Tqm in Manufacturing and Service Organizations

TQM in Manufacturing and Service Organizations 14 April 2010 GM 588 Introduction to Topic Total Quality Management (or TQM) is a management concept coined by W. Edwards Deming. The basis of TQM is to reduce the errors produced during the manufacturing or service process, increase customer satisfaction, streamline supply chain management, aim for modernization of equipment and ensure workers have the highest level of training. One of the principal aims of TQM is to limit errors to 1 per 1 million units produced. The application of TQM can vary tremendously from business to business, even across the same industry.

Why TQM? Why should one believe in TQM and why has it come to the forefront over the last 10 years or so? Resources have become scarce and economic times have called for ways to trip costs and improve production. Today’s competitive market, in almost every category of products and services, is characterized by accelerating changes, innovation, and massive amounts of new information. Much of this rapid evolution in markets is fueled by changing customer needs. Significant customer behavior and market changes happen almost overnight.

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Changes in market preference or technology, which used to take years, may now take place in a few short months. For example, the product life cycles for new consumer computer technology and computer printers are estimated to be as little as six months. Computer marketers must carefully plan one or two new product introductions each year, with contingency plans for making design changes with current product lines as they are being manufactured. As the pace of change accelerates, it becomes more difficult to maintain stable relationships with suppliers, customers, brokers, distributors, and even your own company personnel. Putting out fires” and reacting to new emergencies is unfortunately the norm for many large and small companies caught in the whirlpool of technological change. Are competitors stealing your best customers while you are out looking for more? Commitment to quality and customer satisfaction programs is essential for a small business to compete against both smaller and larger competitors. Think about “post-sale” customer satisfaction (or managing customer “dissatisfaction”) programs as a way to reinforce customers’ buying preferences for your products and services for their current and future purchases!

TQM for small businesses is alive and well! A new company or a small business has limited financial, personnel, and capital plant/equipment resources and is especially vulnerable to instability brought on by rapid changes in customer behavior. One way to help ensure your business success is to make quality and customer satisfaction the number one priority for all employees in your company. Make sure your company is providing “customer management,” not just “product management. ” Larger companies committed to TQM programs may appoint a special manager or VP of quality.

In smaller companies, this task is usually undertaken by the chief executive officer (CEO) or the owner. There are many aspects of successful TQM program implementation. And it may require months or years to fully incorporate TQM into every employee’s value system. Literature Review Total quality management has become an important part of the development of organizations. Although TQM represents a committed effort on the part of management to maintain and increase quality standards in the organization, the manner in which this process is used by the organization varies depending on the specific type of organization.

To demonstrate this point we will look at three different sectors: the government, manufacturing and service organizations. By looking at these different groups it is easy to see how one can differ and how it can be used as a viable strategy. Although there are various organizations that comprise the public sector, total quality management and customer satisfaction have been examined mostly using this sector. It is for this reason that we will examine the public sector as a whole rather than one specific organization.

A critical review of what has been written about customer service and quality management in the public sector reveals that is has only been in the last 10 to 15 years that organizations in this sector have attempted to address this issue. (Fountain, 2001) reports that in the public sector the focus of organizational development is more on internal bureaucracy and speed of processing than on customer service. The public sector has historically been lax on addressing customer service needs because the organization develops more on formalities then on customer service.

In order to better meet the needs of customers the public sector utilized data from the private sector to develop methods of customer service that could improve contact between government agencies and the public. Because the issue of customer service has never been a central focus for government agencies, making the transition from service agency to customer service agency was a difficult challenge. Government organizations had to institute new programs that would allow the public to provide feedback on the service provided.

Careful monitoring of customer service then led to the development of new initiatives in government agencies to make employees more aware of customer service issues and responsibilities. In spite of significant efforts to improve customer service in this sector, Fountain does note that substantial problems do exist. Considering the most notable problems that continue to pervade customer service in the public sector, Fountain acknowledges that leadership support for customer service in the public sector is often lax. Public organizations have long adopted a culture that is impervious to the public’s opinion.

As such, if leadership in the organization does not support the transition from service to customer service, initiatives undertaken by the organization have little impact. In addition, Fountain notes that the specific type of work performed by the public sector often does not lend itself to providing customer satisfaction. For instance, many government agencies simply process paperwork. As such, creating initiatives that can bolster customer service is a notable challenge for leaders in these organizations. The Manufacturing Sector and TQM

Much like the public sector, organizations in the manufacturing sector have been grouped together for the purposes of examining how total quality management in the organization can impact customer satisfaction. For instance, Agus, Krishnan, Latifah, and Kadir (2000) examined TQM practices on customer satisfaction in manufacturing companies in Malaysia. The results of this investigation demonstrate that while the manufacturing company often does not deal directly with the customer, TQM is necessary to ensure the quality of the product produced.

When the quality of the product is high, the manufacturing company will reap the financial benefits of customer satisfaction. Over the long-term this translates into increased revenues and the financial health of the organization. What is perhaps most interesting about the manufacturing sector is that even though it is directly removed from dealing directly with the customer, it must still ensure that quality management is a central focus of development. Without careful adherence to quality management, the organization cannot consistently produce products that meet the customer’s needs and specifications.

