THE IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT ...

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THE IMPLEMENTATION

OF TOTAL

QUALITY

MANAGEMENT

IN SMALL AND MEDIUM

ENTERPRISES

PHAIK LAN GOH

A Thesis Submittedfor the Degreeof Doctor of Philosophy May 2000

IbbersonCentre Departmentof Mechanical Engineering The University of Sheffield Mappin Street Sheffield S13JD

Abstract

Abstract Oakland (1989b) argues that following the Industrial Revolution in the 19thcentury we

are presentlyin the midst of the quality revolution. In the United Kingdom quality took on a new significance in 1979 with the publication of the British Standard for Quality BS5750. Since that date the Department of Trade and Industry (DTI) has been actively promoting quality improvements. In 1989, the DTI its in implementation (TQM) Quality Management Total the specially supported of Managing in the `90s Program.

The benefits of TQM are widely recognised following reports of its successful implementation in many large companies. It has led to these companies becoming highly competitive both locally and internationally through the production of quality products that meet customer requirementsat the lowest cost, significantly increasing their market shareand profitability. As part of the Sheffield Regenerationeffort, this thesis examinesthe current position of Small and Medium manufacturingEnterprises(SMEs) in Sheffield. The thesis aims to facilitate the implementation of TQM in SMEs by enabling them to benchmarktheir progress. The thesisexaminesthree hypotheses: 1. SMEs do not understandthe definitions or implications of TQM. 2. SMEs can be encouragedto implement TQM by a combination of training and mentoring (Uncle Concept). 3. It is possible to benchmark managementstyles and the relative position of a companyon route to TQM using the biological classification system,Cladistics.

Abstract The characteristics of SMEs and principles of TQM were closely researched to develop SMEs. A based 5 Pillars TQM that to the of on needs would specifically cater a model developed based level TQM 5 Pillars these to the of on assess questionnaire was implementation in 30 Sheffield and 10 Singapore manufacturing SMEs.

The survey results based on interviews with senior management confirmed the first hypothesis that SMEs do not understand the defmitions or implications of TQM. This led to the second hypothesis that SMEs can be encouraged to implement TQM through a Framework comprising a combination of training and mentoring (Uncle Concept) by a company that had already implemented TQM.

The TQM Framework was applied to six SMEs in South Yorkshire. Customer and Employee surveys conducted as the prerequisite to TQM implementation provided valuable information to the companies about actions they needed to undertake in their implementation programme. All six companies proceeded to TQM Facilitator Training which

was conducted by Avesta

Sheffield

Limited,

who having successfully

implemented and sustained TQM fulfilled the role of the Uncle.

However, the secondhypothesis was proved to be incorrect. The companies `cherry facets picked' of TQM and the implementationprogramsfailed in eachcase. This thesis also reviews the evolution of management styles through a study of managementpioneers and their principles and theories on management,organisation structures and motivation. The evolution of the bureaucratic, authoritarian and impersonal management style of Frederick W. Taylor to the flexible, open and participative managementstyle of TQM was applied to the classification technique Cladistics to determine if it was possible to benchmark managementstyles and the relative position of a companyalong its route to TQM (Hypothesis3). A Management Style Survey Questionnairewas developed and a structured interview was conducted with ten companiesfrom South Yorkshire and one company from Japan.The results supportedHypothesis3.

ii

To Mum, Dad and Jek

111

Acknowledgements

Acknowledgements

I would like to express my thanks to Professor Keith Ridgway for his supervision, humour His has brought this through of sense work. me support and patience which Chris like Mrs have dark day. I to thank also seen away many a would and ready smile Ridgway for her care, help and encouragement, and for always being there.

I am grateful to Mr Jim Finnie of Avesta Sheffield Limited for conducting the Facilitator Training which was an integral part of this research. My thanks also to the managementand employeesof the companiesthat participated in this researchand for the invaluable insight gainedthough this experience. I would like to thank my family, especially Mum, Dad, Jek, Nette and Chih-hao for your love, encouragement and belief in me. Thank you Dad for your advice and insight into management practices borne of your personal experience and Mum for just being Mum.

IV

Tableof Contents

Table of Contents i

ABSTRACT

ACKNOWLEDGEMENTS

iv

TABLE OF CONTENTS

V

LIST OF FIGURES

xi

LIST OF TABLES

xii

1

CHAPTER 1: INTRODUCTION

IMPORTANCE OF SMES

1

1.2

CHARACTERISTICS OF SMES

3

1.3

PROBLEMS FACING SMES

5

1.4

THE IMPORTANCEOF TQM FOR SMEs

7

1.5

TQM FRAMEwoRK

9

1.6

MANAGEMENT

10

1.7

RESEARCH METHODOLOGY

14

1.8

RESEARCHAND THESIS STRUCTURE

15

1.1

STYLES

CHAPTER 2: THE FIVE PILLARS OF TOM

18

HYPOTHESIS 1: SMES Do NOT UNDERSTAND THE DEFINITIONS OR IMPLICATIONS OF TQM

2.1

QUALITY AND COMPETITION

18

2.2

TQM

19

2.3

QUALITYGURUS:THEIRPIHiLosopxiEs,PRINCIPLES AND METHODS

24

2.3.1

25

IN THE UNITED KINGDOM

W. EDWARDS DEMING

2.3.2 J. M. JURAN

29

2.3.3 PHILIPB. CROSBY

31 V

Tableof Contents

2.3.4 ARMANDV.

2.4

34

2.3.5 KAORUISHIKAWA

35

2.3.6 OVERVIEW

37

TQM MODELFORSMEs

39

2.4.1 2.5

FEIGENBAUM

41

THE 5 PILLARSOF TQM

TOTAL QUALITY MANAGEMENT 2.5.1

OBJECTIVE OF TQM

2.5.2

DEVELOPMENT OF TQM

SURVEY

48 48

SURVEY SURVEY QUESTIONNAIRE

49

2.5.3 QUALITY AWARDS

49

2.5.4

SELF-ASSESSMENT USING THE QUALITY AWARDS

54

2.5.5

SURVEY ME"IHODOLOGY

55

CHAPTER 3: RESULTS OF TOM SURVEY

56

3.1

SURvEY REsuLTs

56

3.2

STRENGTHS AND WEAKNESSES

65

3.3

COMPARISON OF COMPANIES IN SHEFFIELD AND SINGAPORE

66

3.3.1

SIGNIFICANT DIFFERENCES

66

3.3.2

MARGINAL DIFFERENCES

71

3.4

CASE STUDY 1: BEST COMPANY IN SHEFFIELD

73

3.5

CASE STUDY 2: BEST COMPANY IN SINGAPORE

77

3.6

CONCLUSIONS

80

CHAPTER 4: DEVELOPMENT OF A TOM FRAMEWORK

83

HYPOTHESIS 2: SMEs CAN BE ENCOURAGED To IMPLEMENT TQM USING A

FRAMEWORKOF TRAININGAND MENTORING(UNCLE CONCEPT

4.1

DEVELOPMENT OF TQM

4.2

THE UNCLE CONCEPT

84

4.2.1 THE UNCLE

85

PREREQUisiTESFOR TQM FRAMEWORK

87

4.3.1

CUSTOMERFocus

87

4.3.2

CUSTOMERSURVEY QUESTIONNAIRE

88

4.3

FRAMEWORK

vi

83

Tableof Contents

4.4

4.3.3

EMPLOYEE MOTIVATION

90

4.3.4

EMPLOYEE SURVEY QUESTIONNAIRE

92

TQM

94

FRAMEWORK IMPLEMENTATION

4.1.1

CUSTOMER SURVEY METHODOLOGY

95

4.1.2

EMPLOYEE SURVEY METHODOLOGY

97

CHAPTER 5: RESULTS OF TOM FRAMEWORK IMPLEMENTATION

99

5.1

METHOD FOR ANALYSIS OF CUSTOMER SURVEY RESULTS

99

5.2

METHOD FOR ANALYSIS OF EMPLOYEE SURVEY RESULTS

101

5.3

SUMMARY OF SURVEY RESULTS

104

5.3.1

CUSTOMER SURVEY RESULTS

104

5.3.2

EMPLOYEE SURVEY RESULTS

105

5.4

OVERVIEW OF SURVEY RESULTS

107

5.5

FACILITATOR TRAINING

108

5.5.1

BACKGROUND

108

5.5.2

EVALUATION

5.6

5.7

OF FACILITATOR TRAINING

110

EMPLOYEE TRAINING

112

5.6.1

BACKGROUND

112

5.6.2

EVALUATION

5.6.3

OUTCOME OF EMPLOYEE TRAINING

OF EMPLOYEE TRAINING

HYPOTHESIS 3:

114 116

CONCLUSION

CHAPTER 6: BENCHMARKING

113

THE ROUTE TO TOM

118

MANAGEMENT STYLESAND THE RELATIVE POSITION OFA COMPANY ON ROUTE To TQM CAN BE BENCHMARKED USING CL IDISTICS

6.1.

6.2.

INTRODUCTION

118

6.1.1.

EVOLUTION OF MANAGEMENT

118

6.1.2.

ROBERT OWEN

120

6.1.3.

CHARLES BABBAGE

121

SCIENTIFIC MANAGEMENT

122 VII

Tableof Contents

6.2.1.

123

FREDERICK W. TAYLOR

126

6.2.2. HENRYL. GANTT 6.2.3. 6.3.

ADMINISTRATIVE

6.3.1.

126

FRANK & LILLIAN GILBRETH

127

MANAGEMENT

127

HENRI FAYOL

129

6.3.2. MAX WEBER 6.3.3.

130

CHESTERBARNARD

131

6.3.4. JAMESMOONEY 6.3.5. 6.4.

6.5.

132

LYNDALL F. URWICK

135

HUMAN RELATIONS

6.4.1.

MARYP. FOLLETT

135

6.4.2.

GEORGE ELTON MAYO

137

ERA MODERN

139

MCGREGOR 6.5.1. DOUGLAS

140

6.5.2. ABRAHAMH. MASLOW

141

6.5.3.

CHRIS ARGYRIS

142

6.5.4.

FREDERICK HERZBERG

143

6.5.5.

OPERATIONS RESEARCH

145

6.5.6.

DECISION THEORY

146

6.5.7.

SYSTEMSTHEORY

146

6.5.8.

CONTINGENCY THEORY

147

6.6.

TOTAL QUALITY MANAGEMENT

149

6.7.

CONCLUSION

152

CHAPTER 7: BENCHMARKING 7.1

ORGANISATIONAL

7.2

MANAGEMENT

7.3

EVOLUTION OF MANAGEMENT

7.4

CONCLUSION

MANAGEMENT

STYLE

153

153

CHANGES

156

STYLES STYLES

158 158

Vu

Tableof Contents

CHAPTER 8: CLADISTICS

162

8.1

INTRODUCTION

162

8.2

CLADISTICS

162

8.3

CLADOCRAM

164

8.4

CLADOGRAM CONSTRUCTION

165

8.5

CONCLUSION

166

CHAPTER 9: RESULTS OF MANAGEMENT STYLE SURVEY

167

9.1

167

MANAGEMENT

STYLE SURVEY QUESTIONNAIRE

9.1.1

MANAGEMENT

9.1.2

EMPLOYEE PARTICIPATION

167

COMMITMENT

168

9.1.3 CUSTOMER Focus

170

9.1.4

170

ADDITIONAL INFORMATION

9.2

BACKGROUND

170

9.3

SURVEY METHODOLOGY

171

9.4

SURVEY RESULTS

171

CHAPTER 10: CONCLUSION

178

REFERENCES

188

APPENDIX A

TQM SURVEYQUESTIONNAIRE

208

APPENDIX

B

CUSTOMER SURVEY QUESTIONNAIRE

226

APPENDIX

C

CUSTOMER SURVEY REPORT

231

APPENDIX

D

EMPLOYEE SURVEY REPORT

254

APPENDIX

E

EMPLOYEE SURVEY QUESTIONNAIRE

258

ix

Tableof Contents

APPENDIX

F

FACILITATOR

TRAINING

APPENDIX

G

EMPLOYEE

APPENDIX

H

MANAGEMENT

TRAINING

STYLE QUESTIONNAIRE

284

295

305

List of Figures

List of Figures

Figure 1.7

ResearchMap of Thesis

14

Figure 1.8

Research and Thesis Structure

14a

Figure 2.3.2

The Juran Trilogy

30

Figure 2.3.3

Crosby's Quality ManagementMaturity Grid

32a

Figure 2.3.5

Cause and Effect Diagram

36

Figure 2.3.6a

TQM Plan

37a

Figure 2.3.6b

Pyramid Model of TQM

37a

Figure 2.4

The 5 Pillars of TQM

40

Figure 2.5.2a

Malcolm Baldrige National Quality Award

49a

Figure 2.5.2b

EuropeanQuality Award AssessmentCategories

49a

Figure 3.6

Percentageof Sheffield Companiesper Category

80

Figure 6.2.1

Taylor's Functional Foremen

123a

Figure 6.3.5a

The FundamentalPrinciple - Process- Effect of Management:The First Level of Analysis

133a

Figure 6.3.5b

Identification of Co-ordination and Control: The Second Level of Analysis

133a

Figure 6.5.2

Abraham Maslow's Hierarchy of HumanNeeds

141a.

Figure 8.2

Example of a Monophyletic Group

164

Figure 8.3

Four Taxa Cladogram

165

Figure 9.4a

Cladogramof Evolutionary Phasesof ManagementStyles

175

Figure 9.4b

CladogramShowing the Evolution of 11 Companies' ManagementStyles

177

xi

List of Tables

List of Tables

Table 1.2a

The Characteristicsof Small and Big Industrial Enterprises

3a

Table 1.2b:

The Strengths and Weaknessesof SMEs

4

Table 2.2

Differences between BS5750/IS09000 and TQM

21a

Table 2.4.1

Culture Change

40a

Table 2.5.2a

Scoring for the Malcolm Baldrige Award

50a

Table 2.5.2b:

EQA AssessmentCategoriesand Criteria

51a

Table 2.5.2c

Scoringthe Enablers

52a

Table 2.5.2d

Scoringthe Results

53

Table 3.1a

Summaryof TQM SurveyResults

56

Table 3.1b

Quality Progressof Companiesin Sheffield

57

Table 3.1c

Quality Progressof Companiesin Singapore

58a

Table 3.1d

AverageRatings of Companiesin Sheffield

63a

Table 3.1e

AverageRatingsof Companiesin Singapore

64

Table 3.2

Strengthsand Weaknesses

64a

Table 3.3

Comparisonof Companiesin Sheffield and Singapore

65a

Table 5.1a

Number of Customersper Rating for Section 1 (Quality Management)

99

Table 5. Ib

Classificationof CustomerSatisfactionLevels for Section 1

100

(Quality Management)

Table 5.2a

Number of Employeesper Rating for Part A (Work Environment)

102

Table 5.2b

Classification of Employee SatisfactionLevels for Work Environment

103

Table 5.3.1

Summaryof CustomerSurveyResults

103a

X11

List of Tables

Table 5.3.2a

Summary of Employee Survey Results

104a

Table 5.3.2b

Top 15 Questions Classified as "High Satisfaction"

105a

Table 5.3.2c

Top 10 Questions Classified as "Dissatisfaction"

107

Table 6.3.1

TQM Management Functions

127a

Table 6.5.4

Correlation between Maslow's Hierarchy of Needs and Herzberg's Hygiene and Motivation Factors

143a

Table 6.6

Changesfrom Traditional Managementto Total Quality Management

151a

Table 7.1

Organisation Culture, Traditional Management and TQM

154a

Table 7.2

Comparisonof ManagementPrinciples

156a

Table 7.3

Evolution of ManagementStyles from the Pre-Industrial

159

Revolution to TQM

Table 9.4a

ManagementStyle Characters

173

Table 9.4b

Data Editor for 6 Evolutionary Phasesof ManagementStyles

174

Table 9.4c

Data Editor for the Evolution of the 11 Companies'

176

Management Styles

Xlii

Chapter 1: Introduction

Chapter 1: Introduction

1.1 Importance of SMEs

This thesis is part of the Sheffield regenerationefforts to improve the performanceof by describes (SMEs). It the author out carried a study small and medium enterprises Total SMEs from 1999. The basis 1992 to to understand extent which on a part-time Quality Management(TQM) is examinedwith the objective of encouragingSMEs to implement TQM and boost their competitiveness. This need to assist SMEs is in 1996 from Industry by Trade that The Department the and of report reinforced businesses business New "small that are started, changes constantly. stated population information In collected others close, while some change ownership. recent years, 400,000 indicates in Wales, business bank England that, around and accounts about is It down". businesses that new start each year and similar numbers closed SMEs that that are neither viable nor competitive would naturally close acknowledged down. However, if no effort is madeto assist SMEs, attrition over time can increase the casualtiesin the current businessenvironmentwhere "competition is more intense, (DTI demanding technology customers are more and continually advancing" Managing in the `90s).

This thesis tests the following three hypothesesthat are structured to ensure the facing SMEs are fully understoodin order to effectively meet and overcome problems them.

Hypothesis 1:

SMEs do not understandthe definitions or implications of TQM Hypothesis 2: SMEs can be encouragedto implement TQM using a Framework of training and mentoring(Uncle Concept)

Hypothesis 3: Managementstyles and the relative position of a company on route to TQM can be benchmarkedusing the biological classification system,Cladistics 1

Chapter1: Introduction The importance of SMEs to the national economy cannot be overlooked. In the United Kingdom, SMEs employ 67.2% of the total workforce (HMSO, 1992). Within the less 200 SMEs 94% than employees companies with of are sector manufacturing (QED, 1992). This research uses the DTI's definition of an SME, which defines it as having fewer than 200 employees. Although the definition of an SME differs, for SME defines for Foundation Quality Management European the as an example, having fewer than 250 employees, the same concepts apply. Hewitt (1997) views these differences as insignificant becausethese are upper limits.

Owing to the limited financial resourcesand managementskills of SMEs, this sector is one of the most vulnerable and requires assistance.The UK, like other countries, cannot dependonly on multi-national and large companiesto support its economy. SMEs form an integral part of the country's economy. They are the potential future large and multi-national companiesand needto be nurtured and assisted.Wedgwood, Marks and Spencer,W.H. Smith, Sainsbury's and Tesco are examplesof small firms that have grown into householdnames (Clarke, 1972). High technology SMEs have already demonstratedtheir innovation and enterpriseby developing new state of the in be (Oakley, 1995). SMEs Aspiring art productsand markets can equally successful this era of changing technology, precision engineering, computer and knowledge technology.The issueis not the shortageof skill, innovation, invention and enterprise. Rather, it is the need to assist and nurture SMEs through understanding and implementing TQM, allowing them to reap the benefits (O'Neil and Duker, 1986) enjoyed by the larger enterpriseswhich have successfullyimplementedTQM (Buzzel and Gale, 1987;Mann and Kefoe, 1994). The importanceof SMEs was recognisedback in July 1969 when the UK government set up the Bolton Committee whose official title was `Government Committee of Inquiry on Small Firms'. The Bolton Committee had the task of determining the role of small firms in the national economy, the facilities available to them and the problems they faced. The definition of small firms used was companiesemploying 200 or less. The Committee reported there were 1.25 million small firms, which accounted for 19% of GNP and employed 29% of the work population. It also reported that these small firths were not employing resourcesefficiently. The main finding of the 1971 Bolton report was that "despite the small firm being sector a large and important component of the country's industrial structure, it was in a state of 2

Chapter1: Introduction long-term decline both in size and in its share of economic activity, and while the developed true same was of most other countries throughout the world, the process appeared to have gone further in the UK than elsewhere. To guard against the possibility that the decline might continue past danger point, it recommended the setting up, within the Department of Trade and Industry, of a Small Firms Division under the aegis of a minister designated as responsible for small firms, whose main function would be to monitor the health of the sector". This recommendation was immediately implemented (Clarke, 1972).

In 1983, Prime Minister Margaret Thatcher launched the European Year of Small and Medium-Sized Enterprise with the following message: "No sector in industry is more representative of the entrepreneurial spirit of Britain than the small and independent business community. The foundations of this country's economic structure are based upon the enterprise of those who started and developed small businesses. The health of big business may reflect the true state of the economy's present position but it is the health of the small business which provides the best measure of its future" (Ritchie, 1984).

1.2 Characteristics of SMEs Small companiesare characterisedby their size, simple organisation structure, and personalisedmanagementwhere communicationsand proceduresare mostly informal or verbal. They are often family businessesor partnershipscontrolled by one or two people who own or startedthe business(Jenningsand Beaver, 1997). These owner managersare more entrepreneursthan professional managers.Despite their having little or no formal training in management,they run the whole enterprise,making all the decisions,financing the businessand learning through experience.They face time pressure and lack of knowledge (McTeer and Dale, 1994). Successful small enterprisesthat grow larger often retain their original characteristics.At a critical point of growth when the owner managersor partners cannot cope, they employ managersor supervisors to help with the technical and financial aspects of the businesswhilst maintaining tight control, making all decisions in traditional military style, and focusing on short term goals of profit and sale without any proper business strategy(Scott, Roberts,Holyroyd and Sawbridge,1989).

3

THE CHARACTERISTICS

OF SMALL AND BIG INDUSTRIAL

Big Enterprise

ENTERPRISES

Small Enterprise

Resources:personnel, financing, knowledge of markets, economical

Simple and efficient organisation, strong motivation for development.

experience. I

Planning: strategies.

I

Demanding development projects.

I

Connectionsto institutesand other outsiders.

I

Flexibility when markets and techniques are changing.

Quick reactiontowardsthe changes in marketsandnew possibilities. Lack of bureaucracy. Managers are willing to take risks.

Independentof one person. Inside information is informal and efficient.

The governmentregulationsare well known. ý

Qualified technicalstaff.

Unexpecteddevelopmentresultscan be benefited.

Using of idea sources.

Creativity.

Profit targeting through improving lines. product existing

Entrepreneurship. Capability to usesmall, new or risky marketareas.

New ideasnot approved,creativity kept on the background.

Considerableinnovations. Smaller and incrementalinnovations.

Table 1.2a: The Characteristics of Small and Big Industrial Enterprises (Source:Hyvarinen, 1990)

3a

Chapter 1: Introduction

Similar to large companies, SMEs face the challenges of competition, demanding large Whereas technological companies have the advancements. customers and human organisation structure, resources and support systems, management resources, SMEs do not have these basic infrastructures on the same scale. Therefore, although both SMEs and large companies are aware of TQM there exists a difference in their comprehension and interpretation of its meaning and implications. Table 1.2a shows the characteristics of small and big industrial businesses (Hyvarinen, 1990). The strengths and weaknessesof SMEs are listed in Table 1.2b (Hewitt, 1997).

SMEs Strengths

Weaknesses

Ability to respondvery quickly to

Highly vulnerableto slumpsin

changingmarket conditions.

markets.

Wastelittle time on non-corebusiness

Funding investmentis more difficult.

activities.

Cashflow is crucial.

Tend to havehigh employeeloyalty.

May not havetime to look at `outside

Reflect the commitmentand

world'.

personalityof MD/CEO.

May have difficulty getting good

Likely to deploy improvements

suppliers.

quickly and thereforegain rapid

May be operatingan inappropriate

benefit.

because of quality managementsystem

Usually very closely in touch with

customerpressureto be certified to

customers.

IS09000.

Potentialfor excellent internal

Training budgetsare likely to be

communications.

limited and the wider aspectsof people

Peopleare likely to be multi-skilled.

developmentwill probably not be

Operatingan effective IS09000

addressed.

compliant quality management system.

Training is likely to be very focussed on skills neededto achievetargets. Peoplewill usually be awareof how their job impactson the business. Table 1.2b: The Strengths and Weaknesses of SMEs 4

(Source: Hewitt, 1997)

Chapter 1: Introduction

1.3 Problems Facing SMEs

The questionfrequently raised is "Why TQM for SMEs? Would BS5750/ISO9000* by is be this customers?" sufficient since required not

It is important to realise that although IS09000 is an aspect of TQM, only TQM can take the quality strategy to the highest level and ensure quality products and services (Dale, Lascelles and Plunkett, 1990). IS09000 is a quality system that specifies the for procedures ensuring the quality of products or services. In 1996 the DTI reported that when IS09000 was introduced into an organisation as part of a strategy, it provided a useful and progressive tool for improving internal operations. The standard however does not offer any guarantee of a company's products, although it assures purchasers that specifications would be met consistently. Generally, the problems encountered in the implementation of BS5750/IS09000

concern commitment to

quality, leadership, documentation, procedures and training. Long, Dale and Younger (1991) found companies lacked full understanding of the fundamental requirements of a quality system and the necessarycommitment.

Henceit can be hypothesisedthat SMEs will encountereven more problemswith the implementationof TQM, starting from the understandingof the basicsto the resources andefforts requiredto implement it (Holliday, 1994).Companieshaving implemented IS09000 will need guidanceto progressonto TQM insteadof stopping at IS09000. Askey and Dale (1994) and Bradley (1994) statethat IS09000 can provide the basis for the developmentof a road map for TQM. Further researchby Majerczyk and DeRosa (1994) identified one of the major benefits of adopting IS09000 as the commonsenseapproachfor building a TQM foundation.

* The standards BS5750 and IS09000 are used interchangeably in the thesis. Although BSS750hassince beenreplacedby IS09000 to bring uniformity to the international standard, BS5750 is referenced because it was the standard sought by Sheffield SMEs when this researchwas conducted.

5

Chapter1: Introduction The caution is not to oversell TQM as a short-term panacea, rather to emphasise the importance of quality management focused on the customer. The path to TQM is strewn with many failures from multi-nationals and large enterprises to SMEs without the need to add to the numbers (Atkinson, 1990). Research indicates that about 80% of TQM failures were due to problems with implementation (Brown, 1993; Fisher, 1994).

The failure of TQM can be attributedto one or a combinationof the following, which include the lack of management commitment, poor implementation planning, reluctance to change attitudes, culture and managementstyles, and the lack of employeetraining, participation and motivation (Lascellesand Dale, 1994; Wilkinson, 1994; Kearney, 1992). Researchby Sirota, Usilaner and Weber (1994) reported that many companiesachievedpoor results from their TQM initiative when efforts were fundamentallytool and technologies-oriented.Thesecompaniesrestricted their TQM isolated to efforts quality-focusedprojects and activities and not systematicattempts to overhaulexisting cultures,systemsand processes. North, Curran and Blackburn (1993) identified two concernsof small firms when implementingIS09000 as that of finance and time. Clarke (1972) identified two main weaknessesof SMEs as money and management.The findings of North, Curran and Blackburn and Clark, although20 yearsapart, both identified finance as a concernfor SMEs.This doesnot imply large companiesare immune from theseproblems,having themselves had to close down because of cash flow problems and poor or mismanagement.SMEs cannot realistically expect to fare any better when faced with theseproblems,and it is within reasonto assumethe lack of money and management will havegreateradverseeffects on SMEs. The lack of money and difficulty in raising money is often the most seriousproblem for small companies.A small company is very vulnerable to cash flow problems. Often customers are themselves small companiesand are slow in payment. Suppliers are also tougher on small companies and extendonly limited credit to reducerisks. Banks imposestrict lending criteria and are often of little help in granting additional funds to overcomethe crisis. Theseresult in the need for continual juggling to maintain cash flow for the company's survival with little reserve for other use. It is therefore understandablethat small companies resistor limit spendingmoney on TQM. 6

Chapter 1: Introduction

The concerns about management weakness have been highlighted by Stanworth and Gray (1991) and Jennings and Beaver (1997). SMEs are often preoccupied with daily long do term concentrate and not on strategic management or operational chores improvements vital for their survival (Scott, Roberts, Holyroyd and Sawbridge, 1989).

Ironically, the strengths of small companies lie in their size as it accords them flexibility (Curran and Blackburn, 1992; Hewitt, 1997). They can respond quickly to communications, internal have have the opportunity to market changes, good and develop very close working relationships with customers and suppliers. Employees are multi-skilled,

loyal, motivated and know their products and services. This is

supported in a postal TQM survey of British managers conducted in 1992 which reported firms with fewer than 500 staff were less likely to face a lack of commitment from middle managers, poor communications and clashes with other initiatives as significant barriers. Wilkinson, Redman and Snape (1993) attributed this to the less bureaucratic nature of smaller organisations. There are fewer barriers for a small company to implement TQM compared to a large company (Lee and Oakes, 1995).

1.4 The Importance of TQM for SMEs Researchconducted by Dale and Prapopoulos(1995) supports the findings of this thesis,which is, similar to large companies,small companiesrequire TQM to remain competitive. Other studies report that the benefits of TQM enjoyed by large companiescan similarly be enjoyedby SMEs (O'Neil and Duker, 1986). The vision of Sheffield regenerationis for SMEs to meet the challengesof the `90s. The market of today is no longer limited to the local UK market, but includes the Europeanand global markets.Thesemarketspresentnew opportunitiesand neglecting them will be detrimental.The biggestthreat however comesfrom newly industrialised countries.They offer the sameproducts and servicesoften at the samequality but at lower prices. This trend in international trade increasesimports, with the resultant closureof local enterprisesthat cannotcompete. Technology is changing at ever-increasingrates. Product life cycles are shorter and product quality rapidly improving. Researchand development (R&D) has added innovative enhancementsand complexities to existing products. All these require 7

Chapter 1: Introduction

companies to continually upgrade and enhance to remain competitive (DTI Managing in the `90s). Environmental issues too are becoming more important. Regulations regarding pollution and control and the preservation of the environment are more stringent, adding to the costs of production and the need for companies to prove they are environmentally responsible. All

these factors place severe demands on

companies. Investing in R&D or IS09000 alone is insufficient. Companies must engage a holistic approach to quality management that addresses each challenge and propels them to world class standards (Flood, 1993).

Today's customersare spoilt for choice. With the global market literally at their doorstepthrough aggressivemarketing via the multimedia, internet, mail order and hypermarkets,customersare more demanding,wanting the best possible value for their money. They want products incorporating the latest technology, features and performance,in addition to quality and reliability, supplementedby good service and on-time delivery. In 1955 managementconsultant Peter F. Drucker stressedthe importance of customers for the survival of any business. Forty-five years later, despite all the technological advancements,his focus on the importance of the customerstill applies. If anything, the customer has become even more important. Drucker said in 1955 that "there is only one valid definition of businesspurpose:to createa customer.It is the customerwho determineswhat a businessis. For it is the customer, and he alone, who through being willing to pay for a good or service, convertseconomicresourcesinto wealth, things into goods. What a businessthinks it producesis not of first importance.What the customerthinks he is buying, what he considersvalue is decisive - it determineswhat a businessis, what it produces.The customeris the foundationof a businessand keepsit in existence". TQM emphasiseschanginga company'sculture, systemsand proceduresto ensurethe continual improvement of processes,systemsand innovation in order to meet the challenges and demands of the market, competition, technology, customer and environment.TQM will give SMEs the competitive advantage(Davies, 1991). Oakland(1989a)statesthat TQM helps companiesto: Focusclearly on the needsof the market. Achieve top quality performancein all areas,not just in product or servicequality. 8

Chapter 1: Introduction

Operate the simple procedures necessary for the achievement of top quality performance. Critically and continually examine all processes to remove non-productive activities and waste. Seethe improvements required and develop measuresof performance. Understand fully

in detail the competition, and

develop an effective and

competitive strategy. Develop a team approach to problem solving.

Developgood proceduresfor communicationand acknowledgementof hard work. Review continually the processes to develop the strategy of never-ending improvement.

1.5 TQM Framework

The developmentof a tailor-madecost effective TQM framework with a combination of training and mentoring (Uncle Concept) will meet these needs. This is a novel approach,and distinct from conventional off-the-shelf TQM packagespromoted by consultants.As it is low cost and requiresminimal managementeffort, it builds on the strengthsof small companieswhilst overcoming their weaknesses.This approach is supportedby Dale, Boaden and Lascelles(1994) who suggestthat the most effective method is an organisation developing a tailor-made approach after assimilating the available knowledge on the subject, discussingwith practitioners and visiting other companies.Researchby Newall and Dale (1991) shows that companies tend to introduce `off-the-shelf TQM packagesthat are not suited to their needs and are either rejected or extensively modified. A further approach identified by Mortiboys and Oakland (1993) is the `do-it-yourselfmethod where SMEs develop their own TQM package.Both theseapproachesare costly and require extensiveresourcesthat SMEs aretypically unableto provide.

9

Chapter 1: Introduction

1.6 Management Styles The importance of understanding the past in order to fully address the future is the

basisfor the third hypothesis. TQM requires changes in the organisation culture and in management practices (Wiggans and Turner, 1991; Oakland and Waterworth, 1995). It impacts on key areas of management styles such as leadership, strategy and employee involvement (Dean dominance departure from Taylorism 1994), Bowen, the of the and and requiring a fmance function in the management of the business (Pfeffer, 1994). Taylorism cannot high demands day the the of present competitive market environment meet of technology, customer responsiveness and flexibility.

Management concepts, theories

and principles are propounded by scientists and scholars to meet the needs of their economic and social environments. Taylorism met the management needs of the Industrial Revolution but it is not adequate to meet the management requirements of the present quality revolution, illustrating the close relationship between the socioeconomic environment and management styles.

The TQM culture involves a changein managementstrategy from "direct control" to "responsibleautonomy" basedon self-control, trust and commitment (Oliver, 1990). In line with the findings of this research,Ishikawa (1985) writes that top and middle managersmust be bold and delegateas much authority as possible, incorporating as part of their managementphilosophy respect for employees and establishing a managementsystemwhere employeeparticipation is both top down and bottom up. Historically, managementassumedthe basic form of organising collective efforts to achievespecific results.A literature study by Claude (1968) revealedthe management practicesof Sumeriantemple priests and Egyptian pharaohsinvolved the management concepts of planning, staff assistance,division of labour, control and leadership. Mooney (1939) attributes the greatnessof the Roman empire to their genius for organisation. The Industrial Revolution brought major changes.The developmentof steamengines interchangeable and parts in production changedthe economy,with mass production creatinga market economyfor the saleof surplusproducts. The focus of management becameto increaseproduction at the lowest cost. With this effort came Scientific 10

Chapter 1: Introduction

Managementwhich is part of the classical school of management.The practitioners, engineers,scientists and writers from the classical school of managementsought answersto the questionof efficiency. Frederick Winslow Taylor who is credited as the founder of scientific management drastically changed the way manual work was performed on the shop floor with his time study aimed at increasing efficiency. Production standards were introduced and for workers rewarded producing more than the standard. There was a negative side to his approach. It had no place for the workers' intelligence, creativity and initiative. They were treated as work gangs, not as individuals. Management's role was to plan and give orders, and the worker's role was to execute the plans set by management (Person, 1912).

Administrative managementemphasisedthe best way to do a job basedon the belief that monetary incentive is the motivation. Fayol (1949) proposed fourteen managementprinciples and identified Planning, Organising, Commanding, Coordinating and Controlling as the five elements of management. Weber (1947) proposedthe organisationstructure for technical efficiency. He sought to establisha rational basis and definition of authority for the efficient functioning of an organisationor bureaucracy. The next managementschool to evolve was Human Relations, which was popular from 1930to the early 1950s(Wren, 1979).The writers in this school expandedon the classicalschool of managementto include social aspectsof human behaviour in the work environmentusing scientific procedures.This needfor social skills in addition to the technical skills emphasisedby the classical school added a new dimension to management. The Hawthorne study provided the impetus for the study of social behaviour. Mayo (1933) perceived the key factor for explaining the Hawthorne mystery lay in the remarkable change of mental attitude within the group, and attributed the higher productivity to improved morale, supervision and interpersonalrelations. The most notableresearcherin this field was Mary Parker Follett. Her thesis was "true man" is found only through group organisation,and the "potentialities the individual of remain potentialitiesuntil they are releasedby group life. Man discovershis true nature, gains 11

Chapter 1: Introduction

his true freedomonly through the group" (Follett, 1918). Another contribution made by Follett was the integration of management with workers and their interests, the result being the reduction in conflicts and improvement in control and co-ordination.

The Modern Management era started during World War II and encompassed

ManagementScienceand Behaviour Science.Managementscienceis characterisedby the use of mathematical models and computers in decision making.

The BehaviouralScienceapproachto the study of managementinvolved the scientific study of observable and verifiable human behaviour in organisations, drawing significantly from the literature of psychology, sociology and anthropology.It studied the needs of people in organisations and provided motivation theories that are applicabletoday. Behaviour scienceis largely inductive and problem centred (Filley and House, 1969).Key contributorsto behaviour scienceinclude Douglas McGregor, AbrahamMaslow, FrederickHerzbergand Chris Argyris. McGregor theorised that a manager's assumption of human nature and human behaviourdeterminedhis managementstyle. McGregor's "Theory X" representedthe "traditional view of direction and control". "Theory Y" on the other hand represented both the "integration of individual and organisationalgoals" and the "beginning for the new theory to the managementof human resources" (McGregor, 1960). His Theory X and Theory Y were self-fulfilling propheciesabout how people responded to the way they were treated. Maslow arguesfor the improvement of the employee's mental health through better organisationalpractice. His theory of motivation consistsof a hierarchy of 5 sets of needs,namely, "physiological, safety, love, esteemand self-actualisation" (Maslow, 1943). He theorisedthat people would move up the hierarchy of needsas each level was satisfiedor they could move down if a lower hierarchy needwas threatened. Herzberg developed the "hygiene-motivation" theory (Herzberg, Mausner and Snyderman, 1959). He classified work environment factors such as salary, work conditions, supervision, interpersonal relationships, company policies and administration as hygiene factors which brought dissatisfaction to workers when absent,removeddissatisfactionwhen presentto an optimal level but did not motivate 12

Chapter1: Introduction instead factors Motivation to workers. was related such as respect, recognition, achievement, responsibility, advancement and growth.

Argyris (1957) challenged concepts from the classical school of management, such as division of labour, chain of command and unity of direction that he ascertained demotivated employees. He called on management to fully develop and utilise the abilities, self-control and self-direction of employees for the mutual benefit of the organisation and employee.

Modern management began to be displaced by TQM in 1980 when America received the wake-up call from Japan (Walton, 1986). The question "If Japan can can't why ... led to the new quality revolution, and spawned the TQM gurus Deming, Juran, we" Crosby and Feigenbaum. After

almost 20 years the change from traditional

management styles to TQM is still proceeding.

This evolution of management styles from the authoritarian, bureaucratic and impersonal management style of Taylor and scientific management to the flexible, open and participative style of TQM is applied to the classification technique Cladistics. This is to allow a company's progress along its route to TQM to be benchmarked, enabling the accurate determination of its progress and future requirements.

13

Chapter 1: Introduction

1.7 Research Methodology Based on the need to assist SMEs in their implementation of TQM the following researchmap is presented to show the sequenceemployed in this thesis.

Problem Statement

TQM Concepts

TQM survey questionnaire

Review of existing methods

Tool to determine extentof need

TQM implementation methods available

NeedIdentified

Uncle Concept Developand conduct customersurvey

Developand conduct employeesurvey

Developmentof Frameworkbasedon Uncle Conceptto meet need

Implementationof Framework Management style questionnaire

Cladistics

Developmentof tool to benchmarkmanagement styles

Managementstyle benchmarked

Figure 1.7: Research Map of Thesis 14

Conduct facilitator training

Conduct employee training

Chapter 1: Introduction

Chapter2: 5 Pillars of TOM & TOM survey

Chapter3: TQM survey results confirm Hypothesis 1

Chapter4: Development of TQM Framework to test Hypothesis 2

Chapter5: Discussionof why Hypothesis2 is incorrectdespitethe benefitsgained

Chapter6: Studyof managementtheoriesand principlesto determinemanagement styles

Chapter7: The evolutionof managementstyles

Chapter 8:

Review of Cladisticsas a benchmarking tool

Chapter9: Developmentof managementstyle questionnairewhich provesthat Hypothesis3 is correct

Chapter10: Conclusionsandrecommendationsfor further research

Figure 1.8: Research and Thesis Structure

14a

Chapter 1: Introduction

1.8 Research and Thesis Structure This thesis sought to test three hypotheses. The research and findings of which are The Figure 1.8 in thesis the ten and structure. research shows chapters. presented following is a brief overview of each chapter.

Chapter 1: Introduction The characteristics, strengths and weaknessesof SMEs, from the perspective of TQM, in help SMEs in 1 Chapter the that strengths of which concludes while are reviewed their implementation of TQM, their weaknesses can be a major obstacle. The TQM implementation process used in large companies does not take into consideration the strengths and weaknesses of SMEs and is not suitable to SMEs who require a tailormade TQM implementation framework.

Chapter2: The 5 Pillars of TOM The chapterreviews and evaluatesthe principles and philosophiesof the quality gurus for developed development is in UK. TQM A TQM the the of model andalso reviews SMEs. This model is basedon the 5 Pillars of TQM identified by the author. The 5 Pillars are Management Commitment, Customer Focus, Quality Costs, Quality Systemsand ContinuousImprovement.The TQM model led to the developmentof a TQM survey to assessquality managementsystemsin SMEs and their readinessto implement TQM. The Malcolm Baldrige National Quality Award (MBNQA) and the EuropeanFoundation for Quality (EFQM) self-assessmentmodels are reviewed and their suitability is evaluated.Both modelsare found to needmodification before they be can appliedto SMEs.

Chapter3: Resultsof TOM Survey This chapterreportsthe results of the TQM survey for 30 SMEs in Sheffield and 10 SMEs in Singapore.The results confirm the hypothesisthat SMEs do not understand the definitions or implications of TQM. Despite their high awarenessof quality management,IS09000BS5750 certification was largely in responseto pressurefrom their customers. Chapter4: Developmentof a TOM Framework The second hypothesis is examined. The development of the TQM Framework based on the Uncle Concept, as well as the development of Customer Focus and Employee 15

Chapter 1: Introduction

Motivation Questionnairesare discussed.Both thesequestionnaireswere developedin responseto the needshighlighted by the TQM survey and are prerequisitesfor the TQM Framework.

Chapter 5: Results of TQM Framework Implementation The results of the Customer and Employee surveys are analysed and the method used in the implementation of the Framework is presented. The results show hypothesis two is incorrect. This is largely attributed to the lack of management commitment to TQM and a propensity to cherry-picking by management.

Chapter6: Benchmarkingthe Routeto TOM The management theories and principles of management are studied to provide an understanding of how management has evolved from the formal, bureaucratic, authoritarian and impersonal management style of scientific management to the flexible, open, participative management style of TQM.

Chapter7: BenchmarkingManagementStyles A ManagementStyle Questionnaire is developed to test the hypothesis that it is possibleto benchmarkmanagementstyles and the relative position of a company on the route to TQM using Cladistics which is a classification technique based on biological evolution. Chapter8: Cladistics Explains the use of Cladistics and the development of the Cladogram used to benchmarkmanagementstyles and the relative position of a company en route to TQM.

Chapter 9: Results of Management Style Survey

The results of the Management Style Survey conducted with eleven companies confirm the hypothesisthat cladistics can be used to benchmarkmanagementstyles andthe relative position of a companyen route to TQM. Chapter10: Conclusion This chapter concludesthe thesis which has gathereda wealth of information about TQM in SMEs in the manufacturingsector of South Yorkshire. This information will 16

Chapter 1: Introduction

be a valuable help in the regeneration of South Yorkshire's manufacturing industry. The conclusion also critically reviews the four novel aspects developed in this research: "

The survey of the state of TQM implementation in SMEs.

"

The development of a TQM model based on the 5 pillars of TQM.

"

The development of an implementation framework using the Uncle concept.

"

The method of benchmarking management styles using cladistics.

17

Chapter2: TheFive Pillars of TQM

Chapter 2: The Five Pillars of TQM Hypothesis 1: SMEs do not Understand the Definition or Implications Quality Total Management of

2.1 Quality and Competition Quality is one of the most misunderstood issues in business today, and yet it is central to the survival of even the most successful company. Quality is defined by the customer, no longer by the company. In the past, the company defined quality for its customers. Now, customer requirements must be determined factually and the company must produce what its customers want, within the required time frame, at minimum cost.

Quality has been defined in a variety of ways by various gurus, consultants and researchers: Quality is improvementthrough statisticalcontrol of all processesand the reductionin variability of these.

(1986) Deming (1988) Juran -

Quality is fitness for use. Quality is conformanceto requirements.

