Total Quality Management and Operational Excellence

Text with Cases

John S. Oakland, Robert J. Oakland, Michael A. Turner

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781317202950
• Edition: 5
• Topic: Business
• Subtopic: Business generale
• Index: Business

The notion of 'Quality' in business performance has exploded since the publication of the first edition of this classic text in 1989. Today there is a plethora of performance improvement frameworks including lean–Six Sigma and the latest version of ISO 9001, offering an often confusing variety of ways to achieve business excellence.

Quality guru John Oakland's famous TQM model, in many ways a precursor to these frameworks, has evolved to become the ultimate holistic overview of performance improvement strategy. Incorporating the frameworks that succeeded it, the revised model redefines Quality by:

• Accelerating change
• Reducing cost
• Protecting reputation

The popular, practical, jargon-free writing style, along with ten supporting case studies, effortlessly ties the model to its real-life applications, making it easy to understand how to apply what you've learned to your practices and achieve sustainable competitive advantage.

Guiding readers through the language of TQM and OpEx and all their recent developments, including data analytics, this book sets out a clear way to manage change. This exciting update of a classic is all the busy student or professional will need to begin understanding how to manage Quality and achieve Operational Excellence.

Part I
The foundations of TQM

Good order is the foundation of all good things.

Edmund Burke, 1729–1797, from ‘Reflections on the Revolution in France’

Chapter 1
Understanding quality

Quality, competitiveness and customers

In recent times, organizations have experienced a period of great change in their markets and operations. International as well as domestic competition has meant that many organizations have faced an increasingly turbulent and hostile environment. The pace of technological change has quickened to lightning speed, customers have become more demanding and competition has become more intense and sophisticated. Regulators and consumer groups have also added to these pressures.

Good quality performance has always been a key strategic factor for business success, but it is now more than ever required to compete successfully in the global markets of the 21st century. Many organizations have adopted a range of improvement approaches in response to these forces. We have seen the growing adoption of a range of quality and management systems standards, the emergence and development of total quality management (TQM), business process re-engineering (BPR), business excellence, performance excellence, lean thinking, Six Sigma, statistical process control, etc, etc. The battle-weary could be excused for taking a rather jaundiced view of this ever-lengthening list of ‘quality’ offers, but, by and large, they share many of the principles and elements that are found in TQM.

Whatever type of organization you work in – an online retailer, a bank, a hospital, a university, an airline, an insurance company, a software developer, local government, a factory – competition is rife: competition for customers, for students, for patients, for resources, for funds. Any organization basically competes on its reputation – for quality, reliability, price and delivery – and most people recognize that quality is the key to achieving sustained competitive advantage. If you doubt that, just look at the way some organizations, even whole industries in certain countries, have used quality strategically to win and retain customers, obtain business resources or funding and be competitive. Moreover, this sort of attention to quality improves performance in reliability, delivery and price.

Reputations for poor quality last for a long time, and a good or bad reputations can become national or international. Yet the management of quality can be learned and used to improve reputation. For any organization, there are several aspects of reputation that are important:

1. It is built upon the competitive elements of being ‘On-Quality; On-Time; On-Cost’
2. Once an organization acquires a poor reputation for product or service quality or reliability, it takes a very long time to change it
3. Reputations, good or bad, can quickly become national reputations
4. The management of the competitive weapons, such as quality, can be learned like any other skill and used to turn round a poor reputation

Before anyone will buy the idea that quality is an important consideration, they would have to know what was meant by it.

What is quality?

Quality starts with understanding customer needs and ends when those needs are satisfied. Pointing to his wrist, John asks a class of students – undergraduates, postgraduates, experienced managers, ‘Is this a quality watch?’ It matters not who is in the group, the answers vary:

• ‘No, it’s made in Japan’
• ‘No, it’s cheap’
• ‘No, the face is scratched’
• ‘How reliable is it?’
• ‘I wouldn’t wear it’

John’s watch has been insulted all over the world – London, New York, Paris, Sydney, Dubai, Brussels, Amsterdam, Leeds! Clearly, the quality of a watch depends on what the wearer requires from a watch – perhaps a piece of jewellery to give an impression of wealth; a time-piece that gives the required data, including the date, in digital form or one with the ability to perform at 50 metres under the sea? These requirements determine the quality.

