Quality and Total Quality Management (Encyclopedia of Management)
Although quality and quality management does not have a formal definition, most agree that it is an integration of all functions of a business to achieve high quality of products through continuous improvement efforts of all employees. Quality revolves around the concept of meeting or exceeding customer expectation applied to the product and service. Achieving high quality is an ever changing, or continuous, process therefore quality management emphasizes the ideas of working constantly toward improved quality. It involves every aspect of the company: processes, environment and people. The whole workforce from the CEO to the line worker must be involved in a shared commitment to improving quality.
Therefore, in brief, quality and total quality management (TQM) in particular can be defined as directing (managing) the whole (total) production process to produce an excellent (quality) product or service.
It differs from other management techniques in the attitude of management toward the product and toward the worker. Older management methods focused on the volume of production and the cost of the product. Quality was controlled by using a detection method (post production inspection), problems were solved by management and management's role was defined as planning, assigning work, controlling the production. Quality management, in contrast, is focused on the customer and meeting the customer's needs. Quality is controlled by prevention, i.e., quality is built in at every stage. Teams solve problems and everyone is responsible for the quality of the product. Management's role is to delegate, coach, facilitate and mentor. The major quality management principles are: quality, teamwork, and proactive management philosophies for process improvement.
Quality management in is not derived from a single idea or person. It is a collection of ideas, and has been called by various names and acronyms: TQM, total quality management; CQU, continuous quality improvement; SQC, statistical quality control; TQC, total quality control, etc. However each of these ideas encompasses the underlying idea of productivity initiatives that increase profit by improving the product.
Though most writers trace the quality movement's origins to W. Edward Deming, Joseph M. Juran and Philip B. Crosby, the roots of quality can be traced even further back, to Frederick Taylor in the 1920s. Taylor is the "father of scientific management." As manufacturing left the single craftsman's workshop, companies needed to develop a quality control department. As manufacturing moved into big plants, between the 1920s and the 1950s, the terms and processes of quality engineering and reliability engineering developed. During this time productivity was emphasized and quality was checked at the end of the line. As industrial plants became larger, post-production checks became more difficult and statistical methods began to be used to control quality. This was called reliability engineering because it moved quality control toward building quality into the design and production of the product. Taylor was the pioneer of these methods. Although some writers consider Taylor's methods part of classical management in opposition to the quality management system, both Deming and Juran both used statistical methods for quality assurance at Bell Telephone laboratories.
In the decades that followed World War II, the U.S. had no trouble selling everything made. This demand had the effect in the U.S. of driving industry to increase production, which resulted in less quality control. U.S. manufacturers became complacent, thinking that they could sell any product and that the consumer did not want or demand quality. The post World War II situation in Japan was just the opposite. The war had left the country devastated, and it needed to rebuild its means of production. In addition, Japanese manufacturers needed to counteract the shoddy reputation they had that products "made in Japan" were of low quality.
Japan began focusing on serious quality efforts. Japanese teams went abroad to visit foreign countries to learn how other countries managed quality, and they invited foreign experts to lecture in Japan on quality management. Two of these foreign experts were Americans W. Edward Deming and Joseph Juran. They each had a profound influence on Japanese quality processes, encouraging quality and design, built in, and zero defect programs. It took twenty years of concerted effort to revamp Japan's industrial system. The strategies used involved high-level managers as leaders, all levels and functions were trained in managing for quality, continuous progress was undertaken, quality circles were used, and the entire workforce was enlisted. By the early 1980s Japanese products, particularly automobiles and electronic products, were superior in quality to U.S. products. U.S. companies lost markets in the U.S. and in the western world to the Japanese and went in search of the Japanese secret. They found W. Edward Deming.
Deming was an American who worked in the 1930s with Walter A. Shewhart at Bell Telephone Company. Shewhart was a statistician who had the theory that product control could best be managed by statistics. He developed a statistical chart for the control of product variables. Deming developed a process, based on Shewhart's, using statistical control techniques that alerted managers of the need to intervene in the production process.