(1980) Crosby Quality is the lossto the companyand the total lossto society causedby the (1986) Taguchi -

product.

Quality is the total compositeproduct and servicecharacteristicsof marketing, engineering,manufacturingand maintenancethrough which the product and servicein usewill meetthe expectationof the customer. - Feigenbaum(1991) Quality is the totality of featuresand characteristicsof a product, serviceor process,which bear on its ability to satisfy a given need. British Standard Part 1 (1991) Definition BS4778: Quality is delighting the customerby continuously meetingand improving MacDonald Piggott (1990) and Quality meansmeetingcustomer(agreed)requirements,formal and informal, at lowest cost, first time every time. Flood (1993) -

upon agreedrequirements.

These definitions of quality reinforce the importance of focusing on customer requirementsand expectations,the improvementsneededto meet these requirements and expectations,andthe reduction of costs,wastageand losses. 18

Chapter 2: The Five Pillars of TQM

The development of quality management took off rapidly at the turn of the century The Revolution Industrial the the changed way people which radically worked. with had find factories to managers and workers meant new principles prolific growth of (Wren, 1979). Quality to techniques operations management and ensure effective inspection from to quality control, quality assurance and TQM. simple progressed

Evidence from the 1990 Workplace Industrial Relations Survey (WIRS) involving 500 factors that the most crucial for competitive success were establishments revealed "quality" followed by "price". Other aspects of quality such as "responsiveness to customer requirements" and "delivery

time/availability"

fourth third and were

from is It these that respectively. appeared quality results a key factor for competitive success(ESRC, 1990). It is also a key factor that can ensure the survival of a company (Tuckman, 1995; Bavad, 1996).

The keen competition in the businessenvironment of the `90s was recognisedin the British Government White Paper on Competitiveness (HMSO, 1994) which encouragedorganisationsto be more flexible so that they could react quickly to changingmarkets. McQuater, Dale, Boaden and Wilcox (1996) maintain that these continuous and company-wide changes can be attained successfully through the implementationof TQM and the use of quality managementtools and techniques.

2.2 Total Quality Management in the United Kingdom "British productivity is growing rapidly, but, UK companiesare not about to overtake their major competitors". This is the result published from the 1988 Confederationof British Industry (CBI) survey by MacDonald and Piggott (1990) which showedthat if the rate of growth per person remained at its 1983-87 level, it would take Britain nearly ten years to catch up to West Germany, more than twenty years to overtake Japanand the idea of catching up with the United Statescould surely be forgotten. The report also indicated that the second stage of Britain's economic resurgence would be tougherthan the first, which happenedin the post World War II period. It is of interest to note that since that forecast was made, both Japanand Germany have facedproblemsin today's market becauseproductivity alone is insufficient. This was brought forth in a speechmadeby the Prime Minister of Singaporeregardingthe 19

Chapter2: TheFivePillars of TQM life-long "Japan's both had for innovation. He the this to countries: say about need becoming in but "an helped the risked past, social stability ensure employment culture is German to suited and quality were precision required. nimbleness when albatross" the industrial economy, but flexibility and agility are valued more in today's markets. This could be one reason why German economic performance, from 1995 to 1998, Co-operation for Economic developed Organisation US' the than the or was worse and Development countries' average" (Chua, 2000).

In the 1970 Fortune leagueof the top 50 companiesin the world outside the USA, British firms occupied the first four places, the sixth place and seven other places, listed. 1986, 50 By the there were only six twelve the companies end of of making up British firms left in the list - the top two and four others, of which three were in the bottom half of the table (Dale and Plunkett, 1990). However, in the midst of these depressingfigures lies the story of Jaguar. Despite favourable comments about the designof Jaguarcars from internationaljournalists, Jaguarnearly ran out of business in 1980 after losing its market share in North America and other parts of the world because of quality problems. It was at this point that Sir John Egan (1984) demonstratedclearly the role of top managementin creating a quality culture. The quality of Jaguarcars improved rapidly becauseSir John Egan took quality seriously. Everyonein the organisationknew that his first questionwould be about someaspect of quality so everyone took quality seriously. By adopting a vigorous new quality policy where suppliers,managersand workers who consistently failed to achievethe high quality standardsrequired of them were replaced, a dramatic turnaround in quality performancewas achieved.In the three years from 1980 to 1983, the sale of Jaguarcars more than doubled world-wide. In North America, sales increasedfivefold to customerswho were highly critical and had the freedom to choose their productsfrom the world market. BS5750 is the UK national standard for quality systems developed in 1979. It is equivalentto the International StandardIS09000. It documentsthe requirementsof a quality-orientedsystem.The principles of BS5750 are applicable for companieswith ten or 10,000employees.It identifies the basic principles and specifies in detail the proceduresrequired to ensure that products meet customer requirements. BS5750 defines quality as fitness for purpose. This falls short of the TQM objective of delighting the customer.BS5750 setsout how a companycan establish,documentand 20

Chapter 2: The Five Pillars of TQM

being that to the ensure customers system, objective quality effective maintain an defines logical The time. they the a standard require every product or service receive framework that when correctly applied will ensure that quality requirements are met. Companies certified to BS5750 must not be under the illusion that they now have a total quality company. BS5750 is but one aspect of TQM and its implementation will behaviour or employee attitudes. not change management

The DTI has actively promoted quality improvements and assisted companies in achieving quality. It

launched the National

Quality

in 1983 with campaign

important is `Quality telling too to leave to your Quality the advertisement executive, Manager' (Lascelles and Dale, 1989). When it was reported that more work was in launched Managing '90s in to the the necessary promote quality, programme was 1989 as part of the Enterprise Initiative. The Enterprise Initiative was the DTI's comprehensive package of advice, guidance and practical help for British businesses. The DTI provides extensive advisory and support services both regionally and independent An firm or group with a payroll of fewer than 500 could nationally. obtain financial assistance covering five to fifteen man-days of specialist consultancy support in a number of key management functions, including quality. This was directed particularly at the assessment and implementation of systems for BS5750 certification and since June 1989 has included TQM although TQM had begun in by earnest the mid 1980s (Tuckman, 1994).

BS5750hasbeensuccessfulin turning aroundthe fortunesof small and medium sized British businessesas evidencedfrom the survey conductedby ResearchInternational on the impact of quality managementcertification (Harris, 1993a). The research commissionedby Lloyd's Register Quality Assurance(LRQA) showed that among small businesses,83% reported improvementsin managementcontrol and 64% said certification increasedtheir chanceswhen tendering for work. Furthermore, despite widespread criticisms from the small business sector, the survey reported that disappointmentswith BS5750 were relatively low. Only 3% of all organisations reportedthat BS5750had increasedtheir paperwork, with no more than 6% claiming that the standardswere too costly. Linda Campbell, then director and general manager of LRQA and chairman the of Associationof British Certification Bodies,the certification industry's trade body, had 21

Differences Between BS5750/IS09000 and TQM

TQM

BS5750/ISO9000

Not necessarilycustomerfocused

Definitely customerfocused

Not integrated with corporate strategy

Integral to corporate strategy

Technicalsystemsand procedures

Philosophy,concepts,tools and

focused

techniquesfocused

Employeeinvolvementnot necessary

Emphasison employeeinvolvement andemployeeempowerment

No focuson continuousimprovement.

Continuousimprovementand TQM

BS5750/IS09000 -a decision

are synonymous: TQM is a never-

endingjourney Can be departmentallyfocused

Organisation-wide.Involves all departments,functionsand levels

Quality departmentis responsiblefor

Everyoneis responsiblefor quality

quality More likely to preservethe statusquo

Involves processandculture change

Table 2.2: Differences Between BS5750/IS09000 and TQM (Source:Pike andBarnes,1994)

21a

Chapter2: TheFivePillarsof TQM this to say about the potential of British industrial competitiveness and successworldincreased has firmly believe BS5750 "I the competitiveness of 1993b): (Harris, wide British industry. It is a real successstory for Britain....

Britain has the best workforce

in the world, but where we have fallen down is in the poor standard of management for which, rightly, we have been criticised. Now there are the means by which to have it is For total essential you quality management achieve management control. ... TQM is With in blocks Understanding building the essential. systems place. all right there are wider issues such as staff motivation and elements like cost effectiveness".

Henceit is seenthat although BS5750 does improve companies' fortunes, it cannot take the place of TQM which is a quality managementprocessinvolving everyonein the companyworking together to improve every-aspectof the company's operation between differences The to satisfy customer requirements. continuously BS5750/IS09000and TQM are shown in Table 2.2. Another important development in quality managementin the UK is Investors in People(IIP). This standardwas publicly announcedin October 1991 by the Training in Councils Enterprise Councils (TECs) Wales England Local Enterprise and and and (LECs) in Scotlandwhich serve the needsof local economiesand local businesses. TECs and LECs advise, administer, co-ordinate IIP awards and conduct reis IIP a national standardto assessand recognisethe effective investment assessments. by a company in employee training, development and participation. This however falls short of TQM. There are four elements in the assessment:(Scrimshawe and Wooton, 1995) 1)

Commitment to training and developing employeesto meet the company's businessgoals.

2)

Planningand reviewing employeetraining and developmenton a regular basis.

3)

Developingaction plans to train employees.

4)

Evaluatingthe effectivenessof training and development.

The IIP award is for a period of three years after which the company needsto be reThis standardis availableto all companiesin the UK, regardlessof assessed. size. The certified companiesrange from Boots, employing 54,000 employeesnationwide, to a firm consultancy small employing four people. By the end of 1992 a total of 168 companieswere certified to IIP, of which 61% representedcompanies with 250 22

Chapter2: TheFive Pillars of TQM

derived by benefits 1993). Some less (Ashton, the companies of employees or awarded the IIP standard are employee motivation and training, the upgrade of production systems and standards, teamwork and the achievement of company goals improvement Criticisms IIP the of and quality. are waste, work of such as elimination that it is too prescriptive and complicated (Ashton, 1993).

With BS5750 and IIP, a company has only two principles of TQM, that is, quality

/development/participation. training systemand employee Owing to widespread interest in TQM, the British Standards Institution (BSI) IIP, 1992 Total Quality Unlike IS09000 BS7850: Management. and published BS7850is not a standardthat companiescan register for or achievecertification. It is an important standard nonetheless as it clears misconceptions about BS5750 (Williams, 1993). BS7850 has two parts. Part 1 is a `Guide to Management Principles', whilst Part 2 is a `Guide to Quality Improvement Methods' and gives guidanceon implementation. Total Quality Managementis defined in BS7850: Part 1 (1992) as: "Managementphilosophy and company practicesthat aim to harnessthe human and material resourcesfrom an organisation in the most effective way to achieve the objectivesof the organisation". This definition is to be appliedtogetherwith BS4778: Part 2 (1991): "A managementphilosophy embracing all activities through which the needs and expectations of the customer and the community, and the objectives of the organisationare satisfied in the most efficient and cost effective way by maximising the potentialof all employeesin a continuing drive for improvement". BS7850:Part 1 (1992) definesthe fundamentalconceptsof TQM: 1)

Commitment by the chief executive and involvement by everyone in the organisation.

2)

Customersatisfactionshould be the key objective.

3)

Quality losses due to inefficient and ineffective usage of resources such as

4)

customer loss, loss of opportunity, wastage or misuse of resources. Participation by all employees in an organisation. 23

Chapter 2: TheFive Pillars of TQM

5)

Process measurements.

6)

Continuous improvements to people and process performance.

7)

Problem identification.

8)

Alignment of corporate objectives and individual attitudes.

9)

Personal accountability.

10)

Personal development through appraisal, training and career development.

Quality improvement is defined in BS7850: Part 2 (1992): Guide to Quality ImprovementMethodsas: "Actions taken throughout the organisation to increase the effectiveness and efficiency its benefits both to to the activities and of and processes provide added organisation customers".

The critique of BS7850 is that although it is very comprehensiveand encompassing is which expectedof a national guide, SMEs may have problems implementing the principles and guides. They may be overawed by BS7850, and their lack of managementskill and resourcesmay turn them off both TQM and BS7850, seeing BS7850as further confirmation that TQM is a very complex process,meant only for largecompanieswith the financial resourceand manpowerto implementthe standard. Based on the characteristicsof SMEs discussed in Chapter 1, it is necessaryto developa TQM model that can distil the TQM concept,principles and definitions, and presentthem in a format that is easy to understandand implement. Implementation approachesadoptedby large companiesare not suitable for SMEs who require tailormadeimplementationplans (Nagpal,Twamley and Vallis, 1989).

2.3 Quality Gurus: Their Philosophies, Principles and Methods

Somelarge companiesimplement TQM using consultantswho adopt the teachingsof the quality gurus such as Crosby, Deming, and Juran. A common complaint about is consultants their use of TQM packagesas common prescriptive solutions with little considerationof their clients' varying requirements,organisation and culture (Dale, Boadenand Lascelles,1994).At the sametime, a thesison TQM will not be complete without a review of the TQM philosophy, principles and methods of these pioneers and gurus. The review will also provide invaluable insight on the understandingof 24

Chapter 2: TheFive Pillars of TQM

TQM and the necessary culture change. This change can be compared to the changes industrial brought (Taylor, 1911) Management the to Scientific revolution. A that

detaileddiscussionof thesechangesis found in Chapter6 of this thesis. The American and Japanesequality gurus have their own concepts of Total Quality Management based on their professional background. Although there are differences in their approach, there is also much common ground. These differences as explained by Dale and Plunkett (1990) do not present a problem: "It

sometimes seems

being interpretations by different But that there of quality. are so many unfortunate differing to wide and amenable

interpretations it remains appropriate in widely

differing situations and circumstances. Thus it has a unifying effect in that all genuine in direction. The improve known be total to the to quality are moving same aspirations quality image is the sum of a set of attributes, each of which has its own quality criteria. "

The following providesa brief insight to the contributions of five gurus: 2.3.1 W. Edwards Deming (Deming, 1986) Deming is the most widely known of all the quality gurus. He gained fame by helping Japanesecompaniesto improve their quality after the Second World War and was in Japan's highest Treasure Imperial honour, Sacred Second Order the the awarded of 1960. In the USA, he is recognised in the annual Deming Prize awarded to outstandingTQM companies. Deming's major philosophy is quality improvement through statistical control and reduction in variability. He explained that "statistical control does not imply the absenceof defective items. It is a state of random variation in which the limits of variation are predictable". According to Deming, many companies waste time and money looking for causesof chance or random variation in attempting to solve quality problems without using statistical methods. He advocates the use of statistics to

measure performance in all areas, not just conformance to product or service specifications. Deming recognised "special" and "common" causes in variability. Specialcausesare assignableto individual machinesor operators,and common causes are those sharedby operations and are the responsibility of management.Statistical 25

Chapter 2: The Five Pillars of TQM

ProcessControl (SPC) charts were the main technique put forward by Deming to identify commonand specialcauses. He also formulated a systematicapproachto problem solving. The PDCA cycle has four main components:to plan, to do, to checkand to carry out action. Deming (1986) drew up 14 points to tackle the diseasesplaguing Western industry: 1)

Create Constancy of Purpose

Create constancy of purpose for continual improvement of products and implementing long by formulating term plans to remain and service in include business, innovation, to researchand stay competitive and which education,investmentin equipmentand constantimprovement. 2)

The New Philosophy Not accepting commonly accepted levels of delays, mistakes, defective halt defective is Transformation the to materialsand workmanship. necessary decline in industry. Management must lead and adopt the new continued philosophy.

3)

CeaseDependenceon Mass Inspection Eliminate inspectionas a way to achievequality. Build quality into the product in the first placeand use statistical measuresof built-in quality in production.

4)

End the Practiceof Awarding Businesson Price Tag Alone Reducethe number of suppliers. Select a single supplier and establisha longterm relationship, building trust and loyalty. This will lead to the elimination in of variability suppliesand minimise total cost.

5)

Improve Every Process

Search continually to improve every activity in the company, to improve quality and productivity and thus to constantly decrease costs. It is management'sjob to work continually on the system (design, incoming materials, maintenance, improvement of machines, training, supervision, retraining).

26

Chapter 2: The Five Pillars of TQM

6)

Institute Training Institute training for every employee, including management, on the necessary techniques to achieve a full TQM company. Training is essential in ensuring that the employee fully understands his role within the company and knows how to perform it correctly.

7)

Institute Leadership

Institute leadership aimed at helping employees to do a better job. Managementmust take action to improve quality by helping employeesrather than telling them what to do or punishingthem. 8)

Drive Out Fear

Many employeesare afraid to ask questionseven when they do not understand what the job requires, or if what they are doing is right or wrong. This results in the employee continuing to do the wrong job. Also, employees may be afraid to point out problems as they may be blamed. When employees feel secureabout asking,quality and productivity improve. 9)

Break Down Barriers BetweenStaff Areas Break down barriers betweendepartmentsand staff functions. Have people in different areassuch as research,design, sales, administration and production work in teamsto solve problems and design new products that meet customer requirements.

10)

Eliminate Slogans,Exhortationsand Targets for the Workforce Slogansnever help anybody to do a good job. They generatefrustration and resentment,especially when managementfails to provide the means to the ends proclaimed. A workman can only work with the tools provided. To therefore imply that they could do better only serves to offend, and to communicateto them that managementnot only does not understandtheir problems, it does not bother enough to find out. This effectively leads to adverserelationshipsbetweenmanagementand staff.

11)

Eliminate Numerical Quotas

27

Chapter 2: The Five Pillars of TQM

Quotas and other numerical work standards impede quality. They tend to limit the amount of improvement that can be attained. Once the standard is reached, there is no motivation to go further. They also tend to confuse the understanding of the actual nature of work - Are they to accomplish so many jobs per day or to meet customer needs? Numerical targets only take into account quantity, not quality or work methods.

12)

RemoveBarriersto Pride of Workmanship Workers have the right to pride of workmanship.

To allow this, the

responsibility of supervisors must be changed from sheer numbers to quality, giving workers the chance to produce quality work they can be proud of. People are eager to do good work and are distressed when they cannot. Too in faulty defective often, misguided supervisors, equipment and materials stand the way. Those in management also have the right to pride of workmanship. This implies abolition of annual merit rating (appraisal of performance) and management by objectives.

13)

Institute a Vigorous Programmeof Educationand Retraining People must continually acquire new knowledge and new skills to deal with new materials and methods. This can only be achieved with appropriate educationand retraining. With increasedproductivity, somejobs may become redundant in a company. It is important that quality does not cost jobs. Managementmust make it clear that they will reinvest in their workforce.

14)

Top Management'sCommitment Top managementneedsto be committed to continually improving quality and productivity. A structure has to be createdin top managementthat will push everyday on the preceding 13 Points, and take action to accomplish the transformation.

Deming identified the key weaknessesin managementin his "5 Deadly Diseases": 1)

Lack of constancyand purpose.

2)

Emphasison short term profits.

3)

A lack of or unsuitable evaluation of performance, merit rating or annual review. 28

Chapter 2: TheFive Pillars of TQM

4)

Management are too mobile.

5)

Management decision-making too readily relies on quantitative data without factors. hidden due to tangible or consideration paying

To overcome these 5 Deadly Diseases, Deming proposed the "7 Point Action Plan": Management must understand and accept the fourteen points and the 1) formulate They Diseases. 5 Deadly then the an action must undesirability of for change. plan

2)

Managementtakes pride in having taken this decision and developscourageto follow the new direction.

3)

Managementmust then explain to everyonein the organisationwhy changeis required.

4)

Every activity within the company is divided into stages.The customersand improved be identified. Each should stage suppliers of each stage are continually and shouldwork together.

5)

The methodsof eachstagemust be improved and those working in each stage Check, Do, Plan, Deming the together towards advocates shouldwork quality. Action (PDCA) cycle when introducing any improvement.

6)

Everyone needsto participate as a team to improve the input and output of eachstage.

7)

An organisation for quality is required which uses measurements to guide process improvement.

2.3.2 J. M. Juran (Juran, 1988) Juran's definition of quality is "fitness for use" which attained widespreadalthough not universalacceptance. Together with Deming, he pioneered the bulk of the quality initiatives in Japan. However,unlike Deming, Juran focusedon the role of top and middle managementin achieving quality. He concluded that the bulk of quality problems are the responsibilityof managementand hencethey are responsiblefor the successof quality management.

He developedthe Quality Trilogy comprising Quality Planning, Quality Control and Quality Improvementoutlined below: 29

Chapter 2: TheFive Pillars of TQM

Quality Planning

1)

Determinewho are the customers.

2)

Determinethe needsof the customers.

3)

Developproduct featureswhich respondto customers'needs.

4)

Develop processesthat are able to produce those product features. Transfer the resulting plans to the operating forces.

5)

Quality Control

1)

Evaluateactualoperatingperformance.

2)

Compareactual performanceto goals.

3)

Act on the difference.

Quality Improvement

1)

Reducewastage.

2)

Improve deficient processes.

3)

Improve deficient planning processes.

The Quality Trilogy is best understoodfrom the JuranTrilogy shown in Figure 2.3.2: QUALITY CONTROL (DURING OPERATIONS) {

QUALITY PLANNING

SPORADIC SPIKE

QO

1

1 i

u., > Ü

II

ö

ORIGINAL ZONE OF QUALITY CONTROL

20 z

m ä

Lo

° zI cr w w co ö

NEW ZONE I OF CHRONIC WASTE I QUALITYCONTROL t------I QUALITY IM PROVEMENTr - --------__

0

TIME

Figure 2.3.2: The Juran Trilogy

(Source:Juran, 1988)

The initial activity is quality planning to developthe product and processdesign.The plans are then given to production whose job it is to run the processes.When the is output plotted onto the graph, it becomesevident the product deficiencies can be 30

Chapter2: TheFivePillars of TQM traced to the planning process which created the "chronic waste" that production is

unableto eliminate.Hence,the bestthat can be done is to implement "quality control' includes "putting out fires" suchas the "sporadic spike". which With quality improvement, "chronic waste" can be greatly reduced to a lower level than originally

planned. "Chronic

waste" presents the opportunity

for quality

improvement which requires a change in priority to give planners the time and resourcesto do a more thorough job of quality planning.

2.3.3 Philip B. Crosby (Crosby, 1980;Crosby, 1984) Crosby is best known for his concept of Zero Defects. This is the attitude of defect prevention and involves doing the "right job right the first time". He is commonly criticised for his statement"Quality is free" by people who are not aware of the secondpart of the statement,which in its totality reads as: "Quality is free. But it is not a gift." (Crosby, 1980). Crosby'sTQM philosophy is containedin his 4 absolutes: 1) The definition of quality is conformanceto requirements(not "goodness" or "elegance"). 2)

The,systemof quality is prevention (not appraisal).

3)

The only performancestandardis Zero Defects (not "that's closeenough"). The measureof quality is the price of non-conformance(not indices).

4)

Crosby advocatesthat because managementis the cause of 80% of the quality problems within an organisation, the only way to improve is through management leadership. To eliminate the many non-conformances which exist within an organisation, he recommendsadministering a Quality Vaccine with the following "ingredients": 1)

Integrity Everyone,including the chief executive, is dedicatedto the customerreceiving what was promised.

2)

Systems Systemsmust be in place, e.g., measurementsystem,quality educationsystem. 31

Chapter 2: TheFive Pillars of TQM

3)

Communications Information about the progress of quality improvements, achievements, help identify information to errors, waste, missed recognition programs, and opportunities,etc.

4)

Operations Educate suppliers, review and update procedures, conduct routine training, etc.

5)

Policies Clear andunambiguouspolicies on quality.

Crosby recommends14 stepsthat an organisationcan follow to achieve continuous improvement. quality 1)

ManagementCommitment To statewheremanagementstandson quality.

2)

Quality ImprovementTeam To run the quality improvementprograms.

3)

Quality Measurement To identify non-conformanceleadingto correctiveaction.

4)

Cost of Quality

5)

Quality Awareness

, To identify the cost of quality to the company.

To makequality the concernof everyonein the company. 6)

CorrectiveAction To provide a systematicmethod for problem solving.

7)

Zero DefectsPlanning To plan the commitmentto the Zero DefectsProgram.

32

Quality Management Maturity

Grid Unit:

Rater:

Measurement Categories

Management

understanding and attitude

Stage I." Uncertainty

Stage II. " Awakening

Stage Ill: Enlightenment

No comprehension

Recognising that

While going

Participating.

of quality asa tool. management

quality may management

throughquality improvement

Understand absolutesof

Tend to blame quality department for "quality

be of value but not willing to provide money or time to

program learn more about quality

quality management. Recognise their

problems".

makeit all

management;

personalrole in

happen.

becoming

supportive and helpful. Quality organisation status

Stage IV.Wisdom

quality is hidden in manufacturing or engineering

departments. Inspection probablynot part of organisation. Emphasison appraisaland

'Stage V Certainty

Consider quality

managementan essentialpart of company system.

continuing emphasis.

A stronger quality leader is appointed but

Quality department reports to top

Quality manager is an officer of company;

Quality manager on board of directors,

main emphasisis still on appraisal andmovingthe product.Still part of manufacturing or other.

all management, appraisalis incorporatedand managerhasrole in management of company.

effectivestatus reportingand preventiveaction, Involvedwith consumeraffairs andspecial

Preventionis main concern.Quality is a thought leader.

assignments.

sorting. Problem

Problems are

Teams are set up

Corrective action

Problems are

handling

foughtasthey occur,no resolution; inadequate definition;lots of yelling and accusations.

to attackmajor problems.Longrangesolutions arenot solicited.

communication established. Problemsare facedopenlyand resolvedin an orderlyway.

identifiedearlyin unusualcases, their development. problemsare All functionsare prevented. opento suggestion andimprovement

Cost of quality as % of total

Reported: unknown. Actual: 20%

Reported:3% Actual: 18%

Reported:8% Actual: 12%

Reported:6.5% Actual: 8%

Reported:2.5% Actual: 2.5%

No organised activities.No of understanding suchactivities.

Trying obvious " motivational" short-range efforts.

Implementationof the 14-step programwith thorough and understanding establishment of

Continuingthe 14-stepprogram andstartingMake Certain.

Quality improvementis a normaland continuedactivity.

"Defect preventionis a routinepart of our operation" .

"We know why we do not have problemswith quality".

sales Quality improvement actions

Except in the most

each step.

Summation of company qualityposture

"We don't know why we have problemswith quality" .

"Is it absolutely to necessary alwayshave problemswith quality?"

"Through management commitmentand quality improvementwe areidentifying andresolvingour problems".

Figure 2.3.3: Crosby's Quality Management Maturity

(Source:Crosby, 1980) 32a

Grid

Chapter 2: The Five Pillars of TQM

8)

EmployeeEducation To define training that employees need to actively carry out quality improvement programmes.

9)

Zero Defects Day To select a day that emphasisesZero Defects when everyone should do things first time. the right

10)

Goal Setting To let employeesset goalson quality improvementthat are specific and can be measured.

11)

Error-CauseRemoval To allow individual employeesto describe any problem that prevents them from performing error-freework.

12)

Recognition To awardthosewho meettheir goals (Award should not be financial).

13)

Quality Councils To let professionalquality people meet on a regular basis to improve quality programs.

14)

Do it Over Again To emphasisethat quality improvementis a continuousprogramme.

The 14 steps do not fit all national or even company cultures. Therefore, the implementationof TQM must be designedto fit the nature of the businessand the culture of the company. Crosby also developed the Quality Maturity Grid, shown in Figure 2.3.3, for managementto determine where it stands from a quality viewpoint. The grid is divided into 5 stagesof maturity or ratings: 1)

Uncertainty

2)

Awakening 33

Chapter 2: TheFive Pillars of TQM

3)

Enlightenment

4)

Wisdom

5)

Certainty

Each stage is measured using the following 6 measurement categories: 1)

Management understanding and attitude. From no comprehension, to quality being an integral part of the company

system 2)

Quality organisation status.

From quality inspection to having the quality manager on the Board of Directors.

3)

Problemhandling. From fire fighting to prevention,except in the most unusualcases.

4)

Cost of quality as a percentageof sales. From 20% to 2.5%.

5)

Quality improvementactions. From no organisedactivity to continuousimprovement.

6)

Summationof companyquality posture. From "We don't know why we have problemswith quality" to "We know why do have not problemswith quality". we

2.3.4 Armand V. Feigenbaum (Feigenbaum,1991) FeigenbaumemphasisesTotal Quality Control, his philosophy being: 1)

Set quality standards;

2)

Appraiseconformanceto standards;

3)

Act when conditions are not met; and,

4)

Plan to make improvements.

Feigenbaum saw quality as a way of managing a business organisation. Significant quality improvement can only be achieved with everyone's participation. 34

The

Chapter2: TheFivePillars of TQM workforce must have a good understanding of what management wants to achieve. Fire-fighting of quality problems has to be replaced with a very clear, customeroriented quality management process that people can understand and commit themselves to. Senior management must understand quality

improvement and

incorporate quality into their management practice. Managers must abandon shortterm motivational programmes that yield no long-lasting improvement and realise that quality does not mean customer problems have to be fixed faster.

Feigenbaum believes that the effective installation and management of quality programmes represent the best return-on-investment opportunity for companies in a fiercely competitive environment. His major contribution to the subject of cost of quality was the recognition that quality costs must be categorised if they are to be managed. He identified three major categories: appraisal costs, prevention costs and failure costs. Total quality cost is the sum of these costs.

Feigenbaum maintains that management must commit itself to: 1)

Strengthening quality improvement;

2)

Making surethat quality improvementbecomesa habit; and,

3)

Managingquality and cost as complementaryobjectives.

2.3.5 Kaoru Ishikawa (Ishikawa, 1985) Ishikawa is the best known of the Japanesecontributors to quality management.The focus his main of work was the use of statistical techniques to improve quality in Japaneseindustry and his greatest achievementwas the successful introduction of Quality Control Circles (QCCs) into Japan.QCCs usually consist of a small number of volunteersfrom one unit of an organisationwho investigateproblems, collect data to identify their cause, and implement solutions to eliminate them and improve quality. The circle can be led by any person, whether supervisor or worker. Regular meetings are held to discuss how their task can be done more effectively and efficiently, and difficulties and issues are raised and change proposals suggested. Where possible, the circles proceed to implement their own ideas. Management is approachedonly when they unable to proceed becauseof a lack of resources or authority.

35

Chapter 2: TheFive Pillars of TQM

"Fishbone known the Diagram, Effect Cause as also He developed the Ishikawa and likely for is the This 2.3.5. technique analysing used Diagram", shown in Figure documents identifies, the diagram The potential and known sorts effect. causes of a

be between the analysed. can causes that relationships so causesof a problem Measurement

Machine

Material

Effect (Quality

characteristics)

7'/ Man

Method Cause Factors

Characteristics

Process

Figure 2.3.5: Cause and Effect Diagram

(Source:Ishikawa, 1985)

Ishikawa developed seven basic tools for use by QCCs. He wrote: "From my past experienceas much as 95% of all problemswithin a companycan be solved by means of these tools. These seven indispensabletools are sometimeslikened to the seven tools of Benkei, the twelfth-century warrior. Unless a person is trained to use these simple and elementary tools, he cannot expect to master more difficult methods" (Ishikawa, 1985).Ishikawa's seventools are: Tool

Function

f,

Processflow charting Tally charts

What is done

How often it is done

Histograms Paretoanalysis Causeand effect

Pictorial view of variation Rating of problems What causesproblems

analysis

Scatterdiagram

Defining relationships

Control charts

Measuringand controlling variation 36

Chapter 2: TheFive Pillars of TQM

2.3.6 Overview The works of five quality gurus, namely, Deming, Juran, Crosby, Feigenbaum and

Ishikawashow that eachhashis own definition of quality and approachregardinghow backgrounds based These is TQM. their to are on professional and achieve a company interests. Although their personal perspectives and approaches read differently, they is improvement This the emphasis continuous of work share a common emphasis. processes, systems, and management to meet customer requirements (Tenner and Toro, 1992). Ghobadian and Speller (1994) identified these common emphases as:

The importanceof controlling the processand not the products; The controlling of the human processis as vital, if not more so, than controlling the technicalprocess; Quality is the responsibility of top management; Managementmust foster the participation of the workforce to develop a quality culture;

The importanceof educationand training for changing attitudes and enhancing competence; The need for an emphasison prevention of defects, not inspection after the event; Quality improvementis a processbuilt up over time and not an instant cure; Functionalintegration is an important ingredientof TQM; Quality is a company-wideactivity. The following summarisestheir collective view of the key characteristicsof TQM:

a) Qualityof productsandservicesto meetcustomerrequirements. This requiresa changein the culture and philosophy of the company,management and employees.The focus of the company must be the customer and customer requirements.The objective of the company is to meet these requirements to achievecustomersatisfaction at the lowest cost. Everyone in the company, from the chief executive to the newest employee,must be committed to this objective on quality and the customer. b) Total involvementwithin the company. Everyone in the company including marketing, sales, finance, design and production needsto participateto make improvementsin quality, reduce wastage, 37

Figure 2.3.6a: TQM Plan (Source:Cole, 1995)

co CD

nw

Gý`

N3 3O W N

gym`

ýy

r CPr

4ý A



w N

1.011 m

w tD 0

a OO

ýy ý

4` ti

Management1byfact 5ý 2

T0M

Qe ýaý'ýýr ýa ýaý

Dellght the customer Leadership

Figure 2.3.6b: Pyramid Model of TQM

(Source:Kanji andAsher,1993) 37a

Chapter2: TheFivePillars of TQM improve efficiency, productivity and effectiveness. eliminate non-conformance, Quality control circles and work improvement teams are formed as appropriate.

for improvements. Continual c) search This is a continuous process that seeks to continuously

improve quality,

management and organisation. It is not a system that can be started and left to run on its own. It requires the commitment of top management and every employee in the continuous search of customer requirements and expectations, and in meeting these at the lowest cost.

In more recentwork, Mortiboys and Oakland (1993) in the DTI's EnterpriseInitiative publication "Total Quality Managementand Effective Leadership" usedthe following componentsof TQM: Management commitment A

quality assurancesystem Quality tools and techniques Teamwork

Thesefour componentsdo not emphasisesomeof the major conceptsof TQM suchas customerfocus, quality costsand continuousimprovement. Cole (1995) used four concepts to expressTQM - customer, people, process and continuousimprovement,as shown in Figure 2.3.6a. This is more comprehensivebut does not emphasisequality cost which is very important especially for SMEs as explainedin Section2.4.3.

For the Pyramid Model of TQM in Figure 2.3.6b, Kanji and Asher (1993) used four principlesand eight core concepts.The four principles and eight core conceptsare: Principles Delight the customer Managementby fact People-basedmanagement Continuousimprovement

Core Concepts Customersatisfaction 38

Chapter2: TheFivePillars of TQM Internal customers are real All work is process Measurement

Teamwork People make quality Continuous improvement cycle Prevention

In this definition the concept of quality cost is mentioned in the core concept "measurement"but is not given significance as in the TQM Model proposedby the is in found Section 2.4. authorwhich

2.4 TQM Model for SMEs A TQM model is proposedby the author which is based on the conceptsof TQM describedin the works of Oakland (1989b), Flood (1993), Dale and Plunkett (1990), andthe quality gurus.The conceptsare classified into the following five areas: 1) Management leadership and employee participation in the new philosophy (Deming, 1986). Make quality the concern of everyone in the company (Crosby, 1980;Crosby, 1984;Feigenbaum,1991).

2) Emphasis on meeting the requirements of both the internal (Crosby, 1980; Feigenbaum,1991)and externalcustomer(Ishikawa, 1985). 3) Eliminate non-conformance.Ensure conformanceto standards,specificationsand requirements.Have zero defect standard of performance. Reduce the costs of appraisal, prevention and failure (Crosby, 1984; Feigenbaum, 1991).

4) Use statistical and quantitative control methods. Problem solving using Quality Control Circles, the Shewart/PDCA cycle, Quality Assurance. (Ishikawa, 1985; Deming, 1986)

5) Searchcontinually to improve processesand products (Deming, 1986). Develop new products and processes.Quality is a continuous program (Crosby, 1980; Feigenbaum, 1991). 39

Chapter 2: The Five Pillars of TQM

Each of the five areas constitute a major component

or concept of TQM

defined in 2.4.1. These Pillars detail Section in areas are as more explained

and are which

in fundamental TQM BS7850: Part They TQM. the of all concepts cover also support 1. All 5 Pillars are required to fully define and successfully is by developed the called the 5 Pillars of TQM author model

implement

TQM.

as shown in Figure 2.4.

A definition of TQM using the 5 Pillars is:

TQM is a system of quality management consisting

of the 5

Pillars of Management Commitment, Customer Focus, Quality Costs, Quality Systems and Continuous Improvement to ensure

that a company meets customer requirements at the lowest cost and continually improves its processes, products and services via the use of creative techniques and innovation.

Management Commitment

Customer Focus

Quality Costs

Quality

Continuous

Systems

Improvement

Figure 2.4: The 5 Pillars of TQM

40

The

Change

Culture

To

From

Participative style

11ierarchical style Top down information

fewer layers

Top down, lateral and upward

flow

information

flows

Inward quality focus

Customer defined quality

Function focus

Process focus A

Short-term planning

for future the vision

Comprehensive/continuous

I, pisodic improvements

improvement

"

Anecdotal data

Systematic, quantitative data

'lop down initiatives

All staff involved and engaged

Manage

Delegate, lead, coach

Direct

Empower

Employees a cost

Employees an asset

Counsel

Ownership, participation

Functional narrow scopejob

Integrated functions

Fnfbrcement

Promoting mutual trust

Firefighting

incentives 1ew team with

Individual/group

recognition for

continuous improvement

Change Culture Table2.4.1: (Source: Sirota, Usilaner and Weber, 1994)

40a

Chapter 2: The Five Pillars of TQM 2.4.1 The 5 Pillars of TQM The 5 Pillars supporting the TQM system are: 1. Management Commitment 2. Customer Focus 3. Quality Costs 4. Quality Systems 5. Continuous Improvement

1. Management Commitment (Commitment to Quality) Management commitment is essential for a company to successfully implement TQM as resources and management leadership are required. With this commitment, management needsto establish a sound quality policy. The quality policy will state the its its corporate policy, objective(s), mission and vision for the quality of company's the company's products and services and its commitment to customers. The contents of the policy should be made known to and understood by all employees. 'Ehe preparation of a properly thought out policy, together with continuous monitoring, makes for smoother production and operation, minimises errors and reduces wastes. The following must be set out in a quality policy, which requires that management (Oakland, 1989b): a) Establish a quality policy with emphasis on the customer and continuous improvement by everyone in the company; b) Identify customer needs and requirements; c) Change organisation culture and management style to sustain the quality culture

necessaryto meettheseneeds; d) Educate and train in TQM principles, tools and techniques; e) Concentrate on prevention rather than detection, 0

Ensure quality of bought-in materials and services; and,

g) Maintain continuous improvement by everyone.

The quality policy must be widely publicised and understood by all levels of the organisation. Plans for the implementation of this policy should be developed, with special emphasis placed on changing the company culture from that of traditional management (Wiggans and Turner, 1991; Coulson-Thomas, 1992). The plan should include company-wide training and employee motivation. The cultural changes neededare described by Sirota, Usilaner and Weber (1994) in Table 2.4.1.

Chapter 2: The Five Pillars of TQM

A warning was given by Oakland (1989a) at the 1989 International Quality Management in London that "management's

Conference on

to TQM

must be

is lip It possible to detect real commitment, service. real and obsessional, not

it shows

commitment

on the shop floor, in the offices, at the point of operation". reported that "unless TQM

Research by Tyrrell (1991)

is not only demanded but also practised by the chief

executive, nothing will happen. People will not believe that anything can change - and TQM demands a fundamental, even revolutionary change of ideas, culture and behaviour. Words, videos and posters will not bring it about: only deeds".

Without management commitment, the TQM initiative can never be successful. Researchby MacDonald (1992) suggested that lack of management commitment was the most common reason for the failure of TQM.

2. Customer Focus A strength of an SMIF1lies in its closeness to customers because of its size and its smaller customer base. Customer focus may not be a major problem if SMEs are aware of its importance and actively participate in seeking customer satisfaction. requirements and expectations. Companies only continue to exist because of their ability to meet the requirements of their customers and this must drive all the internal processes(Drucker, 1955). A British Institute of Management survey in 1990 reported that "customer satisfaction and quality are ranked as the top two customer issues. Nine out of ten of the participants in the survey considered them to be very important" (Coulson-Thomas, 1992).

TQM emphasises both external and internal customer satisfaction. The internal customer, being the next process or person, is most aware of the deficiencies and areas for improvement and can provide valuable input. Their responses can be solicited through annual employee surveys (Martin, 1991) or a company sponsored employee suggestion program.

Researchby Lascelles and Dale (1994) indicates that the customer is the main driving force for the implementation of TQM followed closely by the need to reduce costs and improve quality. Woodruff, Schumann and Gardial (1993) define customer satisfaction as the positive or negative feeling about the value received through the use

42

Chapter 2: The Five Pillars of TQM

of an organisation's product or services. This reaction applies to both immediate use from to a series of use situations. situations and overall reactions

The following are key sources of information

for monitoring

customer satisfaction and

requirements: a) Customer surveys and trials b) Trade surveys and trials

c) Working with key customers d) Competitor analysis e) Customer complaints and compliments

Customer satisfaction researchers have estimated that the cost of attracting a new customer is three to five times more than retaining an existing customer. Although a satisfied customer tells up to twelve other people about the company, its products and services, a dissatisfied customer tells as many as 25 people (DiPietro, 1993).

3. Quality Costs Monitoring the cost of quality is an important performance indicator. The costs resulting from poor quality are costs of non-conformance. These are offen large, nonproductive costs and are avoidable through the implementation of TQM. According to Feigenbaum (1991) quality costs on average amount to between 25 to 30% of annual sales. This is three to four times the average profit margin. Scrap and rework account for a significant part of these costs of non-conformance. Appraisal activities are commonly found in companies with high costs of non-conformance, and are present because the system produces so many errors. These unnecessary costs can be eliminated by identifying the causes of non-conformance and failure through the implementation of prevention activities, which is an important aspect of TQM. Simply employing more quality inspectors, tightening up standards, developing correction, repair and rework teams do not promote quality. A different strategy of prevention through better design and process control must be employed. Ultimately, the goal must be to do the right things right, first time, every time, and with zero defects.

BS6143: Guide to the Economics of Quality, Parts 1 and 2, provides guidelines on quality costs. Data can be collected on an activity basis following BS6143: Part I or categorised using the Prevention-Appraisal-Failures categorisation of BS6143: Part 2. 43

Chapter 2: TheFive Pillars of TQM Other forms of categorisation can be used such as cost of conformance

and price of

non-conformance but the method must be tailored to the needs of the organisation (Pursglove and Dale, 1995).

The British Standards Institution

(BSI) claims that between 5% and 25% of turnover

is spent on quality related costs (Dale,

1994). About

95% of this is expended on

appraisal and failure, most of which can be saved if a company has a good quality system such as BS5750 (Williams,

1993). Crosby (1980) estimated that this could be

reduced to "less than 2.5% of sales".

A number of researchers suggest that quality cost reduction is the second most important reason, next to customer satisfaction, for companies to implement TQM (Dale, Wiele, Timmers, Williams and Bertsch, 1992; Dale, Boaden and Lascelles, 1994). It can be postulated that for SMEs quality cost reduction can be the most important reason for implementing TQM. Compared to large companies, SMEs are usually closer to their customers and know their requirements. Hence they will have attained a significant level of customer satisfaction, rendering it less important to address than quality cost reduction. A further reason to support this proposal is that quality cost reduction can have an immediate effect on profitability (Cullen, 1991), whereas customer satisfaction does not produce immediate results. The earlier mentioned cash flow problems facing SMEs can be alleviated immediately by quality cost reduction. E-luxtable (1995) writes that the cost of quality is one of the major benefits for SMEs implementing TQM. Dale (1994) classified the uses of quality costs into four categories that have important application to SMEs: 1. Quality costs may be used to promote product and service quality as a business parameter. 2. Quality costs give rise to performance measures. 3. Quality costs provide the means for planning and controlling quality costs. 4. Quality costs act as motivators.

