Executive Summary
Summary Statement
The benefits and key steps of implementing TQM in Smart Pack Ltd.
Key Elements
Commitment, employees, quality control, stakeholders, top management, PDCA
The focus of the Report
The report presents an overview of the Total Quality Management approach. By reviewing the literature, it attempts to summarise the information on its relevance, functionality, common implementation strategies, and possible barriers.
Findings
The report concludes the practical validity of TQM in the case of Smart Pack Ltd., its applicability, and points out the range of benefits resulting from the process. However, at least one important step is expected to cause difficulties unless it is addressed early in the process.
Discussion
Given the successful record and an abundance of case studies that confirm the validity of the approach, TQM would be beneficial to our company regardless of the contract suggested by LEGO.
Conclusion
Except for one particular aspect, all of the main steps are possible to complete within the designated time frame and conclusively assess the progress.
Recommendations
The main concern is the possible rigidity of the workplace culture, which is known to require more time than we have at our disposal. For this reason, it is recommended to thoroughly review the company’s records which may provide additional insights into the flexibility of the employees and their readiness to change based on the prior instances of similar processes. It is also recommended to search for culture-specific literature since the overwhelming majority of TQM cases describe Asian, European, and American companies and will likely require adjustments when applied to the Australian market.
Purpose of the Report
The following report is aimed at illustrating the importance and relevance of the Total Quality Management approach, describing its benefits, outlining its target groups, and predicting the possible barriers in the course of its implementation. The report also suggests a possible action plan for the TQM process and briefly describes each step to create a more concise image. The report is primarily introductory. Thus the present version of the plan is subject to change once the required data and background are obtained.
Background
LEGO is one of the biggest and most recognizable toy manufacturers in the world. We recently received a proposition to become a subcontractor from the company. Cooperation with an entity of such magnitude puts great responsibilities on Smart Pack Ltd. Thus, the TQM implementation is desirable regardless of the demands presented by LEGO.
Method
The current version of the report focuses on the existing knowledge in the literature, primarily the credible scholarly journals.
Scope
The report is a broad overview of the expected actions rather than a set of detailed instructions.
What is Total Quality Management?
Total Quality Management (TQM) is an approach aimed at improving the quality of the company’s operations. It is a long-term action rather than a quick fix solution and is implemented through maintaining a workplace environment that maximizes the efficiency of operations on all stages and constantly improves quality. While the quality improvement process is commonly attributed to the products and services, in reality, it involves the enhancement of the corporate culture as well.
TQM was initially conceived as a set of established practices in the early 1980s when both the European and US market suffered severe competition from Japan. In response to this fact, several government institutions, along with independent scholars, reviewed the quality control approaches used by the Japanese management and conceived what is now known as TQM.
Total Quality Management is not a unified system – instead, it encompasses several common concepts and principles which are shared across variations. First, the level of quality is determined primarily by the consumer. All of the data which can be interpreted as customer’s reaction to the change is used to measure the success of the TQM process on every level of the company’s functioning, including those which have no direct impact on consumers.
For this reason, total involvement of stakeholders is required, with an understandable emphasis on employees. Naturally, to establish such total involvement, the staff must be ready to accept changes, make independent decisions, face responsibilities, and be committed to the shared vision. Such effect is usually produced by top management and, if properly organized, sustained within the self-managed working teams. Second, the practices are for the most part focused on the process: most often, it is broken down into fundamental elements, after which each one is assigned an expected quality standard and monitored to maintain it.
However, the TQM does not separate the processes – instead, the common approach is uniting the previously disparate entities into a horizontal hierarchy. This is achieved by establishing the communication channels and making sure that the staff shares a common mission and vision, understands the objectives, and views their work as an important part of a complete picture. Finally, the responsibilities on the implementation usually rest on a top management segment, with a specially formed committee taking the role of a controlling entity. Every aspect of the TQM, including planning, is either continuous or recurring which guarantees constant improvement and maintenance.
Implementing TQM
Before the implementation is initiated, several important measures must be taken. First, we need to review the current state of the company, most importantly, the conditions which are responsible for the need for change and the capability of the company to accept it. The former is relatively simple since we already know that the primary reason is the request from LEGO. This fact implies that no visible issues were detected that demanded addressing. However, this does not mean that the company in its current state is compatible with LEGO requirements and the reasons for TQM implementations are purely formal.
Thus, we need to collect information on the quality and working culture of other firms in Australia which are expected to compete with Smart Pack Ltd. and those which operate under the same conditions in other countries. Such an approach is consistent with the organization model approach (Jiménez-Jiménez, Martinez-Costa, Martínez-Lorente, & Rabeh, 2015) and will give us a better understanding of the expected level of quality and provide us with some insights on the techniques we can utilize. Next, we need to review the history of the company to determine its readiness to accept change. We must locate the most prominent changes and assess the amount of resistance both from the employees directly involved in operations and the management segment. This will give us an idea of the pace, scope, and intensity of the planned TQM process (Mosadeghrad, 2014).
