Total Quality Management

Text, Cases, and Readings, Third Edition

Joel E. Ross

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351407779
• Edition: 3
• Topic: Business
• Subtopic: Business generale
• Index: Business

Acclaimed and used in over 200 colleges and universities around the country, Total Quality Management: Text, Cases and Readings has been completely revised and expanded to meet the growing demands and awareness for quality products and services in the competing domestic and global marketplaces. Since the publication of the first and second editions of this book, interest in and acceptance of TQM has continued to accelerate around the world. This edition has been thoroughly revised, updated and expanded. Some of the changes are:

• A new chapter on the emerging Theory of Constraints
  
• Expanded treatment of Process Management
  
• Eleven new readings
  
• Ten new cases
  
• Chapter examples of TQM at 12 Baldrige winning organizations
  
• End of chapter recommendations for further reading
  
• Revised and updated textual material
  
• 
  The Varifilm case is retained as a comprehensive study that illustrates good and not so good practices. Each chapter contains an exercise which provides the reader with an opportunity to apply TQM principles to the practices illustrated in each case.Based on sound principles, this practical book is an excellent text for organizational development programs aimed at practitioners responsible for developing and implementing TQM programs in their own service or manufacturing organizations.

1

INTRODUCTION TO TOTAL QUALITY MANAGEMENT

Total Quality Management (TQM) is the set of management processes and systems that create delighted customers through empowered employees, leading to higher revenue and lower cost.

J. M. Juran, quality expert

Total quality management (TQM) is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customer satisfaction.

Of all the management issues faced in the last decade, none has had the impact of or caused as much concern as quality in American products and services. A report by the Conference Board indicates that senior executives in the United States agree that the banner of total quality is essential to ensure competitiveness in global markets. Quality expert J. M. Juran calls it a major phenomenon in this age.¹ This concern for quality is not misplaced.

The interest in quality is due, in part, to foreign competition and the trade deficit.² Analysts estimate that the vast majority of U.S. businesses will continue to face strong competition from the Pacific Rim and the European Economic Community for the remainder of the 1990s and beyond.³ This comes in the face of a serious erosion of corporate America’s ability to compete in global markets over the past 20 years. As we come to the end of the 20th century, the competitive and trade deficit problems are compounded by the weakening situation in Asian and other global markets. To compete in these markets may require additional efforts in both cost reduction and quality.

The problem has not gone unnoticed by government officials, corporate executives, and the public at large. The concern of the president and Congress culminated in the enactment of the Malcolm Baldrige National Quality Improvement Act of 1987 (Public Law 100–107), which established an annual United States National Quality Award. The concern of business executives is reflected in their perceptions of quality. In a 1989 American Society for Quality Control (ASQC) survey, 54 percent of executives rated quality of service as extremely critical and 51 percent rated quality of product as extremely critical.⁴ Seventy-four percent gave American-made products less than eight on a ten-point scale for quality. Similarly, a panel of Fortune 500 executives agreed that American products deserved no better than a grade of C+.

Public opinion regarding American-made products is somewhat less than enthusiastic. In a 1988 ASQC survey of consumer perceptions, less than one-half gave American products high marks for quality.⁵ Employees also have misgivings about quality in general and, more specifically, about quality in the companies in which they work. They believe that there is a significant gap between what their companies say and what they do. More importantly, employees believe that their talents, abilities, and energies are not being fully utilized for quality improvement.⁶

Despite the pessimism reflected by these groups, progress is being made. In a 1991 survey of American owners of Japanese-made cars, 32 percent indicated that their next purchase would be a domestic model, and the reason given most often was the improved quality of cars built in the United States.⁷ Ford’s “Quality Is Job One” campaign may have been a contributing factor. There is also evidence that quality has become a competitive marketing strategy in the small business community, as Americans are beginning to shun mass-produced, poorly made, disposable products.

Other promising developments include the increasing acceptance of TQM as a philosophy of management and a way of company life. It is essential that this trend continue if American companies are to remain competitive in global markets. Customers are becoming more demanding and international competition more fierce. Companies that deliver quality will prosper in the next century.