Crosby defines cost of quality as the price of conformance and non-conformance, where the price of conformance is that which is needed to ensure things turn out right, and the price of non-conformance is the expense incurred in doing things wrong. This concept is more readily understood by the manufacturing sector because of the need to comply with specifications and standards set by the company or customers. When 44

Chapter2: TheFivePillars of TQM from 25% TQM 2.5% in SMEs their to cost of quality can reduce realise management in a relatively short time, it makes them sit up and take notice. This aspect of TQM has not been given much publicity because of the concept that TQM is a long term from less immediate Furthermore savings quality costs are comparatively process. is large In large SMEs. the than to to companies companies cost of quality significant important to justify the considerable investment incurred in a process of continuous quality improvement (Dale, 1991).

SMEs often have no formal cost of quality records although both employeesand fully by the rejects, rework, nonmanagementare aware of problems caused is It the to wrong materials. compliance specifications and suppliers who supply thereforeimportant for SMEs in the manufacturingsector to maintain simple records identify that them to will enable and correct or eliminate the major of quality costs SMEs factors. important builds This TQM to the to of ability step on contributing implement improvements.In a survey of British manufacturing companies, quickly 93% of the companiesreportedthe needfor a "user-friendly method of analysingand 1995). (Kumar Brittain, quality reporting" costs and Having cost of quality data allows SMEs to developplans to reducequality costs both immediately and in the long term These plans range from skills training to capital investmentin equipment.The data also allows actualtargetsto be set for the reduction (1992) Wevill leading to to of quality costs, a planned approach problem solving. improvements deliver that as soon as a quality strategy must writes measurable possible if the commitment of managersand staff is to be maintained. The adage "Nothing succeedslike success"applies. Picking the low hanging fruits of the cost of be (Hollins, TQM for to the to them a strong quality will route motivator embark on 1995).

For SMEs, the danger is that managementmay rush headlong into implementing TQM tools and techniqueswithout the necessarycommitment to cultural changeand training. It is important that tangible benefits are emphasised,especially to SMEs. Whilst large companieshave the resourcesto allow them to seethe bigger picture and long for the term benefits of TQM, SMEs often need to conduct a cost benefit plan analysisto determinethe short term tangible benefits from their investment of time and resources.This is the main drive for the developmentof a tailor-made model of 45

Chapter2: TheFivePillars of TQM TQM for SMEs and a low cost implementation framework using the Uncle Concept. This is also the rationale for including quality costs as one of the 5 Pillars of TQM for

SMEs. 4. Quality Systems Any company can develop its own quality systems to ensure that principles, for its business adequate processes are appropriate and procedures and operation. Almost all companies have written or unwritten procedures. These procedures are necessary because of the mobility of workers and to ensure that procedures and practices are improved upon and updated. Unlike the division of work in scientific integration into distinct TQM the tasks stage or requires of and a management, work is by individual by the team process process carried out workers or a group or when complex. Oakland (1993) conceptualised an organisation as quality chains that cut has internal boundaries, in the quality chain across conventional where each process an internal customer.

Employeesmust be trained to use the seven quality tools, which are: process flow charts,tally charts, histograms,pareto analysis, scatter diagrams and control charts. Whenproblem solving teamssuch as quality control circles, work improvementteams in be the formed, trained teams team and cross-functional members must are 1994b). Boaden, (Dale techniques tools team-building appropriate and and as well as Facilitators need to be appointed to ensure the successful operation of teams. Managementmust include statistical and quantitative control methods, quality tools andproblem solving teamsin its quality system. BS5750publishedby the BSI in 1979 is a quality systemthat any companycan adopt. It is broadly written for application to companieswith any size of workforce. A company certified to BS5750 is automatically registered to the equivalent InternationalStandardIS09000, which is recognisedworld-wide. When this research was conductedin 1993, about 23,000 British businesseshad beencertified to BS5750 (Harris, 1993). At the time of research,BS5750 was the standardthat the Sheffield SMEs soughtor attainedcertification to, hencethe referenceto BS5750 in this phase of the researchinsteadof IS09000.

46

Chapter 2: TheFive Pillars of TQM

There is competitive market advantage placed on BS5750. A DTI (1992) publication is "particularly BS5750 to suggested certification

valuable in marketing".

An

increasing number of customers require suppliers to be certified to BS5750 before they can tender for business. This pressure has a negative aspect because some just for BS5750 to meet the market demand without apply companies

fully

understanding or being committed to the procedures and guidelines. Often, the developed manuals and guidelines are stored in cabinets till the next audit. Holliday (1994) commented "the motive for obtaining BS5750 status is often simply to increase sales. It is a marketing device which allows small firms to tap into vital larger or more up-market customers and more profitable markets. Thus there is no incentive to improve real quality within the company, rather this choice is based on a desire to present a quality image".

For SMEs there are obstaclesto adopting BS5750 becauseof the bureaucracyand costsassociatedwith certification. Williams (1993) reportedthat "for small companies few with only a employeesthe problems associatedwith the standardare now well find They the cost of registration prohibitively high, the level of paper publicised. work requiredover the top". This is confirmed in Chapter 3 in the results of the TQM surveyof Sheffield SMEs conductedby the author. BS5750 is an important element of TQM. Although it does not meet the TQM into delighting be important it is the objective of customer, an stepthat can expanded a TQM system(Askey and Dale, 1994). 5. Continuous Improvement This is the continual search for excellenceand customer satisfaction. Both of these escalateand evolve into ever higher standardsand greater expectationsso that any companywanting to rank amongthe market leadersmust actively engagein this Pillar of TQM to improve growth and productivity. Employeesneed to actively participate in "weeding out the last bug from a produce and process"and managementmust give "workers the opportunity to use their brains and make a contribution to the improvementof their companies"(Lillrank and Kano, 1989). The search for excellence involves the constant review and improvement of all managementand planning activities, products, processesand service. The standardis 47

Chapter 2: The Five Pillars of TQM

best practice in the industry and relevant practices outside the industry. One method of business be benchmarked, is benchmarking. Any this such as, can achieving aspect customer satisfaction, financial performance, market share, distribution, design and managementpractice. Benchmarking provides an insight of what can be achieved and sets a target for excellence and world class status.

Innovation is another essential characteristic of a market leader in a competitive environment. Innovation is not limited to new products and processes. It can apply to all aspects of the company's business operations and management. The focus is on new markets, new products and processes, and new ways of doing things leading to improvements, growth and profitability.

Continuous improvement requires a company-wide

effort

to improve quality

performanceat all levels and in every job. All employeesneedto participatein quality improvementandbe motivatedto do so (Hand, 1993).

2.5 Total Quality Management Survey Despitethe internationalacclaim accordedto the successfulimplementationof TQM in many largeenterprises,researchhas shownthat little attention has beengiven to the needsof small and medium sized companies(Dale and Plunkett, 1990; Hakes, 1991; Oakland, 1989b). SMEs have been overlooked and there is little available to assist them to implement TQM and reap the benefits enjoyed by their larger counterparts. This thesis has arguedthat large companiesand SMEs do not operatewith the same level of managementskills, incentives,and financial and humanresources.In an effort to assistand meet the specific needsof SMEs in their implementation of TQM, the authordevelopedthe Total Quality Managementsurvey. 2.5.1 Objective of TQM Survey The objectiveof the TQM survey is to assessthe quality management system in SMEs and their readinessto implement TQM. This is an important first step to ensure implementation TQM (Weeks, Helm and Ettkin, 1995; Glover, successful 1993; Crosby 1980). It is critical for SMEs owing to their limited resources,especially in time, financeand people.The survey results will: Provide a baselineassessmentof quality management 48

Chapter 2: TheFive Pillars of TQM

Identify the company'sstrengthsand weaknesses Highlight potentialproblem areasfor attentionand action Show the company's readiness for TQM, the efforts required and whether an initiative is more appropriate alternative quality management Bring to light other issues to be studied in greater detail if necessary Provide a benchmark for the company along the route to TQM

Provide a benchmarkfor comparingdifferent companies'TQM status 2.5.2 Development of TQM Survey Questionnaire The questionnaireis basedon the 5 Pillars of TQM, which are: ManagementCommitment(Commitmentto Quality) CustomerFocus Quality Costs Quality Systems

ContinuousImprovement

The questionnaire rates the company's performance against each Pillar which is 5 highest 1 5. The that to given of rating comprisesquestions are rated on a scaleof in found is has TQM A when the company attained status. copy of the questionnaire Appendix A.

The layout of the questionnaireis similar to Crosby's Maturity Grid (Crosby, 1980) to indicates from "Uncertainty" five TQM, the the to which stageson starting path "Certainty" and usesa scaleof 1 for `Uncertainty' and 5 for `Certainty'. However, the CrosbyMaturity Grid is too brief with only six measurementcategoriesand doesnot coverthe full scopeof the 5 Pillars. 2.5.3 Quality Awards The American Malcolm Baldrige National Quality Award (MBNQA) and European Foundation for Quality Management's (EFQM) European Quality Award (EQA) Model for Self-Assessmentwere reviewedand found to be too complex for SMEs. Malcolm Baldrige National Quality Award The MBNQA started in 1987. The award is made annually to three categoriesof businesses- manufacturing companies,service companiesand small businesses.A 49

DRIVER

SYSTEM

-+



MEASURE of

->

COAL

PROGRESS Information and Analysis (70) Leadership

Strategic Quality

Quality

Customer

(100)

Planning

Results

Satisfaction

(60)

180

300

Human Resource Utilisation

(150) Quality Assurance of Productsand Services 140

Total: 1000points

Figure 2.5.2a: Malcolm Baldrige National Quality Award

Leadership (100)

People Management 100

People Satisfaction 90

Policy and Strategy (80)

Customer Satisfaction (200)

Process (140)

Business Results 150

Impact on Society

Resources (90)

(60)

ENABLERS

RESULTS

(500 points)

(500 points)

Figure 2.5.2b: European Quality Award AssessmentCategories (Source:EFQM, 1993)

49a

Chapter2: TheFivePillars of TQM Applicants for the award two each year per category. awards are made maximum of have to conduct self-assessment,and provide a 75 page report describing their TQM is for 50 (Garvin, 1991). the about report companies pages small whereas processes, The MBNQA definition of small companies is less than 500 employees (Storey, 1987). The assessmentis based on the seven categories shown in Table 2.5.2a. These into four driver, of elements system, measure of progress and categories are grouped in 2.5.2a. Figure The 1,000 the totals seven weighting of categories as shown goal, is based factors, for The three each category on namely, approach, scoring points. deployment and results.

There are many criticisms of this system, three of which are the huge effort and in involved the preparation and assessment,the weighting system given to expense financial business the the and sevencategories, absenceof measurementof each of is (Garvin, 1991). Garvin's comment that the "Baldrige Award and short performance term financial results are like oil and water: they don't mix and were never intended to." Although participants of the award include large corporations like Motorola, Cadillac, Coming, Xerox, Federal Express and as well as small enterprises,the is assessment consideredby the author to be too complex for SMEs. EuropeanQuality Award The European Foundation for Quality Management (EFQM) Total Quality ManagementEuropeanQuality Award Model for Self-Assessmentwas introduced in 1991andhasmany similarities to the MBNQA assessment.As it was developedafter the MBNQA and Deming Prize in Japan,it had the "benefits of the experienceof the forerunners" according to Tito Conti, President of the European Organisation for Quality at the International Congressheld in Singapore in 1994. The assessmentis therefore more comprehensivethan the MBNQA and addressesthe criticism of the MBNQA in its lack of measurementof businessresults. There are a total of nine categoriesin two groups titled Enablers and Results as shown in Figure 2.5.2b. A weighting systemis used for the nine categorieswith a total of 1,000 points. This is MBNQA but to the these 1,000 points are divided equally betweenEnablers similar andResults.The criteria for eachcategoryis shown in Table 2.5.2b.

50

MALCOLM

AWARD

BALDRIGE

1. Leadership (100 points) 1.1 Senior Executive Leadership (40)

1.2 Quality Values (15) 1.3 Management for Quality (25) 1.4 Public Responsibility (20)

2. Information and Analysis (70 points) 2.1 ScopeandManagementof Quality Data and Information (20) 2.2 CompetitiveComparisonsand Benchmarks(30) 2.3 Analysis of Quality Data and Information (20) 3. Strategic Quality Planning (60 points) 3.1 Strategic Quality Planning Process (35) 3.2 Quality Goals and Plans (25) 4. Human Resource Utilisation (150 points) 4.1 Human Resource Management (20)

4.2 EmployeeInvolvement (40) 4.3 Quality Educationand Training (40) 4.4 EmployeeRecognitionand PerformanceMeasurement(25) 4.5 EmployeeWell-being and Morale (25) "r

rY

""aa

TAUIG

L. J. bsl:

0w

OCUI-11lb'

lul-

Al

1r T.

IIIG

lvl"AICUIIII

1""

DQIuIIgv

ttwilfu

(Source:National Institute of StandardsandTechnology, 1991)

50a

Chapter 2: TheFive Pillars of TQM

MALCOLM

BALDRIGE

AWARD

5. Quality Assurance of Products and Services (140 points) 5.1 Design and Introduction of Quality Products and Services (35) 5.2 ProcessQuality Control (20)

5.3 ContinuousImprovementof Processes(20) 5.4 Quality Assessment(15) 5.5 Documentation (10)

5.6 BusinessProcessand Support ServiceQuality (20) 5.7 SupplierQuality (20) 6. Quality Results (180 points) 6.1 Productand ServiceQuality Results(90) 6.2 Business Process, Operational, and Support Service Quality Results (50) 6.3 Supplier Quality Results (40)

7. Customer Satisfaction (300 points) 7.1 DeterminingCustomerRequirementsand Expectations(30) 7.2 Customer Relationship Management (50)

7.3 CustomerServiceStandards(20) 7.4 Commitmentto Customers(15) 7.5 ComplaintResolutionfor Quality Improvement(25) 7.6 DeterminingCustomerSatisfaction(20) 7.7 CustomerSatisfactionResults(70) 7.8 Customer Satisfaction Comparison (70)

1,000Total Points

Table 2.5.2a: Scoring for the Malcolm Baldrige Award (continued) (Source: National Institute of Standards and Technology, 1991) 51

EQA Assessment Categories and Criteria 1

Leadership 1.1 Visible Involvement in Leading Total Quality 1.2 A Consistent Total Quality Culture 1.3 Timely Recognition and Appreciation of the Efforts and Successof Individuals and Teams 1.4 Support of Total Quality by Provision of Appropriate Resourcesand Assistance 1.5 Involvement with Customers and Suppliers

1.6 Active Promotionof Total Quality Outsidethe Organisations 2

Policy and Strategy 2.1 How Policy and Strategy are Based on the Concept of Total Quality 2.2 How Policy and Strategy are Formed on the Basis of Information that is Relevant to Total Quality 2.3 How Policy and Strategy are the Basis of Business Plans 2.4 How Policy and Strategy are Communicated 2.5 How Policy and Strategy are Regularly Reviewed and Improved

3

People Management

3.1 How ContinuousImprovementin PeopleManagementin Accomplished 3.2 How the Skills and Capabilities of the People are Preserved and Developed through Recruitment,Training and CareerProgression 3.3 How Peopleand TeamsAgee Targetsand ContinuouslyReviewPerformance 3.4 How the Involvement of Everyone in Continuous Improvementis Promotedand People are' Empoweredto take AppropriateAction 3.5 How Effective Top-Down and Bottom-UpCommunicationis Achieved 4

Resources 4.1 FinancialResources 4.2 Information Resources 4.3 Material Resources 4.4 Application of Technology

5

Processes 5.1 How ProcessesCritical to the Successof the Organisation are Identified 5.2 How the Organisation Systematically Manages its Processes

5.3 How ProcessPerformanceMeasurements,Along with RelevantFeedbackare Used to Review Processes and to SetTargetsfor Improvement 5.4 How the OrganisationStimulatesInnovationand Creativity in ProcessImprovement 5.5 How the OrganisationImplementsProcessChangesandEvaluatesthe Benefits

51a

Chapter 2: The Five Pillars of TQM

EQA Assessment Categories and Criteria 6. Customer Satisfaction How external customers perceive the organisation and its products and services. Areas to addresscould include customer perception of the organisation with respect to: Product and Service Quality.

Additional Indicationsof CustomerSatisfaction. 7. People Satisfaction Whatthe peoples'feelingsaretowardsthe organisation. A Total Quality approachwill satisfythe needsand expectationsof its people. Areasto addresscould includethe peoples'perceptionof the organisation. 8. Impact on Society How societyat large perceivesthe organisation.This includes views of the organisation'sapproach to the quality of life, the environmentandto the preservationof global resources. A Total Quality approachwill progressivelysatisfy the needsand expectationsof the community at large. Areas to addresscould include perceptionsof the local and wider community with respectto the following: The organisation'sactive involvementin the community. The organisation'sactivities to reduce and preventnuisanceand harm to neighboursas a result of operations,businessrelatedtransportationand products. The organisation'sactivities to assistin the preservationof global resources. Additional indicationsof its impact on society.

9. BusinessResults Whatthe organisationis achievingin relation to its plannedbusinessperformance: a)

Financial Measures

Areasto addresscould include profit, cash flow, sales,value added,working capital, liquidity, shareholderreturns,long term "value for shareholders". b) Non-FinancialMeasures Thesewill relateto achievementin other critical businesstargetsand objectivesand will include internal efficiency and effectivenessmeasuresthat are vital to the organisation's continuing success.

Table 2.5.2b: EQA AssessmentCategories and Criteria (continued) (Source:EFQM, 1993) 52

Steps Towards 100% Achievement for the Enabler Criteria Approach Vhat We Do Role model approach totally integrated into normal operation

Deployment Widely We Do I

Clear effectiveapproach,refined as a result of review of business

100%

Approach used in all potential areas

75%

Approachusedin three quartersof potentialareas

50%

I Approachusedin half the potential

effectiveness Regularreview of approachis part of normal operation

I

areas

25%

Soundapproachwith occasionalreview

No systematicapproach

1

0%

Table 2.5.2c: Scoring the Enablers

(Source:EFQM, 1993)

52a

Approachusedin one quarterof potentialareas 1Little effective usage

Chapter 2: TheFive Pillars of TQM

The scoring for Enablers and Results is different, as shown in Tables 2.5.2c and is if have be for Results this to The 2.5.2d. self-appraisal used modified would scoring for SMEs. Three years' of "trends and/or good performance" and "some comparison to other organisations" is required to score 50%. The scoring becomes more stringent for 100%. Without in best "5 50%, modification, class" required years' with above SMEs would at most score 0% to 25%.

Conti (1994) said the EQA model could be "adapted to local situations and needs ... for example,SMEs". The author is of the opinion that such adaptationwould involve `Impact in to the the to on scope of categories exclude a major effort order reduce Society' and `BusinessResults' astheseare not vital to SMEs. The criteria for eachof the other categorieswould need to be drastically simplified for SMEs. The same done have be for the scoringprocedure. to would

Steps Towards

100% Achievement

Results

for the Results Criteria Scope

ur Actual Performance)

(The Range of Performance

Strongpositivetrendsand/or excellent performancefor 5 years,"best in class", confidenceof maintainingimprovement

100%

Resultsfor all relevantactivities

Most resultsshowpositive trendsand/or excellentperformanceover threeyears andcomparewell to other organisations

75%

Resultsfor most relevantactivities

Many positive trends and/or good performance over three years, some

50%

Many relevant results

25%

Somerelevantresults

comparisons to other organisations

Somepositivetrendsand/or satisfactory I performanceand comparisonswith

Few positiveresults

0%

Table 2.5.2d: Scoring the Results

1Few relevantresults

(Source:EFQM, 1993)

53

Chapter 2: The Five Pillars of TQM

2.5.4 Self-Assessment using the Quality Awards A survey of TQM self-assessment in the UK conducted by Finn and Porter (1994) 63% EQA Baldrige 26% that self-assessment, and used self-assessment, used reported 11% used others. Most of the 33 companies surveyed had less than one years in UK in that are slow using the companies self-assessment showing experience technique. Only 55% of the companies reported that the benefits outweighed the cost benefits. The had The the to yet evaluate other companies of self-assessment.

below. listed Most for companiesreported more than are self-assessment objectives one objective: 1. Continuous Improvement

29 companies

(88%)

2. Measuring TQ progress

24 companies

(73%)

3. Increase TQ awareness

15 companies

(45%)

4. To involve employees

14 companies

(42%)

3 companies

(9%)

5. To win an award

The results show that the main objectives for self-assessmentare continuous improvementand measuringTQ progresswhich indicate that companiesusing selfdid include TQM. The the use of selfare already assessment practising survey not implement by is TQM to there companies assessment planning although much support for this (Weeks,Helms and Ettkin, 1995). Dale and Boaden(1994a)stated:"In our opinion MBNQA and EQA (self-assessment) are only applicableto organisationsthat have beenundertaking quality improvement for at leastthree years,and are of little help to those organisationsjust starting out". Furthermore,"the image surrounding self-assessmenttends to be that it is a tool availableonly to thosewith plenty of resources"(Hewitt, 1997). In view of these,and becauseof the significant changesthat need to be made to the MBNQA and EQA self-assessment modelswhen used in SMEs, the author developed the TQM surveyquestionnairefor SMEs that takes into considerationtheir strengths, and characteristics. weaknesses

54

Chapter 2: TheFive Pillars of TQM

2.5.5 Survey Methodology

Fifty manufacturing companies were selected from a list of Sheffield SMEs obtained from the University of Sheffield Regional Office. The companies were selected based had be be 2) They had SMEs, factors: 1) They to to two actively and primary on involved in manufacturing. This is in line with the focus of the thesis, which is the SMEs. Hence Sheffield the type of product manufactured was not an of regeneration issue. Each company was sent a letter followed by a phone call explaining the purpose interview involved The the a personal survey was conducted on-site and of survey. Quality Manager. Based Quality Director Managing Director, the on the or with interview, each survey question was objectively rated on a scale of 1 to 5.

This method of questionnaireinterview with a member of the senior management team is a more vigorous and robust research method than a postal questionnaire interviews face 1992). Face based (Dale, to on questionnaireseliminate the survey possibility of misinterpretationof questions by the respondentand also allows the investigate to the reasons,motivations and strategies author seek clarifications and behind the decisions and practices. The respondentswere very helpful with their in interviews. This allowed the author to the and actively participated comments develop a better understanding of the company's quality management and the for rationale certainactions(Burgess,1984). Twenty-threecompaniesagreedto participate in the survey. This constituted 56% of the 50 manufacturingcompaniesinvited, excluding nine companiesthat could not be had they contacted as either relocated or closed down. This figure of 56% is indicative of the high level of interest exhibited by SMEs towards encouragingand TQM. A further seven companies were contacted from a list of University collaboratorsand agreedto participate,bringing the total numberto 30. During a return visit to Singapore,the same survey was conducted with ten SMEs from the manufacturingsector.This allowed a very useful comparisonto be made of the performances,practicesand views on quality and TQM betweenthe Sheffield and Singaporegroups,bearing in mind the differencesin cultural, political and economic backgrounds.It was felt that it would be useful to analysethe results of both countries in tandemas this could throw somelight on the natureof problemsencountered. 55

Chapter 3: Results of TQM Survey

Chapter 3: Results of TQM Survey

3.1 Survey Results Based on the results of the survey, the companies were grouped into the following facilitate to analysis: categories

No plan for BS5750 Planningfor BS5750 Have implementedBS5750 Planningfor TQM Have implementedTQM

The resultsof the above-mentionedcategorisingfor individual companiesare shown in Tables3.1b and 3.1c. A summaryof the results from both tables is shown below:

Sheffield

Singapore

Number of

Percentage

Number of

Percentage

Companies

of Total

Companies

of Total

1. No Plan for BS5750

1

3.3

1

10.0

2. Planningfor BS5750

11

36.7

4

40.0

3. HaveBS5750

11

37.7

4

40.0

4. Planningfor TQM

6

20.0

1

10.0

5. HaveTQM

1

3.3

None

0

30

100%

10

100%

Categories

Total

Table 3.1a: Summary of TQM Survey Results There was one company in Sheffield, British Steel Stainless,which had successfully implementedTQM for the past five years. There was no TQM company among the ten Singaporecompaniesstudied.As seenfrom Table 3.1a, there was one companyin both Sheffield and Singapore with no plan for BS5750. Case studies of the best from Sheffield company and Singaporeare found in Sections3.4 and 3.5 respectively. 56

Chapter 3: Resultsof TQMSurvey

Table 3.1b: Quality Progress of Companies in Sheffield

Category

Company

No Plan

Planning

Have

Planning

Have

for

for

BS5750

for

TQM

BS5750

BS5750

TQM Working on

Chapmans

IIP. Seen as

Agricultural

Ltd

necessary step

to TQM.

Claims to be

Footprint Tools Ltd

starting TQM

but no ideaof benefits Not all lines

Paramo Tools Group

certified. In

Ltd

processof full certification.

Eclipse Magnetics *

Initial certification problemdueto sistercompany. Year endtarget. Certified 18

Springline Spares

monthsago but quality level still low. S Hardy Ltd

Engineers

*

BS5750 standardsused but companyis not certified

dueto financial constraints.

Allform Tools Ltd *

Planning to get

over next 18 months.

Juststarted,

Forged Rolls (UK)

directivesfrom

Ltd

parentco. BS5750 -5 yrs

Impact Carbides Ltd *

Intendto apply

overnextfew months.

Dynamic Die & Steel Ltd *

In processof

laying groundwork.

FullTQM

British Steel Stainless

for company

Cyclop Works

over 5 years.

(continuedoverleafl 57

Category

Company Prime Engineering *

No Plan

Planning

Have

Planning

Have

for

for

BS5750

for

TQM

BS5750

BS5750

TQM

Year end target to obtain

certification. MD is keen and

Hattersley &

aware of TQM

Davidson Ltd

requirements.

BS5750-1 yr. Accreditedfor

Technicut Ltd

P Howard Group

1 year. Plan to begin this year. Has

BS4871n2& British Steel Standard. Certifiedfor 5

John Holding & Co

years. Excellent

Ltd

quality practicesbut MD feelsTQM not appropriate.

EA Drabble & Co Ltd *

Currently laying groundwork.

Certified to

Rotabroach Ltd

Dormer

BS5750. BS5750 -7 yrs

Tools

Goodquality

Sheffield Ltd

but practices companynot readyfor TQM. PlannedTQM

Marshalls Hard

18monthsago but now on

Metals Ltd

hold "till market picks

up,> View TQM as

Forgemasters

gimmick but

Engineering Ltd

haveextensive quality management

program.

GT Tubes Ltd

Quality managerlaying groundwork.

Table 3.1b: Quality

Progress of Companies in Shellield 57a

(continued)

-

-----------

t -.

Chapter 3: Resultsof TQMSurvey

Table 3.1b: Quality Progress of Companies in Sheffield (continued)

Category

No Plan

for BS5750

for Company

Planning

Have

Planning

Have

BS5750

for

TQM

TQM

BS5750

Coursesare

Jessop Saville Ltd

being planned by

external consultant. Certifiedto

Meco International

BS5750since Dec 1992.

for Certified past2 years.

Oilseal Services (Engineering) Ltd Planning to in

Neville Roe

"near future".

Industries

On hold dueto finances,also seenaswasteof time.

G&J Hall Ltd

Ownquality manuals.Feel BS5750not neededalso financial considerations. Past12 months

McCalls Special

MD working

Products

towardsTQM. Aware of requirements. Staff laying

Tempered Spring Co

groundwork.

Ltd

Not all lines

Stanley Tools Ltd

certified.In processto get all certified.

Summary: No. of Companies per

Category

Percentage

1

11

11

6

1

3.3

36.7

36.7

20.0

3.3

* Denotescompanyhasengagedan externalconsultantto lay BS5750 groundwork 58

Table 3.1c: Quality Progress of Companies in Singapore

Category

Company

No Plan

Planning

Have

Planning

Have

for

for

BS5750

for

TQM

BS5750

BS5750

TQM Certification

Imperial Steel Drum

obtained in

Manufacturers

1992. Target is for

Smith Valve Asia

by certification

Ltd *

April 94. Plan communicated

to employees. Companyis

Tri-M Technologies

currently

preachingTQC, andhaveTQC induction program. Management awareof advantagesand

requirements. Certified in

Seng Heng

April 1992.

Engineering Pte Ltd Central Package

Engaged external consultant2 yrs agobut now on hold. Feelco not readyfor commitment. Obtained

Berger Paints

certificationin January1993.

Ace Plastic

Technology Pte Ltd

Groundwork

inJune begun ' 93 by staff Aiming for

certificationby Nov '93.

MC Packaging Pte

Ltd

Presently in

process.Move communicated to all by management.

58a

Chapter 3: Resultsof TQM Survey

Table 3.1c: Quality Progress of Companies in Singapore (continued)

Category

Company

No Plan

Planning

Have

Planning

Have

for

for

BS5750

for

TQM

BS5750

BS5750

TQM

Aimto be

Drew Ameroid *

certifiedby Dec '94. Companywide action employed. Not all sites

Singapore Oxygen

certifiedyet.

Air Liquide

Top

(SOXAL) Pte Ltd

management is

very committed and MD is keen

to startTQM.

Summary: No. of Companies per

Category

Percentage

1

4

4

1

0

10.0

40.0

40.0

10.0

0

* Denotescompanyhasengagedan externalconsultantto lay BS5750 groundwork.

59

Chapter 3: Resultsof TQM Survey

had for BS5750, 97.6% Of the Sheffield companies, were either planning implemented BS5750, were planning for TQM or had implemented TQM.

In

Singapore, 90% of companies fall within the fore-mentioned categories. These are the indicate high that realise surveyed companies all almost percentages, and very importance of quality improvements. Among the companies in Sheffield, 36.7% were planning for BS5750, with a further

36.7% certified to BS5750. Similar results are shown for Singapore. Companies in be for BS5750 should certified about two years. planning Only 20% of Sheffield companieswere planning for TQM. This figure of 20% is low but it can be improved if the 73.4% of BS5750 companies can be encouragedto TQM. to advance The majority of the 30 Sheffield companies surveyed did not have any plans to in interview, TQM During TQM. the to to enquiries as whether was their proceed future plans drew a look of astonishment from the interviewees. Most of the companiesfelt that TQM was simply not applicable to their company's operations, their common misgiving being that TQM was only for large multi-national is It have between 250 These to companies seven employees. corporations. it in BS5750 the that eleven certified companiessee as an end point their unfortunate drive laurels Dale (Long, their quality and are now on and resting company's Younger, 1991).They do not realise that although BS5750 results in the installation it and maintenance of work procedures and processes neither guarantees an improvementin product quality nor enablesthe company to becomeand remain truly in highly lays how BS5750 the and successful market. a competitive competitive out documents set up, and maintainsan effective quality system.It however falls company shortof the TQM objective of total quality delighting the customer,which is the most important aspectof any business.Without the customer, a highly effective quality futile is is there when process no one to purchasethe product. These companies shoulduseBS5750as a "springboard" to TQM (Long, Dale and Younger, 1991). The companiessurveyedwere still recovering from the costs of implementation and the newly imposed paperwork associatedwith BS5750 (Long, Dale and Younger, 1991)and hencewere apprehensiveabout becoming involved in yet another round of 60

Chapter 3: Results of TQM Survey

quality campaigns, employee talks, training and meetings. Most of the companies

interviewedreportedwidespreadresistancefrom employeesto the increasedamount of paperwork associatedwith maintaining BS5750.

Of the eleven Sheffield companies that were BS5750 certified, five have had BS5750 for between one to two years. None of those five companies had any plans of proceeding to TQM. Another three companies with BS5750 for at least five years were similarly not keen to embark upon the TQM route. A brief insight into the thinking of these three companies will shed some light on their resistance.

CompanyA The companyhad maintainedBS5750 for five years but the Managing Director felt TQM was not appropriatefor his company.The company had so far performed well and had excellent quality practices. The MD was convinced TQM was for large companiesandnot his, which had 38 employees. Company B

The companyhad beencertified to BS5750 for sevenyears. However the MD felt the companywas not ready.for TQM and the new TQM culture. CompanyC The companyhad beenBS5750 certified for at least five years.The MD viewed TQM as a "gimmick". He decidedthat as the company had to date performed well, there was no needfor change.

All three companies had good quality practices and placed strong emphasis on satisfyingcustomers.Basedon their TQM survey results, their good performancewas attributed to employing some TQM principles. Therefore, unknown to them, their companieswere on the TQM route. What they determinedas mere gimmicks or being applicableonly for large companieswas actually the causeof their continuedsuccess. When the interviews were conductedin 1993, a major reasoncited by the companies for not consideringTQM was the economic climate in the UK. With many companies uncertainabout their future, they were understandablyunwilling to venture into yet another quality program. BS5750 was what their customersdemandedand BS5750 61

Chapter 3: Results of TQM Survey

just be it have demanding TQM No to they put one was yet, so would got. was what

BS5750 hold. The that the and costs of getting outlook was efforts general on investment (North, 1993). Curran Blackburn, enough and certification were It is important therefore to provide companies with a cost effective TQM framework to show that TQM is not a high cost quality program but a new company culture that must be adopted by all management and employees to ensure the company's competitiveness, continued progress and success.

Average Rating

The averageratingsof eachof the five categoriesare tabulated againstthe 5 Pillars of TQM in Table 3. ld for Sheffield companiesand Table 3.1e for Singaporecompanies. Calculation of AveraegRating

The averagerating is obtainedby first calculating the averagerating per sectionof the questionnaire.The averagevalue for the Pillar is subsequentlycalculatedbasedon the averageof averagesfor the sectionsof that Pillar. The value that appearsin Table 3.1d is calculatedby grouping the companiesaccording to the relevant category and then calculatingtheir averagerating for eachPillar. Weighting is not used in the calculationsas all sectionsare equally important for the implementation successful of TQM in SMEs. As an example,the averagerating of Sheffield companiesare certified to BS5750 for the Pillar Customer Focus is obtained by first calculating the average rating for `Section 4: Customer Requirements and Expectations' and `Section 5: Customer Satisfaction'respectivelyper company. The overall average is then calculated for all Sheffieldcompaniesthat are BS5750certified. From Table 3.1d, this value is 3.95. Calculationof AverageRating per Pillar As the number of companiesper category is different, for each Pillar the average rating is calculated by first multiplying the average per category of the Pillar in questionwith the number of companiesin that category,and then dividing the sum of the values by the total number of companies. The calculation for the Pillar of Management Commitment for Sheffield is provided: 62

Chapter3: Resultsof TQMSurvey / 30 1)} (4.83* *6) (4.51 * 11) + * (4.61 11) (4.11 + 1) + {(3.6* + Average Rating =

= 4.38 Calculationof AverageRating per Category Pillar. for by the is the each taking average ratings This value average of obtained Hence the average rating for the Category `Have BS5750' is:

AverageRating = {4.61 + 3.95 + 3.81 + 4.39 + 4.15}/5 = 4.18 For Sheffield companies,the averageratings ranged from 3.31 for the company with Singapore For for these TQM 4.81 for BS5750 the to companies, company. no plans 3, 4.73. Taking from 2.98 the to all as rating general average averageratings ranged Sheffieldcompaniesare performing aboveaverage. The Sheffield companieswith no plan for BS5750 had the lowest averagerating of followed is (3.70) highest Customer Focus 3.31. For these the rating companies only Quality Costs (3.50). The (3.60) by Commitment Management ratings and closely 3 the owing to the awarenessof the companiesabout above average rating of all were the importance of quality improvements and the strengths of SMEs described in Chapter 1. This also explains the complacency of SMEs who are resting on past laurels.Their attitude being that past satisfactoryperformancewill continue into the future. They fail to realise that the future is neither the same as the past nor a mere in by it. is brought There changes rapid an exponential rise about extrapolationof technology,communicationsand global markets. The increasein the averagerating as the companiesmoved from the starting category for Plan BS5750' `Have in d `No TQM' Table 3.1 to strongly supportsthe of shown for highest increase from `Have TQM'. The to to the companies need move category 3.31 (No Plan for BS5750) to 4.81 (Have TQM) is a 45% increase and warrants by SMEs consideration serious about the implementation of TQM. The benefits of TQM are describedin the casestudy in Section 3.4 which documentsthe only TQM companyfrom this surveyof 30 Sheffield and 10 SingaporeSMEs.

63

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Chapter 3: Results of TQMSurvey

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Chapter 3: Results of TQM Survey

3.2 Strengths and Weaknesses determine Pillar the TQM to strengths looks the of each This analysis rating average at 3.2. In in Table the The shown are the ratings average companies. and weaknessesof had 3 Sheffield 5, 4 between the range of and which are classified as strengths, ratings in 3.3. Section is Detailed had 4 Pillars. Singapore Pillars and explanation provided 1) Strengths (Ratings between 4 and 5)

Sheffield

Singapore

Management Commitment (4.38)

Management Commitment (4.51)

Quality Systems(4.02)

ContinuousImprovement(4.50)

CustomerFocus(3.99)

CustomerFocus(4.27) Quality Systems(4.16)

is in Pillars, Singapore there Sheffield the Although above companiesare strong and Pillars be has Greater for improvement. to the to weaker given attention still room below. less 4, than shown with ratingsof 2) Weaknesses(Ratingslessthan 4)

Sheffield

Singapore

ContinuousImprovement(3.90)

Quality Costs (3.15)

Quality Costs(3.49)

There is much in common betweenthe Sheffield and Singaporecompanies,with the Continuous Improvement. This Pillar of requires the participation of exception in improve The the to company continuously performance. quality everyone difference in this Pillar results from the socio-economic differences of the two higher The rating of 4.5 for Singaporecomparedto the lower rating of 3.90 countries. for Sheffield is becauseSingaporecompaniesare much younger and have a very small homemarket,compellingthem to competein the international export markets.This-is in contrast to Sheffield companieswhich are more mature and have a large home market.

65.

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Chapter 3: Results of TQM Survey

3.3 Comparison of Companies in Sheffield and Singapore A comparison is made of the average ratings of Sheffield and Singapore companies in Table discussed. The differences for the ratings are shown are and the main reasons

by followed in differences Pillars looks The the 3.3. ratings with significant at analysis the Pillars with marginal differences.

3.3.1 Significant Differences: (in decreasing order)

Singapore) (+0.60, Improvement Continuous a)

Sheffield Only eight of the thirty companies were actively monitoring and striving to Four improve their processes. quality and production product continuously improve This had their to any aspect of operations. upon companies no plans at all is a sharpcontrastto the fact that all ten Singaporecompanieswere working on continuousimprovementprograms. Somecompaniesclaimed they had been operating their plants well for the past decadesand hencesaw no needto considernew improvements.Many companies were family businessesthat had been operating with the same methods and proceduressincethe start of business. Singapore

Singaporeis a young industrial and export economy. Hence companiesactively improve in be to their to seek production process and product quality order internationally. With a population of under four million, Singapore competitive has a very small home market that necessitates her heavy reliance on export to neighbouring countries, Europe and the United States of America. Since the emphasis by the Trade and Development

Board in Singapore on local

manufacturing companies attaining IS09000,

many companies realised the

importance of this international recognition for product quality and have sought to attain certification.

This is a major contributing factor to the difference of 0.6 points in Singapore's favour in this areaof continuousimprovement. 66

Chapter 3: Results of TQMSurvey

Singapore companies were continuously seeking improvement opportunities for their processesso as to be competitive in both quality and price in the international market, and to reduce the costs associated with poor quality products thereby increasing profits. This was done throughout all levels of the company by both management and workers. A report by the Singapore National Productivity Board (Walker, 1994) showed that between 60.4% to 100% of the workforce of 1994 National Productivity Award winners participated in productivity improvement programs such as Quality Control Circles, Work Improvement Teams and other company-wide quality programs.

An exampleof the attitude of a typical Singaporeestablishmenttowards quality international and competitivenessis the national airline, SingaporeAirlines (SIA). Despite having one of the highest airfares in the market, the company is still amongthe top and most popular airlines worldwide and is renownedfor passenger service. This is becausemanagementhas provided intensive training and has imbeddedinto the thinking of all staff at all levels their responsibility to provide quality servicethat not only meets but exceedscustomer expectationsto ensure total customer satisfaction. The airline changesthe fleet of aircraft on average every sevenyears, giving the airline the youngest fleet worldwide. Flights depart and arrive punctually, and any delays are reported to top managementfor review and immediatecorrectiveaction. Singaporecompaniesconductboth internal and external quality audits on a regular basis. Survey results show this figure to be 90% comparedto 57% of Sheffield companies.The one company in the Singapore group not actively conducting quality audits was working on implementing it. In contrast, three Sheffield companiesmadeit clear they had no intention of implementing any quality audits. A

larger percentageof Singapore companies monitor their own performance trends.They realise the importanceof trends to enable them to closely and fully monitor the performanceof their company, be it with regard to customers or productivity. It is only through this monitoring that a company is fully able to identify and improve its weakeraspects.

67

Chapter 3: Resultsof TQM Survey

b) Quality Costs(+0.34, Sheffield)

Sheffield The percentageof total sales lost to poor quality is generally lower than the Singapore companies. The reason is the majority of Sheffield companies are been in for decades. having Many their trade the of companies, established in for hence been had the company years and were very skilled with employees their craft. As a result, there were fewer defective products.

Being more established,the companies were more aware of the necessity of in There maintainingcost of quality records. were comparatively more companies Sheffieldkeepingrecordsof the costsof scrap,rework, inspectionand testing. Another reasonfor the higher averagerating was communicationwith employees. Of the companies, 50% had fewer than 50 employees. Owing to the smaller workforce, the levels of scrap and rework and lost sales due to poor quality were very easily and rapidly communicated to all staff, resulting in employees becoming more personally involved in the day-to-day running of the company. Many companies had a family-like environment with open communications where the cost of quality (scrap and rework) was well understood by all concerned.

Singapore

The companiesbeing young industrially had not fully understoodthe significance of quality costs. Most only had a rough estimate of the cost of rejects as a percentageof total sales.These cost estimateswere lower than that of Sheffield companiesasthey were more limited in scopeand hencelessaccurate. The majority of companiesdid not maintain records of the cost of quality. The conceptof the cost of quality was a recent introduction to the manufacturingsector by the Trade and Development Board which had yet to catch on with the local companieswho werejust getting to grips with IS09000 certification. All the companies interviewed had at least 50 employees, with at least two departments in each company. Unfortunately inter-departmental communication was not well maintained resulting in the cost of quality not being communicated 68

Chapter 3: Resultsof TQM Survey

throughoutthe company.Often only managementreceived all the data regarding floor information This to the then supervisors shop was conveyed quality costs. but not the shop floor workers. Consequently the workers do not realise how much

the companyactually losesto scrapand rework. Overall, only a very small percentage of companies maintained complete and detailed Full The the only majority recorded cost of scrap. quality cost records. quality cost of internal internal failure include Scrap costs. appraisal, and external prevention, records is only a part of internal failure costs.

(+0.28, Singapore) Customer Focus c) Interviewsin Sheffield and Singaporerevealedthat, with the exception of three of the 40 companies,customer surveys were not conducted to either determine customer expectationsand requirementsor customersatisfaction with the company's products Essentially, the companiesrelied on receiving customer feedback,both services. and positive and negative feedback,through customer compliments or complaints, and through the company's salesteamswhich servedthe dual function of also being the customercontactdepartment. If the companiesconductedformal customer surveys on a regular basis they would know their customers' satisfaction,requirementsand expectations,allowing them in turn to improve their products and services to meet these needs thus giving the companyan edge over competitors. Without getting the true picture of their needs from the customersthemselves,the company might not be producing goods and servicesto satisfytheir customers. The difference in the average rating between the Sheffield and Singapore companies with regard to Customer Focus is not high, being only 0.28 in Singapore's favour out of a total of five points. This was because Singapore companies all acknowledged that the customer is the most important and without the customer the company would ceaseto exist. The companies consequently concentrated more effort to establish good customer relationships. The response time of the companies to customer complaints was generally very good. However this is merely a reactive and not a preventive move. The main setback arises because companies do not actively conduct customer surveys to determine the real and future needs of existing and potential customers. 69

Chapter 3: Results of TQM Survey

The following are shortcomings of Customer Focus more unique to the two groups of companies:

Sheffield The companies as a whole did not do as well as Singapore companies in Customer Relationships because the sales personnel did not undergo as much formal training and did not have as many training programs scheduled for them as the Singapore sales personnel. Management felt that the experience gained through the course of their work was sufficient, that on-the-job training far because is This training. approach not recommended outweighed any classroom the lessons learned from on-the-job training might well have cost the company "it it is important but loss This that to remember may seem minimal, customers. takes months to find a customer, secondsto lose one". Furthermore, the fact that a bad reputation spreads much faster than a good reputation should more than reinforce the need for formal training methods.

