much higher compared to the time it takes to achieve it through Policy Management.

So, any improvement process starts with PDCA cycle and once the desired levels are achieved, it is taken up into Daily Management through SDCA cycle for sustenance of the achieved levels and continue with minor improvements. In organizations that implement TQM, creation of a PDCA-SDCA thinking reaps huge benefits. After every major improvement through PDCA cycle, people quickly rotate a SDCA cycle and make further progress through incremental improvements. After some time, they again look forward to carrying out another big improvement and rotating the PDCA cycle. This runs in perpetuity towards continuous improvement of all KPIs.

The example shown in Figure 1.13 explains the productivity improvement story of a manufacturing unit over 3 years. It shows the initial state before improvement where the productivity was low and the standard deviation on performance was also high. A set of major improvements were carried out to improve productivity (performance) through rotation of a PDCA cycle. While the productivity improved, it was initially not stable and had wide fluctuations. Then a SDCA cycle was rotated to stabilize performance.

4. Bringing in Customer focus

The real benefit from TQM comes from change in culture! During initial phases of TQM implementation, even senior people do not understand the profound meaning of ‘Quality’! Quality to them is about meeting customer specifications. Organizations that have sustained TQM practices over a long period through a process approach tend to evolve towards bringing about proactive customer satisfaction! Everyone looks forward to the next process, as they move from ‘customer satisfaction’ to customer delight’. Thus, all activities in a TQM organization tend to focus on the end customer’s requirement in an aligned and integrated manner. This is by far the most important cultural shift that an organization sees on implementing TQM. 

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