Total Quality Management And Excellence Management Essay

Total Quality Management And Excellence Management Essay Over the last two decades organisations have witnessed great variations in markets, tremendous competition, rapid globalisation and economic turbulence. With customers becoming more demanding, satisfaction of customers has taken priority in running a successful business (Porter and Tanner, 2004). As a result, organisations have embraced a range of quality initiatives into every conceivable aspect of organisational work (Wilkinson and Willmott, 1995). In the older sense, Jurans edited work [2] on A History of Managing for Quality relates quality to meeting the requirements of a person obtaining a product or receiving a service. In a wider sense, Fisher and Nair(2006), refer toQuality as the way an enterprise goes about its business, inspired by a theory that acts as a guiding principle for behaviour and informed by the knowledge and knowhow needed to make it occur. In an attempt to survive competition and sustain a competitive advantage, many firms have witnessed the implementation of various quality management systems and standards like the ISO9000, the growth of total quality management(TQM), Business Process Re-engineering(BPR), business excellence, US Baldrige Model, European Foundation of Quality Management (EFQM), lean thinking, Six Sigma etc.,(Porter and Tanner, 2004). What is TQM? Total Quality Management (TQM) has been on the agenda for a very long time. The concept of TQM has origins in the 1920s where product quality control was dealt with the application of statistical theory. Moving forward, the concepts developed in Japan in the 40s and 50s piloted by Americans, like Deming, Juran and Feigenbaum who gave a broader picture beyond quality of products to quality across the organisation which pioneered the beginning of TQM (DTI). TQM is an approach aimed at improving quality to establish effectiveness and efficiency across the firm. It defines ways of planning and organizing every activity associating it to every member at every level of the organization. (Oakland, 2003). Thus, despite the comprehensiveness and fullness of the TQM framework, there seems to be a decline in interest. This essay aims at critically analysing and discussing two works (a book by Wilkinson, Willmott (1995) and an article from Dale et-al (2000)) and evaluating the arguments stated i n them with respect to the emergence of more recent so-called Excellence Frameworks. This leads us to another question. What is excellence? With the evolution of Quality awards, principles of continuous improvement and organisational performance improvement became top priorities. The model devised by the European Foundation of Quality Management (EFQM), supporting the European Quality Award offers a greater focus on business results and hence, Business/organisational Excellence is generally associated to EFQM(Poter and Tanner). The core themes of excellence are heavily influenced by TQM principles. These forms a management system stresses on leadership for attaining quality by formulating policies strategies for developing and managing personnel in order to implement process with a customer focus to achieve excellence in business results. The article by Dale et-al (2000) essentially discusses about the fallen star image of TQM. It highlights the tampering of TQM models to develop excellence frameworks like EFQM and MBNQA. Dale et-al (2000) dismiss the new models for building fads and bringing about futile cosmetic and peripheral changes to the excellence models. The authors also critique the emphasis on point-scoring system which is drawing focus away from the quintessence of quality management and only aim to win quality or excellence awards. The article draws similarities between the key ingredients of TQM philosophy and the principles of excellence. It challenges that excellence is essentialy only a replacement to words like quality and TQM. However, Adebanjo(2000) has a different view about the shift of focus from TQM to Excellence Models and asserts that they both complement each other. He maintains that quality never actually died. While Dale et-al (2000) attributes the failure of TQM to managers, Deming (1986) argues that poor leadership is the cause for poor performance. Adebanjo(1997) discusses this further stating that the failure is partly because managers are often hard to convince, didnt have a clear understanding, demonstrated resistance or viewed TQM as a responsibility of the quality departments . The failure rate of TQM was as high as 75% (Cao et-al, 2000). Fisher (1995) emphasises that TQM doesnt really help everyone, unless the commitment to TQM is across the organisation which is difficult to attain. The introduction of other models like TQMEX, MBNQA further support the view that excellence models are the necessary and sufficient route towards business excellence Ho(). But the overshadowing of TQM by glamorous excellence models doesnt exactly translate into quality performance (Dale et-al, 2000). In terms of the link between excellence models and performance, MBNQA was criticised for