Eighty percent of the Singapore companiesbenchmarkedcustomer satisfaction is in both industry Sheffield 46% This to contrast of with and competitors. limited The Sheffield companies. majority of companies either conducted only comparisonwith their competitorsor monitored trendswithin their own company. Most of the companieshad the tendencyto be inward-looking and were contented just better that they than their neighbouring ensuring with were performing had They competitors. not realisedthe importanceof comparingtheir performance with the best in industry.

Singapore

Singaporewas strongerthan Sheffield in monitoring customer satisfaction. More companies(50% comparedto 20% in Sheffield) monitored customer satisfaction trends obtained through informal feedback from their sales teams. Although limited in scope,it is still advantageousas it enablescompaniesto know for a fact how customers feel about the company and whether customer satisfaction is increasing actually or decreasing. In Sheffield, most companiesdetermined this mainly through `gut feel' and by making occasionalenquiries into the number of complaints or returns received over the past monthsor year. 70

Chapter 3: Resultsof TQM Survey

3.3.2 Marginal Differences: (in decreasing order)

(+0.14, Singapore) Systems Quality a)

Sheffield Eleven of 30 companies (36.7%) were BS5750 certified. A further eleven (36.7%) in for BS5750 the process of writing up the necessary quality and were planning

had A engagedexternalconsultants. manuals. significant number Fourteencompanies(47%) had at most 20% of their employeestrained in quality Generally tools techniques to the company's operations. relevant systems, and job felt do to their their as their employeeswere sufficiently skilled management companieshad performed satisfactorily for the past ten to twenty years at least, there was no pressingneedor justification for any quality training programsto be implemented consideredor now. Singapore The results are marginally better than that of the Sheffield companies(0.14 of 5 because points) of the higher level and amount of training employeesreceive with regard to quality systems. The companies conducted a high level of quality training especially at shop floor level. This is becauseof the high emphasisthe Ministry of Trade and Industry places on the need for training in productivity improvement and quality control circles. These were further encouraged by numerouscampaignsand subsidiesgiven by the Government for the training and retraining of workers. Most first line supervisorsare highly trained and support seniormanagement'squality efforts. Being a young and export oriented industry, management relied on quality training

programsto competeregionally and internationally. Only two companies(20%) had fewer than 20% of their employees trained in quality awarenessor other quality practicesrelevant to the company's operations. These two companies however were working on training schedules for their employees.

71

Chapter 3: Resultsof TQMSurvey

b) Commitment to Quality (+0.13, Singapore)

Sheffield Comparatively,more senior managementwere directly involved in the day-to-day in largely Singapore This than the the companies. was company operations of have fewer 50 fact Sheffield 50% than the to the that companies of attributed interviewed have fewer Singapore than the companies employees whereas none of 50 employees. In these smaller companies, the Managing Director often worked together with his men on the shop floor so problems encountered were reported directly to him. This direct communication of problems in the production process is advantageousas it allows immediate action to be taken. It eliminates the normal before fmally learns of the channels communication management series of of problem.

Although many companieshad quality policies, these policies were not actively communicatedto all employees.As a result, the importance of the quality policy felt in the Singapore companies which ensured all was not as strongly as employeeswere fully aware of the company's stand on quality through the continualemphasisof the policy and its significance.The Sheffield companiesfelt that they were establishedwith a regular customerbase and were therefore more in complacent this regard. Singapore "

Although the Managing Director and Directors visited the shop floor on a regular basis,they were not directly informed of the problems in the production process. Problemswere only communicateddirectly to them if the problems were of a considerablemagnitudeand severity. This resulted in senior managementbeing distancedfrom the day-to-day running of the company. However the companies displayed managementcommitment to the company's quality policy and had formal SupplierRating Systems.

Company quality policies were established and actively communicated to all employees.This was to ensureemployeesknow that excellent quality is of utmost importanceto the company'ssurvival, continuedsuccessand competitiveness. 72

Chapter 3: Resultsof TQM Survey

3.4 Case Study 1- Best Company in Sheffield. Company

Works Cyclops :

Armour andAssociatedProducts Avesta Sheffield Limited Number of Employees: Approximately 73 The Cyclops Works of Armour and Associated Products has been around for 148 has 2000 Limited, is larger Avesta Sheffield over which company, years and part of a is Cyclops Works (CW) a TQM company with a well communicated employees. business The linked is to the that objectives. company's very closely quality policy has Control Circles Work Improvement Teams. Quality active and company

The companyattainedBS5750 certification in 1987 and for the next five years was first in implementing Total Quality Management. Within the and sustaining engaged two years of TQM implementation,progresswas good and the company benefited greatly. However, a plateau was reached and TQM seemed in danger of dying a death. is This a common tendency identified by Cook and Baxter (1991) and natural Roy (1991) and experiencedby many companies. CW prevented this through the company's engaging the services of an external consultant to help identify and eliminatethe causes.Since then TQM has been self-perpetuating.Before becoming a TQM company,the company scheduledand conducted a full training program for every employeeto ensurethat all employeeswere fully aware of the principles of TQM, and of the benefits to be gained. The training sessionslasted betweentwo to four daysper employee. The companyhascost of quality recordsthat are well maintained.The company's cost due to defects, off-standard work and customer returns was reduced to 0.2% per annum.At the time of researchthe companywas not looking to bring this figure down to 0% asthey felt the costsinvolved in would exceedthe current loss of 0.2%. Top executivesare fully committed to quality which is realised by all employeesas well as customersand suppliers.The companygives their suppliersTQM literature in the hope that the suppliers themselves will become TQM companies, benefiting not but CW. The company maintains long-term relationships and forges the only suppliers strong partnerships with suppliers with whom they have major contracts. 73

Chapter3: Resultsof TQMSurvey The company was working on developing its Supplier Rating System. Although the fortunate formal System, had Supplier Rating they as their were a company never The familiar the expectations. company's needs and with suppliers were very be beneficial formal development that the system would of a rating company realised better it them to monitor their suppliers and the consistency of the enable would as quality of goods received. Though their suppliers were aware that the company would development this tolerate goods, of the company's own rating system poor quality not 41 fact. further

would serveto

reinforce this

CW was considering conducting formal customer surveys to better determine their customers'satisfaction,requirementsand expectations.The company had not fared too poorly in this aspectbecausethis short-comingwas compensatedby the Business Managerhimself personally visiting customersto find out what they thought of the how the companycould further improve their performanceto meet the company,and future requirementsof their customers.The developmentof a formal customersurvey will enablethe company to determine customers' satisfaction and needs in a more efficient manner,andplanswere in place to commencethe surveysthe following year. Customer contact employeesare well trained in dealing with customers, and all problemspertaining to customerrelationshipsare dealt with promptly and corrective implemented immediately. The company has well defined customer service actions standardsthat are derived from customerrequirements.Despite customer complaints being at a minimum, a good processis maintainedto collect, analyseand resolve all complaints that may arise. Customer satisfaction with the company is closely monitored,and so far the trendshave beencontinuously improving. All employees are trained to varying degrees in quality management and Statistical Process Control, depending on the extent to which these are relevant to their work. The level of quality awareness among employees is very high. The company rewards good suggestions and contributions

by made

employees to

the company's

improvement suggestion schemes. CW also has Steering Groups which are made up of nine members comprising shop floor operators, shop floor facilitators, and management facilitators. The group meets for brainstorming sessions to look into possible problem areas on the shop floor, evaluate these problems, and draw up a priority listing. Working groups are set up to find solutions to these problems. The 74

Chapter 3: Resultsof TQM Survey

solutionsare reportedto the steeringcommittee for the relevant actions to be taken. The Steering Group is changed every 18 months to ensure that everyone in the has be to an opportunity a part of the group. company

All quality manuals are reviewed six monthly and are amended when necessary. Internal and external quality audits are conducted on a regular basis. When complex designs are received from customers, representatives from the departments involved in the actual production will meet to assess the correctness of the drawings and to determine how the product can be produced in the most cost effective manner before sending the drawing to the production department.

With regardto goods inspectionand testing, all incoming materials must be certified fit for use. A rejection bay ensuresnon-conforming raw material is not inadvertently basically Inspection used. comprisesfirst-off inspection.At least 10% of every batch is inspectedat the end of eachstageof production. Goods requiring 100% inspection hard will receive a stamp identity. Also, all parts loaded for delivery are countercheckedagainsta loading list to ensureno part is left out. The company does not practise benchmarking in the truest sense becauseof the limited market for proper comparison. Furthermore, the steel industry is a very secretiveindustry. Despite this, the company actively gathersas much information as possibleon their competitors. The company eliminated the need for inspectors, instead giving employees responsibilityfor their own work. The companyassuredemployeesfrom the start that improvements although would result in some positions becoming redundantit would not meanemployeesthemselvesbeing maderedundant.When the need for inspectors was eliminated, those previously working as inspectors were retrained and given positionsin more productivejobs. This senseof job security encouragesemployeesto actively work towardsincreasingproductivity. An excellent scheme that CW was implementing was the shared bonus. In addition to their basic salary employees received quarterly bonuses. These bonuses from the were savings that the company made over the last quarter as a direct result of reduced costs. The money saved through on-time deliveries, reduced customer returns, reduced scrap 75

Chapter 3: Resultsof TQMSurvey

and defective products, reduced off-standard work, increasedproductivity, etc, was handedout asbonuses.This greatly increasedproductivity in the company. On the whole, TQM paid off for CW. Off-standard work decreased from £0.25M to £20,000 and defects from 3.5% to 0.05% during the period from 1987, when CW began its TQM initiative, to 1993, when the case study was conducted.

CW is not resting on its laurels and is continually looking for new ways to further improveproductivity. It was actively working on the following: 1) Improving customer response, i. e., faster preparation of quotations.

2) Better communicationbetweenmanagementand shopfloor employees. 3) Fasterorder entry. 4) Developinga better planningprocess. 5) Reducinglead-time. 6) Developmentof a computerdata system.

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Chapter 3: Resultsof TQM Survey

3.5 Case Study 2- Best Company

in Singapore

Company

Limited (Singapore) Technologies Tri-M :

Number of Employees

: 200+

Tri-M Technologies, established in 1987, is a manufacturing firm producing printed Supplier Asean Office first Procurement International boards. Tri-M the won circuit Excellence Award from IBM Singapore in 1989.

Tri-M receivedthe SingaporeInstitute of Standardsand Industrial Research(SISIR) IS09002 certification in May 1992. In the run up to certification, Tri-M engagedthe help of an external consultancy company. The consultants helped organise an IS09002 awarenessseminar to educatekey staff about the requirements.An initial detailed the company's existing quality systemswas conducted and a of assessment its design to the the of quality system and guide work plan was established implementationthrough various proceduresand work instructions. Upon attaining certification, there was initial resistance from employees who saw IS09002 as another quality gimmick that offered nothing more than additional by However, the the strong commitment shown as a result of very paperwork. ManagingDirector and Directors, these`teethingproblems' were quickly overcomeas the benefitsbecameapparent. Tri-M has very strong senior managementcommitment especially in the area of quality and this is evident to employees. Monthly publications distributed to employeescarry very firm yet gentle reminders from managementabout the need to in excel quality to securea competitive advantage.All publications are bilingual in an foster to a closerworking environmentand to ensureno one feels left out. effort Every employee's identification badge has the company's quality policy printed on the back in the languagemedium of the employee as a reminder of the company's commitmentto quality and of their role in ensuring quality products. Management also encourages open communications between themselves and all levels of employees.The Managing Director visits the shop floor daily, and the company operatesan open-doorpolicy. 77

Chapter 3: Results of TQM Survey

Tri-M has its own formal Supplier Rating System that assessesthe supplier's product The technical company conducts cost and product performance. support, quality, its its list and updates of approved suppliers according suppliers quarterly reviews of to their performance. The company's partnership program with suppliers has benefited the company as suppliers have given suggestions which have helped the company in its drive to reduce costs while simultaneously improving product quality.

Tri-M doesnot have formal surveysto assistthem in the determination of customer is Feedback obtainedmainly through their satisfaction,requirementsand expectations. is This team through customer complaint reports. an area that the company sales and improve to upon. The salespersonnel,who are also the company's customer needs having trained, contact personnel, are well attended both in-house training and externaltraining courseson quality. All customer relationship problems are looked into promptly and immediate corrective actions are taken to eliminate the problems and to ensure similar problems do not occur again. Full records are kept of all complaintsand the correctiveactionstaken. The company was also working towards establishing partnerships with their key customers. Customer quality and service standards are well defined and communicatedto employees.The company first began monitoring the satisfaction levelsof its key customersin 1992. Subsequenttrendshaveproved favourable. Tri-M performs benchmarking against both local and foreign industries, closely monitoring their competitors' market share and new production technology. Customersalso provide the companywith feedbackon competitorsperformance. All new employeesundergo a quality induction training program. In addition all employees attend training programs to further increase their levels of quality awareness.As a result, the level of quality awarenessin the company is very high. All employeesare trained in quality tools and techniquesalthough the degreeof training may vary accordingto the natureof their work. Tri-M has active Quality Control Circles (QCCs) and Work Improvement Teams. All leaders of QCCs have to attend the "QCC Techniques for Leaders" course new conducted by the Singapore National Productivity Board. The company holds in78

Chapter3: Resultsof TQMSurvey house QCC conventions where teams present their projects after six months of active involvement in QCC activities. A prize is presented to the winning team. The efforts forgotten in by teams and consolation prizes are are not all other participating put is to These get to them. employees of encouraging means effective an awarded together for brainstorming sessions and problem solving meetings where they can This find to these solutions problems. causes of problems and effectively analyse root is part of Tri-M's pursuit of excellence through teamwork.

Tri-M's main emphasisis to reduce the cost of quality to increaseprofitability and incurred 31 March 1993, financial In the the company year ending competitiveness. Recognising S$3M that a reduction of this cost the of quality alone. on cost almost bottom line immediate have their profits, the companywas turning an effect on would their attention towards reducing this cost. According to the Managing Director, from be derived 60% the targets the of company's cost reduction can approximately internal in both Since the the and cost of quality. cost quality of comprises reduction externalfailure costs,appraisalcosts and prevention costs, projects plannedto reduce these costs included reducing scrap and rework, improving productivity, increasing yields of selected operations, ensuring timely delivery of good quality incoming materials,and ensuringeffective preventive maintenance. Tri-M has an award systemfor both individuals and departmentswho come up with suggestionswhich contribute significantly to the company's drive for continued light In excellence. of the company's new emphasisfor reducing the cost of quality, the SuggestionSchemewas modified to award more recognition, in the form of bonus points, for suggestionswhich help reducethe cost of quality. Similarly, the QCCs are directedto undertakeprojects relevant to reducing these costs. Managementfeel that by aggressively pursuing the goal of reducing wastes such as scrap, rework, downtime,etc., there would be greaterjob satisfactionand increasedmorale amongst employeeswhich would in turn contributetowards increasedprofitability.

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Chapter 3: Results of TQM Survey

3.6 Conclusions

1. Of the 30 small and medium sized companies in Sheffield, 96.7% were either implemented for had BS5750, planning

BS5750, were planning for TQM or had

implemented TQM. As shown in Figure 3.6,36.7%

were actively

planning

for

BS5750, with another 36.7% already certified to BS5750, giving a projected total involved in BS5750 certification. 73.4% of

This shows a high awareness by SMEs

of the importance of quality management and supports the conclusions of Curran and Blackburn (1992).

Implemented TQM

No Plan for BS5750 3.3%

Planning T 20%

anning BS5750 36.7%

Implemented BS5750 36.7%

Figure 3.6: Percentage of Sheffield Companies per Category

2. Only 20% of the companies were planning

for TQM

and 3.3% (one company,

British Steel Stainless) had implemented TQM. This percentage is low because the companies see BS5750 as an end instead of using it as a "springboard" identified

to TQM as

by Long, Dale and Younger (1991). It also shows that SMEs do not

fully understand the principles,

concepts and benefits of TQM.

felt that TQM was only for large multi-national

corporations

Companies also

because many 'I'QM

success stories are of large companies with lots of human and financial resources.

80

Chapter 3: Resultsof TQM Survey

3. The average ratings for the 5 Pillars, i. e., Management Commitment, Customer Focus, Quality Costs, Quality Systems, and, Continuous Improvement, for the 5 for i. for in `Planning Sheffield, `No Plan BS5750', e., categories of companies BS5750', `Have BS5750', `Planning for TQM', and `Have TQM', were above the because 3. This was even the company with no plans to average rating of implement BS5750 had its own systems and informal procedures to produce quality products to meet customer requirements. This is due to the strengths of SMEs discussed in Chapter 1 of this thesis and their high awareness of quality management systems.

4. TQM Pillars with the lowest ratings are Quality Costs (3.49 of 5), followed by Continuous Improvement (3.90 of 5). These two Pillars require the participation of improve to the quality of products and processes and to continuously employees improve quality performance. Both these Pillars require the active participation of employees in quality management and the low rating indicates lack of employee involvement as previously identified by McQuater, Dale, Boaden and Wilcox (1996). The author developed a questionnaire on employee motivation to address this key role of employee participation in TQM. Details of the questionnaire are found in Section 4.2.4.

5. Customer Focus is the Pillar with the third lowest rating of 3.99. The study showed that only three of the 40 companies conducted customer surveys. Companiesmainly relied on customer feedback, complaints and the company salesteams.This need led to the developmentof a customer focus questionnaire the detailsof which are found in Section4.2.2. 6. The benefits of TQM are well illustrated through the experienceof CW which successfullyimplementedTQM. The benefitsgainedare summarised: a) Increasingtrend of customersatisfaction. b) Significant improvementsin product quality and cost reduction. c) Off-standard(non-conforming) work decreasedfrom £0.25M to £20,000 and defectivesfrom 3.5 to 0.05% in 6 years. d) Cost of Quality is 0.2% of annual sales. e) Good Teamwork. f)

High Employee Morale and Motivation. 81

Chapter 3: Resultsof TQM Survey

Strong quality awarenessamong employees. g)

7. Two concerns highlighted through the TQM survey were the efforts and costs of implementing BS5750 and TQM. Two companies planning for BS5750 did not obtain certification due to financial constraints. For similar reasons, another for hold. TQM This the the plan was put on reinforces need company's development of a cost effective TQM Framework for SMEs.

8. Thereis mistrust in consultantsby SMEs basedon their experienceswith BS5750. Consultants are seen to be costly and bureaucratic and not flexible to the requirementsof SMEs. 9. Finally the results of the TQM survey confirm Hypothesis 1, that SMEs do not understand the definition or implications of TQM. Most felt that TQM was for large companies and only one company was practising TQM. The lowest three ratings were for the Pillars of Quality Costs, Continuous Improvement and Customer Focus. These, together with their lack of understanding about the fundamental TQM principles of customer requirements, employee participation and continuous improvement, are the gaps that companies need to bridge in order to successfully implement TQM. Most disappointing were the eleven companies (36.7%) with BS5750 certification that were stopping their quality initiative at BS5750. It can be postulated that all or most of the eleven companies (36.7%) for BS5750 would similarly stop at BS5750. This is a loss of 22 planning companies (73.4%) with the potential to implement TQM.

There is a need to encourageand assistthese companiesto progressto TQM. They display the strengthsof SMEs discussedin Chapter 1 but they also suffer from the The TQM Framework for SMEs must therefore addresstheir needsand weaknesses. provide incentives for SMEs to proceed to TQM. Due to the limited availability of funds in SMEs, they are most reluctant to spendscarceresourcesof time and money unlessthey can realisereturns and benefits almost immediately or in a relatively short term.

82

Chapter 4: Developmentof a TQM Framework

Chapter 4: Development of a TQM Framework Hypothesis 2: SMEs Can be Encouraged to Implement TQM Using a Framework of Training and Mentoring (Uncle Concept)

4.1 Development of a TQM Framework The results of the TQM Survey indicate the need for a cost effective Framework to

be This Framework TQM. in implementation SMEs their neither must of assist do have jargon SMEs the privilege of an not as complex nor contain management abundanceof managementskill, resourcesand time. A low cost Frameworkis important becauseinvestment and cash flow are two main in barriers is in SMEs. This to small change study on supported a weaknessesof (1990) by Corrigan Joyce, Woods, McNulty which and companies carried out identified the major barriers as market demand and finance. This was the case demand in market manufacturing companies where was seen as more especially impeding in lack than the change of capital. The TQM survey showedthat significant SMEs were forced into BS5750/IS09000 certification by the customer but were not for By TQM because the this meeting customer. of was not required planning barrier. If have the the the taken care of market requirements, companies customer TQM framework does not require much financial commitment SMEs can be full look beyond it being initiative to the another quality and recognise encouraged benefitsto the company.

The experience of the author through many hours spent interviewing senior from is SMEs down know they to are management very practical, earth people who the needto continually improve in order to survive. In fact many companiesalready qualities important for the successfulimplementationof TQM. An example possessed is the closeworking relationshipand good communicationsbetweenmanagementand employees.This close working relationship fosters teamwork, not as a defined but as a natural process in the solution of problems and difficulties objective The employees in these companies derive both personal and job encountered. satisfaction, and develop a very strong sense of commitment and loyalty to the company.Their work attitude is that of working together for the common good of the company and they often remain with the company throughout the course of their

Chapter 4: Developmentof a TQM Framework

(1989) Vallis Twamley by by Nagpal, is life. This and supported a study working difficulties the of that same small companies may not encounter which reported implementationas large companiesowing to their size which means all employees know andtrust the other. and management As mentioned in Chapter 3, the general attitude of SMEs is that TQM is not suitable for them. Their main reason for this being that available literature relates success both have disposal large their that money and vast amounts of at companies stories of impression Furthermore, the among Sheffield senior management general manpower. it felt import flavour They TQM American the that was of month. and was an was income. jargon developed by large firms to generate consultancy more management Essentially, they were not familiar with the principles of TQM, and had based their hearsay. Unfortunately, their experience with BS5750 certification and opinions on the cost of consultants had left a bitter taste. It had disrupted work schedules and resulted in discontent among employees as they found themselves loaded with more felt forced into More significantly, management paperwork. obtaining certification through the demands of customers and personally did not feel it brought any improvements. It documentation the significant was merely of existing company procedures and processes.

The development of the TQM Framework seeks to address these issues, misconceptions and prejudices.

4.2 The Uncle Concept The main featureof the TQM Framework is the conceptof the Uncle. This is a novel approachto training and mentoring in the implementationof TQM. During the TQM survey of the 30 Sheffield companies,it becameapparentthat one company(Cyclops Works) was performing better than all the others. The case study of this company is found in Section 3.4. Although the company operated as an autonomousSME, it was in fact part of a larger organisation Avesta Sheffield Ltd. During the TQM implementationAvesta had provided considerablehelp to Cyclops Works by providing facilitators and general consultancyadvice. It becameapparent 84

Chapter 4: Development of a TQM Framework

Works. As Uncle Cyclops this had to Avesta was so successfula that an as acted decisionwas madeto replicatethis conceptof the Uncle with other companies. The Uncle Concept has as the Uncle a company that has implemented and sustained SMEs to training Uncle The TQM. and encouragement will provide guidance, implementing TQM. In this way, SMEs have available assistance from those who be hand first have that the encountered and might of problems experience themselves is key for importantly It the consultants, which need the pitfalls to avoid. eliminates TQM from learning TQM. The for successful concept of not considering reason cited by (1992) Coulson-Thomas is that companies are who reported advocated companies knowledge into the tapping gained through experience of other companies not by "learning builds Concept Uncle The implementation on problems. regarding described by Boaden Dale, information through networks" as association and sharing have framework implementing TQM (1994). The the Lascelles the companies and Uncle not only as a trainer but also as a mentor. In addition, they have the opportunity to establish a network with other companies implementing TQM.

4.2.1 The Uncle CyclopsWorks which had beenactively practising TQM since 1988was chosento be the Uncle based on its outstanding results. It had experiencedthe best and worst it is in implementation importantly TQM, that the and more might arise of situations living proof that TQM is beneficial. Within its first two years of TQM implementation, the company saw significant improvements and reaped many benefits.However, TQM reacheda plateau and seemedin danger of dying a natural death.This was overcomewhen the company engagedan external consultant to help in the identification and elimination of the cause. Since then, TQM has been selfperpetuating.A very significant point to note is the Cyclops Works had a TQM championin their BusinessManager,and the senior managementteam was also fully committedto the initiative. The author approachedthe Business Manager with the proposal of Cyclops Works becomingthe Uncle. He was very enthusiasticand saw it as a very good approachfor helping SMEs. However, he felt that this project would benefit more if it were under the guidanceof its headoffice, Avesta Sheffield Limited. 85

Chapter 4: Developmentof a TQM Framework Avesta Sheffield Limited (ASL) was formed in 1992 following former British

Steel Stainless, a division

of British

Sweden. The UK operation employs approximately

a merger between the

Steel Plc, and Avesta AB of 2,500 people and is based in

Sheffield. The company is made up of a number of business units that act as profit is business Cyclops Works. These units correspond to the main centres, one of which manufacturing

areas which produce stainless steel slabs, wide coils and sheets, long

products, plates, precision strips, armour and tubes.

Their customersdemandproductsthat are of a very high quality and producedto tight specifications.Furthermore,the steel industry is one where technology is continually developing and competition is ever increasing. ASL has successfully met these demandsthrough their commitment to Total Quality in every area of operation. Vital to their successis a structuredquality and skills training programmedesignedto fully equip all employees with the skills and knowledge necessary to fulfil their job requirements.In addition, all employeesare provided with the opportunity for selfdevelopmentthrough numeroustraining schemes. ASL has a CompanyPhilosophy which is well communicatedto all its employees. This philosophy focuses on Customers, Employees, Suppliers and the Local Environment. The following are the principles and guidelines referring to Local Environmentwhich motivatedASL to becomethe Uncle: "Local Environment: We will establish a responsible attitude towards the environment and local community. To achievethis we must: Control pollution - noise, fumesand waste in line with BS Plc policy. Showan `openface' to and supportfor the local community. Support and promote local initiatives and develop appropriate recreational facilities. Establisha forum for exchanginginformation and expertise with local education andresearchinstitutions." It was this philosophy on Local Environment, especially regarding local community support,coupledwith the fact that they were confident of the Uncle Concept being a 86

Chapter 4: Development of a TQM Framework

led to ASL SMEs Yorkshire in that South implementation for TQM formula winning Uncle. the the to of role agreeing assume for be its training to Uncle, provide ASL, as the responsibility would agreed that facilitators from the participating companies. The training would be conducted over a The from ASL. facilitator TQM by hours during days 3 a qualified office period of ASL from that be training the material adapted training manual used would

themselvesusedin their implementationof TQM. A report by NewcastleBreweries (Williams, 1992) revealedthat they met with local SMEs to explain their quality initiatives and implementation methods to them. NewcastleBrewerieswould be a capableand willing Uncle to SMEs in Newcastle. The authorbelievesother TQM companieswould likewise be willing to be the Uncle to SMEsin their vicinities. Another report from the EFQM 3rd European Quality Conference for Education, Training and Researchin 1992 (EFQM News, 1992) confirmed the willingness of SMEs. be large Uncles TQM to to companies successful

4.3 Prerequisites for TQM Framework The results of the TQM Survey conducted with the 30 Sheffield companiesand 10 Singaporecompanieshighlighted two key aspectsthat required further study, namely Customer Focus and Employee Motivation. Survey questionnaires were thus developed to allow actual feedback to be obtained from both customers and in identify to the company's strengths,weaknessesand order accurately employees highlight to the areas requiring emphasis when implementing the needs,and also TQM Framework.

The following sectionsexplain the developmentand contentsof the questionnaires. 4.3.1 Customer Focus The TQM surveyresultsrevealedthat the majority of companies(37 of 40 companies) did not conductformal surveyswith their customersto determinesatisfaction levels of productsand services,expectationsof the company and future needs.Were customer 87

Chapter 4: Development of a TQM Framework

know least their the customers'actual company would annually, at surveysconducted be to take appropriate action. and able expectations, and requirements This need for awarenessof customer requirements is supported in a study by Roper, Hewitt-Dundas and McFerran (1997) involving 15 small UK companies employing between 20 to 70 employees, two thirds of which were IS09000 certified. The study demonstrated that the relative importance attached to the various attributes of product different. In by their the particular, customers was significantly companies and quality intrinsic importance had the tendency to the of over-emphasise smaller companies durability flexibility) image, (product and appearance, uniqueness, quality attributes faults, importance (the the product absence of of extrinsic while underestimating delays, delivery (repairs, returns and maintenance costs) and service quality attributes faulty The the terms). credit authors suggested of and supplier's products replacement that the general tendency for suppliers to over-emphasise intrinsic qualities was consistent with a rigid conformation to manufacturing standards such as IS09000. The implication is not that IS09000 is irrelevant, rather that its implementation is insufficient to meet customers' aspirations. Customers match high manufacturing high levels design of service quality. and quality standardswith

It was in responseto this need for companiesto conduct formal customersurveysthat based Survey Questionnaire developed Customer on the 5 Pillars of TQM. This a was is supportedby Oakland(1989b) and Flood (1993). 4.3.2 Customer Survey Questionnaire The objective of the Customer Survey is to enable the company to determine its in hence identifying meeting customer satisfaction and requirements, performance areasof weaknessthat require action or immediate attention. It is recommendedby Huxtable(1995) that the survey is conductedat 6 to 12 monthly intervals. The questionnairehas six sections.The first five sections are basedon the 5 Pillars, Quality Management, Customer Focus, Quality Costs, Quality Systems and namely ContinuousImprovement. Customersare provided with ratings of 4 to 1, with `4' "Very Good", `3' representing "Good", `2' representing "Needs representing Improvement" and `1' representing"Not Acceptable". Four ratings are provided to 88

Chapter 4: Developmentof a TQM Framework

final The the the taking option easy and choosing middle rating. avoid customers for is their commentsand opinions. asking customers qualitative, section The questionnaire was not rigidly applied to every company. Each company was its individual the to to questionnaire meet needs. Questions were customise asked added, modified and/or removed as the company saw fit. This is important as differently, importantly, for the and operate more companies survey results are internal use and not for comparison with other companies.

The Quality Managementsection asks how well quality and delivery meet customer requirementsand aboutthe performanceof the product with regard to consistencyand durability. Tenner and Toro (1992) define durability as the amount of use obtained from a product before it deterioratesto the point that replacementis preferred over repair. The CustomerFocussectionis structuredto determinehow customersrate the quality of serviceprovided with regard to salesand the accuracyand timeliness of invoices. The efficiency of responseto customers'orders and enquiries is also queried.Finally, the customeris askedto ratethe companyin terms of its ability to satisfy. The Quality Costs sectionseeksto determinehow the company fairs when compared to competitorswith regardto product quality, value, delivery and price. The customer is asked to rate the performance of the product as well as the technical backup provided. The Quality Systemssectionasks the customerto rate the level of importanceplaced being on suppliers certified to IS09000. Customershave to rate the company with its to ability to meet specifications and requirements, the resolution of regard complaints,the level of technical support and assistanceprovided, and the general quality awarenessof employees. Customers are asked for their input concerning improvementsor changesto the company's quality systemthat will be beneficial to them.

The Continuous Improvement section asks the customer to rate the company's responseto product and serviceneeds,and how well theseneedsand requirementsare 89

Chapter 4: Developmentof a TQM Framework

is how Also to products. competitor's asked well product and service compared met innovations meet customer needs.

The qualitative section is used to obtain additional information about what customers like most and least about the products, service and delivery, and the improvements they want to see. Customers are asked if they will purchase from the company again and whether they will recommend the company to others. If the reply is negative in either situation, the customer is asked for an explanation. Finally they are asked for any other comments and suggestions, and to leave their name and contact number if they wish to be contacted about any issues. A copy of the questionnaire is found in Appendix B.

Being a postal survey,the questionnaireis kept short and to the point. Too detailed a has the adverseeffect of the customer not bothering to read through questionnaire pagesof questionsor not responding (Huxtable, 1995). No incentive is offered for participating unlike surveys that offer token gifts. This was decided upon as SMEs havea regular baseof long term customerswho presumablywill help the companyto help themselves.This close customerrelationship is a strong characteristicof SMEs. 4.3.3 Employee Motivation TQM requiresthe active participation of every employeefrom all functions, processes andoperationsto continually improve the quality of products and services.The human factor is vital for successfulTQM implementation. Dale and Boaden (1994b) write that the processof quality improvement cannot be successfulwithout the efforts of people, both as individuals and teams. The absence of company-wide employee commitmentaccountsfor 80% of TQM failures (Tyrrell, 1991). Wilkinson (1994) identifies TQM as having two sides "hard" "soft" and side. -a Whilst the "hard" side emphasisesTQM tools and techniques, the "soft" side emphasisesemployeeinvolvement and commitment. The human factor is responsible for the culture change required for successful TQM implementation. Hill (1991) defines the TQM culture as that which nurtures trust and respect for individuals, building a sharedbelongingto the company and drive for continuousimprovement for the benefitof the companyand individual.

90

Chapter 4: Development of a TQM Framework

Management practices in non-TQM companies vary considerably although they are often based on the specific roles and responsibilities of employees. Since the introduction of scientific management by Taylor, worker involvement in work planning, process improvement and quality improvement has been minimal as these are considered management responsibilities. However, companies that have started improvement strategies such as Quality Control Circles, Work Improvement quality Teams and other productivity programs have begun to change their management by giving practices

employees more responsibilities

for work

planning

and

improvements. Oakland (1989b) describes employee participation as the involvement of every single person in the company regardless of position or location. He maintains there is a pool of expertise, experience and knowledge which offers a tremendous source of ideas and innovations when everyone works towards the good of the company.

Conductingthe EmployeeMotivation Survey prior to the implementationof TQM is important becauseit accurately identifies the company's position in relation to the requirementsof TQM and the changes needed to secure TQM successthrough employeemotivation (Kondo, 1994). Although not directly identified as one of the 5 Pillars of TQM, motivating employees to actively participatein TQM is a vital aspectfor the Pillars of Quality Costs, Quality Systems,CustomerFocusand ContinuousImprovement.

Thecostof qualitycomprisescostsof conformanceandnon-conformance. As shown in Section 2.4.1, quality costs on the average amount to between 25% to 30% of annualsales.The bulk of quality costs are incurred through putting things right after they have gone wrong. An associatedcost is therefore the cost of appraisal.Hence, a significant sum of money can be savedthrough prevention. The best approachis to ensureall employeesare trained in the relevant quality and technical skills neededto do their job well. Employing more quality inspectorsmerely addsto the cost and does long-term not serveany quality improvement goal. Employeesmust be motivated to ensurequality in their own work. This, coupled with management'scommitment to makeresourcesavailableto help employeesimprove their work processesand quality, will leadto a definite andpermanentdecreasein the cost of quality. 91

Chapter4: Development of a TQMFramework Within the Pillar of Quality Systems, it is important for employees to be trained in The TQM tools. the the operation of any of seven application and quality awareness is dependent to efficiency quality goods at maximum machinery or process produce job do Providing to the training the the the well operator with necessary operator. on will motivate him. Successful implementation of the Pillar on Customer Focus relies on employee

motivation. All staff must be committedto ensuringcustomersatisfaction. Employee motivation is also vital in the Pillar of Continuous Improvement which focuseson the continual search for excellence and customer satisfaction, both of which are not static factors. They escalateand evolve into ever higher standardsand leaders the to that market rank any company among wanting greaterexpectationssuch improve in to market shareand profitability must actively engage this Pillar of and TQM. Innovation is another aspect of this Pillar. Innovation is not limited to the developmentof new productsand processes.It appliesto all aspectsof the company's businessoperationsand encompasses new markets,new ways of doing things and the ideas for improvements. be All these new search and can achieved only through the participationand motivation of employees. The above-mentionedfindings led to the development of an Employee Survey Questionnaire.Interviews with the companiesindicated that they had never conducted an employeesurvey.In fact, the only time managementreceivedany form of feedback from employeeswas if a situation arosethat provided them with the opportunity to air their grievance. 4.3.4 Employee Survey Questionnaire

The objective of this survey is to determine existing levels of employee satisfaction in andmotivation order to identify how the companycan motivate employeesto work for the good of the company and to actively participate in TQM. Conducting the surveyson a regular basiswill serveas a good indication of employeemotivation and commitment levels as the company implements and sustains TQM.

The

recommendationto the company is to repeat this survey every 6 to 12 months (Huxtable,1995).

92

Chapter 4: Developmentof a TQM Framework

The employee survey is a confidential survey that looks at Work Environment, Performance, Job Satisfaction and Participation. The final section seeks employee in four Ten the sections and respondents give are asked each of questions comments. their opinions using one of 4 ratings - Strongly Agree (4), Agree (3), Disagree (2) and Strongly Disagree (1). A choice of 5 ratings is not given because the objective is for (disagreement) Hence (agreement) the choice of a or negative responses. positive (Huxtable, rating was not provided or average middle

1995). A copy of the

is in found D. Appendix questionnaire

The Work Environment sectionasksthe employeeto rate questionspertaining to his Questions determine to the employee's environment and conditions. are asked work location benefits, hours, the salary opinion about and working of the company, staffing levels, and the adequacyof the training provided. The employee's opinions are also soughtaboutthe level of co-operationamong fellow workers,job security and work conditions. The sectionon Performanceis designedto determinehow employeesfeel about their work performance. Each employee is asked to rate how well the company job communicates responsibilities, quality goals and performance standards, and feedback. Also of interest is the employee's opinion of whether the performance information, the tools and equipmentto do the job well. companyprovides necessary The employee is asked to rate the competence, fairness and consideration of management. With regard to Job Satisfaction,the questionsare aimed at identifying motivational factors such as achievement and recognition through challenging work, job responsibility, teamwork, respect from other employees, and the full utilisation of skills and capabilities.Questionsask about the emphasisplaced on improving quality, productivity and performance,and the levels of recognition, reward and incentives awardedfor doing good work. Employeesare to rate whether managementtrusts them to do good work. The answers will provide management with feedback about employeemorale,job satisfactionand motivation. The section on Participation is geared towards determining employee motivation throughthe achievementof self-realisation.This is the highest level of motivation that 93

Chapter4: Development of a TQMFramework The This the management. style of section rates stimulates superior performance. development is opportunities, employee asked about promotion, personal growth and for ideas if the and suggestions proposal of new as well as management encourages improvement, the implementation of changes to improve productivity and quality, and in The goal-setting. questionnaire ends problem-solving and employee participation indicates for This "I the the answer company". am satisfied working question with for 39 feels how the the the about working company as earlier employee exactly job issues his invokes to the thoughts and the work all relating about questions environment.

The Employee Survey questionnaire was given to the participating company with the understanding that the senior management team would organise a meeting with for from levels to the the of company conducting the all explain reason employees survey, and to subsequently provide employees with

feedback of the results.

Respondents were told they were not required to write their names on the To assure employees that only the author would receive the completed questionnaires. beside the questionnaires and upon completion, envelops were placed questionnaires, the questionnaires were sealed in the envelop and placed in a designated box. The results were compiled, analysed and a report presented to management. I

The resultsof the Customerand EmployeeSurveysare presentedin Chapter5.

4.4 TQM Framework Implementation The secondhypothesisis that SME's can be encouragedto implement TQM by a combination of training and mentoring (Uncle Concept). For this hypothesis to be tested the Uncle Concept and Framework were implemented as described in the following sections. AvestaSheffieldLimited agreedto fulfil the role of the `Uncle'. However, prior to the facilitator commencing companies and employee training they were required to conductthe Customerand Employee Surveys.If the companydid not want to conduct either or both surveys, it was clear the company was not prepared for the culture changethat invariably must happenfor the successfulimplementation of TQM. The is fundamental. behind this If the company did not know, nor want to know, reason 94

Chapter 4: Developmentof a TQM Framework

how their customersand employeesperceived the company and its products, then improvements bring to measures and steps about quality correct and appropriate

be cannot made. This however was not a problem encountered with any of the companies who welcomedthe surveys. The author met on-site with the company's senior management team member for implementation. TQM first At their the spearheading responsible meeting, copies of the customerand employeequestionnaireswere presentedand discussedto give managementthe opportunity to make any changesthey deemednecessary,such as to modify, add or remove questions.This customisedthe questionnairesmaking them relevant to the company as no two companiesare alike in their managementgoals, operations,customersand employees.A secondmeeting was arranged,usually within a week of the first meeting for the customisedquestionnairesto be collected and amendedto reflect the changes.Two companiesmade slight changesto the customer None questionnaire. of the companiesmadechangesto the employeequestionnaire. The customersurvey was conductedfirst becauseit would take longer for customers to receivethe survey questionnaireand return it by mail. The employee survey was by conducted managementthemselvesto convey to employeesthe commitment that managementaccordedthe survey.This was to help overcomeemployees' attitudes of it being another `flavour of the month' exercise. The results of both customer and employeesurveyswere to be communicatedto employees. The methods for how the surveys were conducted are discussedin the following sections.The sameprocedurewas applied to all six. For both surveys,expenseswere fully borneby the University. The methodsusedto analysethe results are discussedin Chapter5.

4.4.1 Customer Survey Methodology

The companygave the author a list of `Category A' or key customersto whom they wanted the questionnaireposted. A copy of the customer survey questionnaire is found in Appendix B. The questionnaireswere posted together with a letter on University letterheadexplaining the purposeof the survey and the joint work with the 95

Chapter 4: Development of a TQM Framework

University as the company started on its route to TQM. The letter explained that the customer survey was developed as an integral part of the company's progress towards TQM to enable the company to accurately determine their customers' perception of the company, its products and services, and their customers' needs and how well the company was meeting these needs. The letter proceeded to explain that this feedback would greatly help the company to identify and correct or eliminate aspects of its operations that do not work in line with their goal of fully satisfying their customers. Although the University conducted the survey, the letter emphasised that senior management of the company were actively involved. Customers were assured the information received would be used for the mutual benefit of themselves and the company as their supplier.

A stampedself-addressedenvelope was included and sent to the customer via first classmail to conveythe importanceof their feedback. Most of the questionnaireswere returned within two weeks of posting. In the third week, the author contacted the remaining customers personally by telephone to determinewhy the questionnairewas not returned. It is of interest to note there were many instances where, despite the company providing the author with its list of current key customers, the following situations arose:

The addressprovided by the companywas an old address. The companyno longer existed. The companyhad stoppedbeing a customerfor many years. The customercontactprovided by the companyhad long since left the company. This strongly reinforcesthe needfor the companyto know its customersbetter. It was especiallydisturbing to learn the customeraddresswas incorrect. It brings to the fore questionsof delivery to the wrong address,return of incorrectly delivered products, delaysin paymentand the actual size of its customerbase. After four weeks from the posting of the questionnaires, the results were compiled and presented to the company in a report, a sample copy of which is in Appendix C. The

96

Chapter 4: Development of a TQM Framework

The by their the customers. original questionnairesreturned companywas also given in is described 5.1. Section the to results method used analyse

4.4.2 Employee Survey Methodology From the beginning, management was informed that the employee survey would be including basis for confidential all management, employees conducted on a strictly and that this fact was to be clearly communicated to employees. No participant would be asked to write his/her name on the questionnaire. This was to allow employees to express their true feelings and opinions without fear of reprisals. Management was informed they would neither receive the originals nor photocopies of the completed questionnaires. Instead a report analysing the results with all comments typed out exactly as they appeared would be given to management. This course of action was taken to avoid the situation arising where handwriting was analysed to determine what by said was and whom (Huxtable, 1995). A confidential survey is necessary to provide the company with actual and accurate information about the satisfaction and motivation levels present in the company, as well as any other problems. The only time any comment was edited by the author before inclusion in the report was when a specific person was named. The edited comment merely omitted the name.

