ID 8602
Breitfeld, Marit: Customer-Oriented Quality Management in the Automotive Industry - In
Cooperation with Saab Automobile AB, Trollhättan
Hamburg: Diplomica GmbH, 2005
Zugl.: University of Kalmar, MA-Thesis / Master, 2004
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Customer-oriented Quality Management
Table of Content
1
Introduction________________________________________________________________ 1
1.1
Research Question_____________________________________________________________ 2
1.2
Research Methodology _________________________________________________________ 3
1.3
General Thesis Outline _________________________________________________________ 6
2
Quality Management_________________________________________________________ 8
2.1
Defining Quality ______________________________________________________________ 8
2.2
Perception of Quality __________________________________________________________ 9
2.3
History of Quality Management ________________________________________________ 11
2.4
The Quality Management Process_______________________________________________ 14
2.5
Total Quality Management ____________________________________________________ 15
2.5.1
Defining the Concept _______________________________________________________________ 15
2.5.2
Total Quality Management: Implementation & Tools ______________________________________ 17
2.5.2.1
Benchmarking ________________________________________________________________ 18
2.5.2.2
Quality Function Deployment ____________________________________________________ 19
2.5.2.3
Kaizen ______________________________________________________________________ 21
2.5.2.4
Six Sigma ___________________________________________________________________ 21
2.5.2.5
The `Seven Quality Control Tools' ________________________________________________ 23
2.5.3
A Review on Total Quality Management ________________________________________________ 25
2.6
Costs of Quality ______________________________________________________________ 26
2.6.1
Costs to ensure Quality ______________________________________________________________ 27
2.6.2
Costs of poor Quality _______________________________________________________________ 28
2.7
Measuring Quality ___________________________________________________________ 31
2.7.1
The ISO 9000 Quality System ________________________________________________________ 31
2.7.2
Quality Award Programs ____________________________________________________________ 34
2.8
Quality management as a sustainable competitive advantage ________________________ 37
3
Customer Satisfaction _______________________________________________________ 39
3.1
Customer Satisfaction as a Competitive Advantage ________________________________ 40
3.2
The Kano Model of Customer Satisfaction________________________________________ 42
3.3
Measuring Customer Satisfaction _______________________________________________ 45
3.4
Linking Customer Satisfaction to Quality ________________________________________ 47
4
The Automotive Industry ____________________________________________________ 49
4.1
A World Market Overview ____________________________________________________ 49
4.2
The North American Market ___________________________________________________ 50
4.3
Saab Automobile AB__________________________________________________________ 51
4.3.1
Company History & Background ______________________________________________________ 51
4.3.2
Production & Sales Markets __________________________________________________________ 53
4.4
Quality Management in the Automotive Industry __________________________________ 54
III
Introduction
5
J.D. Power and Associates ___________________________________________________ 59
5.1
J. D. Power Company Overview ________________________________________________ 59
5.2
J.D. Power's Initial Quality Study_______________________________________________ 60
5.2.1
IQS Methodology __________________________________________________________________ 62
5.2.2
Summary of the J.D. Powers IQS 2003 results____________________________________________ 63
5.2.3
Saab 9-3 and Competitors in the IQS 2003_______________________________________________ 64
5.2.4
Saab 9-3 IQS 2003 Quality Performance ________________________________________________ 66
5.2.5
Saab 9-5 IQS 2003 Quality Performance ________________________________________________ 69
5.2.6
The typical Saab US-American Buyer __________________________________________________ 69
6
Comparative Analysis- Saab Internal Survey versus J.D. Power IQS _________________ 71
6.1
Saab Internal Survey Methodology______________________________________________ 71
6.2
Analysis ____________________________________________________________________ 73
6.2.1
Comparison internal survey Saab 9-3 and 9-5 ____________________________________________ 73
6.2.2
Internal Survey versus IQS 2003 by Problem Category _____________________________________ 74
6.2.3
Top 10 Problem Symptoms __________________________________________________________ 75
6.3
Recommendations & Implications_______________________________________________ 79
7
Conclusion________________________________________________________________ 82
8
Bibliography ______________________________________________________________ 85
IV
Customer-oriented Quality Management
Table of Figures
Figure
1.1:
Thesis
Outline
(Author's
Illustration)
6
Figure 2.1: QFD's House of Quality (Temponi et al 1999, p. 342)
20
Figure 2.2: Defects & Costs of Quality according to Six Sigma (Harry, 1998, p.61)
22
Figure 2.3: Q7 Toolbox (Bergman & Klefsjö
2003,
p.