the reasons like: winning rewards involves high resource commitments and expense, failure to lead to superior quality standards and winning these certifications does not necessarily result in improved results. Its quite difficult to find companies with good bottom-line results and good quality initiatives (Zairi,Oakland1994). Despite the apparent confusion of terms- TQM, excellence, continuous improvement- all these eventually mean one thing making things better. The article by Wilkinson, Willmott (1995) also suggests that the fluid meanings assigned to quality initiatives make it elusive. In the attempt to introduce quality into manufacturing and service deliveries, quality management techniques like quality control, quality circles and (more holistically) TQM have been sought. TQM has also been critiqued for paying more attention to processes, procedures and policies of the business with little focus on people management, support and culture (Wilkinson, 1991). Rees (1993) also highlights this issue stating that there is little detail interms of how employees perceive TQM. Quality initiatives do not essentially give employees collective sense of objectives, instead it bounds them to procedures and goals defined by the managers who expect them to deliver performance based on the objectives laid down for every job role. A balance between the hard and soft approaches of TQM philosophy seems to be reconsidered and reviewed in recent times. Oakla nd (199), emphasises the importance of motivation and quality required to serve both internal and external customers. TQM strives to introduce quality into every aspect of the business. Wilson-Willmott (1995) also argue that TQM is not directly associated to work-design or employee empowerment and instead follows an iron-clad hierarchal structure. Oakland(2004) stresses on the need for effective communication and leadership for the development and accountability of all employees to implement TQM philosophies successfully. The article also draws attention on the importance of culture on to support Quality Management. Employees associated with strong organisation culture have clarity of their job roles. Thus the culture-strategy fit should hold good for any philosophy to be implemented. Irani(2004) highlights the relationship among culture, quality, and competitiveness. Sluti et al. (1995),studies indicate that corporate culture contributes to quality and performance, but there is alw ays an element of doubt about the level of organisational commitment that is required for TQM implementation. Oaklands(2003) addresses this through a modified TQM-framework for achieving high quality performance using business excellence approach, through people, planning and processes with the soft outcomes of culture, communication and commitment. Wilkinson-Wilmott(1995) also discuss the contributions of various authors. To highlight a few, Stephen Hill relates effective implementation of TQM to business productivity, reduced wastage, better decision-making and sustainable competitive advantage . To develop a rounded approval of TQM, he brings up the subject of social effects of TQM, and its adoption or non-adoption to de-staffing. Walsh challenges the implementation of TQM in service sector because of the difficulty involved in measuring quality as per monitoring levels of customer satisfaction. Webb and Munro highlight the managerial authoritarianism and challenges the effectiveness of the participative scenario during economic slump. McArdle et-al takes this further stating how power-centred participation was replaced by task-centred forms of involvement over the years. Dawson challenges the culture improves commitment aspect of TQM and its success in countries with cultural-pluralism. Kerfoot Knights discuss empowerment a nd assumptions about employee behaviour and argue that control over employees is a consequence of the inconsistency of engineering-like model of firms than that of TQM. Both articles provide strong views on the subject of quality management. In order to evaluate how different TQM actually is from the more recent models, this essay aims to compare and contrast it with the Excellence Frameworks, Lean and Six-Sigma programmes. In the 1980s, the Malcolm Baldrige National Quality Award started gaining popularity. This aimed at identifying US companies that have achieved quality excellence. The framework focuses on customer and market-driven excellence to achieve business results. It focuses on harnessing te talents of employees through effective leadership and management. (Oakland, 2004). The EFQM is a model developed in Europe and it recognises the need to improve processes by involving people and continuous improvement of processes. (Oakland, 2004). Ho(), also advocates a need for an integrated approach to support the process of continuous improvement through the companys commitment to managing by quality and proposed the TQMEX model that encompasses 5-S, BPR, QCC, ISO 9000 and TPM, thus forming a basis for company-wide TQM implementation. Traditional TQM approaches and excellence models are based on rational paradigms, where traditional and normative, research data, includes survey responses associated with deductive theory and testing.