He then utilized these techniques during World War II while working on government war production. In 1947 Douglas MacArthur and the U.S. State Department sent Deming to Japan to help the war-devastated Japanese manufacturing plants. He introduced these "statistical process control" methods in a series of lectures on statistical methods to Japanese businessmen and engineers. The Japanese were an attentive audience and utilized Deming's ideas readily. They found him charming and considerate and listened to his ideas. His concept of employees working toward quality fit well into their personal ideas. His philosophy went beyond statistical quality control and encouraged building quality into the product at all stages.
Deming developed the chain reaction: as quality improves, costs go down and productivity goes up; this leads to more jobs, greater market share, and long-term survival. He stressed worker pride and satisfaction and considered it management's job to improve the process, not the worker. Quality circles, a central Deming theme, are based on the importance of employees meeting regularly in groups to comprehensively discuss product quality. The GDP in Japan rose steadily from 1960s by more than 10 percent per year. By 1951 the Japanese had named their quality prize in his honor. Deming's book, Out of the Crisis, emphasized improving quality of the product as more important than short-term financial goals. He de-emphasized quantity, and emphasized quality. He believed that "statistical process control" was an invaluable instrument in the quest for quality. Deming developed fourteen points for management which can be summarized as:
- Create a plan; publish the aims and purposes of the organization.
- Learn and adopt the new philosophy of quality.
- Understand the purpose of inspection; stop depending on inspection.
- Stop awarding business based on price alone.
- Improve the system constantly.
- Institute training.
- Teach and institute leadership.
- Drive out fear, create trust, and create a climate for innovation.
- Optimize the efforts of teams, groups and staff areas.
- Eliminate exhortations, and targets for the work force; provide methods of achievement.
- Eliminate numerical quotas for the work force.
- Remove barriers that rob people of pride for workmanship.
- Encourage education and self improvement for everyone.
- Make action to accomplish the transformation, make it everyone's job.
Besides the fourteen points, Deming is known for the Deming Cycle and the Seven Deadly Diseases. The Deming Cycle is illustrated in Figure 1. It involves five steps: consumer research and planning of the product (plan), producing the product (do), checking the product (check), marketing the product (act), and analyzing how the product is received (analyze.)
The Seven Deadly Diseases can be summarized as:
- Lack of constancy of purpose to plan products and services.
- Emphasis on short-term profits.
- Personal review systems for managers and management by objectives.
- Job hopping by managers.
- Using only visible data in decision making.
- Excessive medial costs.
- Excessive costs of liability driven up by lawyers that work on contingency.
Joseph M. Juran, like Deming, went to Japan in 1954 and assisted the Japanese in their quest to achieve quality. Like Deming, Juran emphasized planning, organizing and controlling. However he emphasized customer satisfaction more than Deming did and focused on management and technical methods rather than worker satisfaction. Juran was a prolific author, publishing over a dozen books. His most influential book Quality Control Handbook (later called Juran's Quality Handbook)was published in 1951 and became a best seller.
By 1960 Japan was using quality control circles and simple statistical techniques learned and applied by Japanese workers. Juran developed basic steps that companies must take, however he believed there was a point of diminishing return, a point at which quality goes beyond the consumer needs. For example, if the consumer trades his car in after 50,000 miles, the car need only be built to perform trouble-free for 60,000 miles. Building a better car would drive up costs without delivering the expected product. This is called the Pareto Principle, or the Juran 80/20 rule: 80 percent of the trouble comes from 20 percent of the problems. The rule is named for Vilfredo Pareto, an economist, but it was Juran that applied the idea to management. It can be expressed as: "concentrate on the 'vital few' sources of problems; don't be distracted by less important problems." Juran's trilogy involves:
- Quality planning (determine customer needs, develop product in response to needs).
- Quality control (assess performance, compare performance with goals, act on differences between performance and goals).
- Quality improvement (develop infrastructure, identify areas of improvement and implement projects, establish project team, provide teams with what they need).
Juran's ten steps to quality improvement are:
- Build awareness of opportunities to improve.
- Set goals.
- Organize to reach goals.
- Provide training.
- Carry out projects to solve problems.
- Report progress.
- Give recognition.
- Communicate results.
- Keep score.
- Maintain momentum by making annual improvement part of the systems and processes of the company.