THE CONCEPT OF TQM

TQM is based on a number of ideas. It means thinking about quality in terms of all functions of the enterprise and is a start-to-finish process that integrates interrelated functions at all levels. It is a systems approach that considers every interaction between the various elements of the organization. Thus, the overall effectiveness of the system is higher than the sum of the individual outputs from the subsystems. The subsystems include all the organizational functions in the life cycle of a product, such as (1) design, (2) planning, (3) production, (4) distribution, and (5) field service. The management subsystems also require integration, including (1) strategy with a customer focus, (2) the tools of quality, and (3) employee involvement (the linking process that integrates the whole). A corollary is that any product, process, or service can be improved, and a successful organization is one that consciously seeks and exploits opportunities for improvement at all levels. The load-bearing structure is customer satisfaction. The watchword is continuous improvement.

The Conference Board has summarized the key issues and terminology related to TQM:

■ The cost of quality as the measure of non-quality (not meeting customer requirements) and a measure of how the quality process is progressing.

■ A cultural change that appreciates the primary need to meet customer requirements, implements a management philosophy that acknowledges this emphasis, encourages employee involvement, and embraces the ethic of continuous improvement.

■ Enabling mechanisms of change, including training and education, communication, recognition, management behavior, teamwork, and customer satisfaction programs.

■ Implementing TQM by defining the mission, identifying the output, identifying the customers, negotiating customer requirements, developing a “supplier specification” that details customer objectives, and determining the activities required to fulfill those objectives.

■ Management behavior that includes acting as role models, use of quality processes and tools, encouraging communication, sponsoring feedback activities, and fostering and providing a supporting environment.⁸

ANTECEDENTS OF MODERN QUALITY MANAGEMENT

You [= Japan] will never be able to compete with the United States in technology, but you do make very good handkerchiefs and pajamas which you would sell very well in the USA. Why don’t you export these?

John Foster Dulles (1950)

We are going to win and the industrial West is going to lose out; there’s not much you can do about it because the reasons for your failure are within yourselves. Your firms are built on the Taylor Model. Even worse, so are your heads. With your bosses doing the thinking while the workers wield the screwdrivers, you’re convinced deep down that this is the right way to run a business. For you, the essence of management is getting the ideas out of the heads of the bosses and into the hands of labor.

Konosuke Matsushita (Matsushita)

Quality control as we know it probably had its beginnings in the factory system that developed following the Industrial Revolution. Production methods at that time were rudimentary at best. Products were made from non-standardized materials using non-standardized methods. The result was products of varying quality. The only real standards used were measures of dimensions, weight, and in some instances purity. The most common form of quality control was inspection by the purchaser, under the common-law rule of caveat emptor.⁹

Much later, around the turn of this century, Frederick Taylor developed his system of scientific management, which emphasized productivity at the expense of quality. Centralized inspection departments were organized to check for quality at the end of the production line. An extreme example of this approach was the Hawthorne Works at Western Electric Company, which at its peak in 1928 employed 40,000 people in the manufacturing plant, 5200 of whom were in the inspection department. The control of quality focused on final inspection of the manufactured product, and a number of techniques were developed to enhance the inspection process. Most involved visual inspection or testing of the product following manufacture. Methods of statistical quality control and quality assurance were added later. Detecting manufacturing problems was the overriding focus. Top management moved away from the idea of managing to achieve quality, and furthermore, the work force had no stake in it. The concern was limited largely to the shop floor.

Traditional quality control measures were (and still are) designed as defense mechanisms to prevent failure or eliminate defects.¹⁰ Accountants were taught (and are still taught) that expenditures for defect prevention were justified only if they were less than the cost of failure. Of course, cost of failure was rarely computed. (Cost of quality is discussed further in Chapter 11.)¹¹

Following World War II, the quality of products produced in the United States declined as manufacturers tried to keep up with the demand for non-military goods that had not been produced during the war. It was during this period that a number of pioneers began to advance a methodol...