(McAdam et-al, 2006). To address complex socio-political events and phenomena, a strategic TQM has been developed representing the dynamic nature of business and environment. Quality initiatives date back to after World War-II and the bombings in Japan. Unable to imitate the US practice of manufacturing in masses due to limited capital, Toyota developed a Production System, minimising waste across its operations, a technique now known as Lean Manufacturing. Lean Manufacturing overlaps TQM significantly. The TQM process orientation eventually leads to almost the same results as lean manufacturing. But, TQM starts with quality which may or may not be the most critical area or the area that produces quickest results. http://www.strategosinc.com/tqm_benefits_0.htm A more recent model gaining favour in industries is Six-Sigma. Its a model developed by Motorola. Motorola was also cited as the first winner of MBNQA in 1988. Six-sigma is efficient, often statistical, techniques are used in a systematic way to reduce variation and improve processes and there is a focus on results including customer-related ones that lead to enhanced marketplace performance and hence improved bottom-line financial results. (Klefsjo ¨ et al. 2001). Mikel Harry[1], developer the Six Sigma program at Motorola, has defined Six Sigma as a disciplined method of using extremely rigorous data gathering and statistical analysis to pinpoint sources of errors and ways of eliminating them. and is all about improving customer and business results by linking the tactical with the strategic. The improvement model follows DMAIC and has 5 phases as illustrated below: C:UsersuserDesktopUntitled.jpg Six-sigma is a subset of TQM and not an alternative to TQM. It is a methodology within TQM which also considers the dynamic nature of the management system (Klefsjo ¨ et al. 2001).In contrast to TQM, six-sigma aims at delivering breakthrough tangible benefits in the short-term and doesnt focus on a step-by-step improvement(Oakland, 2004). Both excellence models and six-sigma can complement eachother where the former baselines the phase for improvement and the latter attains excellence through delivering breakthrough strategy, leadership, learning, innovation, customer-market-business-focus and continuous reinforcement. (Oakland, 2004). Demand for Lean has surpassed six sigma by almost 35%. This indicates that most companies are looking at Lean techniques to face the challenges of the economic slump. (Avery Point Group,2010) To conclude, heres a warning: TQM may not be the in-thing for most organisations anymore. But it is here to stay. As firms gear themselves up to rapid advancements interms of its operations and information management and to meet customer needs, there will always be a challenge to make products or deliver services faster through a reliable system. That kind of a system can be established only by getting the basic TQM philosophies right. The underlying objective is to make things better, both for the customers and the organization. The means of achieving this may slightly vary through quality or excellence models. However, it is all about Do the right things right the first time, every time. . http://qualitytricks.wordpress.com/2006/10/26/introduction-and-implementation-of-total-quality-management-tqm/ Ans2: IMPLEMENTING BUSINESS EXCELLENCE IN THE HOTEL INDUSTRY: This essay particularly focuses on implementing BE framework in the hotel industry which is a service industry. To attain customer satisfaction and excellence in an industry, various models ranging from EFQM, Lean, Six-Sigma, TQM could be implemented. However, among the available models, this essay proposes to use the model devised by EFQM, to analyse the quality perspective of both management and customers of the Tristar Group, a chain of 3-star hotels. Oaklands (1999) Total Organisational Excellence (TOE) framework for performance-based measurement embraces all areas like strategic planning, process analysis, self-assessment, benchmarking measurement, people, teamwork, and continuous-improvement (Oakland, 1999). While EFQM helps benchmark core processes for a limited period in time and defines current standing, TOE focuses on continuous improvement for achieving organisational excellence. Every sector exists in a highly competitive market. Succeess is largely dependent on delighting customers important (Irani,2004). In order to understand the how the quality frameworks can be implemented in Hotel Tristar, it is primarily important to understand the customers and their needs with respect to Tristar. Who are our customers? The hotel must recognise the needs of all its clients the value of the guest as a paying customer; the importance of its employees as internal customers; the expectations of the local community as an environment conscious corporate citizen and its responsibility to the owners and operators as a producer of high profit margins with an all round positive image. The key external customers are from the commercial,corporate and