If the records also allow us to indicate the reasons behind the slowdown, we can adjust the techniques accordingly in the planning phase. It is worth pointing out that the resistance to change is not a purely negative effect – it also provides a necessary amount of challenge which will highlight the inconsistencies in the process and help with the assessment to some degree. Thus, it should be integrated into the planning rather than avoided at all costs.
Next, we need to identify the critical success factors (CSF) (Hietschold, Reinhardt, & Gurtner, 2014). Since we are a company which produces material goods, it is possible to outline the most likely factors: for Smart Pack Ltd., they are product quality, customer satisfaction, and financial performance. Nevertheless, it is recommended to assess the matters more thoroughly to locate other possibly relevant factors and, more importantly, to assign a weight to the existing ones. This will help to prioritize the processes and activities to achieve the best results.
The next step is developing a meaningful and streamlined system of metrics to assess the progress made in the selected CSFs. For instance, customer satisfaction can be measured through surveys and other communication channels to produce feedback. Naturally, a certain level needs to be set as “satisfactory” in the initial phase to establish a goal. Once established, the system can also be used to prove successful TQM implementation.
The next phase involves fostering the commitment of the employees. Since the main responsibilities of the success of TQM are on the top management segment (Burkert & Lueg, 2013), it is important first to persuade the managers who will then convey the message to the other workers. The most obvious way of doing it is by describing the benefits of the quality improvement process and backing the claims with hard data and cases of successful implementation by other firms.
In our case, the lucrative contract with LEGO is the most obvious and direct consequence of the implementation. At the same time, the company will also likely experience financial growth thanks to the higher customer satisfaction and improving working conditions. At this point, visits to the award-winning business organizations can also come in handy, both as an illustration and as a way to gain useful information (Lee & Ooi, 2015).
Another important point is the honest and unequivocal acceptance of the difficulties which will likely accompany the process. The barriers for implementation will occur regardless of the fact of prior acknowledgment, but the initial recognition will improve the efficiency of mitigation and create a more robust environment among workers. In other words, the employees will not be shaken by the adverse effects of the change process and will show readiness to accept the challenge if its details are known, and the ultimate reward is convincing.
Once the staff is informed about the transition, is prepared to accept the challenges of the process, and is committed to contributing to the successful implementation, we can proceed to the allocation of responsibilities (Netland, Schloetzer, & Ferdows, 2015). At this step, the majority of roles of the existing hierarchy may be already consistent with the new vision and mission. Thus, the changes may not be necessary on a large scale.
However, two new entities associated with TQM implementation need to be assigned. First, a steering committee must be formed. The responsibilities of the committee include overseeing the implementation process, accepting and analyzing the reports, determining the reasons for deviations from the planned course, and introduce the corrections into subsequent versions. Second, a consultant must be appointed to provide an independent opinion.
The consultant needs to be an outside specialist rather than an affiliate of the company to assure the necessary level of integrity and provide a fresh view on the matters. On the other hand, the committee is formed from the existing managerial personnel to establish a connection between the chosen practices and the previous knowledge of the company (Tavares de Aquino & Maciel de Melo, 2016). The collaboration between an outside specialist and a team familiar with the setting will result in better adaptability and maximize the efficiency of change.
The next step is establishing the relation between certain processes and the objectives determined by our mission. The best way to do that is to construct a quality policy that will reflect the key points of our vision and motives clearly and transparently.
Once everything is done, we may proceed to the execution phase, followed by evaluation and restatement. However, it is important to recognize possible barriers.
Action Plan
- Evaluation of the current conditions
- Reasons
- Capabilities
- Research of the contemporary market conditions
- Identifying critical success factors
- Assigning weight
- Setting milestones
- Communicating vision and mission
- Establishing horizontal hierarchy
- Allocating responsibilities
- Acquiring a consultant
- Forming a steering committee
- Conceiving a quality policy
- Overseeing change process
- Reviewing feedback
- Re-establishing faulty or ineffective parts of the plan (if necessary) (Tomic et al., 2016)
Things to Avoid
One of the common barriers to TQM implementation is the cost. Smart Pack Ltd. is a niche company, which means it is tight on resources. The TQM implementation and the changes introduced to the process are expected to require financing, which may be difficult if the investors do not share the vision of the management. Thus, it is important to explain that these are investments rather than losses and will subsequently lead to growth (Jiménez-Jiménez et al., 2015).
Another common difficulty is the poor understanding of accountability. The employees often perceive empowerment in a one-sided fashion – accepting the decision-making but ignoring the responsibilities which come with them (Talib & Rahman, 2015). It is thus important for the management to clearly and concisely communicate all aspects of the process and actively monitor for inconsistencies. Time restrictions may also be a problem.
LEGO demands the TQM implementation within a year. Most of the steps of the action plan can be fitted into this time frame. However, some inherent aspects of the process, such as the change of the working culture, are known to be much more time-consuming, sometimes requiring several years to be fully adjusted. These limitations need to be acknowledged on a planning stage, and possible mitigation strategies need to be developed. Finally, education and training are often overlooked in the process, especially when no major reallocation of responsibilities is made. The knowledge and skill set of employees thus must be included in the list of factors that influence the outcome and regularly measured to timely detect and eliminate gaps.