To illustrate this point, Agus and coworkers report that there are a host of customer issues that can be addressed under the framework of TQM in the manufacturing organization. These include: customer satisfaction on product quality, customer satisfaction on product features, customer satisfaction on product delivery and customer satisfaction on pricing. When placed in this context, it becomes evident that there are a myriad of ways in which total quality management can improve the very nature of customer satisfaction for the manufacturing organization.

While it is quite evident that manufacturing firms can improve customer satisfaction through total quality management, it is also evident that in order to achieve this goal, organizations must have solid leadership in place. Agus, et al. , make the argument that, “To be successful, it (TQM) must be top management-driven and focus on maximizing efficiency and effectiveness, and promoting market dominance through improving systems and processes, error prevention, and aligning business objectives and customer needs” (p. S814).

Thus, if TQM is to be successful in producing positive customer satisfaction, strong leadership across the entire organization is needed. Without formidable leadership, the total quality of the product cannot be ensured by the organization. Service Organizations and TQM Examining the importance of quality management in the service industry Erto and Vanacore (2002) consider hotel and hospitality management. The authors note that in this industry, members of the organization have direct contact with customers. As such, efforts to increase customer satisfaction are critical for the development and success of the organization.

Although TQM initiatives are widely used in the manufacturing sector, Erto and Vanacore note that employing TQM structures in the service industry is a complex task. This is because many of the roles and functions carried out by individuals in the service organization are difficult to structure in a TQM framework. Demonstrations and Applications in the Business World When Henry Ford began building the Model T he never would have thought of having as little as one error per million but now as we manufacture cars we strive to achieve just that, a lofty goal in deed.

Car manufacturers are in a competitive field and now are fighting for a world share of the consumer’s dollar. One would be challenged to find a nation that is not manufacturing cars and exporting to the world. With a lot of cars looking and feeling a like, the quality and reliability of the cars has become forefront in the consumers mind. When a quality product is manufactured there is a less costly product with few rework errors and a quicker product to market.

To ensure the quality of their products, a lot of time and resources are poured into quality assurance and making sure that each and every car is as error free as possible. This in turn produces a much happier consumer because they feel a sense of trust and reassurance in the fact that the car will be reliable and learn to trust the brand names that are associated with their favorite car. Since Henry Ford began his assembly line process many years ago, the modernization of equipment has made great strides and continues to this very day.

During a recent visit to Boeing in Seattle Washington, I was amazed at how their assembly line and supply line worked. Boeing, a huge manufacturer of airplanes has large hangers where they assembly all their different models of both military and civilian transports. To streamline the supply chain and expedite the assembly process, they have many third party suppliers who assemble sub systems and ship them direct to Boeing for final assembly. One such assembly is so large (the fuselage) that Boeing had to create a special plane to bring it to the hanger for assembly!

Rest assured the new 787 Dreamliner and the special transport plane that brings its assemblies to Seattle flows like a well oiled machine, assembling a new 787 Dreamliner in just over 4 days. The basis of TQM is to reduce the errors produced during the manufacturing or service process, increase customer satisfaction, streamline supply chain management, aim for modernization of equipment and ensure workers have the highest level of training. One of the principal aims of TQM is to limit errors to 1 per 1 million units produced Conclusion and Reflection

On a personal note this paper expanded my thought on TQM and actually interested me. After many years of hearing the phrase “TQM” in the military I never really saw any practical use for it but now wee how it actually reflects my own philosophy of “Do it right, do it once, don’t do it again”. Constant improvement has a place in the private sector and the military in many ways; this pointed that out to me. On a professional perspective I felt this had implications on my job at Verizon. Many times we do the same task over and over again because we rush the jobs and don’t take the time to do it right the first time. Emergency drive by shootings” become a “get it done now” crisis and always requires completion at a later time. By using this information learned here I can show how doing it the right way can actually SAVE time! I highly doubt we will get to one error in a million though. ( References The Performance Paradox in the Public Sector, Sandra Van Theil, 2002 Sage Productions, pages 267-281 How Different Organizations Use TQM to Ensure Customer Satisfaction, Jorge Benson, 2008. http://www. associatedcontent. com/article/886111/_how_different_organizations_use_tqm_pg3. html? cat=3

TQM in the United Sates Air Force, a Transition to Excellence. 1998, US Air Force, Senior Noncommissioned Officer Academy Literature. Gunter AFB, Al. Published by the Community College of the Air Force Total Quality Management, downloaded April 3, 2010. http://en. wikipedia. org/wiki/Total_quality_management Total Quality Management, downloaded April 13, 2010. http://www. asq. org/learn-about-quality/total-quality-management/overview/overview. html Total Quality Management (TQM) Toolkit, downloaded April 13, 2010. http://www. toolkit. com/small_business_guide/sbg. aspx? nid=P03_9000 alit

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