217)
23
Figure 2.4: Model for optimum quality costs (Gyna, 1999, p. 8.22)
27
Figure
2.5:
Costs
of
Quality
(Author's
Illustration)
27
Figure 2.6: ISO 9000 Audit (Dilbert Website, 2004)
33
Figure 2.7: Baldrige Quality Award Criteria Framework (Malcolm Baldrige Website, 2004)
35
Figure 3.1: The Kano Model of customer satisfaction (Sandholm 2000, p. 16)
43
Figure 3.2: Kano Questionnaire Example (4managers
Website,
2004)
44
Figure 4.1: Timeline Saab Models (Author's
Illustration)
52
Figure 4.2: Quality Management at Saab (Lindberg, Saab Internal Presentation, 2004)
56
Figure 5.1: J.D. Power Model Ranking 'Entry Luxury Segment (Author's Illustration)
65
Figure 5.2: J.D. Power Overall Evaluation
(Author's
Illustration)
65
Figure 5.3: Development PP100 Saab 9-3 (Author's Illustration)
66
Figure 5.4: Saab 9-3 Problems per category
(Author's
Illustration) 67
Figure 6.1: Composition Internal Survey (Author's Illustration)
72
Figure 6.2: Comparison 9-3 versus 9-5 internal survey results (Author's Illustration)
73
Figure 6.3: Problems per Category Saab 9-3
(Author's
Illustration)
74
Figure 6.4: Problems per Category Saab 9-5
(Author's
Illustration)
75
Figure 6.5: Top10 Problems Saab 9-3 (Author's
Illustration)
75
Figure 6.6: Top10 Problems Saab 9-5 (Author's
Illustration)
76
Figure 7.1: From Quality Management to a company's competitive advantage
83
V
Customer-oriented Quality Management
1
Introduction
This thesis deals with the field of quality management in the context of customer
satisfaction. To show the practical applicability of quality management, this
thesis is looking at how quality management is conducted in the automotive
industry, as we compare the Initial Quality Study (IQS) from the market research
institute J. D. Power with a survey that was internally conducted at the Saab
Automobile AB.
Today's business environment creates a growing need for quality management.
Tougher competition leads to the demand for cost savings and higher profitability.
These days the consumer can choose from a variety of similar products, which
are often exchangeable in the eyes of the customer. If they are not satisfied with a
product's performance, they switch to the competitors brand. Thus the focus on
the customer's needs and wants in line with quality is one way of differentiation
from the vast number of competitors. Satisfied customers are likely to build up a
brand loyalty and this helps to ensure long term sales. The explosive growth of
technology led to a higher product complexity and thus favored the quality
movement. Some technical products bear threats to human safety and to the
environment which resulted in an expansion of governmental quality regulations
as well as warranty laws in order to protect the consumers. In addition, the
product life cycles are shortening along with the technological development and
producers have to be prepared for increased quality requirements from the
customers´ side as well as to respond to fast changing customer wants.
Especially, on such a competitive market as the world market for passenger cars,
the contenders are forced to reduce costs and to fulfill their customers' wants and
satisfy their needs to be successful.
These developments show that striving for quality is and will be of importance for
a company that wants to succeed in its business. This thesis is going to highlight
the importance of quality management as it is proved that product quality is a
major competitive success factor to create a sustainable competitive advantage.
1
Introduction
1.1 Research
Question
The research question in this thesis was developed in cooperation with Saab
Automobile AB. We were looking at their quality management practices while also
studying the respective literature. The research focus can be divided into two
main sections. The first part is concentrating on quality management with a
customer focus in general, while the second part is going deeper into detail and is
looking at quality management from a more practical point of view as a concrete
case is analyzed.
The general research questions can be formulated as followed:
·
Why are quality management and a customer focus crucial for a company's
success today?
·
How does a customer-oriented quality management create a sustainable
competitive advantage?
The second part contains a more practical description of customer-orientated
quality management and leads thus to more detailed research questions:
·
What are the customer's complaints regarding the quality and features of
the Saab cars?
·
Do the Saab employees discover and report the same problems with the
Saab 9-3 and 9-5 as the American customers in J.D. Power's IQS 2003?
·
What product features need to be improved in particular to improve Saab's
performance for the future?
2
Customer-oriented Quality Management
1.2 Research
Methodology
In economic science, theories are generally formulated in order to explain and
describe existing phenomena. To create an understanding of these phenomena,
concepts have to be developed and correct and relevant descriptive knowledge is
necessary to find adequate explanations (Denzin et al, 1998). When creating these
concepts it is necessary to follow a methodological path and to use valid social
science research methods in order to protect one self from misleading
conclusions. The so called `methodology' focuses on how the necessary knowledge
is acquired and the research is undertaken. Thus methodology can be described
as the study of basic data to acquire knowledge in science and is associated with
the search for rules (Strauss et al, 1990). It is important to differentiate between
the methodology which describes the general approach to studying a research
topic that establishes how the researcher goes about (Marshall et al, 1999). The
method of the research refers to the specific research technique, e.g. if an
interview or a statistical analysis is chosen.
In general there are two alternative directions of a research methodology-
positivism and phenomenology (Davidson et al, 1994). The chosen research
methodology has an important influence as it affects the selection of the overall
research strategy, the choice of data collection as well as the analysis and
consequently the kinds of conclusion that are drawn.
Positivism is supposed to be the most important methodology in social science
and business research (Lecture on Methodology, 2004). It is concerned with
causal explanations and seeking for patterns or regularities. The aim is to find a
hypothesis and test it. The research uses a deductive approach as it starts with a
theory from literature and the research should confirm or refute the theory. The
positivistic approach puts an emphasis on numerical facts and uses quantitative
methods in the data collection and analysis. Quantitative studies emphasize the
measurement and analysis of causal relationships between variables (Denzin et
al, 1998). This research refers to the collection of data that can be measured in
numerical terms and analyzed with statistical methods. Quantitative research
3
Introduction
seeks to produce descriptive statistical data to reveal causal relations based on a
large representative sample.
