ID 7779
Haring, Christina: Total Quality Management in theoretical and practical context
Hamburg: Diplomica GmbH, 2004
Zugl.: Anglia Polytechnic University (APU), Hochschule, BA-Thesis / Bachelor, 2002
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Table of Content
1. Introduction
1
2. The Emerging and Development of Quality Concepts
3
3. The Principles of Total Quality Management
5
3.1. Adaptation of a Quality Orientated Attitude
6
3.2. The Role of Management
8
3.3. Leadership Development
10
3.4. Management of People
12
3.5. Customer/Supplier Relationship
14
3.6. Customer Orientation
15
3.7. Supplier Integration
16
3.8. Preventive Action
18
3.9. Continuous Improvement
20
3.10. Lean Management
22
3.11. Benchmarking
24
3.12. Quality Controlling
25
4. The European Quality Award
27
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5. Nokia Company Profile
29
6. Nokia and the Excellence Model
31
6.1. Leadership
33
6.2. People
37
6.3. Policy and Strategy
41
6.4. Partnership and Resources
44
6.5. Processes
48
6.6. People Results
52
6.7. Customer Results
54
6.8. Society Results
57
6.9. Key Performance Results
63
7. Conclusion
65
8. Bibliography
I
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1
1. Introduction
Today's leading organisations are getting aware that it is important to
develop a process of continuous improvement in order to deal with the
worldwide increasing competition in a successful way. The adaptation to the
incessant changing demands of the market and the customer is a problematic
task for a company. Under these conditions, top-managers are looking for
ways to break up old structures and to take future demands into
consideration.
One particular approach to improved effectiveness of company performance
is the Japanese inspired Total Quality Management (TQM). The fundamental
thought is that quality cannot only be seen as a mechanistic process but has
to be accepted as a company pervading system. It requires teamwork and an
increased development and involvement of employees.
Companies, which strive after a high level of quality, see in the customer the
key element. They realise that they have to offer the highest possible quality
level of products and services. Total Quality Management provides various
techniques, which secure the acceptance of this philosophy within the entire
organisation and facilitate the necessary changes of behaviour and mentality.
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2
The following study focuses on the main principles of this management
theory in relation to the implementation in a world leading company, which
received the European Quality Award in the year 2000. The appliance of the
various principles is examined and discussed. The subsequent results are
critically analysed.
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2. The Emerging and Development of Quality Concepts
After World War II the global business conditions significantly changed. This
was mainly due to the Japanese revolution in quality. The development of
quality concepts started in the mid 1950s in the USA. However, they were
not put into practice at this time. The Japanese economy adopted some of
these new ideas in order to achieve competitiveness in the international
markets. Training programs in quality control were built up and continuous
quality improvement projects were established.
Due to the impressing success of the Japanese economy, the Americans
started to focus more closely on this concept in the 1980s. Soon all Western
industrial countries realised that the Japanese factories were organised in a
far more efficient way than it was usual in the Western world. Therefore the
Japanese were able to offer high quality products to a favourable price and
exerted pressure on the international market.
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4
To oppose that pressure the United States founded the Malcolm Baldrige
National Quality Improvement Act in 1987, which contains the annual award
of a national quality price to merit organisations. Thereupon the European
Community established the European Foundation for Quality Management
(EFQM) in 1988. Since 1992 it also offers an award to organisations, which
apply Total Quality Management in a successful way and can therefore
function as a model for other companies.
The aim of the European Foundation of Quality Management is to encourage
the application of quality management concepts in Europe and to support
organisations, which are planning to implement Total Quality Management.
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3. The Principles of Total Quality Management
Total Quality Management is a management strategy, which influences the
entire organisation with all its activities, employees and its environment. The
application of this tool helps to determine customer oriented quality goals.
Quality can be defined as "the totality of features and characteristics of a
product or service that bare on its ability to satisfy stated or implied needs"
(ISO 8402, 1986).
From this definition the objective criteria of TQM can be derived, which are
customer and co-worker satisfaction, benefits for society, quality, time and
costs. TQM is the most comprehensive strategy a company can apply and
therefore it is indispensable to formulate quality principles, which provide a
guideline and secure a uniform proceeding.
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3.1. Adaptation of a Quality Orientated Attitude
In the past the majority of companies focused only on product quality while
the quality development process was not taken into account. The new
direction concentrates much more on the quality of the processes and
assumes that high product quality is always a result of excellent process
quality. That implies that all processes have to be controlled consistently and
have to work without any defects.
It was also a widespread belief that quality represents a counterpart to
productivity. Higher quality was related to a lower level of productivity.