The employee survey was conducted three weeks after the customer surveys were posted as the employeesurvey takes a much shorter period to complete. The whole from the time the questionnaires were given to the employees to the process, collection and analysis,was completedwithin a week. Another prerequisiteof the employeesurvey was for managementto agreeto organise a company-widemeetingto communicateto employeesthe reasonfor conductingthe survey. The meeting would be led by the CEO or Managing Director with all managementstaff present, and will emphasise the confidentially of replies, and convey the messagethat results will be analysed independently by the University. Managementwas advised to reassureemployeesthe survey was not intended as a witch-hunt but as a meansto help the company as it sought to improve, and that the resultswould be communicatedto employees. Employee participation was not compulsory. Management left the questionnaires at the back of the room so that those who were interested could collect one as they left 97

Chapter 4: Development of a TQM Framework

the meeting.This was to avoid the employeefeeling coercedinto participating which might havehappenedhad he been handedthe questionnairepersonally by a member team.Envelopesbearingthe University namewere placedwith the of the management questionnairesand employees were asked to seal the envelope containing the completedquestionnaireand place it in a designatedbox. Employeeswere given three daysto returnthe completedquestionnaires. A samplecopy of the analysedresults and report to managementis found in Appendix E. A copyof the employeequestionnaireis found in Appendix D.

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Chapter 5: Resultsof TQM FrameworkImplementation

Chapter 5: Results of TQM Framework Implementation The TQM Framework was implemented in six South Yorkshire manufacturing SMEs.

5.1 Method for Analysis of Customer Survey Results

The objective of the CustomerSurvey is to enablethe companyto accuratelydetermine their level of customersatisfactionand to assistthem in determining their strengthsand be baseline It that taken. so action weaknesses corrective can against also servesas a which the company can compare and monitor the trend as it progresses to a TQM

company.The reports given to managementexplain the method of analysis so that the companycan conductthe surveythemselveson a regular basis. A sampleresult, basedon twenty respondents,is given in Table 5.1a to illustrate the methodof analysingthe results.

Quality Management

Number of Customers per Rating Rating

Question

Very

Average

Good

Needs

Not

Improvement

Acceptable

I a. Quality of Product

10

7

3

-

lb. Delivery

9

4

5

2

lc. Quality of Service

6

4

5

4

2a. Consistencyof Product

8

12

-

-

-

5

7

8

33

32

20

14

2b. Durability of product TotalNumber ofCustomas perF, g

Table 5.1a: Number of Customers per Rating for Section 1(Quality Management) As seenin Table 5.1a,the horizontal summationdoesnot always equal the total number of respondents.This is becausenot all respondentsansweredevery question. This is illustrated in question`1c. Quality of Service' where the horizontal summationis 19.

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Chapter5: Resultsof TQM FrameworkImplementation

The results were the classified in two columns indicating the `Number of Satisfied Customers' and `Number of Dissatisfied Customers'. Each question is classified it is `High Strength', `Strength' or `Weakness' as shown in Table to according whether 5.1b.

The classifications `High Strength', `Strength' and 'Weakness' are defined as: High Strength is awarded only when all participants rate the question as `Satisfactory' and there are NO dissatisfied customers for the question.

Strengthis awardedwhen more than 80% of customersare satisfied. Weaknessis awardedwhen 20% or more customersrespondedwith dissatisfaction. Alternatively, it applies when 80% or fewer customers are satisfied.

Section 1: Quality Management

Question

Number of

Number of

Satisfied

Dissatisfied

Customers

Customers

2a. Consistencyof Product

20

la. Quality of Product

Classification

-

High Strength

17

3

Strength

lb. Delivery

13

7

Weakness

lc. Quality of Service

10

9

Weakness

2b. Durability of Product

5

15

Weakness

Percentageof Customers1

65.0%

1

34.0%

1

Table 5.1b: Classification of Customer Satisfaction Levels for Section 1 (Quality Management)

The columns `Number of SatisfiedCustomers'and `Number of Dissatisfied Customers' are obtained by summing the number of customers in the `Very Good/Average' and `Better/Same' columns and the `Needs Improvement/Not Acceptable' and `Worse/MuchWorse' columnsper questionrespectively. The percentagesfor the satisfiedand dissatisfiedcustomers are obtainedby dividing the total number of responsesin each rating by the product of the total number of survey respondentsand the number of questionsfor that section.This is illustrated for `Number of SatisfiedCustomers': 100

Chapter S: Results of TQMFramewor

Implementation

Percentageof Satisfied Customers = (20 + 17 + 13 + 10 + 5) / (20*5)

= 65% The percentagesfor satisfiedand dissatisfiedcustomersdo not always add up to 100% becausenot all respondentsanswerevery question. The question concerning the customer's requirement of IS09000 found in the Quality Systems section is not taken into consideration in the calculations as it is a request for information about the customers' requirement for the company to be certified to IS09000.

The customersurvey report concludesby highlighting the areaswith the highest levels of customer satisfaction, the lowest level of satisfaction and those that need improvement.

An important feature included in the questionnaireconcernsCustomer Retention. The is if customer asked he will re-purchasefrom the company and if he will recommend the companyto others. A reason is requestedif the responseto either or both of the is is feedback important This though to questions negative. all companies of vital significance for SMEs becauseof their smaller customer base and lower resources. Huxtable (1995) supportsthis, writing that the loss of a key customer for the small companycould well meanthe end of the company.

5.2 Method for Analysis of Employee Survey Results The employee survey aims to provide management with information on staff morale and the problems and dissatisfactions present among staff. On a positive note, the survey lets management know what they are doing correctly. It serves as a baseline for the company to compare and monitor the trend along its progress to TQM. The report explains the method of analysis so the company can conduct future employee surveys.

A sample size of 40 employees is shown in Table 5.2a. The ratings represent the following: StronglyAgree (4)

Agree (3)

Disagree(2) 101

Strongly Disagree(1)

Chapter 5: Results of TQM Framework Implementation

Similar to the customer survey, the horizontal summation per question does not always equal the number of respondents because employees did not answer all questions.

Part A: Work Environment

Number

Rating 1. I am paid a fair and competitive salary.

of Employees per Rating

4321 4

11

15

8

2. Companybenefitsare fair and competitive.

-

16

18

6

3. Working hoursare suitableto me.

3

25

10

2

4. It is convenientto travel to and from work.

6

28

3

3

-

10

18

10

6. Company provides adequate training.

-

12

22

6

7. Co-workersare friendly and helpful.

7

23

8

2

2

30

8

-

3

10

15

8

-

15

14

10

6.3%

45.0%

32.8%

13.8%

5. Company employs enough employees to operate productively.

8. I havegoodwork relationshipswith people in the company. 9. I have job security and stability.

10. I am satisfiedwith conditionsat work. Percentageof Employeesin eachRating

Percentage Motivated

Demotivated Percentage

51.3%

46.6%

Table 5.2a: Number of Employees per Rating for Part A (Work Environment) The percentageof employeesper rating is calculated by dividing the total number of responsesper rating by the product of the total number of survey participants and the numberof questions.The calculation is shown for rating 4: Percentageof Employeesfor Rating 4= (4 +3+6+7+2+

3) / (40* 10)

= 6.3% (to one decimal place) The PercentageMotivated and PercentageDemotivatedis

obtainedby taking the sum of

the percentagesfor ratings 4 and 3, and ratings 2 and 1 respectively. The Percentage

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Chapter 5: Results of TQM Framework Implementation

due 100% the to do to earlier Demotivated Percentage Motivated and add up always not did fact that not answer every question. employees mentioned The report presents the final results according to the levels of employee satisfaction. 5.2b. in Table `Dissatisfaction' Satisfaction' `High The classifications are as shown and

Part A: Work

Environment

Number

of

Number

of

Motivated

Demotivated

Employees

Employees

Classification

34

6

High Satisfaction

in the company.

32

8

High Satisfaction

Co-workers are friendly and helpful.

30

10

High Satisfaction

Working hours are suitable to me.

28

12

High Satisfaction

I have job security and stability.

17

15

1 am paid a fair and competitive salary.

15

23

I am satisfied with conditions at work.

15

24

Dissatisfaction

Company benefits are fair and competitive.

13

23

Dissatisfaction

Company provides adequate training.

12

28

Dissatisfaction

10

28

Dissatisfaction

It is convenient to travel to and from work. I have good work relationships with people

Company employs enough employees to operate productively.

Table 5.2b: Classification of Employee Satisfaction Levels for Work Environment

The table is arranged in descending order of the number of motivated employees.

The classifications `High Satisfaction' and `Dissatisfaction'

are defined as:

High Satisfaction is awarded only if 60% or more employees are motivated. Dissatisfaction is awarded when 60% or more employees are demotivated. Classifications left blank represent areas with Lower Satisfaction levels. These areas be can worked on and transformed into areas of High Satisfaction at the discretion of the company, as opposed to the areas of Dissatisfaction which require immediate

attention and action by the company. Measuresto improve these areas of lower satisfaction may require minimal effort by management as opposed to the time,

103

Percentage of Satisfied Customers per Pillar

Company

&

Response

Rate

Quality

Customer

Quality

Quality

Continuous

Focus

Costs

Systems

81.3

84.0

64.0

71.7

65.3

92.5

100.0

90.0

93.8

87.5

84.4

82.2

82.2

77.8

81.5

68.0

66

73.3

67.5

63.3

90.0

84.0

86.7

77.5

90.0

96.0

84.0

86.7

90.0

86.7

90.0

88.6

81.0

83.9

89.8

73.3

72.0

58.3

73.8

61.3

85.4

90.1

84.4

92.2

71.8

84.5%

83.4%

78.5%

80.9%

77.5%

Management

Improvement

Triten International

15 Customers (50%) Allform Tools 8 Customers (53%) Cintride 9 Customers (30%) Street Cranexpress 10 Customers (10%) Burnand XH 10 Customers (27%) Crane & Hoist 5 Customers (9%) Standard Piston Ring 14 Customers (23%) Edward Pryor & Son MME Division 20 Customers (33%) Consumables Div. 16 Customers (57%)

Average Percentage

Table 5.3.1: Summary of Customer Survey Results

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Chapter 5: Results of TQM Framework Implementation

financial commitment needed to effectively and permanently possible and effort transform the areas of Dissatisfaction into areas of High Satisfaction.

The employee survey report concludes by reiterating the key findings of the survey. Employee comments provide invaluable insight into the workings of the company and the areasthat need management's attention.

5.3 Summary of Survey Results A total of six SMEs participated in the Customer and Employee Surveys. Of these six in 30 had Allform Tools TQM the the companies, participated survey conducted with Sheffield companies. Triten International and Stand Piston Ring's management learned of the TQM Framework and expressed their interest in participation. The other 3 companies are University collaborators.

5.3.1 Customer Survey Results The results of the Customer Surveys are shown in Table 5.3.1 for each of the six companies. A total of 107 of 368 customers (total number of customers from the six companies) completed and returned the questionnaire. The average percentage per Pillar based on the `Number of Satisfied Customers' is:

"

Quality Management

84.5%

Customer Focus

83.4%

Quality Costs

78.5%

Quality Systems

80.9%

Continuous Improvement

77.5%

These values are calculated based on the `Percentage of Satisfied Customers' shown in Section 5.1. The percentages obtained per company are presented in Table 5.3.1. The average percentage is obtained by taking the overall average per Pillar:

Average Percentage for the Pillar Quality Management

=(81.3+92.5+84.4+68.0+90.0+96.0+90.0+73.3+85.4)/9 = 84.5%

104

Percentage of Employees per Classification Company & Participation Rate

High

Low

Satisfaction

Satisfaction

45.0

30.0

25.0

40.0

27.5

32.5

30.0

20.0

50.0

60.0

25.0

15.0

30.0

55.0

15.0

27.5

40.0

32.5

32.5

35.0

32.5

37.9%

33.2%

28.9%

Dissatisfaction

Triten International 36 Employees (80%) Allform Tools 16 Employees (100%) Cintride 35 Employees (87.5%) Street Cranexpress

41 Employees(75%) StandardPistonRing 68 Employees(76%) Edward Pryor & Son MME Division 48 Employees(58.5%) ConsumablesDivision 69 Employees(73.4%) Average Percentage

Table 5.3.2a: Summary of Employee Survey Results

Note: `High Satisfaction'- 60% or more employees`Strongly Agree' or `Agree' with the question. `Dissatisfaction'

`Strongly Disagree' 60% `Disagree' employees or more or with the question.

104a

Chapter 5: Resultsof TQM FrameworkImplementation The Pillar Management Commitment

is referred to as Quality Management because the

is in the the of quality, which questionnaire management pertains emphasiswhen used Commitment. Management an aspectof Customers generally gave the companies high ratings for Quality Management, Customer Focus and Quality Systems. Lower ratings were given for Quality Costs and Continuous Improvement.

Some customers were so dissatisfied they clearly stated they would not repurchase from the company. As the companies were asked to select their key customers to participate in the survey, this loss is very serious and requires urgent action to prevent further loss having Despite IS09000 certification, it is clearly not customers. of all six companies enough to ensure satisfied customers.

The customer survey results are consistent with the strengths and weaknesses of SMEs discussed in Chapter 1. They confirm the high awareness of SMEs with regard to quality management, the need to meet customer requirements, and the importance of a good quality system. However to remain competitive SMEs need TQM to achieve improvements in quality costs and continuous improvement.

5.3.2 Employee Survey Results A total of 313 employeesparticipated in the Employee Survey, giving a participation rate of 74%. The result from each company is shown in Table 5.3.2a. The average employeeprofile is summarised: "

High Satisfaction

37.9%

Low Satisfaction

32.3%

Dissatisfaction

28.9% Total 100.0%

The top fifteen questionsclassified as `High Satisfaction' together with the number of employeeswho ratedthem, and the percentagebasedon the total of 313 participants are listed in Table 5.3.2b. Most of the `High Satisfaction' questionscome under Herzberg's hygiene factors (Herzberg, Mausner and Snyderman, 1959) which correspond to the

105

Number of Employees

Questions

Percentage of Employees

1. Management trusts me to do a good job.

268

85.6

2. I have good work relationships with people in the company.

265

84.7

3. I am working towards the future of the company.

261

83.4

4. It is convenient to travel to and from work.

250

79.9

5. Co-workers are friendly and helpful.

242

77,3

6. Working hours are suitable to me.

240

76.7

7. I haveenoughauthority to do my work.

232

74.1

8. I am satisfiedworking for the company.

177

56.5

9. I find my job interestingand challenging.

174

55.6

10. I work a reasonableamountof overtime.

167

53.4

11. I know my quality goals and performance standards.

150

47.9

12. I can learn new skills at work.

107

34.2

13. I havejob security and stability.

103

32.9

14.1 have enou h information to do my job.

100

31.9

15. People in the company treat me with respect.

89

28.4

Table 5.3.2b: Top 15 QuestionsClassified as 'High Satisfaction'

105a

Chapter 5: Results of TQMFramework Implementation

three lower level needs of Maslow (1943), namely physical, safety and social needs. Reviews of Herzberg's and Maslow's works are found in Sections 6.5.2 and 6.5.4. The top ten questions classified as `Dissatisfaction' are listed in Table 5.3.2c. Again, these are mostly Herzberg's hygiene factors. The issue with the most dissatisfied issue is for The is lack the the good work. next of reward and recognition employees lack of training. Both these very clearly indicate that employees want to positively job high levels by the to of satisfaction. so-doing will attain and company contribute The surprising revelation to management was that the level of pay was not the greatest between had dissatisfaction This they the gulf predicted. reveals as source of management's perception of employees and the true aspirations of employees. Management must change their mindset to acknowledge that employees want to contribute to the successof the company and want the opportunity to achieve this.

Implementing TQM's organisational culture change with its open positive style of lead teamwork management, and employeeparticipation will motivate employeesand to the continuousimprovementof product and servicequality. The solution is to remove dissatisfactionso that employeescan meet the higher level needsof esteemand selfrealisationthrough participation in a companywith an open, flexible, supportive and cooperativestyle of management.

106

Chapter 5: Results of TQMFramework Implementation

Number of

Percentage

Employees

of Employees

254

81.2

2. Company provides adequate training.

200

63.9

3. Everyone is working to their full ability and capability.

196

62.6

4. Managementis competentin doing its job.

164

52.4

5. My salary increaseis basedon how well I do my job.

148

47.3

6. I receivefeedbackon my performance.

121

38.7

7. Companybenefitsare fair and competitive.

121

38.7

8. There is good team spirit and co-operation in the company.

94

30.0

9. I am paid a fair and competitive salary.

93

29.7

10.Thereare promotion opportunities.

92

29.4

Questions

1. There is enough reward and recognition for doing good work.

Table 5.3.2c: Top 10 Questions Classified as `Dissatisfaction'

5.4 Overview of Survey Results The results of the customer and employee surveys showed the companies the areas in improvement. improvements All to product six companies need make needing delivery better Delivery and service received a quality, although product quality rating. and service were very poorly rated with numerous customer complaints. Three have from them. customers who companies would not re-purchase All the companiesneedto motivate their employeeswho want and require training to do more challengingand satisfying work, as well as recognition for doing good work.

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Chapter 5: Results of TQM Framework Implementation

These companies need to change their traditional management style to the open, coits TQM teamwork, on emphasis with style of management supportive operative and have improvement. They they vast must recognise problem solving and continuous be the to in that their given their want employees employees, and untapped resources opportunity to contribute actively to the company's success.

The surveyresultsyielded a long list of problemsrequiring urgent attention,confirming that the companiesmade the right decision to implement TQM. Theseresults and the development for the the of a cost effective urgent need responseof managementsupport framework which consists of the customer and employee surveys, and facilitator and employee training.

5.5 Facilitator Training Upon completion of the prerequisite customer and employee surveys, the companies Manager facilitator by Training Quality the training commenced which was conducted Sheffield Limited. Avesta of 5.5.1Background An integral part of the TQM Framework is Facilitator Training. Facilitators are the TQM championsof the company. The facilitator training enables them to provide training for their fellow employeesin the principles, tools and techniquesof TQM. It is important for facilitators to guide and sustainthe TQM initiative although the ultimate for implementation the successful responsibility of TQM restswith management. The method of selecting facilitators is left to the discretion of the company. It is preferablefor one facilitator to be selectedfrom each level of the company so that no feel will group underrepresented.Facilitators must have the respectof fellow workers be and able to leadby example. Most of the companies selected facilitators by short-listing staff who possessed interpersonaland communication skills and were committed to quality improvement. The short-listedemployeeswere not forced into becoming facilitators. They were told the scope of responsibilities and the level of involvement and given the final say 108

Chapter 5: Resultsof TQM FrameworkImplementation

concerning their participation through total commitment

because successful implementation

that TQM is the only way forward.

and the conviction

have is to an unwilling worse scenario

can only be attained

facilitator

as it can effectively

The

halt or jeopardise

the successof the initiative. Some companies used a volunteer system in their facilitator selection. Although it did is this method an overwhelming response whereupon not occur, a possible setback with demotivating have be down. This have turned to effect on the unsuccessful can a people for A into bring the rejection. volunteer system will question reasons volunteer and will As issue the the previously and qualifications of volunteers. suitability of also raise interpersonal it is for facilitators to possess and communication skills vital mentioned, fellow have to the employees. respect of and

Avesta Sheffield Limited, having acceptedthe role of the Uncle, offered to conduct the Facilitator Training sessionsin their own purpose built Training Centre. The Training Centre was built to meet their training needswhen Avesta was itself undergoing the its implementation. but TQM facilitator Avesta training of own process used manual it adapted to caterto the needsof SMEs. The training was scheduled for three half-day sessionsand conducted during office hours to show the commitment of managementto the TQM initiative. A dinner was planned to mark the end of the training. The cost of the dinner was borne by the respectivecompaniesas a further indication of managementcommitment. The Director or ManagingDirector responsiblefor the TQM initiative was required to attendthe first facilitators to the support session and to familiarise himself with the training techniques and topics to be covered.He was also required to be presenton the last day to address issues any raised by his facilitators during the training. The dinner was in a restaurant agreeableto all. This consensuswas reachedon the first day of training and provided a goodexamplefor participantsof how to reachcollective agreement. Three Facilitator Training courseswere conducted. The training was conducted on a "least formal interactive discussion style" (Oakland and Waterworth, 1995) to encourageactive participation from trainees. The reasons for not conducting one training course for all six companies were, firstly, owing to individual company 109

Chapter 5: Results of TQMFramework Implementation

it it time, the the to and, secondly, same surveys at schedules was not possible conduct is more effective to conduct the training with smaller groups of facilitators. As To did 20. (1993), by Oakland trainees the not exceed number of recommended elaborate the first reason, as the companies completed their customer and employee facilitators for important by it training the to maintain momentum sending surveys, was in fellow It they turn train that their was so could employees. soon as possible as essentially a case of striking while the iron was hot, and not letting employees become `flavour the as of the month'. of what many perceived sceptical

The first training courseheld in February 1994 was attendedby four facilitators from Triten International Limited and two facilitators from Allform Tools Limited. The held in April 1994 was attended by four facilitators from Cintride second course Limited, four facilitators from Street CranexpressLimited and six from the Machinery Division (MME) of Edward Pryor and Son Limited. The final course was held in August 1994with five facilitators from the ConsumablesDivision of Edward Pryor and SonLimited and sevenfacilitators from The StandardPiston Ring CompanyLimited. All the training courseswere similarly structuredand all usedthe sametraining manual. The following are the areascoveredduring the training course: What is Total Quality (TQ)? CustomerFirst, Quality First. Managingfor TQ.

Teamworkfor TQ. Putting TQ into practice. Peoplemake quality. Overcomingbarriersto implementation. Making TQ stick. Detailsof the Facilitator Training are found in Appendix F. 5.5.2 Evaluation of Facilitator Training The facilitators found the training very useful as many did not have in-depth and formal knowledgeof the principles and conceptsof TQ. The facilitators knew that to remain successfuland competitive in today's market, changesto their existing company culture 110

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fellow becoming They that required. were also aware employees were were andsystems increasingly demotivated about their inability to contribute actively becauseof the existing style of management.Hence when the opportunity presented itself, they facilitators become to or accepted the facilitator appointment as their volunteered fmally be improve to to the conditions and environmentat work. able opportunity Trainees were required to give lecturettes. This opportunity to give a presentation was

given positive reviews by the facilitators who then felt much more confident of conductinggood employeetraining coursesin their own companies. Facilitatorsfound the coursematerial very applicable, practical and interesting.In fact, the level of `common sense' and practicality of the concepts and principles left facilitators feeling confident this initiative to implement TQM would be well received by their colleagues.The absenceof complex methods and terminology was a positive feature.

Facilitators were motivated by management'scommitment to hold the course during office hours. They felt the three sessionswere adequatefor familiarisation with the materials,and that the size of the group gave everyonethe opportunity to practisetheir presentationskills. There was however disappointment with the video by American quality guru Tom Peters.Although the video `What is Total Quality' contains good concepts,principles and practical advice, the general feedback from facilitators immediately after the viewing was they had actually stoppedlistening about a third into the video. The reason was unanimouslyagreedupon by facilitators. They had found the video too `American' for them and did not appreciatehis "shouting" and almost "showman" performance. They agreedthat this video would not be used in their employeetraining. This cultural differencewas mentionedby Mortimer-Lee and Casbourne(1991) who reported TQM as being "too American to go down well with the people here". This incident is in line feedback the author receivedduring interviews - that TQM is an American flavour with of the month, merely another transatlantic import destinedto die a natural death, and that TQM is just a money making packagedreamtup by American consultancyfirms.

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The Facilitator Training was very well received by the facilitators who especially appreciated the worksheets and exercises.

5.6 Employee Training 5.6.1 Background

Having completedthe facilitator training course,facilitators were ready and competent to conduct their own employee training. The training is based on Avesta Sheffield's TQM SMEs. training that the to employee manual was adapted own suit needsof Employee training was conducted only by the MME and ConsumablesDivisions of Edward Pryor and Son Limited. Unfortunately the other five companies that participatedin the facilitator training did not proceedwith employeetraining. Allform Tools Limited was at the time undergoing a take-over so there was a changein management.Also, the managementcontact in Triten International Limited left the company which effectively marked the end of the company's commitment to the implementationof TQM. For the remaining three companies, the disappointing responseboiled down to one factor - ManagementCommitment, or rather, the lack of it. Managementwas not ready to deal with the `revolution' they knew they would encounter if their employeeswere empowered.They did not see the need for empowered and motivated employees. Another reason was the consideration of time and financial resources. Having committedto facilitator training, managementwas not preparedto "lose" more money and time sending all employeesfor training. Managementthus chose to halt the TQ initiative at Facilitator Training. Edward Pryor & Son Ltd. named their TQM initiative `In Pursuit of Excellence' (IPEX). The same employee training approach was used by facilitators from both Divisions.

It was decidedby the managementteam that the Employee Training course would be conductedover two consecutivedays as recommendedin the Employee Manual, with 112

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for Attendance fourteen training the between having to twelve employees. eachcourse was voluntary. The training was conducted off-site during office hours at the University of Sheffield for inconvenience the from is the no ten company, ensuring minute walk a which this to the them of success commitment management's showing participants and initiative. Participants were paid their full wages for the two days of training and were for fully lunches In paid were addition, all refreshments and not required to attend work. by the company. The course began at 9am and ended punctually at 4pm on both days.

Eachgroup had a mix of staff from various levels and departments.This was to improve the level of communicationsand knowledge of other functions within the respective Divisions, which were shown as weaknessesin the survey results. Both MD's were Adopter's for their respective Employee Training sessions.Each training coursewas conductedby two facilitators. The companyconductedthe training off-site to eliminate interruptionsthat might otherwise have arisen such as a participant being called to attendto somethingsimply becausehe was on site. Furthermore,as the training was conducted division-wide, workers attending the training had their work have did by their to worry about returning to two that they not covered colleaguesso days' backlog of work. The programover the two daysand the topics coveredare found in Appendix G. 5.6.2 Evaluation of Employee Training The author attendedtwo training sessionsas an observer.The atmosphereon the first initially morningswere strainedas employeesfound themselvesamongstpeople whom they had only seenbut did not personallyknow, and they were also apprehensiveabout the natureof the training. However as the morning progressed,the participants became involved more and enthusiastic. This was largely due to the informal nature of the training session.The exercisesfrom the Training Manual also servedto `break the ice' as it requiredteamwork.

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The facilitators developed a feedback form for participants to complete at the end of the day. Employees day 1 to the two training were asked rate on a of second scale (worthless) to 10 (excellent, of great value). The feedback was to enable facilitators to improve the training sessionsand to address weaknessesbefore the next training course.

Participants on the whole rated the training and materials very highly. The average rating was 8.5 of 10 for both Divisions. Comments showed they found the training course very interesting and did not feel much improvement was needed. In fact, intensive training sessions to be scheduled in the future. Even participants wanted more those who started the course unsure about what they stood to gain found the training exceeded their expectations. Conducting the training over two working days was a surprise for employees who never imagined it would have happened as it cost the company two `lost' days of wages per participant. The fact that management was paying for the refreshments and lunches was yet another surprise to participants.

The main scepticismamongemployeeswas what managementwould actually do about the issues raised, whether they would take any action. Participants felt that if managementfollowed up on the suggestions,the two days would have beenwell worth the effort. Otherwise,it was a wasteof everyone'stime and effort. 5.6.3 Outcome of Employee Training Upon completion of the employeetraining coursesmanagementfulfilled their promise of meeting with employees. Management reiterated their support for IPEX and discussedthe issuesraised by employees,resulting in the short-listing of improvement projects. The MME Division having conductedits employeetraining first naturally embarkedon the projects earlier. The training course was attended by 89% of MME employees which is a very high percentageconsidering it was on a voluntary basis. The results of the improvementprojects were very encouragingand a second wave of projects was soonunderwaywith more employeesjoining improvementteams.The motivation level among employeesincreasedas they found they were able to actively participate in improving their work.

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A disadvantage of not conducting the TQ initiative on a company-wide basis was the demotivation among staff from the Consumables Division. They felt left out as they

watchedtheir colleaguesin the MME Division begin the improvementprocess. The Consumables Division had a lower attendance for the training course because one section did not want to participate. These were workers in their 40s and 50s who felt they were poorly regarded in the company. The MD considered the possibility of making attendance compulsory but decided against it as it might introduce `disruptive into the sessions.Moreover, the MME Division had conducted its training on elements' a voluntary basis. The final attendance was 80% for the Consumables Division's employee training. This figure was very encouraging as the section that had intended to boycott the training made up 40% of the Division. The initial plan for six training courses had to be increased to seven midway through the training program as previously unconvinced employees wanted to join in.

An example of management's response to employee feedback about the lack of communicationwas the introduction of three notice boards displaying details of sales activities, customer feedback and new businessopportunities. The TQ initiative also in resulted joint improvement projects between the two Divisions which otherwise would not havehappened. Unfortunately, the departure of the MD who spearheadedTQM brought the IPEX initiative of both Divisions to an abrupt end, resulting in employeesbecoming more demotivatedthan before. The effect of organisation change on TQM was reported by Bunneyand Dale (1996). They confirmed their hypothesisthat the changein leadership would seethe halt or backslideof improvementprocesses.In their work, they also cited Juran'stheory about the difficulty of maintaining the momentum of any improvement initiative after the departureof the original motivators. Despite having tasted the fruits of success,managementreverted to its old style of managementand employeeswere left without a voice again. Management are aware that employeesare more demotivatedthan before the initiative but have at present no intentionto restartthe initiative.

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5.7 Conclusion The Framework is an effective low cost approach to helping SMEs implement TQM as Edward by MME Consumables Divisions Pryor the the and and of results of evidenced Son Ltd. which also clearly showed that the implementation and sustainability of TQM will happen only with the full support and commitment of senior management. The first because for the the conducting employee survey companies surprised employees time management showed an interest in them. Employees although doubtful about the began. A small training encouraged company-wide outcome were when employee number of employees remained unconvinced but the majority were eager to apply their training. As the sceptics witnessed the changes they too participated. Overall, tremendous improvements were made. This shows companies have rich untapped human resources. The results prove employee commitment can be harnessed through two-way communication and empowerment. Being able to actively contribute and is participate a very strong motivating factor.

The need for TQM is confirmed through the results of the customer and employee surveys.The customer survey results identified common problems of product quality, delivery and services. Half the companieshad customers who would not repurchase from them. The employeesurvey identified the needfor increasedemployeemotivation to improve productivity, efficiency and quality. However, all the companieslost their managementcommitmentalong the route to TQM. A TQM survey of British managersin 1992 (Wilkinson, Redman and Snape, 1993) reportedfirms with fewer than 500 staff were less likely to face a lack of commitment from middle managementwhich is indicated in this research. It was not middle managementbut senior managementwho halted TQM. This was the situation with the other five companieswho terminatedtheir TQM initiative. The positive outlook is that they have all benefited from participation and can restart TQM implementation when they havethe commitmentand resources. Regardless of how well the TQM initiative is organised and of employees' determinationto contribute to its success,TQM will fail without senior management's commitment. The employees had contributed to the progress of the company and achievedgood results but once senior managementpulled out nothing more could be 116

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done. Management from the six companies essentially wanted to cherry-pick. They beneficial they to the company at minimal cost, such as the perceived as wanted what Customer and Employee Surveys, Facilitator Training and the Employee Training Manual. They fail to acknowledge that unless employees are allowed responsibility for their own work, no level of training will lead to improvements in quality, product, service and customer satisfaction.

The results prove that the second hypothesis, that SMEs can be encouraged to implement TQM by a framework of training and mentoring (Uncle Concept), is incorrect.

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Chapter 6: Benchmarking the Route to TQM

Chapter 6: Benchmarking the Route to TQM Hypothesis 3: Management Styles and the Relative Position of a Company

Cladistics be Using Benchmarked TQMcan Route to on

6.1. Introduction

This chapter reviews the development of management,which did not start with the Industrial Revolution but had its beginnings early in the history of man. In addition to These has drink for food, the needs social needs of affiliation. and shelter, man human basic is family, develop the the to which economicand social needscombined benefit. for formed family To tribes their the mutual survival groups or ensure group. Each of these groups or tribes had leaders or lords who were the early managersin feudal society. Other organisationswere formed to serve the needs of man. As these organisationsgrew they needed more complex management.Hence, as civilisations had to evolve too theories emergedand evolved, managementpractices,conceptsand accordingly(Wren, 1979). The major changein managementtheories,principles and conceptsoccurred in the 19th involves "thinking scientifically century with scientific management,which essentially insteadof traditionally or customarily about the processesinvolved in the control of the socialgroupswho co-operatein production and distribution" (Urwick and Brech, 1959). This chapter reviews the major contributions of the managementpioneers up to the War II and concludes with a study of the World modern era which started after managementaspectsof TQM. 6.1.1. Evolution of Management

To understandmodem management,the past needs to be studied to determine how managementhas evolved. Koontz and O'Donnell (1955) defined modem management function the of getting things donethrough others. as The early groups or organisationsformed by man to achieve his collective needswere the family and tribe. Even in these early groups, elementary management was in practise. Over time, these led to the development of the state, the church and the

118

Chapter6: Benchmarking theRouteto TQM Many the sophisticated the of the advanced. most was military which of military, The by to developed notable most the management. applied were military principles delegation of unity and, staff, of authority, the command, of chain principles are in These 1991) that terms & Stearns, management (Aldag used still are are command

today. income, by low economic Pre-industrialised society was characterised per capita little degree low dependence very of specialisation and on agriculture, a stagnation, in in People integration groups predominantly worked of markets. geographical from to in involved the tilling the soil they process whole were agriculture where harvesting. Although technology had been evolving and advancing for thousands of years, a "revolution" occurred in late 18`hcentury England that marked the beginning of a more Revolution before. Industrial The the of than substitution saw ever advance rapid farms from for human the working on movementof people power and machinepower to factories in the towns and cities. This shift in England from a pre-industrial to an industrial nation was most obvious in 1750 (Deane, 1965). The introductionof JamesWatt's steamengine in 1776 provided cheappower for ships, trains and factories and revolutionised commerceand industry. Steam power reduced in that turn required more machines,workers production costs and expandedmarkets in divided larger task Labour a with each worker specialising scaleproduction. was and to provide a part that would be madeinto a final product. Industrialisedsociety was characterisedby rising or high per capita income, economic labour low dependence high degree and of of specialisation growth, on agriculture, a longer integration (Deane, 1965). Workers were no widespreadgeographical of markets involved in the whole production processbut were just a part of it. The rapid growth of factories presentedmanagementproblems different from those encountered in preindustrial organisations.The statecould operatewithout competition or having to show a profit; the church could organiseand manageits activities becauseof the devotion of the faithful; and the military could control large numbers of troops through a rigid hierarchyof discipline and authority. 119

Chapter 6: Benchmarkingthe Routeto TQM

Managers of factories had to find a different set of principles and techniques to control the workers and make a profit. These became more difficult

as the factories grew

bigger. As the number of factories increased, so was introduced the concept of meeting competition. As people and the environment evolved, management principles, theories had too to evolve to meet the needs and address the associated problems. and concepts

The growth in the workforce madeit increasinglydifficult for one personto overseethe operations.The solution was to employ managersto overseeparts of the production focus being the to direct the workers. Thus begun the factory of management process, systemand capitalism. It was during this time several individuals beganto addressthe issue of management. Two of the best-knowntheorists were Robert Owen (1771-1858) and CharlesBabbage (1792-1871).

6.1.2. Robert Owen (1771-1858) Owen is widely consideredthe father of PersonnelManagement.He was the first to bring attention to the importance of human resources. He recognised that human resourceswere as valuable to the production of goods and services as financial and material resources.He believed that factory workers would be more productive if they were motivatedinsteadof punished. The mid 19thcentury was the period of rugged individualism. Labour was merely a factor of production, a commodity to be bought and sold. Any suggestionof improving the welfare or working conditions was rejected.Employerswere incapableof seeingthe broader and long-term view or of recalling the repeateddogma of Owen, that money invested in the well-being of employeeswould yield a return that no other form of investmentcan equal. Owen (1857) argued that it "would return you, not five, ten, or fifteen percentfor your capital so expanded,but often fifty and in many casesa hundred percent".

Owen (1857) developed his "silent monitor" to motivate workers. A wooden block with

sidespainted black, blue, yellow and white indicating the marks earned by the worker

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be This displayed to to the current sales can compared worker's performance. show was in data used modem management. and production

Owen deploredthe division of labour, in contrastto Babbage.In Owen's ideal system, jobs, from different do one to another. of changing easily a number eachmanwould 6.1.3. Charles Babbage (1792-1871) Babbage was one of the pioneers of the classical school of management. He had propounded the essential principles of the scientific approach to business management long before Taylor (Urwick,

1956). He advocated profit-sharing plans and bonus

labour, between better thus to achieve systems as means relations management and interest in the profitability ensuring workers'

of the factory. Each worker received a

fixed salary based on his work, plus a share in profits and a bonus for "applying any improvements he might discover" (Babbage, 1832). He perceived this combination of profit sharing and bonus for improvements and suggestions to reduce waste as meeting both the interests of workers and employers, benefiting both parties and bringing harmony to the factory.

Babbagewas a firm believer in division of labour. He saw this as the most efficient way. To Babbage(1832), division of labour brought more efficiency because: 1. Of the time required for learning. 2. Of wasteof material in learning. 3. Time is savedfrom not having to changefrom onejob to another. 4. Time is savedfrom not having to changetools. 5. Skills are acquiredthrough frequentrepetition of the sameprocesses. 6. The division of labour also suggeststhe contrivance of tools and machinery to executeits processes. His other contribution was the use of machinery and tools to increaseefficiency, and he foresawthe advantageof a larger factory with more capital investment.

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6.2. Scientific Management

Scientific Management employed scientific methods to improve efficiency in the managementof work and workers in the factories of the Industrial Revolution. It emerged primarily among American scholars and managers and changed the way in factories. (1959) described Urwick Brech tasks their the and workers performed scientific managementas "thinking scientifically insteadof traditionally or customarily involved in the the control of the social groups who co-operate in about processes productionand distribution". Scientific managementis regardedas beginning with Taylor. However, the conceptsof division of labour and increasingefficiency in industry had an earlier origin, especially in Great Britain through Charles Babbage who applied the scientific approach to management.By the time Taylor first outlined his principles, Great Britain was already an industrial country. The Industrial Revolution which beganin Great Britain in 1750 createda new cultural environmentthrough the rapid advancementof technology. It replaced human power with machinesand changedthe feudal system and mercantile economy to a market economy.The heart of the Industrial Revolution was the invention of the steamengine which turned mills for grinding grain, replaced water power for cotton mills and operated the bellows for iron works. These factories needed to be organised and managed.As the factories grew managerswere employed to supervise, control and ensurethe proper utilisation of resources and to increase profits. Managers learned through experienceas there was no formal training. JamesMontgomery of Glasgow advisedmanagersin a managementpaper in 1832to "always (be) on the alert to prevent rather than check faults after they have taken place". Montgomery was so well respectedthat he was brought to be superintendentof York Mills, Maine, USA. He found that America had higher production costs,paid higher wagesbut paid less for raw materials.Great Britain was the completeopposite in thesethree aspectsbut had higher efficiency as the factorieswere better managed(Montgomery, 1840). After the Civil war in the United Statesthere was considerable study of managerial methodsas a meansto raising productivity and coping with the growing organisational scale and technological complexity. Discussion centred particularly on modes of 122

Chapter 6: Benchmarkingthe Routeto TQM

organisational control and structure, executive recruitment and training, new costing techniques and incentive wage payments. These developments and the socio-industrial

formed them the backcloth to scientific management. changeswhich stimulated The impetus for scientific management was the great need for skilled labour and increase to skills management efficiency. Scientific management brought together in knowledge in the form of a complete system, based on advances existing managerial a powerful philosophy of the "mental revolution" in industry, which sought to fuse management and labour's interest for mutual benefit and to reduce friction between labour and management.

Scientific management analysed human as well as mechanical jobs to increase efficiency, productivity and the skill and wages of workers. America pioneered this largely due to its acute shortageof skilled labour. It was not until the 1890s movement that the techniquewas seriouslydeveloped,and not until the early 1900sthat it reached maturity in Henry Ford's motor works. Under the impact of Taylor scientific became both a programmeand a reality in the 1880s. management Other prominent contributors to scientific managementwere Frank Bunker Gilbreth, Lillian Gilbreth, and Henry LaurenceGantt. 6.2.1. Frederick W. Taylor (1856-1915) Taylor passed the Harvard law exams but his poor health forced him into an apprenticeshipwith a machine shop in Philadelphia. He completed his four year apprenticeshipin 1878 and moved to Midvale Steel in Philadelphia that same year to work as a labourer. He quickly rose through the ranks to becomechief engineer in six years (Copley, 1923). Midvale Steel had implemented a piecework incentive system that Taylor, basedon his experience,knew was not effective. Contrary to management's believethat this systemwould motivate workers, the workers were only working at one third their capability and were soldiering to protect their own interestsand that of fellow workers. Taylor blamed managementfor the soldiering problems, not the workers. He deemedit management'sresponsibility to designjobs and offer the right incentives to stop soldiering.

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Instruction Card Clerk

Order of Work Route Clerk

Time and Cost Clerk

Disciplinarian

I

PLANNING

PERFORMANCE

Gang Boss

III

SpeedBoss

Repair Boss

Inspector

Individual Workman

t_

Figure 6.2.1: Taylor's Functional Foremen (Source:Wren, 1979)

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Taylor used time study to find the right way to perform a job. "Time study as its name implies, involves a careful study of the time in which work ought to be done rather than the time in which work was actually done" (Copley, 1923). Each job was broken into its basic steps. Useless steps were rejected and the fastest time for each step was determined by timing the most skilled workman. A percentage was added for delays, for for the another percentage newness of and another rest. work unavoidable This became the piece-rate system, scientifically

determined by the planning

department. The piece-rate was set at the pace of "first-class man" which Taylor defined for is keep long his health. "can injury It term to up a of years without as a worker who a pace under which men became happier and thrived" (Taylor, 1903). A differential developed was consisting piece-rate

of

the

piece-rate

incentive and an

as

for greater efforts. In addition, payment was not based on position but encouragement on the individual worker in an effort to overcome soldiering. Taylor's objective was to improve workers and motivate them.

Taylor (1903) statedeachworkman should be given as far as possiblethe highest grade of work for which his ability and physique fit him, and should be called upon to turn out the maximum amountof work that a first-class man of his class can do and thrive, and when he works at the best pace of a first-class man, he should be paid from 30% to 100%accordingto the natureof the work he does,beyondthe averageof his class. Taylor stressedthe responsibility of managementto selectthe "first-class man" for the task that best suitedhim and to designthe work systemto obtain maximum productivity instead of depending on incentives. He separated work planning from work performanceand developedthe "functional foremen" shown in Figure 6.2.1 to carry out the planning and preparationof work instructions, work flow and time recording. The worker performed the task under the supervision of a "gang boss" and "speed boss". Therewas also a "repair boss" and "inspector" responsiblefor quality. This conceptwas acceptedby workers but not bossesas it reducedtheir authority and responsibilities. The authority of the factory manageror generalmanagerwas decentralised.He was to leave the running of the factory to the specialists,and would only be informed about "exceptions". This "exception principle" was another of Taylor's contributions to management.His believe was managementshould receive only summarisedreports of 124

Chapter6: Benehmarking theRouteto TQM free him This bad to would exceptions. exceptions past averagesor standards, especially to formulate policies and to study the character and fitness of the workers. To Taylor (1911) the principle objective of management was to ensure maximum "prosperity" for both his employers and workers, and that inefficiency

be overcome with could

"systematic management".