M.I.C.E((Meetings, Incentives, Conferences, Events) segments.. Tristar also has customers on business and leisure travel from international and domestic markets. The target market is currently divided as follows: What do our customers want? Customers desire better quality services, but it is always difficult to reaching an agreement on the conformance to specification, mainly because measuring quality in the service sector isnt easy (Wilkinson,Willmott,1995). However, to state a few basic services any hotel is expected to provide: Good value for money, reliability and efficiency High standards in terms of its facilities and pricing. Quality personal service, home-like experience and on-time delivery of services. Good IT systems to make reservations and bookings quick and easy. A luxurious, pleasing environment to relax or conduct their business. Complimentary breakfasts and free in-room wireless internet. Customers treated with basic courteousness, kept informed and not to be passed around Effective feedback and suggestion systems. Conduct responsible business, both on the social and environmental fronts. The Hotels success in the current environment will depend on corporate contract business, tourism and customer loyalty to the brand. To address this Oaklands (1999) framework for TOE helps the organisation achieve business excellence by implementing the following steps. 1. The effectiveness of an organisation depends on efficient leadership and commitment from the people to perform their roles aimed at moving towards common goals and objectives. TOE involves comprehensive planning for gaining competitiveness through people management and employee involvement. The top management must demonstrate commitment to improvement and leadership through supervision, training and process management. There must also exist a shared motive of need for change to attain excellence among the top management and the stakeholders of Tristar. 2. The next step involves developing a clear strategy for implementation. The vision describes the strategic intent of the organisations existence. Hotel Tristars vision involves commitment to creating extraordinary customer value by ensuring quality and responsiveness of customer services. The mission statement is used to communicate this vision for the organisation of where it is going. Tristars mission is dedicated to provide hospitality service through motivated human resources and inspired leadership. The goal to ensure financial strength and sustainable growth can be achieved by focusing on domestic and international markets through innovation and technology and Tristar must strive to create value for owners and shareholders and operate as an environment conscious corporate citizen. 3. The next step is identifying critical success factors (CSFs). CSFs are what must the organisation accomplished to achieve the above mission The CSFs for Hotel Tristar can be recognised as: Positioning and guest profile Site and location On-time and Quality customer service Motivated and skilled staff/ efficient management Quality suppliers and effective distribution channels Identification of potential business opportunities and markets 4. The Key Performance Indicators support the mission and CSIs to help translate the directional statements to clear targets. They help monitor progress and the KPIs for Hotel Tristar can be identified as: Yield Management and Differential pricing Job rotation and training for timely delivery of services Brand Recognition and marketing methods Optimal resource utilisation and cost effectiveness 5. The next step is understanding the core processes. The top management team identify the action plan on how the organisation must institutionalise the mission and meet its CSF. For Hotel Tristar, the core process can be identified as: Revenue Wealth Management Process for the operations Reservation process: from the time a guest makes a booking until they arrive at their room. Asset Management Process for brand extension Event management process: from the time the organizers book the banquet/conference room to the completion of the event. Selection and Recruitment process Advertising and Brand promotion process Each of these processes could have a sponsor from the management team. The process sponsorship can be owned up by the existing Managing Director, Financial Controller, HR Manager, COO and CEO of the Hotel. 