The Union of Japanese Scientists and Engineers (JUSE) considered Juran's vision of top-to-bottom quality management even more important to their quality turnaround than Deming's insights. JUSE asked Juran if it could name its top-level award, a 'super-Deming award' after him, but he declined. This medal is called the Japan Quality Control Medal.
Philip Crosby, author of Quality is Free, founded the Quality College in Winter Park, Florida. Crosby emphasized meeting customer requirements by focusing on prevention rather than correction. He claimed that poor quality costs about 20 percent of the revenue; a cost that could be avoided by using good quality practices. He pushed for zero defects. His "absolutes" are: (1) quality is defined as conformance to requirements, not goodness; (2) the system for achieving quality is prevention, not appraisal; (3) the performance standard is zero defects, not that's close enough; and (4) the measure of quality is the price of non-conformance, not indexes.
Crosby's method does not dwell on statistical process control and problem solving techniques that the Deming method uses. He stated that quality is free because prevention will always be lower than the costs of detection, correction and failure. Like Deming, Crosby had fourteen points:
- Manage commitment, that is, top level management must be convinced and committed and communicated to the entire company.
- Quality improvement team composed of department heads, oversee improvements.
- Quality measurement are established for every activity.
- Cost of quality is estimated to identify areas of improvement.
- Quality awareness is raised among all employees.
- Corrective action is taken.
- Zero defects is planned for.
- Supervisor training in quality implementation.
- Zero defects day is scheduled.
- Goal setting for individuals.
- Error causes are removed by having employees inform management of problems.
- Recognition is given, but it is non-financial, to those who meet quality goals.
- Quality councils meet regularly.
- Do it all over again (i.e., repeat steps one through thirteen).
Looking at the history of quality management, we see several stages of development. The first was quality control, which involved setting up product specifications and then inspect the product fore for leaves the plant. The second state is quality assurance, which involved identifying the quality characteristics and procedures for quantitatively evaluating and controlling them. The next phase is the true total quality control, a term actually coined by Feingenbaum in 1983. At this stage the quality became a total organization effort. It effected production, profit, human interaction and customer satisfaction. The fourth stage is total quality management. In TQM the customer is the center and quality is an organization-wide effort.
The top three quality prizes are the Deming Prize, the Baldrige Award and the European Quality Awards. Union of Japanese Scientists and Engineers have annually awarded the Deming Prize since 1951. For three decades it was the quality award and is still the
QUALITY IN THE U.S.
The U.S. was slow to see the advantages of TQM, although the American Society for Quality Control (now known as American Society for Quality) was formed in 1946. Huge markets for American-made products after World War II kept American industries producing products with little change in manufacturing methods. It wasn't until the late 1970s that U.S. manufacturing came up against foreign competition and the trade deficit, and at that time it became obvious that Japanese companies were far ahead of U.S. companies in quality.
One of the first companies in the U.S. to grasp and utilize TQM was Motorola. In 1981 Bob Galvin, Motorola's chairman, called for an across-the-board improvement of 10:1 in five years. To accomplish this they needed a breakthrough technique. This breakthrough is detailed in the Six Sigma process:
- Faith that the improvement target could be achieved.
- Total customer satisfaction.
- Powerful new tools, especially design of experiments.
- Cycle-time reduction.
- Designing for ease of manufacturing.
- Manufacturing innovations.
- True partnerships with key suppliers.
- Training for all employees.
Within five years Motorola had achieved their goal. In 1988 they were awarded the Malcolm Baldridge National Quality Award for their impressive Six Sigma process. Keki R. Bhote nurtured the Six Sigma project for eleven years at Motorola and then went on to consult with other companies.
In the early 1980s when Donald Petersen was CEO of Ford, Ford executives were investigating the secret of the Japanese success. They discovered W. Edwards Deming's holistic blend of statistics and management. Deming's ideas came to Detroit. Ford was in serious trouble because of Japanese competition. Deming introduced the statistical methods needed to improve processes. These are the foundation of what became known as Six Sigma, a statistical measure that refers to 3.4 defects per million. Besides this scientific method of improving quality, Deming emphasized that all employees needed to work toward quality. He advocated teamwork and cross-department collaboration, close work with suppliers and employee training. Other companies that adopted the Deming quality methods were General Motors, Florida Power & Light, and Procter and Gamble.