Taylor's call for a "mental revolution" to successfullyimplement scientific management has its counterpartin the `cultural change' neededfor successfulTQM implementation. Taylor (1912) was convinced the essenceof scientific managementinvolved the total it in both For workers and management. workers was relation to mental revolution of their duties toward work, their fellowmen, and their employers,whilst for management it was in relation to their duty towards their fellow managers,their workmen, and daily problems.The aim of the mental revolution was to make both workers and management work togetherto increaseprofits insteadof fighting over existing profits. Scientific managementwas more acceptedby workers than managementwho opposed decentralisationof their authority. The strongest antagonistswere the Union leaders who opposedthe co-operationbetween managementand labour required by scientific management.However, scientific managementwas brought into disreputeby managers who abusedtime study. They increasedworker fatigue and reducedworkers to robots, while at the sametime exploiting the incentive system. Although there were many criticisms of scientific management,many of the theories and principles were well accepted.The obvious criticism was the lack of emphasison the social aspect of people (Farquhar, 1924). Scientific management increased efficiency and production but failed to humanisethe work place although Taylor did not forget about worker motivation. He proposed a scientific investigation to study the motives which influence men (Taylor, 1911). This investigation was conducted by psychologistsof the Human Relations school, starting with the Hawthorne Study. It is assumedTaylor did not have the training and experienceto investigate and formulate humanmotivation theories.More importantly the overwhelming emphasison efficiency and the searchfor the `one best way' for the factory culture would not have accepted any motivation theory other than that of money. This provides further evidenceof how managementwas influenced by the environmentand evolved with it. 125

Chapter 6: Benehmarkingthe Routeto TQM

6.2.2. Henry L. Gantt (1861-1919) Gantt was a teacher of natural science and mechanics who became a mechanical in department in joined Steel 1887 Midvale He the engineering as an assistant engineer. interest in Taylor. They the application of science to shared a mutual and worked with investigations in for his Gantt the efficient use of used scientific search management. labour and "harmonious co-operation" (Gantt, 1916) between labour and management. Gantt modified Taylor's differential piece-rate to give an additional variable bonus as job less. This incentive in time the the to who completed allowed or an workers departure from Taylor's differential piece-rate came about because of Gantt's awareness of the human aspects of work.

Another changeintroduced by Gantt was the payment of a bonus to the foreman for his his if bonus An the each of worker's who met standard. additional was given all in workers succeeded meeting the standard. These bonuseswere incentives for the foreman to teach and train his workers. Gantt (1916) believed the past method of forcing people to work must give way to teaching and leadership, and that this will benefit both the worker and the foreman. Gantt sought greater harmony in the workplace. Gantt's lasting contribution to managementis the concept of using charts to measure workers' progress.The successof this expandedthe use of horizontal bar chartsto other areas such as production balance, cost control, and quantity of work. He finally expandedthis bar chart to plan and control work. The Gantt chart is one of the tools of TQM for work schedulingand control. 6.2.3. Frank B. Gilbreth (1868-1924)and Lillian M. Gilbreth (1878-1972) Frank Gilbreth started as an apprentice bricklayer in Boston, USA, at the age of seventeenand becamechief superintendentten years' later. She studied English and psychologyat the University of California. As a bricklayer apprentice, Gilbreth noticed the many different methods and speeds used by bricklayers and set out to develop the best way that would lower costs and pay higher wages to workers. This was the start of his motion study, his "quest for the one best way" (Gilbreth, 1924). He improved methods and eliminated unnecessary body 126

Chapter 6: Benchmarkingthe Routeto TQM

increasing by by improve being his to reducing effort, not productivity movements, aim be brick laying His that can reduced and workers can motions analysis was speed. increaseproductivity with no extra effort. In 1907 Gilbreth met Taylor. Each continued with his own analysis, Taylor with time include the However, Gilbreth to Gilbreth started study. motion with and study dimension of time in his motion study. Frank worked with his wife Lillian on the study

between differentiated Study" (1916) book "Fatigue fatigue. In they their of work fatigue fatigue of work. associatedwith unnecessarywork and necessary unnecessary They proposedthe elimination of unnecessaryfatigue and minimising work fatigue through rest periods. Lillian Gilbreth published "Psychology of Management" (1914) individual fully develop how the the potential of managementcould which emphasised throughtraining andjob rotation to boost morale.

6.3. Administrative Management The focus of Administrative Managementis organisation structure and management. The earliestBritish writer on this subject was F. Slater Lewis who wrote "Commercial Organisationof Factories" (1896). This was before the scientific managementpioneers who appliedscientific methodsto developtheoriesand principles to define organisation structure and the work of management.The common objective of administrative managementwas to define the most efficient organisation and managementbecause "only through proper organisation could machines, materials, and human efforts be directedto improve efficiency and reducewastage" (Wren, 1979). Prominentwriters in this field were Henri Fayol, Max Weber, ChesterBarnard, James Mooney and Lyndall Urwick. 6.3.1. Henri Fayol (1841-1925) Fayol was an engineerwho rose to the position of managing director of Commentary Coal Mines in France in 1918. His main contribution to managementwas from the executivepoint of view. His writings starting from 1900 were on concepts relating to organisationaladministration.

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'ds1

1. PLANNING Interpret site, functional and departmental objectives to work groups. Assist with the development of work group objectives. Collaborate with work groups to achieve consensusof plans. Support, facilitate and serve the group's planning.

2. LEADING Provide and interpret the vision and elaborate key organisational strategies for work groups. Nurture a positive work environment. Facilitate responsible risk taking.

Be a role model. Provide feedbackandrecognition. 3. ORGANISING Educateand train work groups. Facilitate work group development. Encourageparticipation/crosstraining/flexibility. Managework group boundaries. 4. CONTROLLING Develop and maintain steeringcommitteestructures. Regularly review work group objectivesachievement. Establishand review work group charters. Interpret budgetand other resourceconstraints.

gf.

ýý. .

Table 6.3.1: TQM Management Functions (Source:Smyth, 1991)

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He analysedthe role of managementand defined the five functions of managementas Planning, Organising, Command, Co-ordination and Control. Fayol's five management functions are employed in TQM, as can be seen from Table 6.3.1. The Co-ordination function has been incorporated into the other four functions. The following is a

descriptionof the five functions: (Fayol, 1949) To plan is to examine the future and draw up the plan of action.

To organiseis to build up the material and human structureof the undertaking. To commandmeansmaintaining activity amongpersonnel. To co-ordinatebinds together,unifying and harmonisingall activity and efforts. To control is to ensureeverything conforms to establishedrule and expressed commands. Fayol was concernedwith the lack of managementteaching in schoolsand collegesand the lack of formal management training. Management requires leadership and (1949), Managers, Fayol to the according of management. principles understandingof following: fulfil the must 1.

Havea thoroughknowledgeand understandingof personnel.

2.

Eliminate incompetentpersonnel.

3.

Know the agreementsbinding the businessand its employees.

4.

Leadby being a good example.

5.

Conductperiodic audits of the organisation.

6.

Meet supervisorsregularly to ensurethere is unity of direction and efforts are focused.

7.

Not becomeobsessedwith details.

8.

Ensureunity, energy,initiative and loyalty are prevalent amongpersonnel.

Fayol also proposed14 generalprinciples of administration that he felt would provide managerswith the necessarybuilding blocks to serve as guidelines for managerial activities. His principles emphasiseefficiency, order, stability and fairness. These principles were largely basedon the military regime of authority and command. The principles of unity of command and centralisation conflicted with Taylor's functional foremen.

128

Chapter 6: Benchmarkingthe Routeto TQM

Fayol's 14 Principles for Effective Management are: (Fayol, 1949)

1.

Division of Work

2.

Authority

3.

Discipline

4.

Unity of Command

5.

Unity of Direction

6.

Subordinationof Interests

7.

Remuneration

8.

Centralisation

9.

ScalarChain

10.

Order

11.

Equity

12.

Suitability of Tenure

13.

Initiative

14.

Esprit de Corps

Thesebureaucraticprinciples of managementwere the earliest attemptsto define the largely based They these the were of some on military and were efficient organisation. in conflict with managementpractices. Urwick updated them in his principles of described in Section 6.3.5. management 6.3.2.Max Weber (1864-1920) Weber was a German intellectual and scholar who focused primarily on organisation Industrial Revolution the He the the and saw of experienced social upheaval structure. him led implications for This forms having broad society. of organisationas emerging to studythe relationshipbetweenorganisationsand society. Weber (1947) propounded three types of authority: "legality", "traditional" and "charismatic". Of these only legality, that is, legal authority vested in the position, basis form the of an organisation. should Adhering to a perspectivethat viewed society as becoming increasingly rational in its in activities, order to study this movementtowards "rationality" of organisations,Weber

129

Chapter 6: Benehmarking the Route to TQM

ideal in its impersonal form. The efficient organisation an most rational and constructed ideal Weber's organisation are: structural elements of

1.

The division of labour, where authority and responsibility are clearly defined for

2.

eachmemberand legitimisedas official duties. The positions will be organisedin a hierarchy of authority resting in a chain of commandor the scalarprinciple.

3.

All employees are to be selected based on technical qualifications determined

through formal examinationsor by virtue of training or education. 4.

Managersare appointed,not elected,unlesselection is mandatory.

5.

Administratorshave fixed salariesand were careerofficials.

6.

The administratordoesnot own the unit he administers.

7.

The administratorwill be subject to strict rules, discipline, and controls when conducting official duties, though these rules and controls will be impersonal anduniformly applied in all cases.

Weber'sbureaucraticorganisationbasedon rational legal authority rather than tradition or charismawas widely followed by American organisation theorists from 1940 as organisationsgrew larger and more complex. Bureaucracy is not well received in modernmanagementnot only becauseof its red tape and resulting inefficiency, but it is not appropriateto the modernconceptof a flexible, flat organisation.However, many of theseprinciples are widely practised,especiallythe types of authority. 6.3.3. Chester Barnard (1886-1961) Barnardwas a manager,executive and president of New JerseyBell Telephone,USA, with a keen interestin organisationalwork. He defined the organisationas "a systemof consciouslyco-ordinatedactivities or forces of two or more persons" (Barnard, 1938) and saw the organisation as a co-operative system of individuals embodying three essentialelements: 1.

Willingness to co-operate.

2.

A common purpose.

3.

Communication.

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Chapter 6: Benchmarkingthe Routeto TQM

constructedan idealefficient organisationin its most rational and impersonalform The structuralelementsof Weber's ideal organisationare: 1.

The division of labour, where authority and responsibility are clearly defined for

2.

eachmemberand legitimisedas official duties. The positionswill be organisedin a hierarchy of authority resting in a chain of command or the scalar principle.

3.

All employeesare to be selectedbasedon technical qualifications determined throughformal examinationsor by virtue of training or education.

4.

Managersare appointed,not elected,unlesselection is mandatory.

5.

Administratorshave fixed salariesand were careerofficials.

6.

The administratordoesnot own the unit he administers.

7.

The administratorwill be subject to strict rules, discipline, and controls when conductingofficial duties, though these rules and controls will be impersonal anduniformly applied in all cases.

Weber'sbureaucraticorganisationbasedon rational legal authority rather than tradition or charismawas widely followed by American organisation theorists from 1940 as organisationsgrew larger and more complex. Bureaucracy is not well received in modernmanagementnot only becauseof its red tape and resulting inefficiency, but it is not appropriateto the modem conceptof a flexible, flat organisation.However, many of theseprinciplesare widely practised,especiallythe types of authority. 6.3.3. Chester Barnard (1886-1961) Barnardwas a manager,executive and president of New JerseyBell Telephone,USA, with a keen interestin organisationalwork. He defined the organisationas "a systemof consciouslyco-ordinatedactivities or forces of two or more persons" (Barnard, 1938) and saw the organisation as a co-operative system of individuals embodying three essentialelements: 1.

Willingnessto co-operate.

2.

A commonpurpose.

3.

Communication.

130

Chapter6: Benchmarking theRouteto TQM According to Barnard, the absence of any of the three will lead to the disintegration of

the organisation.The organisationmust be efficient in satisfying individual and group needsto achieveorganisationgoals. Barnard defined executive work as the specialised work of maintaining the operations in an organisation through a system of co-operative effort, and not the managing of a important He for giving people information to saw communication as group of people. decide the balance between organisation incentives and personal efforts, as well as an important means to communicate authority.

Like Weber,Barnardviewed authority as an important processwithin the organisation. Whilst Follett postulatedthe Law of the Situation relating to authority (Section 6.4.1), Barnardbelievedthat the sourceof authority doesnot lie with the personwho gives the ordersbut with the subordinateswho could chooseto either accept or reject directives from their superiors. He maintained that people would accept authority when four conditionsare satisfied: 1.

They understandthe communicateddirective.

2.

They believethe directive is consistentwith the purposeof the organisation.

3.

They believethe directive is compatiblewith their own interests. They are mentally and physically able to comply with the directive.

4.

This view of authority hasbecomeknown asthe AcceptanceTheory of Authority. Barnard incorporated the human element and communications into the organisation based structure on his executiveexperienceat New JerseyBell Telephone.His ideasare still relevantand are appliedto modem management. 6.3.4.JamesMooney (1884-1957) Mooney, a mining engineer,joined GeneralMotors, USA, in 1920 and rose through the head its Export Corporation. He left General Motors in 1942 to head the US to ranks Navy Bureau of Aeronautics, and was president and chairman of Willys Overland Motors after the war. Mooney in 1947revised the book "Onward Industry" which he co-wrote with Alan C. Reiley (1869-1947), an historian turned executive. The book was retitled "The 131

Chapter 6: Benchmarking the Route to TQM

Principles of Organisation" and became an important part of classical management thought compatible with Fayol and Weber. Mooney and Riley (1931) defined the form human for "the the attainment of a common every as of association organisation developed They the principles of organisation efficiency, and explained the purpose". relationship between organisation and management using the analogy of body and is "Management the vital spark which actuates, directs, and controls the plans and mind: procedures of organisation. With management enters the personal factor, without which body be living being could no a with any direction toward a given purpose. The relation of management to organisation is analogous to the relation of the psychic complex to the physical body. Our bodies are simply the means and the instrument through which the psychic force moves toward the attainment of its aims and desires".

Mooney (1947) developed three principles of organisation. The first and primary is principle Co-ordination,which is the organisationof group effort to ensurethe unity of action in the pursuit of a common goal. The secondprinciple is the Scalar Principle, which concernsthe degreeof authority and its correspondingresponsibility. The third is principle the Functional Principle, which distinguishes between different kinds of duties.Each of theseprinciples has its own principle, processand effect to explain the objectives of organisation, leadership, delegation of authority, responsibilities and functionalactivities for the efficient operationof the organisation. The primary concern of Mooney and Reiley was the structure and design of an organisation.Although they did not give high priority to the human aspect of the organisation,it was included in their analyses. Although Mooney and Reiley's principles are similar to Weber's bureaucratic organisation,they madeno referenceto Weber. It can be assumedthat they developed their principles independentlyand had no accessto Weber's work which had not been translatedat that time (Wren, 1979). 6.3.5.Lyndall F. Urwick (1891-1983) LieutenantColonel Lyndall Urwick servedthe British Army and governmentin the first and secondWorld Wars. He was organising secretaryat Rowntree and Company from 1920till 1928,then director of the International ManagementInstitute in Geneva from 132

Chapter 6: Benchmarkingthe Routeto TQM

1928 till 1933, and chairman of his management consultancy company Urwick, On and Partners in London until his retirement.

Urwick wrote extensively on various aspects of organisations. His most important work Elements Administration" "The of was

(1944) which integrated the works of Fayol,

Mooney and Taylor into Classical Management theory. He identified eight principles applicable to all organisations: (Urwick, 1938)

1.

Principle of the Objective All organisationsshouldhave a purpose.

2.

Principle of Correspondence

Authority and responsibility must be equal. 3.

Principle of Responsibility Responsibilityof higher authority for the work of subordinatesis absolute.

4.

Scalar Principle

Chain of Commandfrom top to bottom. 5.

Principle of Spanof Control Supervisorscannotdirectly supervisemore than five or six subordinates.

6.

Principle of Specialisation Limiting a person'swork to one function.

7.

Principle of Co-ordination Relationof resourcesto activities.

8.

Principle of Definition Clear descriptionof duty.

133

,,.

Scientific Investigation

Plans

Forecasting

Operations

..:.

Figure 6.3.5a: The Fundamental Principle - Process - Effect of Management: The First Level of Analysis

(Source:Donnelly, Gibson and Ivancevich, 1971)

Appropriateness ýj Resources of

Scientific ýJ Investigation ý'I

Forecasting

Organisation

Plans

Operations

Order

Figure 6.3.5b: Identification

Co-ordination

Command LJ

Control

Co-ordination of and Control: The Second Level oft

Analysis

(Source:Donnelly, Gibsonand Ivancevich, 1971)

133a

Chapter 6: Benehmarkingthe Routeto TQM

Urwick used Mooney's approach to develop a framework to describe the whole in Figure 6.3.5a. first level described The the as shown process of analysis managerial basic principle of management as scientific investigation. This investigation of facts is necessaryto enable the organisation to forecast and subsequently plan their operations.

The next level of analysisis co-ordination, as shown in Figure 6.3.5b. Forecastingcan only be successfulwith proper allocation of human and material resourcesthrough coordination,resulting in a structureof tasks and authority that excludesthe human factor. However,this absenceof the humanfactor is resolvedin the control function. The final level of analysis is control which is achieved through order and command, resulting in commitment by employees to the goals of the company. He proposed resolving conflicts through employing competentmanagers.This in turn would lead to esprit de corps in the organisation. Selection was important to ensure that staff employedhad a senseof initiative. Urwick recognisedthat financial rewards alone did not necessarilymotivate and proposed non-fmancial incentives as well. Finally, he proposedthat equity would result in staff stability through the inclusion of discipline. Similar to Fayol, Urwick recognised the importance of staff stability in successful organisations. Urwick applied Mooney's "principles, processand effect" to Fayol's 14 principles and found a correlation of these principles though they were developed independently.He continued to search for a general theory of administration. He developed 29 major principles and many sub-principlesthrough integrating his ideas with those of Fayol, Mooneyand Reiley, Taylor and Follett. Gulick and Urwick (1937) developeda seriesof papersto showthe divergencesin managementthought in the classicalperiod. Urwick's principles of managementupdated Fayol's 14 principles of management basedon the military and are widely accepted,except for the controversy regarding the principle of `span of control' that states a supervisor can supervise at most six subordinates(Thomas,1993).

134

Chapter 6: Benchmarkingthe Routeto TQM

6.4. Human Relations

The human relations approach was popular from 1930 to early 1950. However Owen had in 1828 already propounded a human relations philosophy, observing the human factor and its influence on productivity. Mary Parker Follett, a forerunner of the human Other individualism theory. Taylor's group with views of relations approach replaced human by the that relations school were changed or modified classical principles include division of labour, scalar principle, specialisation principle and organisation theories on structure and span of control. Division of labour which had caused work by isolation the the was replaced criticism received most and which monotony and concept of group synergy.

The humanrelationsapproachfocusedits attention on the effects of work groupson the individual, in contrast to the classical writers and scholars who concentratedon the does invalidate This the work of the concept not physical and economicenvironment. for but it. Technical enough skills alone are not expands on classical movement individuals have to the needs of who also satisfy social and groups at work. managers Thereare many critics of this concept.Among them was Drucker (1955) who felt it did not take into considerationthe dimensionof economics. A more accepteddefinition of human relations which took into account the economic and psychologicalaspectsis "the integration of people into a work situation in a way that motivatesthem to work together productively, co-operatively and with economic, psychologicaland social satisfaction" (Davis, 1957). The key contributors to the human relations approach were Mary Parker Follett and Elton Mayo.

6.4.1.Mary Parker Follett (1868-1933) Follett, born in Boston, USA, was trained in philosophy and political scienceand was interestedin the emergingstudy of social psychology. She was a political scientist and businessphilosopherfrom the scientific managementera but her philosophy placed her in the humanrelationsera (Dainte, 1964).

135

Chapter 6: Benchmarkingthe Routeto TQM

Her book "The New State" (1918) contained innovative ideas on the importance of the

found is "true the in through that group or only man" maintaining group organisation, life. by individual the are only released group organisation,that the real potentialsof Her next book "Creative Experience" (1924) expanded her "group" philosophy into "integration". The organisation is more than a co-operative system and through group interactions, the organisation is more than the sum of its parts. She hypothesised four iii) ii) i) victory of one side, submission of one side, ways of resolving conflicts: it because integration integration. four, iv) Of the was advocated only compromise, and force both the or use of sides without reduced conflict and sought a solution satisfying force because first The two or power was used to ways were not accepted compromise. dominate. Compromise was also not accepted because "truth does not lie `between' the two sides".

Follett applied integration to the solution of other organisation and businessproblems. She was against bargaining as it was based on the balance of power and ultimately in lose Bargaining the compromise. was also not recommendedas resulted parties may joint their responsibility for the business. Her solution was collective sight of be for because the common good of the then responsibility working everyone would in Metcalfe feel Urwick (1940) that they are organisation. and write when employees some sensepartners in the business,will they improve the quality of their work and overcometime and material wastage. Integration required a changein the way authority and power were perceived. Follett depersonalisedauthority and power by developing the conceptof "law of the situation" which statesthat orders should not be given, rather they should be taken from the situation. This will eliminate the situation of someone giving orders and someone receivingthem. Everyoneis equal in law of the situation. Obedienceis to the situation, not to a power or person. The integration concept was applied to other management functions,seekingalwaysto reachdecisionswithout force or domination. Another aspectof Follett's businessphilosophy was the style of leadershipneededfor success.She attributed leadershipnot to power but a reciprocal relationship between managementand worker. Managementhasto make workers realise they are working to 136

Chapter6: Benehmarking theRouteto TQM the be the through of activities collective that attained can only a common purpose them but followers have leaders best with working The and women men not group. (Metcalf and Urwick, 1940). Hence, the leader does not depend on commands and from define but the purposes, and evoke responses on skill to co-ordinate, obedience

1979). (Wren, law the to the situation of workers Follett's concept of group synergy is part of the TQM

principle

of employee

been has for integration her However, resolving conflict concept of participation. TQM ideas, Follett's 1996). Thomas, though feasibility (Fry for its part of and criticised

idealistic then too today, and were not successfullyapplied. considered were philosophy Drucker called her "a prophet of management"(Graham,1995). 6.4.2. George Elton Mayo (1880-1949) Mayo, an Australian, taught logic and philosophy at QueenslandUniversity, Australia, before studying medicine in Edinburgh, Scotland. He also studied psychopathology industrial his He background to the was an associate on research. work which provided industrial University. Harvard researchat professorof Mayo's major contribution resulted from his participation in the Hawthorne Plant Study The Electric Western 25,000 people. purpose of the study was to which employed at determine the effect of illumination on efficiency. Two groups of female workers in located the tasks two rooms telephone same of assembling relays were performing illumination. illumination The the same control group was not changedwhile that with of the test group consistingof six female workers was varied. The researchersobserved both groups and recorded their production. The illumination of the test group was increasedas well as decreased,till it reachedthe intensity of moonlight (Roethlisberger and Dickson, 1939). Regardlessof the intensity of illumination, production increased. This puzzledthe researcherswho concludedthat illumination had little or no effect on productivity. The researchersproceededto study the effects of changesin wages,working conditions, working hours, incentive plans and rest pauses with refreshments. In all cases, increased. Frustratedat the results, the researchers,with the exception productionwas of individual piece rate, reverted to the same working hours and working conditions 137

Chapter 6: Benchmarkingthe Routeto TQM

thinking that this would affect the workers. However, the daily and weekly outputs increase, higher levels to than before (Roethlisberger and Dickson, reaching continued 1939). When rest pausesand refreshments were reinstated, there was another increase in highest to the production output level. During the study, production increased from 2400 relays per week per worker to 3000. The illumination hypothesis was proved wrong. No correlation could be found between wages, working conditions, working hours, and other variables and the output of the workers.

Mayo joined the study after it had started. He explained the Hawthorne Study results due to "a remarkablechangein mental attitude in the group. The most significant were changethat the WesternElectric Company introduced into its test room bore only a casualrelation to the experimental changes.What the Company actually did for the groupwas to reconstructentirely its whole industrial situation" (Mayo, 1933). During the study the researchershad moved the workers from the shop floor to a special test room and assisted in supervision. This changed the usual supervision of the workers. The researchersworked closely with the workers, advised and listened to them, and showed personal interests in them. As a result, the researchershad inadvertentlycreateda better working environment, where the workers involved could discusstheir problemswith the researchersand fellow workers. The Hawthorne study showed the need for new managementskills to handle human relations at work. Technical skills alone were not adequate.Mayo referred to this as "human collaboration" to stressthe importance of the group in the organisation. This was reaffirmed by Roethlisbergerwho statedthat people need to feel important and to be recognisedas doing important work. He emphasisedthat althoughthe amount of pay important, it was not always the primary concern of workers. Issues such was as pay reflecting the importanceof their jobs and their treatment by managementwere more crucial. Workerswant to be an integral part of the company.

138

Chapter 6: Benehmarkingthe Routeto TQM

6.5. Modern Era

Modern era managementstarted from World War II and encompassesManagement Scienceand Behaviour Science. Management Science

ManagementScience is characterisedby the use of mathematical models. It started during World War II in Great Britain, was applied to industrial production after the war it developments in high by that made speed computers and spreadrapidly, assisted in decision to models making processes. use mathematical possible Most managementscienceshavethe following characteristics:(Wagner, 1970) 1.

A primary focus on decisionmaking.

2.

Appraisalsusing economiceffectivenesscriteria - comparing various decisions basedon variablessuchas costs,raw materials,demandand revenue.

3.

Relianceon formal mathematicalmodelsthat are replicable.

4.

Dependenceon the computerbecauseof the complexity of the model or volume data be to of processed.

The mathematical model must accurately reflect the actual system so that it can simulate and react like the real system. This makes mathematical models useful in businessdecision-making(Ackoff and Rivett, 1963). Managementscienceimpacts mainly the planning/forecastingand controlling functions of management.It does not cover the full spectrum of management functions. In it addition, cannotbe usedfor all managementdecisions.ManagementSciencedecision making processescommencedwith OperationsResearchin World War II and includes DecisionTheory, SystemsTheory and ContingencyTheory. Behaviour Science Behaviour Scienceapproachto managementbecamepopular in the early 1950s.It is a move away from humanrelations to humanresourcemanagement.Behaviour scienceis defined as "the study of observableand verifiable human behaviour in organisations, using scientific approaches".It is inductive and problem centredand draws on expertise from the fields of psychology,sociology and anthropology(Filley and House, 1969). 139

Chapter6: Benchmarking theRouteto TQM Although there are other ways to study human behaviour, such as using observation, intuition, been has the approach scientific successfully applied. More reason or importantly the scientific approach allows for "self-correction". Built-in checks control and verify the researcher's activities and conclusions (Kerlinger, 1964).

Prominent behavioural scientists are Douglas McGregor, Abraham Maslow, Chris

Argyris and Frederick Herzberg whose theories and concepts are described in the following sections. 6.5.1. Douglas McGregor (1906-1964) McGregor taught social psychology at Harvard University. He was assistant professor of psychology at Massachusetts Institute of Technology from 1937 till his death, except for a short period from 1948 to 1954 when he was president of Antioch College.

Whilst at Antioch College, McGregor discovered the shortcomings of the human relations philosophy. He concluded that a leader had to exercise authority and accept responsibilityfor his decisions(McGregor, 1954). McGregor (1960) made the transition from human relations to behaviour science. He developed Theory X as representativeof the classical management assumption of humannature.His assumptionsof Theory X are: 1. The averagepersoninherently dislikes work and will avoid it if he can. 2. Their dislike of work meansworkers must be coerced,controlled, directed and threatenedwith punishment before they will work toward the achievementof organisationalobjectives. 3.

The average person would rather be directed and avoid responsibility, and possesses relatively little ambition whilst wanting security.

McGregor developedTheory Y as a new theory managing human resources.Theory Y is the "people approach", where the human element is important to the organisation (Donnelly, Gibson and Ivancevich, 1971). Employing the terminology of Follett and Argyris, McGregor (1960) referred to Theory Y as "the integration of individual and organisationalgoals". He believed that by working towards the successof the company,

140

Chapter 6: Benchmarking the Route to TQM

Y Theory basic His be assumptionsof workers would able to achievetheir own goals. are: 1.

At work, engaging physical and mental effort comes naturally.

2.

When committed to an objective, people will naturally exercise self-direction it. to and self-control attain

3.

Rewardsfor achievementsencouragecommitmentto objectives.

4.

In the correct environment, the average person learns not only to accept but to

seekresponsibility. 5.

There is a large human resourceof imagination, ingenuity and creativity in the solutionof organisationalproblems.

6.

Modern industrial life does not fully utilise the intellectual potential of the averageworker.

The task of managementis to unleash the potential of their employees and in the processachievethe goalsof the organisation. Theory X is reflected in the tightly controlled organisation structure of classical managementand principles of organisation. Theory Y has similarities to Follett's Principle of Integration, in which everyone is working for the common good of the idealistic be Is this that an principle cannot practised in an organisationof organisation. imperfectmen?The challengeto managementis to fully utilise resources,both human Y Theory together with the motivational theories discussedin the next and material. sections,makethis challengeattainablein the open participative managementof TQM.

6.5.2.AbrahamH. Maslow (1908-1970) Maslow, a psychologist, developed his theory of motivation based on a hierarchy of is based four hierarchy This on premises:(Plunkett and Atther, 1992) needs. I.

Behaviouris influenced only by an unsatisfiedneed.

2.

Man's needis arrangedin order of importance,starting with the most basic need (water, food, shelter) and progressing to the most complex (ego and selfactualisation).

3.

As needsare met, the personadvancesto the next level of needs.This next level is soughtonly after the previous level of needsare minimally satisfied. 141

Reaching Your Potential

Needs

"

Independence

"

Creativity

0

Self-Expression

"

Responsibility

Needs

"

Self-Respect

"

Recognition

"

Senseof Accomplishment

Needs

Needs

"

Esteem

Social

Physical

Self-Realisation

Companionship "

Acceptance

"

Love and Affection

"

Group Membership

Safety

"'

Security for Self and Possessions

Needs

"

Avoidance of Risks

"

Avoidanceof Harm

"

Avoidanceof Pain

":

Food

"

Clothing

"

Shelter

"

Comfort

"

Self-Preservation

,

Figure 6.5.2: Abraham Maslow's Hierarchy of Human Needs (Source:Maslow, 1943)

141a

Chapter 6: Benchmarking the Route to TQM

4. -

The lossof satisfactionfrom a previously satisfiedneedwill causeit to becomea priority need again.

levels five in 6.5.2. is The Figure five levels of needs The hierarchy of of needs shown basic The (Maslow, 1943). most are physical, safety, social, esteem and self-realisation defined (1954) Maslow is level highest is the of need self-realisation. and physical need is, become become to "desire to one the more and more what self-realisation as becoming". is of capable everything one

level The food, need, next Physicalneedsare primary needssuch as water and shelter. is is level from harm. The health is third which need social and protection safety, good due to the gregarious nature of man and the need for friendship, affection and in levels These three are usually present most organisations. acceptance. The focus for motivation is therefore the two higher levels of needs:esteemand selfjob Management these that can needs are enlargementand meet concepts realisation. individual Worker commitment, and group participation can provide participation. ideal ideal integration Barnard's Follett's of effectiveness of and satisfactionand meet andefficiency. Maslow's motivation theory neither provides a complete understandingof motivation it is it However, does the to easyto understand achieve means motivation. provide nor it been have As has Many is common sense. such, widely accepted. used and essentially this hierarchyin writings on motivation in businessorganisations(Haynes and Massie, 1969;Filley andHouse, 1969).

6.5.3. Chris Argyris (1923 Argyris, Professorof Industrial Relations at Yale University, USA, expanded upon Maslow's theory with his "personality versusorganisation" hypothesis(Argyris, 1957). He arguedthe incongruencybetween the needs of the individual and the following organisationpractices: Division of labour which limits employeeinitiative and the use of his abilities. 1. Chain of commandwhich makes employeespassive and leaves them with no 2. control over their environment. 142

Chapter 6: Benchmarking the Route to TQM

Unity of direction which leads to goals that are determined by management,

3.

from input employees. allowing no

Spanof control which decreasesthe employee's self-control and assumeshis

4.

immaturity.

Argyris sought to achieve harmony between the individual and the organisation. He better their job to the to utilise opportunity give employees enlargement proposed He that their them to also proposed over work. of control a sense give abilities and

in order to remove employee managementshould encourageemployee participation indifference and to enable the employee to attain self-realisation. He encouraged managementto provide employees with a range of experiences and to provide increased He for through them advised that management responsibility. challenges for for His and self-control. was objective more employeeself-direction should allow the organisation to nurture employee maturity so that both the employee and fulfil increasing their organisationaleffectiveness. could goals whilst organisation 6.5.4.Frederick Herzberg (1923 Herzberg,a psychologistand Professorof Psychology at Western ReserveUniversity, USA, developed a motivation theory called "two-factor" or "hygiene-motivation" theory based on research. Herzberg asked his survey sample of accountants and felt to think they exceptionally good or exceptionally engineers of an occasion when bad abouttheir job, be it their presentor previousjob, and to relate the incident to him. From the responsesto thesesemi-structuredinterviews and additional detailed surveys, Herzbergdevelopedtwo lists of factors, "hygiene factors" and "motivation factors". He it called "hygiene factors" becausethese are analogous to the principles of medical hygiene which despite removing health hazards from the environment are merely preventive,not curative(Herzberg,Mausnerand Snydermann,1959). The hygieneand motivation factors are: (Donnelly, Gibson and Ivancevich, 1971) Hygienefactors 1.

Companypolicy and administration.

2.

Technicalsupervision.

3.

Interpersonalrelationswith supervisors. Interpersonalrelationshipwith peers.

4.

143

F

Herzberg's

Maslow's

Hygiene and Motivation

Hierarchy of Needs

Factors

Hygiene Factors (Job Context) Physical Needs

1.

2.

3.

SafetyNeeds

SocialNeeds

"

Salary

"

PersonalLife

"

Work Conditions

"

Job Security

"

Company Policy

"

Work Conditions

"

TechnicalSupervision

"

Interpersonal Relations with Peers, Supervisorsand Subordinates

Motivation Factors (The Work Itself)

4.

5.

EsteemNeeds

Self-RealisationNeeds

"

Recognition

"

Achievement

"

Advancement

"

Possibility of Growth

"

Responsibility

"

Work Itself

S

Hierarchy Maslow's between Correlation 6.5.4: Table of Needs and Herzberg's Hygiene and Motivation Factors

Ivancevich, 1971; Plunkett Gibson Donnelly, from: and (Adapted and Attner, 1992) 143a

Chapter 6: Benchmarkingthe Routeto TQM

5.

Interpersonalrelationshipwith subordinates.

6.

Salary.

7.

Job security.

8.

Personal life.

9.

Work conditions.

10.

Status.

Motivation factors

1.

Achievement.

2.

Recognition.

3.

Advancement.

4.

Work itself.

5.

Possibility of growth.

6.

Responsibility.

The preventivenatureof hygiene factors meansthey causedissatisfactionwhen absent, factors dissatisfaction but do These are conditions not motivate. remove when optimal job. They to the the environment. are external of work The motivation factors are conditions relating directly to work, that is, the job itself. Herzbergwarnedthat the lack of motivating factors at work will make employeesmore job be bad hygiene, of real or perceived can only aware which overcome through the constantimprovementof both the amount and quality of hygiene. Herzberg suggestedthe following as means to motivate workers: structure jobs to provide achievement, provide growth opportunity, provide jobs that give selfactualisation, provide recognition, and, give workers responsibility for their jobs (Pollard, 1974).Theseinvolve reviewing and restructuringjobs to provide motivation. The close correlation betweenMaslow's Hierarchy of Needs and Herzberg's Hygiene Motivation factors is and shown in Table 6.5.4.

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Chapter 6: Benchmarkingthe Routeto TQM

6.5.5.Operations Research Operations Research started in Great Britain during World War II to deal with the logistics of war. The first operations research team was formed by the British under the leadership of Professor P. M. S. Blackett, physicist and Nobel prize winner, with a team Army "three two one one astrophysicist, physicists, mathematical physiologists, of (Trefethen, two and mathematicians" physicist, officer, one surveyor, one general 1954). This variety of expertise in the group was necessary to address the complicated problems of the war.

Operationsresearchapplied scientific knowledge to the study of complex problems to developa quantitativebasis for decision making. The end of the war did not mean the first industry. by Its Its applicability was recognised end of operations research. industrialapplicationswere to solve production problems such as production schedules, inventory control and production costs. Churchman, Ackoff and Arnoff (1957) wrote "operationsresearchin the most generalsensecan be characterisedas the application of scientific methods,techniques,and tools to problems involving the operation of the systemso asto provide those in control of the operationswith optimum solutions to the problems". Operations research gradually moved from production management to operations in management the 1950susing statistics and mathematicsin techniquessuch as linear programming,queueingtheory, decision trees, probability theory, quantitative methods and other simulationsto determinethe optimal decision under varying circumstances. Thesetechniquesand simulations were greatly assisted by the use of computers to handlemassesof datato test the effect of changesin the variablesor the model. The efforts to develop a framework for operations research tools resulted in the developmentof Decision Theory, which is discussedin Section6.5.6. One major shortcoming of operations research is statistics and mathematical models cannotaccuratelyaccount for the human factor becausethis is not easily quantifiable. Howeveroperationsresearchhas developedmany models and techniqueswhich are still usedto solve presentproduction and managementproblems such as break-evenpoints, linearprogramming,queueingand probability. 145

Chapter 6: Benchmarking the Route to TQM

6.5.6. Decision Theory

Decision Theory combined the quantitative tools of operations research with the in framework to examine various objectives and choice a economicconceptsof utility in decision-making. andsolutions In the decision making process, although the manager is able to choose the Strategy (S) to be used there are two variables that are uncontrollable which significantly influence the outcome of the selected strategy. These variables are the State of Nature (SN) and Competitive Action (CA). The outcome of the decision gives the decision maker some form of utility. This relationship in decision theory between the utility derived based on the interaction of Strategy, the State of Nature and Competitive Action can be expressed follows: (Donnelly, Gibson and Ivancevich, 1971) as

U=f (S, SN, CA) where,

U= Utility or Outcome S= Strategy SN = Stateof Nature CA = Competitive Action

Decision theory further takes into account three conditions related specifically to the Stateof Nature or Competitive Action as perceivedby the decision maker. Thesethree conditionsare certainty,risk and uncertainty. Decisiontheory is used when historical data about the State of Nature or Competitive Action is not available. Instead of the managerhaving to resort to the use of opinion about the probability of occurrence which is dependent on whether the manager's behaviour is optimistic or pessimistic, decision theory gives the manager a scientific procedureto analyse the problem (Archer, 1964). With the use of computers, the decisiontheory framework allows managersto study problems with many strategies, statesof natureand competitive actions. 6.5.7.SystemsTheory Ludwig von Bertalanffy (1968), a biologist, introducedthe

concept of SystemsTheory

at a University of Chicago Seminarin 1937but it was only published after the war. The systemsapproachwas a searchfor a theory of management,"a way of thinking about 146

Chapter6: Benehmarking theRouteto TQM internal for framework job and visualising the of managing ... which provides a Rosenzweig, Kast integrated (Johnson, factors and whole" as an external environmental 1963). A business organisation was compared to a system with many sub-systems, for

functioning This divisions, departments systemsapproachwas a as whole. and example, best by for in 1960s the the one way to manage. and was characterised a search popular The systemsview of a businessorganisationwas that no sub-systemor departmentwas independent of the other. It could not act independently without affecting other departmentsand the system as a whole. Survival of the system depended on the interactionsof the sub-systemsand their contribution to the whole system.Activities in the productiondepartmentwould be dependenton the salesdepartmentwhich would in turn be dependenton the budgetand so on. The implication of systemstheory on managementwas the need to understandthe factors that affect the organisation, such as workers, technology, work various interrelated factors All these and conditions motivation. are and actions taken on one factor mustbe analysedso as not to disrupt others.

Interestin systemstheory declinedbecauseof criticismsthat it was abstractand too theoreticalfor decision-making.This led to the developmentof ContingencyTheory. 6.5.8. Contingency Theory

The ContingencyTheory school developed from systemstheory in the 1970s as less credencewas placed on `one best way of management'. The market was expanding through product differentiation because customers wanted more product varieties. Customersno longer acceptedHenry Ford's axiom from a previous generation that "you can buy a car of any colour as long as it is black". With consumer demand becomingmore diversified so did the problemsof management.Writers were predicting the start of a post Industrial Revolution era (Bell, 1973). The new trend that emerged was situational managementwhich basically stated that what worked in one situation may not necessarily work in another. This provided the basis for managing organisationsindividually.

147

Chapter 6: Benchmarking the Route to TQM

Situationalmanagementgaveway to contingencymanagementwhich introduced three interrelated assumptions. These assumptions being: (Kast and Rosenzweig, 1973)

1.

There is a relationship between organisations and their environments and betweenmanagementsystemsand its various components.

2.

This relationshipexists for all types of organisations.

3.

The best contingency plan requires management to determine what and how it is

to be done, who is to do it, and the impact on the organisationof what is being done.

The contingency approach to management begins with "it depends" because the factors No is dependent the two situations to the and situations. on solution any problem are exactly alike andthereforeno two solutionsare the same. Contingency theory draws upon classical management theory, behaviour science, managementscience,and other managementtheories and principles to provide possible solutionsto a problem. The strengthof contingencymanagementis that it takes accountof the situation before a courseof action is decidedupon. However there is disagreementabout whether it is a comprehensivetheory of management. Some researchers credit the contingency approachas providing the framework for bridging the gap betweenmanagementtheory (Luthans andpractice and Stewart, 1977) whilst others disagreeon the groundsthat the contingencyapproachis basedon conceptual schemes,with no proposalsto integrate variousconcepts(Longeneckerand Pringle, 1978). Contingencytheory is particularly applicable to the rapid changesin technology and environment of the modem era which requires a flexible "it depends" analytical approachto management.

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Chapter 6: Benchmarkingthe Routeto TQM

6.6. Total Quality Management Total Quality Management started in Japan as Total Quality Control after World War II its industries had following devastation to the the of the atomic rebuild when country bomb. Deming, a statistical consultant with a Ph.D. in Physics from Yale University, for in by Supreme Command Allied Powers 1947 to Japan. A the the was recruited group of Japanesescientists and engineers called the Union of Japanese Scientists and Engineers (JUSE) was reconstructing the country. In 1951, he visited a camera factory 200 400 "a they they ago year made cameras are per month, now making and reported, and hope it will be 500 this month and hereafter, with no increase in workers or hours better (Deming, 1951). control of quality" simply

Japanese TQM guru Kaoru Ishikawa in his book `What is Total Quality Control? - The JapaneseWay' (1985) explained that quality was all encompassing,and included the information, service, quality of work, process,division, company,objectives and quality of people,which includedworkers, engineers,managersand executives. In America, TQM startedwith the television documentary"If JapanCan Why Can't ... We?" on June29,1980 (Walton, 1986). Waves of American quality and manufacturing executivesvisited Japan in the early 1980s following the documentary. One success story was Ford Motor Company'sUS$3.25 billion project to develop a new quality car, the Ford Taurus,in 1981with Deming as a consultant.At this time Ford posteda loss of US$3.3billion during the 1980-1982period and the most it had spentdeveloping a new car was US$800million for the Fiesta (Shook, 1990).Ford's managementteam set up a semi-autonomousgroup of developers called `Team Taurus' with the following mission:(Doody and Bingaman, 1988) 2.

The teamwas to createa world-classcar, with quality secondto none. The customerwould be the focal point in defining quality.

3.

Productintegrity would never be compromised.

1.

To achievethe objectives,the team from the start involved people from both upstream and downstreamin the car making process.This meant involvement from the CEO's office to the design studios to the end of the assemblyline and beyond to the supplier, the advertisingagency,the dealershipand ultimately, the customer.