6. This step involves breaking down the core process into sub-processes, tasks and activities and formulating improvement teams. To illustrate the breakdown of a CSF to individual task through an example: CSF: On-time and Quality customer service KPI: Job rotation and training for timely delivery of services Core- Process: The event management process, from the time the organizers book the banquet/conference room to the completion of the event. Sub- Process: Develop an event concept and determine the feasibility Activity: Formulate budget and monitor finance Task: Prepare a chart to track progress of the event 7. The people and processes identified must be aligned to integrate excellence into business strategy. This is through a policy deployment or goal translation process. For Tristar, the top team must study the customer preferences to understand how the goal of creating quality customer service can be achieved. Once the core processes and the sub-processes are identified, they must be successfully analysed to lay foundation for systems and procedures. A process classification framework for a generic view of the business process is documented for systematic development of mapping and flowcharting the processes. The core-processes need to be self-assessed and benchmarked. The EFQM framework is used to self-asses Tristar to figure out what the hotel is good or bad at and where there is a need for improvement. EFQM Model Implementation: The European quality model highlights the significant strengths and weaknesses and the relationship among people, processes and outcomes. The model represented in Figure 2, People and customer satisfaction and positive impact on society provide a competitive advantage. There are nine factors to evaluate the level of excellence of a company, The primary problem is related to the first element in the model, that is leadership. The management and directors showed very little interest in quality management initiatives. This absence of commitment and lack of conviction results in failure to recognise good performance, inability to efficiently guide culture changes, less interaction with customers and suppliers, little involvement in running a sustainable and responsible business. This problem also raises concerns at the strategic level in the policies strategy element of the model. The external strategic analysis explains problems in the context of the hospitality industry. The challenges relate to the changing patterns in travel tourism during recession. The decline in business travelling and the re-location of the airport in Hyderabad have hit the business hard. Internal strategic analysis highlights problems of incorporating very little total quality measures into policies strategies. Lack of audits and process plans d o not support continuous improvement. Personnel Management is another key element in hotel industry. The companies HR policies, training and retention are factors that determine successful implementation of any TQM project. Hotel Tristar has staff on temporary or contract basis. This hinders effective implementation of training activities and results in low employee commitment and motivation. Resource Management through optimization of technical, financial, infrastructural resources should generate cost and quality benefits. However, Hotel Tristar lacks effective asset management system to improve return on capital employed and reduce cash-flow volatility. Processes should be continually reviewed and redesigned for successful implementation of quality policies aimed at customer satisfaction. Effective customer feedback system does not exist, thus making it impossible to assess the existing quality of services provided to various customers (rooms, banquets, restaurants and leisure gu ests). Quality does not necessarily mean luxury. Improvement programs aimed at services that provide value for money should be top priority during the recession period. The social impact with regard to responsible trading is largely emphasised in the hospitality industry. CSR activities and eco-hospitality are gaining popularity and Hotel Tristar has a long way to go at implementing sustainable and environmental friendly practices aimed at energy conservation, waste management etc., Economic results have shown a dip in ROCE and steady decrease in productivity. Thus, this model highlights a serious problem of lack of coordination of various operations and initiatives that run independently without synergy therefore impeding continuous improvement. (1) After the identification of the potential areas of improvement, the next step involves defining improvement opportunities and prioritizing the actions needed. This requires effective use of tools and techniques by the workforce. The employee commitment and involvement is attained through effective performance management systems implemented by the management team. This involves clarifying roles, providing training, developing action plans and setting targets. Teamwork is key in hospitality industry. Besides demonstrating leadership and commitment, the pioneers of TOE must also be proactive in visualizing ideal processes and competent in the mechanics of business process re-engineering. For Tristar, this must be focussed on identifying prospective clients in the right sectors, understand their needs, and implement processes to service these needs by involving the people. Potential problems with implementation: Implementing changes in the organisation can potentially face the following problems: 1. Employee resistance to change: Change efforts usually experience human resistance. There are many reasons for employees to resist change. These could range from a desire not to lose something of value, a fear of making mistakes, risk-averse, a misinterpretation of the change and its benefits and implications, a belief that the change does not add value to the organization or a general low tolerance for change. 