Quality is often used to signify ‘excellence’ of a product or service – people talk about ‘Rolls-Royce quality’ and ‘top quality.’ In some manufacturing companies the word may be used to indicate that a piece of material or equipment conforms to certain physical dimensional characteristics, often set down in the form of a particularly ‘tight’ specification. In a hospital it might be used to indicate some sort of ‘professionalism.’ If we are to define quality in a way that is useful in its management, then we must recognize the need to include in the assessment of quality the true requirements of the ‘customer’ – the needs and expectations.

Quality then is simply meeting the customer requirements, and this has been expressed in many ways by other authors:

• ‘Fitness for purpose or use’ – Juran, an early doyen of quality management;
• ‘The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs’ – BS 4778. 1987 (ISO 8402, 1986) Quality Vocabulary; Part 1, International Terms;
• ‘Quality should be aimed at the needs of the consumer, present and future’ – Deming, another early doyen of quality management;
• ‘The total composite product and service characteristics of marketing, engineering, manufacture and maintenance through which the product and service in use will meet the expectation by the customer’ – Feigenbaum, the first man to publish a book with ‘Total Quality’ in the title;
• ‘Conformance to requirements’ – Crosby, an American consultant famous in the 1980s;
• ‘Degree to which a set of inherent characteristics fulfils requirements’ – ISO (EN) 9001: 2015 Quality Management Systems – fundamentals and vocabulary.

Another word that we should define properly is reliability. ‘Why do you buy a Japanese car?’ ‘Quality and reliability’ comes back as the answer. The two are used synonymously, often in a totally confused way. Clearly, part of the acceptability of a product or service will depend on its ability to function satisfactorily over a period of time, and it is this aspect of performance that is given the name reliability. It is the ability of the product or service to continue to meet the customer requirements. Reliability ranks with quality in importance, since it is a key factor in many purchasing decisions where alternatives are being considered. Many of the general management issues related to achieving product or service quality are also applicable to reliability.

It is important to realize that the ‘meeting the customer requirements’ definition of quality is not restrictive to the functional characteristics of products or services. Anyone with children knows that the quality of some of the products they purchase is more associated with satisfaction in ownership than some functional property. This is also true of many items, from antiques to certain items of clothing. The requirements for status symbols account for the sale of some executive cars, certain bank accounts and charge cards and even hospital beds! The requirements are of paramount importance in the assessment of the quality of any product or service.

By consistently meeting customer requirements, we can move to a different plane of satisfaction – delighting the customer. There is no doubt that many organizations have so well ordered their capability to meet their customers’ requirements, time and time again, that this has created a reputation for ‘excellence.’ A development of this thinking regarding customers and their satisfaction is customer loyalty, an important variable in an organization’s success. Research shows that focus on customer loyalty can provide several commercial advantages:

• Customers cost less to retain than acquire;
• The longer the relationship with the customer, the higher the profitability;
• A loyal customer will commit more spend to its chosen supplier;
• About half of new customers come through referrals from existing clients (indirectly reducing acquisition costs).

Many companies use measures of customer loyalty to identify customers who are ‘completely satisfied,’ would ‘definitely recommend’ and would ‘definitely repurchase.’ The so-called net promoter score (NPS) is one such measure, often quoted on a scale from 1 (lowest score) to 10.

Understanding and building the quality chains

The ability to meet the customer requirements is vital, not only between two separate organizations but within the same organization.

When the air stewardess pulled back the curtain across the aisle and set off with a trolley full of breakfasts to feed the early morning travellers on the short domestic flight into an international airport, she was not thinking of quality problems. Having stopped at the row of seats marked 1ABC, she passed the first tray onto the lap of the man sitting by the window. By the time the second tray had reached the lady beside him, the first tray was on its way back to the hostess with a complaint that the bread roll and jam were missing. She calmly replaced it in her trolley and reached for another – which also had no roll and jam.

The calm exterior of the hostess began to evaporate as she discovered two more trays without a complete breakfast. Then she found a good one and, thankfully, passed it over. This search for complete breakfast trays continued down the aeroplane, causing inevitable delays, so much so that several passengers did not receive their breakfasts until the plane had begun its descent. At the rear of the plane could be heard the mutterings of discontent. ‘Aren’t they slow with breakfast this morning?’ ‘What is she doing with those trays?’ ‘We will have indigestion by the time we’ve landed.’

The problem was perceived by many on the aeroplane to be one of delivery or service. They could smell food but they weren’t getting any of it, and they were getting really wound up! The air hostess, who had suffered the embarrassment of being the purveyor of defective product and service, was quite wound up and flushed herself, as she returned to the curtain and almost ripped it from the hooks in her haste to hide. She was heard to say through clenched teeth, ‘What a t...