149

Chapter6: Benchmarking theRouteto TQM in Class' `Best identify 400 50 to dismantled The team comparable cars and examined (BIC) items for the new car. The team listened to customers, employees, suppliers and before line the from ideas Ford first workers dealers. For the time, assembly solicited found when designed problems about complaints about workers' out and car was installing car doors because the body panels were formed in too many pieces. One head to have there bolts the need was no so size same should employee suggested all "company this These the culture results of changes were accepted and change wrenches. for first Taurus features, target 400 BIC Of the the was on revolution" were spectacular. 320 features. Mainly due to Taurus sales, Ford over took General Motors in earnings in

1986for the first time since 1924. After a slow start in America in the 1980sled by the gurus Deming, Juran, Crosby and Feigenbaumthe paceof TQM picked up in the 1990s.A 1989 Gallup survey of Fortune 1000 executivesin America showedonly 26% achievedsignificant results from TQM, By late 1991, 1989). (Gallup, 28% the a poll conductedwith a satisfiedwith results with Inc. Little for D. Corporation Arthur by Opinion Research similar sampleof executives 36% TQM 93% that the reported significant a program, of companies with of revealed in future 1992). (Little, be believed 62% the that significant effects would effects and Other surveyswere equally optimistic about TQM and its future in America. A joint Productivity Quality International by Development Dimensions and and survey ManagementAssociation in 1993 showedthat 56% of a sampleof 536 North American far from TQM. In TQM, "is waning, still an emerging practised other words companies businessstrategy"(Development, 1993). Resultsof surveys have also shown the spreadof quality managementinitiatives and TQM outsidethe USA (Binney, 1992; Witcher and Whyte, 1992; Witcher, 1993).TQM is the new managementpractice and business strategy that will give companies the competitive advantage.Changesin product markets, technology, customer demands, deregulationand increasing competition from imports have changed the competitive market environment.Thesechangessignal the move to "flexible specialisation" (Piore and Sabel, 1984) or "lean production" (Womack, Jonesand Roos, 1990). Under these conditionsof production flexibility, product quality and customer responsiveness,it is for both necessary managementpracticesand businessstrategiesto changeaccordingly. Oakland (1993) stressesthat regardlessof the nature of the business,the competitive

150

Chapter 6: Benchmarkingthe Routeto TQM

incorporate the demands to total that quality maintain companies market environment increase their market share. to or maintain and advantage competitive It is important not to think of TQM narrowly in terms of product and service quality. It is much more than producing quality products and services. TQM is a management in business its institutionalise to that to quality a organisation ensure philosophy customers receive what they expect. Traditional management must make the change to the new quality culture. Achieving cultural change is central to TQM (Wiggans and Turner, 1991; Williams,

Dobson and Walters, 1991; Dale and Boaden, 1994a;

MacDonald, 1994). Dale and Cooper (1992) explain that this culture change requires considerable thought, planning, motivation and persuasion on the part of management it is as not easy to change people's beliefs and attitudes.

Main (1994) emphasisesthat TQM is not a managementtool but an overall way of managing.Ishikawa (1985) refersto it asthe "thought revolution" of management. This "cultural change" or "thought revolution" of TQM is not unlike the "mental revolution" of scientific management.Scientific managementwas a product of its environment.It was developedduring the Industrial Revolution to meetthe demandsfor efficiency. The "mental revolution" of scientific managementrequired managementand workers to shift their focus from division of the surplus of production to working together to create a greater surplus with resultant lower production costs for managementand higher wagesfor workers. Wilkinson, Redman and Marchington (1998) refer to TQM as the "innovation in managementpractice" of the late 1980s and 1990s. Indeed, TQM is a management systemto continually improve quality in every aspect of the organisation involving everyonein the organisationto satisfy internal and external customers.The new culture is basedon an organisation that is flatter, flexible, adaptable,responsiveand proactively anticipatingchangesand innovations. Hill (1991) describes a quality culture as one that nurtures high trust social relationships where individuals are respected and have a sharedsenseof membership the of organisationtogether with the belief that continuous improvementis for the common good.

151

Traditional

Total Quality Management

Management

1. Looks for quick fix to problems.

1. Adopts a new management philosophy. -

reactive in style. 2. Firefights problems a

2. Structured, disciplined operations"--

which analysefor prevention.

3. Focuses short-term to meet production

3. Stresseslong-term, continuous improvement.

at any cost.

4. Inspectsfor errors after productis

4. Preventserrorsand emphasisesquality of design.

produced. 5. Decisionsbasedon opinionsof a few

-

5. Decisionson data-drivenfacts drawn from many people.

key people.

6. Motivated by profit.

6. Motivated by customersatisfaction.

7. Throws resourcesat a task.

7. Usespeople/resources to improve.-

Table 6.6: Changesfrom Traditional Management to Total Quality Management (Source:Miller and Cangemi,1993)

151a

=

Chapter6: Benchmarking theRouteto TQM Traditional assembly line work

is mechanised, automated or computerised and

in labour by countries without shortages or when manual or supervised workers, except is from TQM the scientific economical. away more moves semi-automatic operation down line broke Taylor concept work to the smallest of which management assembly tasks in order to increase efficiency, and from the administrative management principles integration, Fayol. It teamwork, decentralisation of authority, emphasises work of empowerment of employees, employee participation, training, problem prevention, continuous improvement and customer focus. Walton (1985) argues that organisations from human based the moving away resource strategy are on compliance which incorporates narrowly defined jobs, limited employee discretion and involvement, and individual incentives, to one that is based on commitment, broader more flexible jobs, teamwork, involvement, group-based incentives, flatter organisation structures with less emphasis on hierarchical, positional authority.

Humanresourcemanagementwhich is the "soft" aspectof TQM is an important factor in the successful implementation of TQM. The necessarymotivation, attitude and behaviouralchanges,interpersonalskills and leadership,commitment, self-control and trust need to be developed and nurtured. Management needs to take McGregor's "Theory Y" view of employeesinstead of the traditional "Theory X" view of classical management. The changesfrom traditional managementto TQM are summarisedin Table 6.6.

6.7 Conclusion This chapterprovidesan overview of the key emphasesof the managementtheoriesand principles from pre-Industrial Revolution through to present day Total Quality Management. This is necessary for the study of Hypothesis 3, which seeks to benchmarka company'smanagementstyle and its relative position en route to TQM.

152

Chapter 7: BenchmarkingManagementStyles

Chapter 7: Benchmarking Management Styles

7.1. Organisational Changes Management styles and human relations management are important aspects of TQM is largely because be This to tend overlooked. of the emphasis placed on which history has long documented starting with the concept of a product quality which quality

inspection and evolving

into

quality

control

and quality

assurance.

Furthermore the name Total Quality Management lends the impression that the is based (1991) Hill on managing quality. solely wrote that this shortfall philosophy lay not with technical aspects, but with the "lacunae in the treatment of the social factors". TQM is more than technical issues relating to the quality of products and processes.It is a management process involving everyone in the organisation working together to continually improve every aspect of the organisation's quality to achieve customer satisfaction. It is not a goal but a way of life for everyone in the importance Dale (1996) the organisation. stressed of organisation culture and management style in sustaining TQM. Dale, Boaden, Wilcox and McQuater (1997) described TQM management style as "unitary". A unitary style of management places emphasis on strong teamwork, and on employees working

to common goals.

MacDonald (1994) describes the management practice of TQM as one where the traditional style of command and control needs to be replaced with leadership where help managers employees to achieve improved performance and not demand compliance.

Dale, Lascelles and Boaden (1994) present the importance of social and human relationsaspectsof TQM in "six different levels of TQM adoption" basedon research conductedover thirteen years. These six levels are "Uncommitted, Drifters, ToolPushers, Improvers, Award Winners and World Class". The lowest level is "Uncommitted" and the highest is "World Class". For the purpose of this thesis, the area of focus is "Level 5- Award Winners". Dale, Lascelles and Boaden state that companies at this level are not necessarily winners of internationally recognised quality awards.It does mean however that these companieshave "reached a point in their TQM maturity where the kind of culture, values, trust, capabilities, relationship

153

Chapter 7: Benchmarking Management Styles

have been business in involvement to their win such an award required andemployee developed-a point at which quality improvementhas becomeTotal in nature". Awardwinners havethe following characteristics: 1. A company-wideculture of leadershipand improvementthat is not dependent but involves few all employees. on a select 2.

Successful organisational changes.

3.

Effective and measurablecross-functionalmanagementprocessesand process streamimprovements.

4.

Conductingbenchmarkingand performancemeasurementat all levels.

5.

An organisationalculturethat involves more employeeparticipation.

6.

Empowermentof employeesto make decisions. EmployeesacknowledgeTQM as the new way of managingthe business.

7.

Only the third and fourth characteristicsrelate to systemsand procedures.The other five characteristicsrelate to leadership,organisation culture, managementstyles and human relations. This supports Hill and other researcherswho have voiced their concernsabout this soft side of TQM. The benefits of TQM have been given much publicity and there are few companiesthat do not know about TQM. The problems arise when companies implement the systems, tools and techniques by dictate of managementwhile only paying lip serviceto the supporting culture and infrastructure changeswhich are much more difficult and time consumingto implement. Wilkinson, Redmanand Marchington in their book `Managing with Total Quality Management' (1998) warned that TQM is too often incorporated into existing company cultures. This creates"Partial Quality Management" is which a common occurrenceof TQM the UK. Partial Quality Managementfalls short of TQM and will not deliver the same benefits.

The needto changethe organisation culture and style of managementis highlighted in `BS7850: Part 1: Total Quality Management, Guide to Management Principles' (1992). The standard states that the implementation of TQM requires "creating appropriateorganisationalstructures". It is necessaryto conduct reviews to determine the relevance of the existing organisation structure. Changes to the style of management are most often needed in the following management processes: Employee recognition a) and reward. 154

Organisational Culture

Traditional Western

Feature

Management Workers work, managers

Shared responsibility and co-

things.

manage.

operation.

Organisational structure.

Hierarchy, much emphasis on

More flattened; less social

authorityrelatedto one's

distancebetweenmanagers

placein the structure.

and workers.

Coercion, "do it becauseI'm

Peer management,

the boss".

empowered.

Unilateral, autocratic, not

Consensus, group

alwaysobjective.

participationbasedon facts.

Closed, reactive, and

Open, proactive, and adaptive.

1. The meaning and order of

2.

IR

TQM Management

3. Use of power with

workers. 4. Decision-making.

5. Responsivenessto in changes markets,

-

constrictive.

community and environment. 6. Internal relationships.

7. Valuesin the workplace.

Conflict ridden, labour and

Harmony, balance, teams are

management are adversaries.

priorities.

Incongruentnot sharedby all;

Congruentand shared

is fear, alienation often

throughoutthe organisation';,

predominant.

trust, belonging are predominant.

8. Communications.

Top down, vertical.

Multi-directional.

9. Use of time, resources

Not alwaysrelatedto overall

Focusedon goals and

goals,"looking good" and

prevention,"games" are

other gamesare played.

minimised.

Quantity, efficiency, have top

Quality, effectiveness is given

priority, often at the expense

the samepriority as

of effectiveness.

efficiency.

Attempts to "force" relations

Seek to "Fit".

andpriorities.

10. Productivity.

11. External relations.

with markets, communities,

and ecosystems.

-.,

(Continuedon next page) Table 7.1: Organisation Culture, Traditional Management and TQM. (Adapted: Glover, 1993)

154a

Chapter 7: Benehmarking Management Styles

b)

Resourceallocation.

c)

Administrative support.

d)

Establishment of trust and teamwork among employees.

e)

Employee training plans.

fl

Companywork procedures.

The relationship between organisation culture and management styles is shown in Table 7.1 which also compares TQM management style with traditional Western

managementstyle.

Organisational Culture Feature

Traditional

Western

TQM Management

Management

12. Measurement/accounting. Profit and loss, etc., serveas

Information from consumers

anxiety-inducingrituals which

and employeesare given

seekto "justify" existing

equal focus with profit and

paradigm;myopic bottom line.

loss; market shareand demandare stressed;"true" bottom line.

13. Performanceevaluation.

14. Motivation concepts.

Focuson results(ends),

Focuson processes(means),

individual recognition.

group recognition.

Individual is responsiblefor

Group orientation, self-

his/her well-being, "carrots"

directedteams,"ownership"

and threatsare used

by all levels in the goalsof

simultaneously,goals of

the organisation.

individuals not always those of the organisation. 15. Control.

External to individual.

Internalised.

16. Growth.

"Predator" type, one

Mutually beneficial to all

constituencyoften benefits at

constituents,balanced.

expenseof another.

Table 7.1: Organisation Culture, Traditional Management and TQM. (Adapted:Glover, 1993)

155

Chapter 7: BenchmarkingManagementStyles

7.2. Management Styles Just as it is possible to conduct a qualitative survey of cultural changes based on the behavioural characteristics of management and employees, ' it is possible to benchmark TQM to using a qualitative assessment of management styles. route a company's Modem management still retains some of Taylor's management styles, especially in identify Taylorist (1994) Boaden Lascelles Dale, elements and mass production. imbedded in modem organisational culture as: `them and us' attitudes, a limited view job demarcation, inflexible 'on-the-job' and scant working practices, expertise, of is in individuals. Taylor's the conflict management style potential of recognition of be low Taylorism level The TQM. trust of must replaced and close supervision of with with high trust between management and workers.

The different managementstyles and organisation structures reviewed in Chapter 6 chartsthe evolution of managementprinciples and practices from the domination of the military and church during the feudal system through to TQM. The classical is impersonal is formal, bureaucratic, that organisation structure authoritarian and different from TQM's flexible, co-operative structure with open communications, effective teamwork and cross-functionalimprovements.Wilson and Rosenfield (1990) definedorganisationstructure as "the establishedpattern of relationshipsbetweenthe component parts of an organisation, outlining both communications, control and authority patterns. Structure distinguishesthe parts of an organisation and delineates the relationshipbetweenthem". Flood (1993) comparedhis ten TQM principles with Taylor's Scientific Management (mechanicalvision) and Weber's Administrative Management(political vision). This comparisonis shown in Table 7.2. Flood provides two fundamentalvisions into the nature of organisations.The first is a mechanical vision and the second a political vision. In the mechanical vision, he sees the organisation as a machine run by engineeringprinciples. In the political vision, the organisation is seento be operating undera strict power structureof control. Although theseare not a direct comparisonof managementstyles, to achievetheseprinciples requires their own managementstyles and behaviours.

156

TQM Principles

Scientific Management (Mechanical Vision)

Administrative

Management

(Political Vision)

Theremust be agreed

Externalrequirementsarenot

Requirementsare set internally at

internal both for requirements,

in be to relevant the view of seen

the top and imposed on lower levels.

and externalcustomers.

management.

Customer requirements must

Rigid notion of objective goals

Punishments rather than rewards;

be met first time, everytime.

to be achievedin a strict internal

the requirementsmust be met

order.

otherwisedemotionor dismissal may result.

Quality improvementwill

Costreductionmust be pursued

Thereis a possibleadvantageof.

total costs. and waste reduce

as a goal, which meansthat

gettingright to it with less

peoplemust work togetheras

deliberationand thus lower costs,

cogsmuch more efficiently.

but higher costscould be incurred to

Peoplemust shakeoff what

police and superviseto achieve

makesthemunreliable.There

imposedrules. In terms of costs,

must be machineefficiency.

therewill be beneficiariesand

_F.

victims. Theremust be a focuson the

The problemsare essentially

In authoritarianregimes,quality by

preventionof problems,rather

deviationsfrom setpoints,and

inspectionmissesthe value of

in to than an acceptance cope a

mechanismsmustbe installed

quality by prevention; there will be aß

fire-fighting manner.

that preventthe deviationfrom

tendencyto scapegoatand workers

happeningor to correctit if it

becomegood at problem avoidance

doeshappen.

and fire-fighting.

Quality improvementcanonly

Goals,or requirementsto be met, Action is complianceto the plan,

result from planned

are externalisedfrom all but the

managementaction.

chief governorsandare

plannedmanipulation or coercion.

implementedby leadershipfrom

-

the top.

Everyjob must add value.

.

Mechanismsmust operate

A quotaor higher performan ce

increase to systematically quality

expectation.

at everystage.

(continuedon next page Table 7.2: Comparison of Management Principles

(Source:Flood, 1993)

156a

Chapter 7: BenchmarkingManagementStyles

TQM Principles

Scientific Management (Mechanical Vision)

Administrative -

Management

(Political Vision)

Everybodymust be involved

Everyoneis a cog in the machine Forcedparticipation; work in unison

from all levelsand acrossall

andmust work in unison strictly

becauseof the explicit will of some

functions.

according to laws that must be

person/people.

obeyed ... because an

organisationas a whole has a machinepurposethat must be achieved;cogs(i. e., people)have no purpose. Theremustbe an emphasison

Quantitativemethodsusing

to help assess measurement

statisticsor mathematics

andto meetimprovementsin

establishhow well laws are

processes.

being met, how well the human

Rigid policing.

cogsin the machineare performing accordingto machine efficiency criteria. A cultureof continuous

One law that drives the machine

The culture is a kind of slavery,

improvementmust be

explicitly statesthat the product

driving not striving, with little

established.

or servicemust becomemore

improvementlikely to follow

and more efficiently produced, but this takesno accountof confoundingexternalinfluences. An emphasisshouldbe placed

This principle is marginalisedby

It is unlikely that peoplewill be

on promotingcreativity.

machinethinking and is difficult

creativewhen they are merely

to give meaningto in a

instrumentsserving other people's

mechanicalcontext; creativity is

interests.

divergentwhile mechanicalgoalseekingis convergent.

(End of Table) Table 7.2: Comparison of Management Principles (continued) (Source:Flood, 1993)

157

Chapter 7: BenchmarkingManagementStyles

7.3 Evolution of Management Styles The author in Table 7.3 presents the different management styles that have evolved from pre-Industrial Revolution through to TQM. The table shows the emphases, principles and concepts, management styles and problems of each of the management eras and the gradual evolution of scientific management to TQM as society progressed from the eighteenth century.

7.4 Conclusion

It is seenfrom Table 7.3 that the style of managementevolved in accordancewith the needs of society at the time. In today's market of intense global competition managementmust keep pace to ensurethe successof the company. The purpose of Table 7.3 is thus to provide managementwith a chart with which they can compare their existing managementstyle against that of TQM. It serves to highlight to how far they have evolved in their practices and philosophy, and points management the way forward.

158

Chapter 7: BenchmarkingManagementStyles

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APPENDIX

B

Customer Survey Questionnaire

226

Appendix B: Customer Survey Questionnaire

CUSTOMER SURVEY Please take a few moments to rate the quality of our products and services and provide Please the by appropriate this circle questionnaire. completing comments your us with rating. We thank you for helping us to improve the quality of our products and services. Company Name:

Product Purchased:

Section 1__Qualit}y Mau

I

ercent

To what extent do the following requirements:

Rating Veryy Good

meet your

Average

Needs Improvement

1. Quality and Delivery a. Quality of Product

4

3

2

b. Overall Quality of Service

4

3

2

c. Delivery , i.e.. i) Time tör Delivery

4

3

2

4

3

2

a. Consistency

4

3

2

b. Durability

4

3

2

a. Sales

4

3

2

h. Invoices are correct and timely

4

3

2

ii) Meeting Delivery Promises

2. Performance of Product

Section 2:

Customer Focus

1. Pleaserate the quality of service provided by us with regard to the Ibllowing:

2a. I low efficiently

did we respond to your order?

4

3

2

2h. Ilow efficiently

did we respond to your enquiry?

4

3

2

4

3

2

3. How do you rate our company in terms of

meeting customer satisfaction? 227

Not Acceptable

Appendix B: Customer Survey Questionnaire

CUSTOMER SURVEY Rating

Section 3: Quality Costs

How do we compare with other suppliers in the following:

netter

a. Product Quality

4321

b. Value for Money

432l

for Delivery i. i) "Dime Delivery e., c. ,

4321

ii) Meeting Delivery

Promises

Same

Worse

Poor

Needs

Not

4321

Very

Average

Improvement Acceptable

Good

2. How does our product pertörmance measure up

4321

to your requirements?

3. What is the estimated cost of our nonconformance as a percentage of your annual sales?

4I3I2

Section 4: Quality S_ytems Very High

1. What emphasis do you place on your suppliers being certified to IS09000?

2. Pleaserate the following regarding our performance:

I li6h

a. Meeting specifications and requirements

432

b. Complaints resolved to your satisfaction

432I1

Average

c. Technical support and assistance 4I3I2I1

228

Not Required

4131211

Very Good

d. Quality awareness of our employees

Low

Needs Not Improvement Acceptable

Appendix

B: Customer Survey Questionnaire

CUSTOMER SURVEY Rating

Section 5: Quality Improvements Very

1. flow well do we react to your needs in:

Average

well

a. Product

4

32

b. Service

4

32

a. Product

4

32

b. Service

4

321

2. flow have we improved in the following

since

last purchase: your

Section 6: Others

1. What do you like MOST about our: a. Product

229

Needs Improvement

Not Acceptable

Appendix

B: Customer Survey Questionnaire

CUSTOMER SURVEY 3. What IMPROVEMENTS

would you like made to our:

a. Product

b. Service and Delivery

Yes

No

4. a. Would you like to purchase from us again'? b. Would you like to recommend us to others? --

[f `NO', why not'.'

----

5. Other comments or suggestions

Would you like to be contacted to further discuss your comments? If `YES', please provide us with the following Name:

details: Contact Number:

Designation:

230

Yes

No

Appendix C: CustomerSurveyReport

APPENDIX C

Customer Survey Report

231

Appendix C: Customer Survey Report

Customer Survey Report for Company A

Part 1:

Overview

Part 2:

Summary of Survey Results

Part 3:

Identified Strengths and Weaknesses

Part 4:

Conclusion

Appendix A: Method Used to Determine Areas of Weakness Appendix B: Customer Survey Questionnaire

232

Appendix C: CustomerSurveyReport

Part 1: Overview

Total Number of Participants:

16

Tables: Tables 1,2,3,4

from 5 the returned the obtained of results summary and provide

for Customers Rating indicate forms. Tables These the per exact number of survey each question.

The horizontal summationof each sub-sectionwill not add up to 16, i.e., the number in Customers the that customers completed questionnaire all participated, as not of full.

Customer Comments: Questionswere included in the Survey Form and all the responsesgiven are shown in Part 2 of the report.

Part 2: Summary of Survey Results The Summaryof the CustomerSurveyresults comprise the following: Table 1:

Number of Customersper Rating for Section 1 (Quality Management)

Table2:

Number of Customersper Rating for Section2 (CustomerFocus)

Table 3:

Number of Customersper Rating for Section 3 (Quality Costs)

Table4:

Number of Customersper Rating for Section4 (Quality Systems)

Table 5:

Number of Customersper Rating for Section5 (Quality Improvement)

CustomerComments

233

Appendix C: Customer Survey Report

Table 1: Number of Customers per Rating for Section 1 (Quality Management) Section 1: Quality

Number

Management

per Rating

of Customers

Very Good

Average

Needs Improvement

Not Acceptable

Ia. Quality of Product

12

3

1

-

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8

5

3

-

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4

10

2

-

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5

6

3

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12

2

1

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9

6

1

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33.3

11.5

0

Rating

Percentage of Customers per Rating

Table 2: Number of Customers per Rating for Section 2 (Customer Focus) Number of Customers per Rating

Section 2: Customer Focus

Very Good

Average

Needs Improvement

Not Acceptable

I a. Quality of Servicewith regardto Sales

4

9

2

-

lb. Invoicesare correctandtimely 2a. Efficiency of Responseto order placed by Customer 2b. Efficiency of Responseto Customer Enquiry 3. Performancewith regardto meeting CustomerSatisfaction

10

6

-

-

7

7

1

-

9

5

2

-

7

8

1

-

46.3

43.8

7.5

0

Rating

Percentage of Customers per Rating

234

Appendix C: Customer Survey Report

(Quality Costs) Section 3 for Rating Customers Number 3: Table per of

Section 3: Quality Costs Number

per Rating

of Customers

Better

Same

Worse

Poor

la. Product Quality

7

8

1

-

lb. Value for Money

6

8

1

1

Ici. Time for Delivery

1

13

2

-

lcii. Meeting Delivery Promises

4

11

1

-

Very Good

Average

Needs Improvement

Not Acceptable

11

4

1

-

Rating Performance when Benchmarked against in: by Customer the other suppliers

Rating 2. Extent to which productmeets performancerequirements 3. Estimatedcostof non-conformanceto Customerrequirementsas percentageof Customer'sAnnual Sales

Percentage of Customers per Rating

L 4

4

2

1

34.4

50.0

8.3

2.1

235

Appendix C. Customer Survey Report

Systems) 4 (Quality Section for Rating Customers Table 4: Number of per Section 4: Quality System Number

High

Very High

1. Emphasisplacedby Customeron 5750 BS being to certified suonliers

per Rating

of Customers

Low

Not Required

67-3

Number of Customersper Rating

Rating 2a. MeetingCustomerSpecificationsand Requirements

2b. ResolvingCustomerComplaintsto the Satisfactionof the Customer 2c. ProvidingTechnicalSupportand Assistance 2d. Level of Quality Awarenessof Com any

Percentage of Customers per Rating

Very Good

Average

Needs Improvement

Not Acceptab le

10

5

1

-

11

4

-

I

7

6

3

-

5

11

-

-

48.8

41.3

5.0

5.0

Note: Question1 is not taken into accountin the analysis of Customer Satisfaction levels for CompanyA as the questionhas no direct relation to the level of customer satisfaction is the company certified to BS5750. since

236

Appendix C. Customer Survey Report

Table 5: Number of Customers per Rating for Section 5 (Quality Improvement) Section 5: Quality Improvement Number of Customers per Rating Very Good

Average

1a. Product

9

6

-

1

lb. Service

6

9

1

-

Much Better

Better

Worse

Much Worse

-

8

1

-

-

g

1

23.4

48.4

4.7

Rating

Needs Improvement

Not Acceptable

1. Extentto which CompanyA is reactingto Customer'sneedsin:

2. Extentof improvementin CompanyA sinceCustomer'slast purchasewith regardto: 2a. Product 2b. Service

Percentage of Customers per Rating

237

-

1.6

AppendixC: CustomerSurveyReport Customer Comments

The following are Questionsand the corresponding Customer Responsesreceived in the Customer Survey Form:

Qn.:

What do you like MOST about our : a) Product:

Ans.: "Good quality." "It's quality." "Consistencyin quality." "It meets with all production requirements. " "Value for money."

"We have never had the need to raise a non-conformance report as products delivered always correctly." "Consistentlyhigh quality." "Not a lot." "Well finished (Good Quality). Very hard wearing (Long Life). " "The quality." "Accurate and durable." "Consistentquality." "The degreeof perfection in manufacturingcigarette machine dies." b) Serviceand Delivery: Ans.: "Service- CompetentStaff Delivery - Honour promise. " "Excellent. "

"Responseto customerneedswhen pressurised." "In generaldelivery promisesare kept."' "As good as one could expectwhen taking into account distance." "Good" "Salesstaff helpful in confirming which part number we needto order by." "Keep delivery promise." "Done during our shutdownis a big advantage."

238

Appendix C: CustomerSurveyReport

"Service very good. Delivery sometimes slightly

out butt we are usually

informed as to why. " "Prompt delivery. " "Timely delivery. " "Reliable delivery - able to respond quickly if required. "

Qn.:

What do you like LEAST about our: a Product:

Ans.: "Re-curing faults, communicatedto yourselvesand never resolved." "Price - Recent survey has alternatives 50% cheaper. (May not be same quality)" "The price. " "It's price! "

"Very expensiveto buy." "The averagelife needsto be improved." b) Serviceand Delivery. Ans.: "Difficult for the customer- how to ascertainwhat "in (Company A's) eyes" is a specialor standardproducts" "Salesstaff sometimesnot very forthcoming with firm delivery date for urgent orders." "Very expensiveto repair." "Nothing drastic. Delivery sometimes slightly out. But we are usually informed asto why." "Your unwillingnessto carry out further designwork on an existing product to the extent of us having to approachyour competitor to solve a problem, after giving you over a year to come up with an answer You do not keep to agreed servicedatesfor the overhaulof the machines." "Responseto urgent requirement." "Rigid and long lead times." "Partswithin a multiple order are not identified and have to be sortedby

239

us."

Appendix C. CustomerSurveyReport

Qn.:

What IMPROVEMENTS

would you like made to our:

a Product. " life for longer cost. economic at an stamp Ans.: "As a userwe constantlysearch improved. " be do I they think can "On the componentswe purchase not "Durability. " "Easier maintenanceby our Fitters." "Flat faced charactersfor hot-foil coding, have a sharp edge that can cut " being the printed. through material "Make them more robust and able to cope with abrasive and corrosive " environments.

"Improvementsin the averagelife of cigarette machinedie." "Yours is an expensiveproduct; Need to maintain high quality by not changing is " Otherwise low good. to product quality materials; b) Serviceand Delivery: implement "Listen to the requirementsof your customer, solve problems and Ans.: the solutions." "Single departmentfor standardsand specials,especially on salesand progress " contact. "Keep up the good work." "The need for firm delivery dates would be useful as our client base requires " dates they goods. when will receive exact "Quicker reactionto requestsfor "specials"." "Parts andoverhaulsat sensibleprices." "Start an after salesservice schemeto find out how your product is being used by your customer.Give advice." "Quicker responseto urgent requirements." "Full orders to be sent as a single shipment. Dies within an order to be identified."

Qn.:

Other Commentsor Suggestions:

Ans.: "Businessworld-wide has becomevery competitive. Therefore there is a need for every businessman(like you) to try and gain a competitive edgeby: (1) Delivering your product promptly (2) Visiting your customersin the field 240

Appendix C: CustomerSurveyReport

lead be Don't times Understanding (3) with rigid e. g., your customer, " when the customer needs your product urgently. " Products. Quality full know be the to "We would range of your grateful

be Changes is that by backup this may "Find that technical company excellent. " dealt with promptly. requiredare "Contact by technicalrepresentativenot evident: As an IS09002 approved " TQM. to of manufacturer,you are welcome visit our site on any aspect "(A) New building to project a better image? (B) The productsand service are excellent. It is only (A) that could affect a " initial the company. perceptionof customer's "Generally,we have no major complaintswith your company."

"Our dealingswith your companyhave been very good. Our only current less 50% is know We than the of your suppliers cheaper of pricing. concern " We that the of your company. quality would match are not sureof prices. "Quite frankly there are better machineson the market for two-thirds of your

better " to our requirements. conform price,whicharemorereliableand "Cheaper packagesfor planned maintenance instead of £1000 per machine every 12 months."

241

Appendix C: CustomerSurveyReport

Part 3: Identified Strengths and Weaknesses

Company A Weaknesses indicate Strengths E the C, D B, A, the of Tables and and basedon the surveyresults. The Method usedto determineif a classification of Weaknessis to be given is found in Appendix A.

High Strength

A classification of High Strength is awarded if NO Customers have indicated any dissatisfaction.

Strengths Classifications that have been left blank are the Strengths of the Company A as indicated by their customers. These generally are areas with high levels of Customer Satisfaction.

Weaknesses

Theseareareaswhichhavea significantpercentage of CustomerDissatisfaction.

242

Appendix C: CustomerSurveyReport

Management for Quality Levels Satisfaction Customer Table A: Classification of Section 1: Quality Management

Number of Satisfied Customers

Number of Dissatisfied Customers

of Product

15

1

2b. Durability of Product

15

1

2a.Consistencyof Product

14

1

lci. Time for Delivery

14

2

lb. uali of Service

13

3

Weakness

lcii. Meeting Delivery Promises

11

3

Weakness

I a. Quali

Classification

Table B: Classification of Customer Satisfaction Levels for Customer Focus Section2: Customer Focus

Number of Satisfied Customers

lb. Invoices are timely and correct

16

Number of Dissatisfied Customers

Classification

-

high Strength

3. Performance with regard to meeting

customersatisfaction 2a. Efficiency of responseto orderplacedby Customer

15

1

14

1

2b. Efficiency of res onseto CustomerEnquiry

14

2

1a. uali of Servicewith re andto Sales

13

2

Table C: Classification of Customer Satisfaction Levels for Quality Costs Section3: Quality Cost I a. Performance when Benchmarkedin Product uali 1cii. Meetin Delive Promises 2. Extentto which product meetsperformance requirements lb. Performance when Benchmarkedin Value for Mone 1ci. Time for Delive 3. Estimatedcost of non-conformance to Customerrequirements as percentageof Customer's Annual Sales

243

Number of Satisfied Customers

Number of Dissatisfied Customers

15

1

15

1

15

1

14

2

14

2

8

3

Classification

Weakness

Appendix C: CustomerSurveyReport

Table D: Classification of Customer Satisfaction Levels for Quality Systems Number of Dissatisfied Customers

Classification

16

-

High Strength

15

1

14

1

Number of Satisfied Customers

Section 4: Quality System

2d. Quality Awareness of Employees

Specifications Customer Ability to and meet a. Re uirements 2b. Complaintsareresolvedto the Satisfactionof the Customer 2c. Level of Technicalsupportand assistance provided

7 13

3

Weakness

Table E: Classification of Customer Satisfaction Levels for Quality Improvement Section 5: Quality Improvement

Ia. Reactionof CompanyA to Customerneedswith regardto Product 1b. Reactionof CompanyA to Customerneedswith regardto Service 2a. Improvementin CompanyA's Productsince Customer's last purchase

Number of Satisfied Customers

Number of Dissatisfied Customers

15

1

15

1

8

2b. Improvementin CompanyA's Servicesince Customer'slast purchase

8

244

1

Classification

Appendix C: CustomerSurveyReport

Part 4: Conclusion high indicate that percentage of customers are very the a very The analysis of results the Quality, Product the of performance overall and the consistent satisfied with durability, have Customers consistency, expressed satisfaction with product Product.

their to specificationsand requirements. the meet ability and Company A's Awareness Quality favourably have the of Customers rated also very high is invoices That timely customer area of another correct and are employees. satisfaction has indicate in that the this established Generally, commentsmade company survey good relationswith their customers. Although Product Quality is a very important considerationto a customer, this is not has been This in determination their communicated supplier. of a good the solecriteria by CompanyA's customers.The commentsand ratings received show dissatisfaction Service Quality to the the to the company meet and ability of of regard with exists Delivery Promises.Dissatisfactionis also presentpertaining to the level of Technical SupportandAssistanceprovided. It is important for CompanyA to give immediate attention and action to overcoming is The full to company's success. theseas any sustained customer satisfaction vital for is importance to the a company satisfy customer always of paramount ability intendingto becomea full Total Quality Managementcompany. HighestLevel of CustomerSatisfaction: The largestnumberof customersansweringany questionsin the rating of 4, i.e., Very Good, is 12. This is 75% of the participating customers. The areas in which these occurare: Section1, Questionla:

Product Quality

Section1, Question2a:

Product Consistency

LowestLevel of CustomerSatisfaction: 245

Appendix C: CustomerSurveyReport

i. Not 1, in the of e., rating The largest number of customers answering any questions The is Four 1. questions are: as such. rated Acceptable, questions were Benchmarked. for Money Value lb Question 3, when Section :

Estimatedcost of CompanyA's non-conformanceto

Section3, Question3:

the customer's of a percentage as requirements customer

annualsales. Section4, Question2b : Resolutionof complaintsto the satisfactionof the customer. Section5, Questionla : Ability of CompanyA to react to customerneedsregarding product. AreasRequiringImprovementAccording to CustomerFeedback: following The i. Needs Improvement. 3, based identified Theseareasare e., on rating 3: Rating Customers 20% of awarded a or more are areaswhere Section 1 (Quality Mana eg ment) 20% of Customersfeel the company needsto improve on its overall Quality of Service. 20% of Customersfeel the company needs to improve on Meeting Delivery

.

Promisesto enablethat their requirementsbe met. Section4 (Quality System) 20% of Customers want improvements concerning the level of Technical

"

SupportandAssistanceprovided. Customer Retention: Two Customers have stated they do not wish to continue with Company A

.

as their supplier. These companies have also indicated that they will Company A to others. The reasonsgiven for their decision are: "

"Far Too Fxnencive"_

"

"Very

"

"Very expensiveto repair."

exnencive

to hiiv_"

246

not recommend

Appendix C: CustomerSurveyReport

"Cheaper packages for planned maintenance instead of £1000 per machine every

.

12 months." Recurring faults, communicatedto yourselvesand never resolved. Your unwillingness to carry out further design work on an existing product to the having to to solve a problem, after giving competitor approach your us of extent dates do keep You to to agreed service not you over a year come up with a answer. for the overhaul of the machines.

Make them more robust and able to cope with abrasive and corrosive

"

environments. "

Listen to the requirementsof your customer, solve problems and implement the solutions.

The remaining 14 Customershave indicated they will re-purchaseand recommend CompanyA to others. Although 14 of 16 Customerswanting to continue with Company A as their supplier is a significant percentage,it cannot diminish the fact that the company has lost 2 is is difficult find it This to a new customerthan very costly much more as customers. it is to retain a customer.Furthermore,a poor reputation spreadsmuch more rapidly

harder is to mend. much and

247

Appendix C. CustomerSurveyReport

Weakness. Areas Determine Used Method to A: of Appendix

The resultsshownin TablesA, B, C, D and E are obtainedas follows: is by Customers' Satisfied for Number The column obtained adding the numbersof of for customersper question ratings: (Very Good andAverage),(Better and Same),or (Much Better and Better). Similarly, the column for 'Number of Dissatisfied Customers' is obtained by adding for the numberof customersper question ratings: (NeedsImprovementandNot Acceptable), (Worse and Poor), or (Worse and Much Worse).

Weakness Thesetwo columnsare then comparedper question. Any question which has a value in is Customers' 'Number Dissatisfied 3 the of column classified as a of or greater Weakness.

The value of 3 Dissatisfied Customersis taken as this study aims to look at areas i. least 20 20% Customers, the total number of participating at percent e., of of where 16, haveindicatedtheir dissatisfaction.

248

Appendix C: CustomerSurveyReport

Appendix B: Customer Survey Questionnaire

249

Appendix C: Customer Survey Report

CUSTOMER SURVEY Please take a few moments to rate the quality of our products and services and provide Please the by this rating. circle appropriate questionnaire. completing comments our -,

us with

We thank you iör helping us to improve the quality of our products and services. Company Name:

Product Purchased:

Rating

Section 1: Quality Management Very Good

To what extent do the hollowing meet your requirements:

Average

Needs Improvement

Not Acceptable

1. Quality and Delivery a. Quality of Product

4

3

2

I

h. Overall Quality of Service

4

3

2

1

i. i) Time iör Delivery Delivery e., c. ,

4

3

2

I

4

3

2

1

a. Consistency

4

3

h. Durability

4

3

2

1

a. Sales

4

3

2

1

h. Invoices are correct and timely

4

3

2

4

3

2

4

3

2

ii) Meeting Delivery Promises

2. Performanceof Product

Section 2:

Customer Locus

1. Pleaserate the quality of service provided by us with regard to the Hollowing:

'2a. I low ell iciently did we respond to your order`? 2b. I low efficiently did we respond to your enquiry? 3.1 low do you rate our company in terms of meeting customer satisfaction'?

4I321

250

1

Appendix C: Customer Survey Report

CUSTOMER SURVEY Rating

Section 3: Quality Costs How do we compare with other suppliers in the

Better

Same

Worse

Poor

following: a. Product Quality

4321

b. Value for Money

4321

c. Delivery,

i. e., i) Time for Delivery

4321

ii) Meeting Delivery Promises

4321

Very Good

2. flow does our product performance measure up to your requirements?

3. What is the estimated cost of our noncontormance as a percentage of your annual sales?

Average

Needs Not Improvement Acceptable

4321

4I3I2I1

Section 4: Quality Systems Very High

1. What emphasisdo you place on your suppliers being certified to IS09000?

2. Pleaserate the following regarding our performance:

Ili Sh

a. Meeting specifications and requirements

4321

b. Complaints resolved to your satisfaction

4321

Average

c. Technical support and assistance

251

Not Required

4I3I2I1

Very Good

d. Quality awarenessof our employees

Low

4I3I2I1

Needs Not Improvement Acceptable

Appendix C: Customer Survey Report

CUSTOMER SURVEY [Section

5: Quality

Rating

Improvements Very

in: do to How needs your we react 1. well

Average

Well

Product a.

4

321

b. Service

4

321

a. Product

4

321

b. Service

4

321

2. How have we improved in the following last purchase: your

since

Section 6: Others 1. What do you like MOST about our:

a. Product

h. Service and Delivery

2. What do you like LEAST ii,,.... ,......

252

Needs Not Improvement Acceptable

Appendix C: Customer Survey Report

CUSTOMER SURVEY 3. What IMPROVEMENTS would you like made to our: a. Product

b. Service and Delivery

Yes

No

4. a. Would you like to purchase from us again'?

b. Would you like to recommend us to others'? l'NO',

why not?

5. Other comments or suggestions

Would you like to be contacted to further discuss your comments? II"YES',

please provide us with the following

Name:

details:

Contact Number:

Designation:

253

Yes

No

Appendix D. Employee Survey Questionnaire

APPENDIX D

Employee Survey Questionnaire

254

Appendix D: Employee Survey Questionnaire

EMPLOYEE SURVEY This is a confidential

survey regarding employee satisfaction.

Please give your opinion

by following the circling the relevant rating. on STRONGLY

AGREE (4)

AGREE (3)

DISAGREE

(2)

STRONGLY

DISAGREE

(I )

Thank you for your participation.

A. WORK ENVIRONMENT

RAT ING

I.

I am paid a fair and competitive salary.

4

3

2

2.

Company benefits are fair and competitive.

4

3

2

3.

Working hours are suitable to me.

4

3

2

1

4.

It is convenient to travel to and from work.

4

3

2

1

5.

The company employs enough employees to operate productively.

4

3

2

6.

The company provides adequate training.

4

3

2

7.

Co-workers are friendly and helpful.

4

3

2

8.

I have good work relationships with people in the company.

4

3

2

9.

I havejob security and stability.

4

3

2

4

3

2

1. My responsibilities are well defined.

4

3

2

2.

4

3

2

4

3

2

10.1 am satisfied with conditions at work.

1

1

1

B. PERFORMANCE

3.1

I know my quality goals and performance standards. receive feedback about my performance.

I

4.

I work a reasonableamount of overtime.

4

3

2

5.

My salary increase is based on how well I do my job.

4

3

2

6.

We share information with each other in our work.

4

3

2

7.

I have enough information to do my work.

4

3

2

8. The tools and equipment available are adequate to do my job.

4

3

2

9.

Management is fair and considerate.

4

3

2

1

10. Management is competent in doing its job.

4

3

2

1

255

1

Appendix D: Employee Survey Questionnaire

EMPLOYEE SURVEY RAT ING

C. JOB SATISFACTION 1.

There is good team spirit and co-operation

2.

in the company.

4

3

2

1

People in the company treat me with respect.

4

3

2

I

3.

My training and skills are fully utilised.

4

3

2

4.

I find my job interesting and challenging.

4

3

2

5.

I have enough authority to do my work.

4

3

2

6.

The company recognises the importance of my work.

4

3

2

7.

Management trusts me to do a good job.

4

3

2

8.

There is enough emphasis on improving quality, productivity and performance.

4

3

2

9.

There is enough reward and recognition for doing good work.

4

3

2

0.

Everyone is working to their full ability and capability.

4

3

2

1

1

U. PARTICIPATION I.

I am working towards the future of the company.

4

3

2

2.

I am encouraged to be creative in my work.

4

3

2

3.

I am encouraged to share new ideas and suggestions for improvements.

4

3

2

4.

I can learn new skills at work.

4

3

2

5.1

can develop to my full potential.

4

3

2

6.1

can implement changes to improve productivity and quality.

4

3

2

7.

My ideas and suggestions are solicited before decisions are made.

4

3

2

8.

''here is opportunity for personal growth.

4

3

2

9.

There are promotion opportunities.

4

3

2

10.1 am satisfied working for the company.

4

3

2

256

I

I

Appendix D: Employee Survey Questionnaire

E. ANY OTHER COMMENTS

257

Appendix E: Employee Survey Report

APPENDIX

E

Employee Survey Report

258

Appendix E. Employee Survey Report

Employee Survey Report for Company A

Part 1:

Overview

Part 2:

Summary of Survey Results

Part 3:

Identified Strengths and Weaknesses

Part 4:

Conclusion

Part 5:

RecommendedAction Plan

Appendix A: Method Used to Determine Areas of High Satisfaction and Dissatisfaction.

Appendix B: Employee Survey Questionnaire

259

AppendA E. EmployeeSurveyReport

Part 1: Overview

Total Number of Participants:

69

Tables:

Tables 1,2,3 and 4 found on the following pages provide the summary of results from Survey. the obtained The Tables indicate the exact number of employees that opted for each rating per subsection. It shouldbe notedthat the horizontal summationper subsectionwill not equal the total in is filled 69, the the of participants survey, as not all number participants which of in full. did Furthermore, there the were participants who not select questionnaire out i. 4,3,2 e., rating, an exact

or 1. These participants' options fell into in-between

between 3 2. and e. g., ratings ratings, For the purposeof this analysis,these in-between ratings are not taken into account. The computationsmadebasedon the number of employeesin the categoriesindicated by ratings4 (Strongly Agree), 3 (Agree), 2 (Disagree)and 1 (Strongly Disagree). EmployeeComments: Of the 69 participants, 24 have provided comments as requested in the questionnaire. The comments in this report are the actual comments written in the returned forms.