2. Lack of senior management interest and support: For implementing change of any magnitude, it is essential to clearly communicate strategies and objectives of change to all the stakeholders. Some managers view quality management as just another managerial fad or fashion (Wilkinson and Redman, 1994). Hotel Tristar lacks effective pioneers to responsibly lead this change process and confidently implement practices to achieve continuous improvement. 3. Emphasis on Short-term results: Implementing a change is a time consuming affair. It is a matter of concern that the stakeholders involved usually hold a short-termist attitude (Wilkinson and Redman, 1994). Hotel Tristar, which is classified in the luxury segment, is constantly facing demands for quicker results interms of increased cash-flows and profitability. 4. Inflexible and rigid organisation hierarchy: Tristar is a 27 year old family-run business with deep-rooted culture and inter-group relationships. Any decision making process resulting in disturbing the complex hierarchy and deviating from the traditional methods is bound to face strong resistance and confrontation. It is a challenging task to overcome traditions. This is true when employees do not see the relation between their traditions and an existing problem. (http://www.themanager.org/strategy/Change_Problems.htm) 5. Lack of individual development opportunities: High performance seeks appropriate skills and capabilities. This requires creating effective training and learning opportunities for the employees or recruitment of new labour. Tristar lacks appropriate training structure and also has a high attrition rate due to the fluid market conditions. 6. Unfavourable Market Conditions: Tristar has faced sudden plunge in its sales due to the re-location of the Airport. This has resulted in an urgent need to refocus on its target market segment to lay more emphasis on repeat customers and business customers. The changes in demographics and customer spending also pose as potential barriers to achieving competitive advantage. 7. Lack of resources and cost constraints: Inefficient management of financial resources and assets could pose some serious problems in implementing organisational excellence. According to Wilkinson et al., (1994), Quality management appears to suffer from resource limitations. Keeping up-to-date with the latest information and technology will be challenging for Tristar. During the recession, there is also a major emphasis on value for money. The training and implementation of quality management process is a costly affair. 8. Problems in measuring quality : Lack of complete and accurate information makes it difficult to convince the employees of long term gains of implementing best practices. In service industry, it is always difficult to measure quality. If customer satisfaction is used as a yardstick to measure quality, what level of satisfaction can be attributed to high quality? Plans for overcoming these problems Kotter and Schlesinger(2008) have highlighted methods for dealing with change. These are can be applied to Hotel Tristar as follows: Training and Communication: One of the most effective ways of dealing with resistance to change is by educating and clearly communicating the goals and strategies of the organisation to all the members. This will help people understand the need for change. Tristar could conduct group presentations, individual discussions, pass on reports and statements to the concerned employees, to facilitate the same. Employee Empowerment and involvement: It is highly effective to actively involve the employees with the quality management process and decision making. This gives the participants a sense of responsibility and commitment to achieving excellence. The MD could ask the 2nd and 3rd level managers to recommend changes in the current event management and reservation system of the hotel. Facilitating and Supporting: The managers could also support those who are resisting change by listening to their concerns and taking actions to address those concerns through appropriate training and development. So, Tristar could talk to the members about their re-focus strategy towards customer service and identify beforehand who would have difficulty in adjusting to new roles. Measure quality efforts: By investing in reliable and accurate information to identify effective information gathering and analysis techniques. TQM is based majorly on rational thinking and problem solving (Oakland, 1999), thus the probable best solution is to provide a balanced mix of information and creative ideas. Emphasis on long-term goals: Tirstar can overcome the short-termist attitude of the stakeholders involved by communicating the budget, financials involved and the pace of change generated. Thus, by encouraging transparency, the stakeholder gain the broader picture and understand the long-term gains of quality programmes. Trial Runs: To identify teething problems before releasing the change systems across the departments and to rectify these, as very often, first impressions are considered last impressions.