Not all U.S. attempts at quality improvement have been successful. Frequently cited reasons for failure are poor leadership, team-mania (setting up teams before management or employee have been trained in team work), and lack of integration of quality efforts into the whole organization. Obstacles and barriers to success have been researched by Robert J. Masters. He lists eight common problems that lead to failure:
- Lack of management commitment. Management must commit time and resources and clearly communicate the importance and goals to all personnel.
- Inability to change the organizational culture. Change takes time and effort. In order for the culture to change, the employees need to want change and be willing to participate. This requires reasons that management must convey. The change will only occur if the employees trust the management. It cannot occur from a state of fear.
- Improper planning. Planning must involve all parts of the organization and be communicated clearly to employees.
- Lack of training. The most effective training comes from senior management. Informal training needs to occur on a continual basis.
- Organizational structure problems and isolated individuals or departments. Multifunctional teams will help break down some of these barriers. Restructuring is another method.
- Ineffective measurement and lack of data. Effective decisions require that the employees have access to the necessary data.
- Inadequate attention to internal and external customers.
- Inadequate empowerment, lack of teamwork. Teams require training. Their recommendations should be followed whenever possible. Individuals need to be empowered to make decisions.
Although different authorities on total quality management emphasize different techniques and use different terminology, all share three common ideas: quality, teamwork and process improvement. Although many books have been written to guide U.S. companies through TQM, one of the major writers was Joseph Jablonski. In Implementing TQM, he identified three characteristics: (1) participative management; (2) continuous process improvement; and (3) utilization of teams.
Participative management is the opposite of the hierarchical management style of the early twentieth century businesses. It involves all employees in the management process and decision making by having managers set policies and make key decisions based upon the advice and ideas of subordinates. This method provides management with more information from the front line and motivates the workers as they have some control of the decisions. Continuous process improvement is one of Deming's major ideas and involves small steps toward the ultimate goal. This involves patience on the part of management. Teamwork refers to cross-functional teams of workers that share in problem solving.
Jablonski went on to list six attributes necessary for success: (1) customer focus; (2) process focus; (3) prevention versus inspection; (4) employee empowerment and compensation; (5) fact-based decision making; and (6) receptiveness to feedback.
U.S. companies have long relied upon company organization by functions. TQM emphasizes a decentralized structure to encourage leadership and creativity. The purpose of this change in structure is to change the behavior of the employees. This is a major change for most U.S. companies. However, successful companies have more functional integration and fewer layers of hierarchy.
QUALITY AND THE 1990S AND BEYOND
In the 1980s many U.S. companies implemented total quality management systems in order to be competitive in the global market place. Successes lead them to be interested in hiring managers and engineers with some TQM training. This prompted universities to start teaching quality methods. To help universities in this, the University Challenge program was developed by a group of companies that had implemented TQM successfully. Their goal was to encourage universities to commit to integrating TQM in their own operations and courses. Initially eight universities with both business and engineering schools were chosen. Milliken worked with North Carolina State University and Georgia Institute of Technology. IBM worked with Massachusetts Institute of Technology and Rochester Institute of Technology. Motorola worked with Purdue University. Procter & Gamble Company worked with University of Wisconsin at Madison and Tuskegee University. Xerox worked with Carnegie Mellon.
Another area of transformation by TQM since 1990 is in human resources. Numerous studies have indicated that human resource practices that improve the corporate culture lead to better profits. Therefore many companies have extended TQM to the HR department. Yet another area of development of TQM in American firms is in the area of ethical philosophy and behavior of top management. Recent corporate scandals have increased interest from the public in corporate responsibility and accountability. Corporate responsibility is defined as how a company's operating practices affect its stakeholders, such as consumers, and the natural environment. This is new quality movement is being called total responsibility management. It involves responsible vision and values, leadership build on these values.
TQM has had a wide acceptance in the U.S., which has been growing since the 1970s. Quality management principles have had a remarkable influence on every sector of American business and are spreading to non-profit organizations and universities. It is essential that this trend continue for U.S. companies to be competitive in the global market and to meet consumer demands.
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