Measuring Success of TQM Implementation
Method 1: PDCA
One possible way of maintaining and improving quality is through a plan-do-check-act cycle or PDCA. It is a simple and approachable technique that, when properly implemented, benefits both the management and the workers (Tomic et al., 2016). The planning phase involves assessing the current situation and searching for inconsistencies with the established norms. Once found, these issues are addressed by developing appropriate solutions in the “do” phase.
The solutions then undergo an evaluation and are tested. This phase is preliminary and is necessary to verify the solutions which were defined as the most promising. After the pilot run the check phase begins, where the feedback and data which illustrates the success of the intervention is gathered and analyzed. If the results are consistent with the set objectives and goals, the suggested strategy is then fully implemented into the production cycle.
If it yields inadequate results, the data is reviewed to determine the possible reason for failure. After this, the cycle is reinitiated, i.e. the planning phase is initiated again to adjust the existing strategy or develop a new one. Importantly, since the TQM is an ongoing process that aims at constant improvement, the cycle is repeated regardless of the result. Once the set milestone of quality is reached, a new one is established, and in the meantime, minor improvements can be introduced which further improve the workplace culture.
Method 2: ISO 9000
In some cases, ISO 9000 is utilized to measure the effectiveness of the TQM. The reason for this is several similarities between the two systems which cover the importance of quality, its impact on the customers, the communication between departments of an organization, and the cultural and social influences. However, it should be pointed out that these systems also have several important differences.
ISO does not recognize customer satisfaction as a measure of success, requires replicability as a component (not included in TQM), prioritizes individual responsibilities over the group and team ones, and, most importantly, prefers strict regulations over shared decision-making and empowerment (Prajogo, Huo, & Han, 2012). Thus, to apply to TQM evaluation, the latter needs to be heavily modified.
Conclusion
Total Quality Management is a well-established and trusted the concept. While it lacks concrete definitions and varies substantially throughout the literature, it is flexible and versatile enough to be successfully implemented and adjusted for a wide variety of uses. The action plan, developed and detailed in this paper, combined with the PDCA monitoring tool, will provide Smart Pack Ltd. with a necessary understanding. The metrics system detailed in step 3 can be used to illustrate the fact of successful implementation. The plan is intended to serve as a preliminary guide to communicate the necessity of such change as well as outline the main points to consider. It is recommended to further expand the plan to avoid the possible difficulties mentioned above.
Recommendations
First, the TQM is a highly acclaimed system with an impressive success record. However, it must be acknowledged that the overwhelming majority of evidence is based on the European, Asian, and American experience. Thus, it is recommended to approach the cases and strategies which depend on the cultural aspect with caution. Case studies that account for the Australian market should also be prioritized to better understand the conditions. This second recommendation is especially relevant since the cultural segment of the TQM is known to be more time-consuming and, according to common understanding, does not fit well into the time frame allocated by LEGO. Third, the plan in its current state pays little attention to staff education and training. This aspect requires both time and resources and should be expanded in the extended version once the preliminary assessment is done.
References
Burkert, M., & Lueg, R. (2013). Differences in the sophistication of Value-based Management–The role of top executives. Management Accounting Research, 24(1), 3-22.
Hietschold, N., Reinhardt, R., & Gurtner, S. (2014). Measuring critical success factors of TQM implementation successfully–a systematic literature review. International Journal of Production Research, 52(21), 6254-6272.
Jiménez-Jiménez, D., Martinez-Costa, M., Martínez-Lorente, A. R., & Rabeh, H. A. D. (2015). Total quality management performance in multinational companies: A learning perspective. The TQM Journal, 27(3), 328-340.
Lee, V. H., & Ooi, K. B. (2015). Applying the Malcolm Baldrige National Quality Award criteria: an approach to strengthening organisational memory and process innovation. Total Quality Management & Business Excellence, 26(11-12), 1373-1386.
Mosadeghrad, A. M. (2014). Why TQM programmes fail? A pathology approach. The TQM Journal, 26(2), 160-187.
Netland, T. H., Schloetzer, J. D., & Ferdows, K. (2015). Implementing corporate lean programs: the effect of management control practices. Journal of Operations Management, 36(4), 90-102.
Prajogo, D., Huo, B., & Han, Z. (2012). The effects of different aspects of ISO 9000 implementation on key supply chain management practices and operational performance. Supply Chain Management: An International Journal, 17(3), 306-322.
Talib, F., & Rahman, Z. (2015). Identification and prioritization of barriers to total quality management implementation in service industry: an analytic hierarchy process approach. The TQM Journal, 27(5), 591-615.
Tavares de Aquino, A., & Maciel de Melo, R. (2016). Multicriteria model for selecting TQM consultancy and certification services. Benchmarking: An International Journal, 23(7), 311-324.
Tomic, B., Brkić, V. S., Karapetrovic, S., Pokrajac, S., Milanović, D. D., Babić, B., & Djurdjevic, T. (2016). Organizational culture, quality improvement tools and methodologies, and business performance of a supply chain. Journal of Engineering Manufacture, 27(2), 559-564.