FIG.3.1. The Old Attitude (Source: Hummel & Malorny 1997 p.9)
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The new attitude assumes that better quality of the processes means less
repairs, less waste, less mistakes and thus a higher productivity.
FIG.3.2. The New Attitude (Source: Hummel & Malorny 1997 p.10)
Quality is the key to productivity, and a higher quality level means less costs.
The traditional conflict between quality, cost and time is removed. The new
thinking on continuous improvement of the processes leads to decreasing
mistakes and thus to diminishing costs. As well, a high process quality
enables an undisturbed flow of material and information with short supply
and development times.
That means cost and time become a characteristic of quality and quality
becomes the highest strategic objective of the company.
This new attitude has to be disseminated within the entire company and
provides the basis for all other principles.
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3.2. The Role of Management
The introduction of Total Quality Management is a strategic decision, which
will lead to a change of the entire organisational structure of an organisation.
In order to avoid uncertainty and resistance of employees and executives, the
necessary changes have to be directed and pushed by the management. The
management has to perform its executive function and has to support the
changing process by an exemplary behaviour.
The basis for the implementation of TQM can only be built up if the
management strives in the strongest possible way for quality and supports
this with the consequent proceeding.
All changes have to be initiated by the senior management. It is important
that employees in leading positions are not able to prevent or slow down
necessary actions.
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This principle goes ahead with the theory of Philip B. Crosby, who assumes
that within the management a core of quality specialists has to be created in
order to spread the quality improvement approach throughout the
organisation. Crosby strongly supports the "Top-Down" approach, which
leads to the conclusion that senior management is entirely responsible for
quality insurance. (Crosby 1984 p. 6875).
Fig.3.3: Crosby's Top-Down Approach (Source: Financial Times 1986)
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3.3. Leadership Development
TQM is a management method, which is based on the co-operation of all
members of an organisation. Leadership has to be created in a way that gives
everybody the possibility to be actively involved in the company.
It is the people in an organisation who create quality. Therefore, it is the duty
of the leaders to develop an effective work environment that encourages the
creativity and the productivity of all employees.
In order to use the full potential of all members, teamwork plays an
important role. Leaders have to be prepared for this form of co-operation,
which requires social competences like communication skills, empathy,
creativity, personality and an exemplary behaviour.
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The organisation should introduce an executive development program that
improves the methodical and the social competences of quality-orientated
leadership. It is essential to offer learning opportunities, which are specially
directed towards quality techniques and quality management systems.
Additionally proficiency in group presentations and discussion management
should be further developed.
Fig: 3.4. Leadership Style (Source: Hummel & Malorny, p. 30, 1997)
The aim is to form leaders with an excellent quality understanding combined
with social leadership competences.
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3.4. Management of People
In every organisation, it should become commonly accepted that every single
member of staff is a significant potential for creativity and problem solving.
Therefore, a work environment has to be created, which enables all members
to think independently, to work on their own responsibility and to be
satisfied.
According to Kamiske, the following points build the foundation for a
successful implementation of TQM (Kamiske 1996 p. 50).
· The preventive quality strategy of TQM requires the commitment of all
people, who are involved in the process. Only then, possible mistakes can
be realised and eliminated in an early stage.
· The orientation of all members of staff on quality and continuous
improvement builds the core element of all activities.
· Flexibility and adaptability concerning customer demands can only be
reached with the help of good trained employees who are able to think
entrepreneurial.
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All members on all levels of the organisation have to acquire a basic
knowledge of the main TQM principles. This can be done with the help of
training facilities. Additionally the employees should work in teams and
develop an appropriate application of the principles in their work area.
In order to support group work, the strict division of labour has to be
abolished. New work contents have to be created and groups with a high
degree of self-responsibility have to be formed.
If there arise skill or knowledge based difficulties, the leaders have to meet
those problems by increased training programs and personal conversations.
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3.5. Customer/Supplier Relationship
The majority of people in an organisation never meet their external
customers directly. As a consequence, they often fail to realise their
individual importance in improving quality. Therefore, as Atkinson says,
"everybody within an enterprise should consider the interactions between
themselves and their "internal" customer those who are next in line"
(Atkinson 1990 p. 120). First, if this internal customer/supplier chain is
successful, it will be possible to meet the needs of the external customer.
Fig.: 3.5. The Customer/Supplier Network (Source: Dale & Cooper 1992 p.44)
The effectiveness of this internal relationship should be examined on a
regular basis. It builds the basis for a successful communication and
cooperation with all external customers and suppliers.
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- , 2002, Total Quality Management in theoretical and practical context, Hamburg, Bedey Media GmbH, https://www.diplom.de/document/223048
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