260

Appendix E. Employee Survey Report

Part 2: Summary of Survey Results

The Summaryof the EmployeeSurveyResults comprisethe following: Table 1:

Summary of Results for Part A (Work Environment)

Table 2:

Summaryof Resultsfor Part B (Performance)

Table 3:

Summaryof Resultsfor Part C (Job Satisfaction)

Table 4:

Summaryof Resultsfor Part D (Participation)

EmployeeComments

261

Appendix E: Employee Survey Report

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Appendix E: Employee Survey Report

Employee Comments

The following are actual comments as they appear on the Survey Forms. "Too many new chiefs standing about talking (and not about work). The management do not ask the people who work in the department for their ideas on for department from bring in better. theirs. job They the another somebody making The management do not seem to know the rules into the running of the firm. i. e., Having time off in the week (sick or holiday) and then letting them work on Saturday." "I feel my grade of pay is totally unrewarding, Re: the extra responsibilities received from management." "Some sort of personal development scheme would help to inspire me to work harder. Management do not seem to be able to make decisions without authority of Directors. What the MD says goes! In discussion we dare not say anything that the MD does not like. " "This company is short sighted and very old fashioned in its attitude. We employ far too many staff (non-production) in ratio to hourly paid (production). The management will do anything to avoid facing up to problems. " "If the management were doing their job correctly there would be no need for a survey into be The this time this survey put to better use getting work out put could of nature. factory the of gate to customers." "If management did their job correctly we wouldn't need this survey. There is no cooperation between managers of different departments. Management seem to create problems rather than solve them, i.e., passing the buck. " "How much expense has this cost the company to carry out? " "Management appear to ignore shopfloor suggestions for possible improvements in productivity, training and working relationships. TQM `appears' to he only a "nodding" formality. Too much emphasis is placed on old, out of date work practices that cost employees and the company money. A strong feeling of Who Knows Who is present when "favours" are in the offering, with nepotism being a strong underlying trend. " "Management are inconsistent in certain areas of authority. " The company lacks direction. General morale is low. Generally many people do not want to take responsibility för their own quality of work. Generally the employees are conservative organisations. "

and lack exposure to working

fi' r other

"Questions are too generalised impression be formed. wrong can easily -a Most, if not all, of the company's problems lie at the door of the management. They can neither manage the company well nor manage their personnel well. " 266

Appendix E: Employee Survey Report

"Training: Very little formal training is given. Conditions: The building as a whole is in a state of disrepair - This is not conducive to a pleasant includes furniture This Particularly toilets office and environment. working Reception. Salary: This is a male orientated company. Management:

We feel that managementis not interestedin what goeson in the departmentsand that they do not care.They haveyet to prove themselves. Job Satisfaction: There are no rewardsfor hard work - the only time your performanceis highlighted is is hunt" begins. "witch there a problem and a when Superteams: Last year 5 employeesset about trying to solve the problems of this division. They produceda twentish pagereport which was acclaimedat the time. One year on we still haveno official feedbackeventhough this has beenchasedwith managers,constantly. The generalopinion is that managementdo not care - particularly about its staff's " opinions. "This is a small company.It should be run on small company lines. When worker to is is 1 1 to this wrong. I find a managementteam having to resort to staff almost having this sort of survey done meansa total lack of knowing what is going on in the " factory, a total lack of management. "It is all well and good having these seminars and mini meetings, but the average is bothered only operator(worker) about coming to work, doing their job and going home. I feel it is for managementto take all responsibility on production and problems, not the worker." "As I have not beenwith the company for long I have answeredthe questionsto the best of my knowledge. I think my views may change when I have been here a length reasonable of time." "This companyis badly managedby people who take no time to look into the views of the workforce.A Them and Us attitude exists, sex discrimination is rife, women being treatedas secondclass in every way imaginable even down to male workers being given ice lollies in the hot weather,the ladies get nothing." "The questionsare mostly too generalisedand not specific. What has happenedto the managerswho have or had the ability to manage a company without the need for outsideconsultantswho do not know the businessor its employees?Employees are increasinglybecoming more Dissatisfied, Demoralised and Demotivated with little hopeof positive changefor the future." "1. 2.

The scrapand bonussystemis totally unfair. Thereare not enoughemployeesto do a satisfactoryjob of getting work produced(i.e., too much work to cope). 267

Appendix E: EmployeeSurveyReport

infighting that instead better the petty all of Management should communicate 3. goes on. let bit, done have "I have that somebody else the attitude my Too many people 4. sort this out". (Scrap be therefore mistakes. creating Pre-production work should not rushed 5. Bonus) instead it the through correctly company If a job is started off correctly then should go " large and scrap. amount of re-work of a

is bonus in feeling ill the the system. company major causeof is Solomon judgement the work when Managersare requiredto exercise of scraped. force. fall the work Financialpenalties unfairly on a small section of Times on jobs do not allow for quality. less it bonus lost his has attitude. care Oncean employee promotes a consistent The systemis opento abuseand is abused. fault lies. " in disputes the is lost to the Quality time to as where company

"A 1, 2. 3. 4. 5. 6.

"1. 2. 3.

Departmentswork on an individual basis,rather than as a whole unit. Too many chiefs not enoughIndians who don't pull their weight but rake in benefits,i.e., the companycars which are a waste of money, unless SalesRep. High wagesfor Directors who sit on their arses."

don't it for to for time, the company "Having worked seems me sections only a short joint has its i. own particular goals and not a get on together as a unit, e., each unit venture. Bonussystemseemsto work at 75% of its capacity." "I feel that by using a Yes/No, agree-disagreeanswerthis questionnairedoes not truly in feelings, the the towards company general. managementand reflect my Having worked for the company for many years, I have witnessed new schemesand ideasbeing suggested,and implemented,only to seethings remain exactly the same. This coupledwith the length of time for a decision to be made about either production impetus, losses financial then company and the management, matters, methods,or leaves This then the supervision problems and obviously workforce. credibility with issues to contendwith. otherrelated The department has had little or no capital expenditure for many years, this mixed together with the constant productive output pressure, and seeing other departments benefit from new equipment, has left people feeling that the company no longer cares, is dedication deal bother. Motivation to they another problem and now should why so " with.

"A7 - Most workers are friendly and helpful. Cl - Agreedin my departmentbut not throughout the company. C8 - Disagreethrough lack of communicationbetweensupervisorsand workers. CIO - Totally disagreedue to the fact that a number of individuals wonder around the but the time of other workers whose time their own company,not only wasting departmentthey wander into without just cause. "I think that the managementshould pull themselves together becausethey are no " good. 268

Appendfc E. Employee Survey Report

Part 3: Identified Strengths and Weaknesses Strengths The following are the identified Strengths of the company based on their employee feedback: 1. Employees feel Management trusts them to do good work.

2. Employeeshavegood relationshipswith people they work directly with. 3. Good work Processesand Procedures (Employees know their Quality goals and performance standards. Their defined. Employees are given enough information and responsibilities are well do to their work.) authority 4. Good work environment. 5. Employeesare committedto and are working for the future of the company. 6. Employees have a strong sense of job security and stability working for the company. Overall, employeesare satisfiedworking for the CompanyA. Weaknesses The identified Weaknessesin Company A are based on Dissatisfactions highlighted through employeefeedbackin the survey. The following indicate the areas in which theseoccur: 1. Level of Recognition and Reward for good work, and the method and level of FinancialRemuneration. 2. Teamworkand Co-operation. 3. Employees'opinion of ManagementCompetence. 4. Creativity and Methods to Improve Quality and Productivity are not actively soughtfrom Employees. 5. Lack of CommunicationbetweenManagementand Employees. 6. EmployeeTraining. 7. Work Conditions. 8. AdvancementOpportunities.

269

Appendix E: EmployeeSurveyReport

for it is Opportunities, that Advancement With regard to generally acknowledged is is difficulty hard that to this an area of companies, sized small and medium

limited due the to promotion opportunities. very overcome Advancementopportunitiesfalls into the highest level of needsas defined by Maslow, i. e., Self-Actualisation Needs. It is the highest level of motivation

in Maslow's

hierarchyof needsand is not easily achievable.

Tables Indicating Employee Satisfaction Levels

Tables A, B, C and D on the following pages serve to highlight the Areas of High Satisfactionand Dissatisfactionindicated by employeesin the survey. Classificationsthat are left blank representareasof low satisfaction. These areascan be worked on and transformedinto areasof high satisfaction at the discretion of the dissatisfaction immediate to the as opposed areas of which require attention company, is found in by A Recommended Action Plan Part 5 management. of the action and improve lower Efforts to areas upon of satisfaction require minimal required report. being by the company as opposed to the time, effort and possible expended effort financial commitment neededto effectively and permanently transform the areas of Dissatisfactioninto areasof High Satisfaction. The Method usedto determinethe SatisfactionLevel Classifications in Tables A, B, C in is found D Appendix A. and

270

Appendix E: Employee Survey Report

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Part 4: Conclusion

High Satisfaction

Low Satisfaction

Dissatisfaction

32.5

35.0

32.5

(13 Qns. of 40)

(14 Qns. of 40)

(13 Qns. of 40)

Percentage of Total Questions 40 of

Positive: 67.5%

Negative: 32.5%

From the above Table, it is shown that the level of satisfaction among employees is high in (i. 32.5%). 13 Only the the survey not very e., asked questions pertaining be Satisfaction'. `High It the noted that the classification should under questionscame fall is based 60% the these opinion of only of on under which questions classification in Appendix 13 A. For the employees, as explained questionsrated as participating all `Dissatisfaction',they representareaswhich Managementmight want to perform Root CauseAnalysis to determineif there are solutionsthat may be implemented. Taking into consideration Company A is a small company, it will therefore have limited promotional opportunities for its employees.Hence, it is fair to set aside the for Question (There D9 are promotion opportunities). This will negative answer decreasethe percentageto 12 of 40, i.e., 30%. The strengthsof the company indicate there is a good level of employee commitment towardsworking for the future of the company. Good work relationships are present among co-workers, and employees are happy with their work environment. Employeesalso feel that managementtrusts them to do good work, and they have a job strongsenseof security and stability working for the company. This strong sense job securityfelt by employeesis a strong positive factor the company, especially in of todays market. Employees have indicated they know their Quality goals and performance standards, and that their responsibilities within the company are welldefined. This is positive as it means employees are aware of their role in the company regarding the company's requirements and expectations of them. It is important that 275

Appendix E: Employee Survey Report

is to this them know them and goals guidelines as gives expected of what employees information feel have to Employees they and authority sufficient towards. also work

have indicate 69 43 The do that their to of employees them results work. enable indicatedthat they are satisfiedworking for the company. The employees have, through their participation shown their willingness and interest

to improve the company's performance, quality and productivity, and consequently improve their own welfare as well. The following are key areasof dissatisfaction indicated by employeesthrough their level level The training the of provided, and of and comments: survey response Employees have between indicated themselves and management. communication improvementsmust be maderegarding inter-departmentTeamwork and Co-operation. They would appreciaterecognition from managementfor good work done, and also be listen discuss ideas to to to their willing and and suggestionsto want management help the companyfurther improve its quality and productivity. There is a notable level level dissatisfaction to the pertaining of and the method employed to ascertain of financial remuneration,and a significant proportion of employeeshave statedthey are not satisfiedwith work conditions in the company. Total Quality Management requires: 1) Management Commitment, 2) Employee Commitment, and 3) Efficient and Effective Systems. TQM requires that all be employees committed and participate actively in continuously seeking to improve the quality of their work, and that they are appropriately trained to enablethis. These be only achievedwith full commitment from Management.Managementalone is can responsiblefor motivating their employees.Managementmust maintain a motivated workforcewith a high level of employeemorale in order to fully reap the benefits of a totally committedworkforce. Basedon the commentsprovided in the questionnaireand the fact that 69 employees voluntarily participated it is a very clear indication that employees want greater successto be attained for the company, and that they want to be able to contribute towardthis. They have highlighted areaswhich in their opinion need improvement. It is now the responsibility of Managementto analysethe results presentedin this report, and to determinethe necessarycorrective actions to be undertaken.The decision of 276

Appendix E: EmployeeSurveyReport

feedback from in to their this to obtain candid survey order the company conduct identify level to the to their working with employees of commitment employeesshows future improve affect progress. adversely might upon areaswhich and The conducting of this survey and the high level of participation have undoubtedly its both A is, Company that that to workforce and share a common goal, shown future With the this shared goal, the the of continued company. and success achieve it definitely its first its has taken crucial and successful step as embarks on company journey down the route to TQM.

277

Appendix E: EmployeeSurveyReport

Part 5: Recommended Action Plans Employees. All Survey to Results the Communicate 1. of

Appreciation should be extended for good points made and assurancegiven that identified weaknesseswill be studied and appropriate courses of action will be informed, be that consulted and updated on these. taken, and employees will

2. The identified weaknessesneed further definition and root cause analysis by Managementwith participation from employees. Employee participation will result in their ownership of the problems and leadership Management However, the must play role. solutions. Suggestion:The formation of work teams to define, analyse and recommend solutionsto problems. 3. Plan of Action should be developed to resolve the problems. This will result in improved leading teamwork to greater and enhanced employee motivation productivity. 4. Action should be taken to improve Low Satisfaction areas and maintain High Satisfactionareas,thus utilising the skills and resourcesof employeesto the fullest andconsequentlyfurther increasingproductivity.

278

Appendix E: EmployeeSurveyReport

Appendix A: Method Used to Determine Areas of High Satisfaction and Dissatisfaction.

Theresultsshown in TablesA, B, C andD are obtainedas follows: The column for Motivated Employees is obtained by adding the values for Ratings 4

for Demotivated Employees is Similarly, for 3 the column each subsection. and for 2 1 for Ratings by the and eachsubsection. values obtained adding Thesetwo columns are then comparedper subsection.Any subsectionwhich has a in value either column of 41 employeesor more will be classified as follows: High Satisfaction:

41 or more employeesin the column Number of Motivated Employees'.

Dissatisfaction:

41 or more employeesin the column 'Number of Demotivated Employees'.

The determiningvalue of 41 employeesis taken as the study aims to look at the results obtainedbasedon 60% of the employees.As 69 employeesparticipated in this survey, the value of 41 employeesis usedin the analysis,i. e., 60% of 69 employees.

279

Appendix E: EmployeeSurveyReport

Appendix B: Employee Survey Questionnaire

280

Appendix E: Employee Survey Report

EMPLOYEE S This is a confidential survey regarding employee satisfaction. on the following by circling the relevant rating. STRONGLY

AGREE (4)

AGREE (3)

DISAGREE

(2)

Please give your opinion

STRONGLY

DISAGREE

(1)

Thank you for your participation.

A. WORK ENVIRONMENT

RAT ING

1. I am paid a fair and competitive salary.

4

3

2

2.

Company benefits are fair and competitive.

4

3

2

3.

Working hours are suitable to me.

4

3

2

4.

It is convenient to travel to and from work.

4

3

2

5.

The company employs enough employees to operate productively.

4

3

2

6.

The company provides adequate training.

4

3

2

7.

Co-workers are friendly and helpful.

4

3

2

8.

I have good work relationships with people in the company.

4

3

2

9.

I havejob security and stability.

4

3

2

4

3

2

10.1 am satisfied with conditions at work.

R. PF,RFORMANCE I.

My responsibilities are well defined.

4

3

2

2.

I know my quality goals and performance standards.

4

3

2

3.

I receive feedback about my performance.

4

3

2

4.

I work a reasonable amount of overtime.

4

3

2

5.

My salary increase is based on how well I do my job.

4

3

2

6.

We share information with each other in our work.

4

3

2

7.

I have enough information to do my work.

4

3

2

8.

The tools and equipment available are adequate to do my job.

4

3

2

9.

Management is fair and considerate.

4

3

2

10. Management is competent in doing its job.

4

3

2

281

I

I

1

Appendix E: Employee Survey Report

F

EMPLOYEE SURVEY RATI NG

C. JOB SATISFACTION 4

3

2

People in the company treat me with respect.

4

3

2

3.

My training and skills are fully utilised.

4

3

2

4.

I find my job interesting and challenging.

4

3

2

5.

I have enough authority to do my work.

4

3

2

6.

The company recognises the importance of my work.

4

3

2

7.

Management trusts me to do a good job.

4

3

2

4

3

2

4

3

2

4

3

2

1. I am working towards the future of the company.

4

3

2

2.

I am encouraged to be creative in my work.

4

3

2

3.

I am encouraged to share new ideas and suggestions for improvements.

4

3

2

4

3

2

4

3

2

4

3

2

1.

There is good team spirit and co-operation

2.

in the company.

8. There is enough emphasis on improving quality, productivity and

1

performance.

9.

'T'hereis enough reward and recognition for doing good work.

10. Everyone is working to their full ability and capability.

D. PARTICIPATION

4.1 5. 6.1

can learn new skills at work. I can develop to my full potential. can implement changes to improve productivity and quality.

7.

My ideas and suggestions are solicited before decisions are made.

4

3

2

8.

There is opportunity for personal growth.

4

3

2

9.

There are promotion opportunities.

4

3

2

10. I am satisfied working for the company.

4

3

2

282

Appendix E: Employee Survey Report

283

Appendix F: Facilitator

APPENDIX

F

Facilitator Training

Appendix F is divided into the following sections:

F1

Day 1 of Training Session

F2

Day 2 of Training Session

F3

Day 3 of Training Session

284

Training

Appendix F." Facilitator Training

Fl. Day 1 of Training Session

looked first day for the at: The training program facilitators. facilitator the of training and role/expectations Objectivesof the Facilitator techniques. Video presentation: `Case of the Short Sighted Boss'.

Syndicate Exercise on "What is Total Quality". This exercise reviews the TQ. introduction for four the TQ of phaseprocess andthe principlesof The objectivesof the Facilitator Training are: Facilitatorsto generatecompanyexamplesof the conceptsand techniquesof TQ. Facilitatorsto understandhow the TQ training material fits together. Facilitatorsto understandand effectively use the employeetraining manual The facilitator's role is to: Be a TQM champion. Train fellow employeesin TQ. Offer guidanceto both teamsand individuals. Assist TQ steeringgroupsto control projects. Encourageand supportTQ. Maintain a watching brief - to recommendredirection. Facilitatorsare taught the techniquesthey should use to be effective facilitators, such listening learning They laying the aspects. styles, and of ground rules, presentation as teaching to to a senses, apply wide of methods, several variety appeal encouraged are (audio to teaching stimulate and participants play an active role. and visual) aids, use The Program for Days 2 and 3 consist of presentations by the trainer, syndicate facilitators. lecturettes by The lecturettes the provide presented exercises and facilitators with the opportunity to give presentationson the principles and concepts Training TQ Employee Program. to their to them which conduct own prepares relating An importantpoint that is reiteratedis the need for customisation.Facilitators are told that although Avesta called their TQ initiative `Precise Performance', facilitators it by initiative best their title own giving a suitedto the culture of the shouldcustomise 285

Appendix F: Facilitator Training

important as it focuses the attention of employees and conveys is The title company. title during that the training Consensus the was reached the TQ messageto customers. but the itself name has another given TQ reputation, an unfavourable TQM or earned better be received. sameprinciples would

F2. Day 2 of Training Session The sessiondiscussesthe following: is becoming TQM, is implementing quality Why the company and why increasinglyimportant. What makesa quality company,and the characteristicsof a quality company. External and internal customers and customer satisfaction and emphasisesthat has in the a customer. company everyone The importanceof prevention instead of detection and the concept of the cost of for Participants tools the taught prevention. are quality. The type of managementbehaviournecessaryfor the successfulimplementation of TQM, andhow to effectively communicatethe messageof TQM to employees. How to define quality problems and identify quality opportunities. Facilitators learn that one of the aims of TQM is to ensureeveryone understandsthe aimsand goalsof the companyso that everyonewill work towards achieving the same objective. Total Quality is defined as achieving quality at the lowest cost which necessitates having everyone's commitment. The ultimate aim of TQ is the company-wide is that the most effective route to customer satisfaction and to the quality realisation company'ssurvival and growth. The sevenkey principles of TQ are discussed: 1. Philosophy - Prevention, not detection.

2. Approach - Managementled. 3. Scale Quality is the responsibility of everyone. 4. Measure

Costs of quality. -

5. Standard - Right first time. 286

Appendix F: Facilitator Training

6. Scope 7. Theme

Company-wide. improvement. Continuous -

TQ discuss the towards facilitators the approach the to In addition sevenprinciples, TQ its The of encompasses the premise people. company of asset most valuable three aspects:

Total quality beginswith top management. Total quality is not a quick fix. The real changesof attitude and behaviour within a begin at the top. must company Total quality places the emphasis on people.

Total quality is about balancingand optimising all resources- people, systemsand importance The in to of technology maximise customer satisfaction. order is drives because human the the technology resource and systems above people link between in the them. technology used a company and provides systemsand Hence TQ promotes quality improvement through people using systems and technologyto supportwhat they do. Total quality exertsbottom-up pressure. As commitment and action towards improvement extends throughout the is in bottom-up pressure set motion through teamwork and company,a processof the initiative of employees. Total Quality will only be successfully incorporated into the company culture if the following four stagesare followed: 1. ManagementCommitmentand Focus Senior managementcommitment is the most important factor in the successor failure of TQ implementation.They have to lead by example. 2. Diagnosis and Preparation

The only way forward is to know wherethe company is now.

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Appendix F: Facilitator Training

3. Planned Improvement Upon determination of the areas needing improvement, it is important to develop a is is be involved. Training to the how to to skills provide vital and who of plan implemented. is best taken the and of action course ensure

4. Review and Reinforcement

Review is necessaryto monitor the successof changesand improvements made. Reinforcementensurescontinuousimprovement. At this point, a syndicatework assignmentis conductedto reinforce the importanceof TQ in the facilitators' company. The next topic is customer satisfaction. Facilitators are reminded that in addition to has internal is that the employee an each customer customers and employee external in turn a supplier. The same concept of satisfying external customers applies to the internal customer.Hence every employee needsto meet customer requirements.The facilitators identify internal to their assignment requested work customers syndicate internal identified. be that the customers' needs can ways and The TQ principle of preventioninsteadof detection means: "

Tackling the cause,not the effect or symptoms. Solving the problem at source,not managinground it.

"

Removingthe mistake for good, not just this once.

Efforts and resources must be focused on doing things Right First Time Every Time as this:

Maximisesthe useof resources. Ensuresquality performanceat every stageof the operation. Cutsdown wasteand rework. Eliminateswork disruption. Satisfiesand delights internal and external customers. Syndicatework assignmentsrequired facilitators to list five examplesof detection and preventionand to list samplesof waste/rework with suggestionson how these can be prevented. 288

Appendix F: Facilitator Training

Facilitators were reminded that the quality improvement processneeds a structured finding defining identifying the the cause root problem, and entails which approach, be the testing determining to taken, the solution, and solving and action and

implementingthe solution. Identification of quality improvement opportunities can be achieved through:

Analysing departmentactivities in terms of customer-supplierrelationships, both internal and external. Analysing customercomplaints. Treatingall tasksor functions as potential quality improvement areas. Talking to workers to find out how much of their time is actually wasted as a result of poor quality. The best way to define quality problems is to perform a disciplined analysis as follows: 1. Clearly statethe current situation through: Simple definition of the problem. Quantifying the problem, indicating how it is measured. Obtaining more information on the problem, such as details of the who, when, where and how long. Determining failure, appraisaland other costs causedby the problem. 2. Having definedthe current situation, it is then comparedto actual requirementsof what the situation should be. These actual requirements are determined in the samemannerasthe current situation analysis. 3. With both setsof data and information, the problem can be clearly defined based on its deviation from requirements. This approachto quality improvement is recommendedbecauseit focuseson looking for solutions for future changes,and does not dwell on laying blame for present mistakes.

A good start for quality improvementis to tackle problems within the facilitator's own departmentor group that have a high potential for improvement and that will involve 289

Appendix F." Facilitator Training

develop because beneficial is to This of a sense employees able are employees. several department their the security of or group. within own confidence and achievement

discussed that Another point was the need to publicise results obtained companywas involved. This the team to to members acts as a strong motivator wide and give credit in initiative TQ the builds and confidence as actual results are up enthusiasm and being achieved.

All facilitators are given a copy of the Employee Training Manual to be used to The training trainer gave an overview of the their own employee program. conduct facilitators training to read through the manual so that manual and asked employee they could clarify any doubts with him the following day. Moreover, he extendedan invitation facilitators him if to to they subsequentlyencountered any contact open problemswith the training material or employeetraining program.

F3. Day 3 Training Session

The third sessiondiscussesthe benefits of problem solving teams, their importance and use. It emphasisesthat quality improvement is integral to TQ and develops this concept.It also stressesthe actions neededto overcome the barriers to TQ and to ensureit becomespart of the new culture of the company. The aim of this sessionis for facilitatorsto understandthe following: "

"

Whenand how to

useproblem solving teamsin TQ.

How to usethe techniques teamwork for TQ. of How to analyseand solve quality problems in a methodical The action neededto

"

The application

'

What must be done

manner.

produceerror-free work.

of TQ to accident prevention.

to make quality improvementspermanent.

The needfor strongteamwork is emphasised.Teamwork is the best involving way of everyonein quality improvement. Teams harness commitment, provide a means of cross-functional or departmental communication and serve as a platform for promotingpositive attitudesfor change. 290

Appendix F." Facilitator Training

Committee Steering by Forces discussed. Task the are set up Two types of teams are boundaries department that and deal cross to with specific multi-function problems include members from each affected department. Action Teams on the other hand are

include Teams Action The departmental education formed to solve aims of problems. first do help tasks TQ to help right everyone message,and commitment to spreadthe time every time.

The benefitsof teamwork are: Teamscan do jobs individuals cannot. A

team uses the skills and talents of all members to arrive at the best answers. Working in teams builds ownership across the organisation.

Everyoneis involved in the decision and having invested in it, they will be more it. to committed Managementcannot solve quality problems by itself. Teams use talent throughout departmentsto bring responsibility for improvementcompany-wide. Team selectionand team size are vital for success.Teams should include people who decisions Essentially have the to take these are the of made. as action a result will likely be by job decisions made. to affected or responsibilities are people whose Participants are alerted to the fact that teams begin to lose their cohesion and is five The to twelve ten team members. optimum size effectivenessat a maximum of to eight members. The next topic of discussion is problem solving. The need to know customer improvements before any effective quality can be madewas emphasised. requirements For the participating companies, this is a step they have already taken through conductingthe CustomerSurvey. The approachto achieving quality improvement is outlined: Determinethe root causeof the problem. Solvethe problem and test the solution to ensureit will not causenew problems. Implementthe proven solution. Ensurethat any changemadeis permanent. The accurate determination of the root cause is the first vital step to correctly addressingthe problem. Facilitators are taught how to analyse and solve quality 291

AppendixF." Facilitator Training

in a methodical manner using brainstorming and the cause and effect problems facilitators the to to practice conducted allow Two exercises were syndicate diagram. tools. these use of be improvement only realised when: can Quality it. to Employees are motivated act on it have the authority to effect a permanent to act on and Employees are empowered change.

Procedures are in place to allow measurement and monitoring of the improvements and any deviation that may arise. The improvement has to be basis. reviewed on a regular An important point brought to the attention of facilitators is that quality improvement to satisfy customerrequirementscan only be achieved when customer requirements known. The be determining to pitfalls aware of when customerrequirementsare: are The conclusion that meeting customer requirements is all about product requirement, ignoring service quality and an overall quality business.

The failure to appreciatethat meeting customerrequirementsmust be a continual process.Customerrequirementsare not static. The failure to acknowledgethat everyone has a customer, especially an internal customer. Fear.This is the fear of changeor recrimination and is usually the greatestbarrier to changein any organisation. The following TQ principles on accident prevention are discussed: 1. Prevention.

Throughthe adoptionof safeworking proceduresand training in theseprocedures. 2. Managementled. Managementdemonstrates

commitment through the implementation of safe working and ensurescommunicationthrough safety committees(Action Teams).

3" Everyone is responsible. Everyone must be awareof his responsibilitiesto himself and others. 292

AppendixF." Facilitator Training

4. Costs.

Accidents are a clear example of failure that penalises the business through increasedcosts. 5. Right first time. The adoption of safe working practices will ensure accidents are avoided, and can

bring aboutthe realisationof zero accidents 6. Company-wide. Accidentscanoccur anywhere. 7. ContinuousImprovement. This must be the aim. Six stepsare discussedto makequality improvementspermanent: 1. Give every improvement,large and small, the statusof a permanentchange. Ensurethat all plans,resultsand changesare recordedand updated. 2. Follow up every change. Removeall factors that may causethe changeto be reverted and even after the has been change permanently entrenchedensure that it is monitored to prevent backsliding.

3. Understandthat changein one areamay meanchangeselsewhere. Make surethat all necessaryrelated changesare made. 4. Communicatethe changesto everyone. Reinforcechangesby making them as well known as possible. 5. Fix changesin eachperson'smind. Involve all affected personsin the improvement process.A good way to ensure commitment to the change is to make known the full reason and supporting evidencefor the change.

293

Appendix F: Facilitator Training

6. Control the processof consolidating improvement. Regularly review the change and monitor improvements in results. Make the

improvements known involved to the all so as to reinforce their progress of commitment.

The final training assignment was the presentation of lecturettes by facilitators. This

included is facilitators hands-on in to give assignment experience presentation. Facilitatorsare encouragedto ask the presentersquestions. The training concludeswith the reminder that the only way forward is through the in and conviction commitment of everyone the company, that TQ is the key to the long term survival and successof the company, and that positive attitudes toward changeneedto be reinforced through training.

294

Appendix G: Employee Training

APPENDIX

G

Employee Training

Appendix G is divided into the following sections: GI

Introduction

G2

Programmefor Day 1

G3

Programmefor Day 2

295

Appendix G: EmployeeTraining

G1. Introduction fifteen to talk Training minute Employee a short course with The Adopter begins each He initiative. in TQ important the role the participants. The Adopter plays a very for initiative the TQ to the support and confirms the company's commitment the his the He of end at return Training Employee assures participants of course. to they issues wish concerns any other and raised training course to personally address by Director Managing CEO by filled is or the or discuss. The Adopter's role usually implementation for the of team responsible the member of the senior management TQM. The Adopter sets the scene for TQ by providing

the participants with

He to TQ the explains plan. information of the company's company's and progress

participantsthat: The companyhasconductedEmployee and CustomerSurveys. by findings from the feedback accepted The the surveys were analysed and management. The implement TQ. has to The managementteam produced a structured plan identified dealt be through the the to surveys. weaknesses are with areas priority The Employee Training course marks the beginning of new and better things to for both employeesand the company. come, The Adopter leavesthe training room and the facilitators begin the training sessionby: 1. Introducingthemselves,giving their name,designationand function. 2. Asking the participants to introduce themselvesbriefly. Participants are provided

with namecards. Facilitatorsexplain the objectivesof the training are: To understandthe principles of TQ and the tools and techniques. TQ is a culture changewithin the companythat will only be successfulthrough the participationof everyone. Before distributing the coursematerial, facilitators assureparticipants that no one will be forcedto give presentations.The following Ground Rules were also explained:

Be candidandhonest. If a participant is interested in another's view or needs clarification, ask for it directly. Do not makeassumptions. 296

Appendix G: EmployeeTraining

Eachpersonwill be given the opportunity to contribute on eachtopic. Silenceis assumedto be agreement. Be constructive.

G2. Programme for Day 1

> Total Quality Video. > What makesa Quality Company? Coffee break > SyndicateExercise. > Customersand Suppliers- External and Internal. > SyndicateExercise. Lunch > CustomerSatisfactionVideo. > Teamwork- Discussionand Exercise. Coffee break > Feedbackon ExerciseResults. > Preventionnot Detection. Facilitators introduce and explain the sevenkey principles of TQ, emphasisingthese principles must be understoodand acceptedby everyone in the company before any be changecan achieved. Participantslearn that a company moves from being a good company into a quality following through the company route: Quality beginswith customer'sneeds. Quality productsand servicesstart with quality in the company. A

quality companycomesfrom: >

Quality of management

>

Quality of the workforce

>

Quality of operationsand service

Total Quality turns good companiesinto quality companies.

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Appendix G: Employee Training

It is emphasisedto participants that the quality of operations and services are achieved from the collective quality efforts of Hence a quality company comes through people. everyone. A graphical representation is used to illustrate the competitive edge a quality in has meeting the continually company

rising levels of customer expectations.

Quality Competitive Edge

iality Edge

Customer F

Company Achievement

Time

The first syndicate exercise looks at the "Characteristics of a Quality Company". This exercise reveals how employees perceive the company against the characteristics of a quality company.

The next topic concerns customers. The learning objectives are: the definition of `meeting customer requirements', the concept that everyone has internal and/or external customers and that the only way to meet customer requirements first time every time is through a system of prevention. Results from the company's Customer Survey Report are discussed with participants to show how customers rate their satisfaction with the company. Participants are taught that a company is made up of sets of customer and supplier links. Achieving

lasting satisfaction for the end

customer depends on the quality of each internal supplier/customer link. The customer must come first, regardless of whether he is an internal or external customer.

The next syndicate exercise deals with "Everyone has a Customer and Supplier". Participants are divided into three groups, making sure that the members in each group do have a supplier/customer link.

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Appendix G: Employee Training

Facilitators next discuss the importance of teamwork and its benefits. The syndicate illustrate benefits is is Sea". The "Lost At the to this of group exercise aim of exercise effort compared to individual effort. This exercise gives participants the opportunity to from differently Employees the previous are grouped experience working as a group. includes from different functions departments Each to give group or people exercise. them the experience of team working with `outsiders'.

Another important featureof this exerciseis participants have to discussif a leader is to be chosenand how he is selected,the qualities of a good leader, their opinions on the ideal size of groups, the methods for reaching consensus,how to deal with a disruptive member,how to stop membersfrom becoming too dominant, and how to ensureparticipationby team members.Theseare useful points as it gives participants the opportunity for hands-on experienceof actual group decision making which will be an integral part of their new responsibilities as the company begins quality improvementsthrough teamwork. It helps remove apprehension employees have aboutteamwork. Next on the agendais `Preventionnot Detection'. Participantsare told the best way to producequality is to prevent poor quality. Prevention is defined as tackling the cause andnot the effect through solving the problem at the sourceand not managing around it. This solvesthe problem once and for all. The accompanyingexerciseis `Counting the F's'. Participants are asked to count the numberof F's appearingin a given phrase,the aim of the exercisebeing to illustrate the flaws in using detection to produce a quality product. The exercise successfully demonstratedthat detectionis a waste of effort, demotivating and not foolproof. The last item on the agendafor Day 1 is `Cost of Quality'. Participantsare shown that cost of quality comprises Prevention costs, Appraisal costs and Failure costs. The exerciseinvolved facilitators giving participantsten statementsdescribing actual tasks performed within the company and asking participants to allocate them to the categoriesof prevention,appraisalor failure.

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Appendix G: EmployeeTraining

G3. Programme for Day 2

> Introduction - Review of Day 1 Learning > Quality Improvement Process ¢

Problem Definition

Coffee break

> Brainstorming > ProblemSolving Video > Causeand Effect Lunch > Barriers > Total Quality Video Coffee > Conclusionby Adopter

The quality improvementprocessis discussedusing the following flowchart:

Doesthis Meet Requirements?

DefineProblem Wherearewe now? Wheredo we want to be? Define Requirements

Plan f Action

Find Root Causes

Solving and Testing

Implement Action

Deviationfrom Requirements

Figure G3.1: Quality Improvement Process

300

Permanent Fix

Appendix G. Employee Training

Before deciding on the action to take to solve a quality problem, it is necessaryto have: Clearly definedrequirements. Clearly defineddeviationsfrom requirements. Identified the effectsthe problem is having. Identified the potential savingsfrom solving it. Participantsare shownand taught to usethe Quality Problem Definition Sheet.This is an effective formal approachto problem definition. This is shown in Table G3.

Opportunity Current Situation

Requirements

from

Difference

Simple definition of the problemand requirements

Quantificationof the problemand requirements

Potential Gains

Who, when,where, how long, detailsof the problemand requirements

Likely Time Scale

Costof the problem

Estimated

and requirements

saving/benefits

Table G3: Quality Problem Definition Sheet

Facilitators familiarise participants with the procedure of Brainstorming is which designed to bring creativity to problem solving. The underlying assumption in brainstormingis the range of ideasgeneratedtend to be rational and feasible because people in group situations have the tendency to carefully judge and measure their contributions. Brainstorming is based on the premise that the richer the supply of 301

Appendix G: Employee Training

ideas, the more complete will be the exploration of a problem, hence providing a better solution. It allows the usersto collect as many ideas as possible for discussion. The optimum group size is betweenfive and sevenpeople. The ground rules of Brainstorming are: Clear definition of problem.

Generationof as many ideasas possible. No criticism, no evaluation. Everyonehasan opportunity to contribute. Recordevery idea,evenunconventionalones.There must be no editing. Choosea leaderandhavethe right team. Allow time for ideasto be discussedand developed. Maintain a relaxedatmosphere. Encouragefreewheeling.

The next problem solving technique is the Cause and Effect Diagram. It is a very useful techniquefor identifying the problem and defining the root causes.Also taught is the Solution Effect Diagram.This provides a meansfor establishingwhat effects the proposedsolutionwill haveon the process. The final topic covered in the employeetraining is Barriers. Participants look at five different barriers they were most likely to encounter and how to overcome them. Thesebarriersandtheir most commoncausesare: 1. Barriersto EstablishingCustomerRequirements. > Believing that meeting customer requirements is only about product requirements. > Not believing that everyonehas a customer. > Forgettingthat meetingcustomerrequirementsis a continuousprocess. > Lack of feedback. 2. Barriers to Meeting Requirements.

> Not willing to bearthe increasedshort-termcost of prevention. > Fearthat new technologyand improvements will bring job losses. > Employeesnot feeling they have contributedto making improvements. 302

Appendix G: Employee Training

This happensbecausethey are neither not told why things are done differently nor arethey allowed any input in developingnew ways of working. > Tradition - "We've always done it this way". This is the most commonbarrier. 3. Barriers to Measuring Quality. > Not knowing what to measure or how to measure it.

> Being afraid to exposethe real problem. 4. Barriersto Maintaining the Improvement. >

Slipping back into the old ways.

> Losing the impetusfor improvement. ¢ Total Quality is seenas a `flavour of the month'. > Other priorities taking over. 5. BarriersWe CreateOurselves. > Our attitudeandbehaviour. ¢ Failure to be consistent. For example,one day quality will be all important then the next day urgent ordersare rushedthrough, by-passingthe quality system. > Discouragingcreativebehaviour. This is done by not taking up ideas,or worse, by not giving any explanation for why the ideaswere not accepted.

Thefollowingflowchartwasusedto illustratethe procedureto overcomingbarriers: Define Requirements Keep

Fulfil Requirements

Developing

Measure Success

Figure G3.2: Procedure for Overcoming Barriers.

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AppendixG: EmployeeTraining

Participants are encouraged to use the Adopter Session to discuss their concerns and is The days' Adopter issues from the two the presented with views. results and requiring management response. These are written on a flip chart so that the Adopter items the will address all raised.

The Adopter begins this final session with a brief talk about `The Way Forward', is: which

The Total Quality processis headedby the facilitators serving as TQ champions with full support from the managementteam. The group is informed who all the facilitators are. The new culture of listening and asking will hopefully create many quality improvementideaswhich will be successfullyimplemented. As needed,teams will be set up to deal with quality improvement process ideas/actions.

The active involvementof everybodyin the company. It may not be possibleto include everybodyin teamwork. Changewill not happenovernight, but will take time. Facilitators take over from the Adopter and assurethe group that they be kept will informed about decisions made and the actions to be taken. The group is also informed that a meeting with managementwill be held after all employee training coursesare completedto addressall issuesraised.

304

AppendixH." ManagementStyleQuestionnaire

APPENDIX H

Management Style Questionnaire

305

Questionnaire Style Management H. Appendix "

MANAGEMENT

STYLE QUESTIONNAIRE Date:

Company Name:

1. MANAGEMENT

YES I NO

COMMITMENT

A. Commitment 1. Is there a very high level of managementcommitmenttowards quality? 2. Is there a very high level of managementcommitmenttowards productivity? 3. Is there a very high level of managementcommitmenttowards the customer?

4. Does managementlead by example?

B. Organisation Culture

1. Is the organisationstructurepyramid-shaped?

2. Are jobs directedtowards a common goal? 3. Is there more than one supervisorper worker? 4. Does managementplace emphasissolely on machinery? 5. Is emphasisplaced solely on human resources? 6. Are humanand material resourceswell co-ordinatedto ensure maximum efficiency? 7. Are companypolicies and plans communicatedto employees?

306

AppendixH ManagementStyle Questionnaire

I YES

C. Management Style

I NO

1. Is there good relationship between management and workers? 2. Is authority centralised, i. e., is authority and power concentrated at the upper levels of management?

3. Is authority routed from the top of the company? 4. Is authority vested in the position, i. e., is the authority of a person the result of his position? 5. Is there a senseof justice and kindness shown by management dealing with subordinates? when

D. Training and Development

1. Is managementcommittedto employeetraining? 2. Are financial resources allocated specifically for employee training?

3. Doesthe companyhave scheduledemployeetraining?

4. Is there scheduledtraining for the further developmentof management?

YES I NO

2. EMPLOYEE PARTICIPATION A. Employee Satisfaction 1. Is there a senseof commitment amongworkers for the common good of the company? 2. Do managementactively ensureemployeesare motivated? 3. Do managementmeet employeesregularly to updatethem on the progressor otherwiseof the company? 4. Is there a consciouspolicy by managementto ensuregood working conditions for employees? 307

AppendixH." ManagementStyle Questionnaire

I YES

A. Employee Satisfaction

5. Doesthe companyhavea formal employeewelfare policy? 6. Are job rotations planned to avoid the situation of work monotony arising?

7. Is there a high literacy rate amongworkers? 8. Is the employmentof new staff in line with long term company high turnovers? avoiding needs, 9. Is (a senseof) co-operationfosteredin the company? 10. Is there a high level of inter-departmentalco-operation? 11. Is there a high level of intra-departmentalco-operation? 12. Do employeeshave a high level of work discipline? 13. Do employeesplace the interestof the companyover and above their personalinterests?

14. Do employeeshave a senseof job security?

B. Employee Motivation and Involvement 1. Is teamwork encouragedwithin the company? 2. Are there work improvementteams? 3. Is the employeespecially trained to cope with his areaof work? 4. Are employeeshighly skilled in their work? 5. Do all employeereceive detailed work instructions? 308

I NO

AppendixM ManagementStyle Questionnaire

YES B. Employee Motivation

I NO

and Involvement

6. Are employeesgiven responsibility for their quality of work? 7. Are there daily performance charts to monitor the performance of individual employees?

8. Are employeesstrongly encouragedto participatein relevant decisionmaking within the company? 9. Are employeesencouragedto act on their own initiative when the needarises? 10.Are growth and developmentopportunitiesavailableto employees?

C. Communications 1. Is there good and effective communicationamongemployees? 2. Do employeeshave open communicationswith management?

I YES I NO

3. CUSTOMER FOCUS A. Customer Satisfaction 1. Is there an active searchfor customerfeedback? 2. Is customersatisfactionmonitored to identify trends and to initiate quality improvements? 3. Is there a specific customercontact employeeto deal with specific customers? 4. Are customercomplaintscommunicatedto all employees? 5. Is the complaint fed-backto the relevant operator? 309

AppendixH." ManagementStyle Questionnaire

I YES

B. Continuous Improvement

I NO

1. Is there a program to continuously improve product quality?

2. Is there a program to continuously improve service quality?

3. Doesthe companycomparecustomersatisfactionlevels with that of competitors?

I YES I NO

4. ADDITIONAL INFORMATION

1. Is the companycertified to IS09000BS5750? 2. Are all work processesdocumented? 3. Doesthe companywork closely with suppliers? 4. Is there a formal cost accountingsystemfor the cost of quality?

5. Are companyrecords (minutes,financial statements, documents)kept for future decision making and for the purpose of efficiency (learning from mistakesand the identification of successfulactivities) and continuity?

310