In contrast, the phenomenological approach is inductive and uses qualitative
methods to collect and analyze the data (Denzin et al, 1998). The researcher
interacts with the subjects of research. The aim is to understand peoples'
interpretation of phenomena by discovering the meaning rather than by
measurement, as qualitative research deals with the analysis of data patterns in
order to get an insight and understanding of the studied object (Creswell, 1998).
The phenomenological approach starts with exploring a few assumptions and is
guided by the investigations to construct the theory. In-depth investigation of a
single or a few samples are used to conduct the research. The tools for the
phenomenological approach can be case studies, interviews or observations. The
collected data are recorded in verbal format and require thus a higher degree of
interpretation as the numerical data in the quantitative analysis.
In scientific research it is necessary to assure the validity and reliability of the
studied data (Carlsson, 1991). Validity describes the accurateness and relevance
of the measuring tools that are chosen in connection to the object to be
measured. A research is valid if the variables measure that what is supposed to
be measured. Reliability refers to the relevance of the indicators. If a research
methodology is reliable, it is possible to replicated the research and find similar
results. In terms of reliability the positivistic approach scores higher as it
emphasizes numerical facts and a representative sample. Looking at the validity
the phenomenology leads to better results as the research regards for detail and
context in the interpretation of the data. This fact shows a trade-off between
reliability and validity and therefore it is helpful to combine both approaches in
the methodology as they can complement each other. Often the research begins
with deduction from a theory and proceeds by induction from discovered facts
(Denzin et al, 1998).
Based on these theoretical foundations, the following part is explaining the
research strategy applied to the thesis. As the combination of both approaches
increases the validity and reliability of the research project, the thesis starts with
4
Customer-oriented Quality Management
the deduction from the theory to create a general understanding of the field of
quality. Thus the first part presents the basic theories of different authors in the
field of quality management and customer satisfaction. The academic literature is
analyzed from possible neutral standpoint and should portray the current status
of the quality movement and stress the importance of quality management for
creating a competitive advantage. The primary source of information for this part
is the respective literature in the form of books and various articles from scientific
journals and magazines. The internet with its wide range of data was also a
useful source. This part should give a basis for understanding the research in the
practical part.
The empirical part of this thesis consists of a quantitative research project. The
research aim is to get an insight in the customer's perception of the quality of the
Saab cars and is also going to discover the specific problems that occur. The
analysis intends to identify the most common complaints of the customers. The
results of the IQS 2003 should be used as a benchmark. In order to have a set of
data to compare to the results of the IQS, we decided to conduct a survey in the
form of a questionnaire in Sweden. To generate the data for the Swedish sample a
questionnaire was conducted among employees that drive a staff car at Saab
Automobile AB. In order to assure the reliability when comparing the two data
sets, the exact same questionnaire from the J.D. Power IQS was taken. The
population of interest for this research is Saab 9-3 or 9-5 customers. The choice
of owners of a Saab staff car can be regarded as a valid sample as these
employees are especially sensitive to discover possible quality problems. The
quantitative research gets a qualitative touch as the questionnaire offered the
option to give verbal comments to specify the complaint in addition to just
indicating that a problem with the car occurred. For the analysis the method of a
comparison study was used, as we measured the same variables in the form of
the problem symptoms and concluded how the two results of the two surveys
differed. The results of the survey intend to give advice for further quality
improvement work for Saab.
This shows that we used a positivism orientated approach, as the data collected
and interpreted were mainly numerical. The theory of the quality management
5
Introduction
was taken as a deductive basis and it was continued with an induction of the
discovered data to draw conclusions. In addition, the verbal comments in the
questionnaire gave the research also a qualitative characteristic.
1.3 General Thesis Outline
The outline of the thesis `Customer-oriented Quality Management in the
Automotive Industry' is visualized in figure 1.1. In general, the thesis can be
divided in two dimensions. The theoretical dimension contains a literature review
on quality management and is also stressing the role of customer satisfaction.
The practical dimension, in form of the comparative analysis in chapter six,
should give an account for the applicability of quality management as it analysis
the quality of the Saab cars from the perspective of the customers. The chapter
four in between intends to link the theoretical to practical dimension.
The
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Research Question
Research Question
Automotive Industry
Automotive Industry
Comparative Analysis
Comparative Analysis
Saab Internal Survey
Saab Internal Survey
versus
versus
J.D. Power Initial Quality
J.D. Power Initial Quality
Study
Study
Conclusion &
Conclusion &
Recommendations
Recommendations
The
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Research Question
Automotive Industry
Automotive Industry
Comparative Analysis
Comparative Analysis
Saab Internal Survey
Saab Internal Survey
versus
versus
J.D. Power Initial Quality
J.D. Power Initial Quality
Study
Study
Conclusion &
Conclusion &
Recommendations
Recommendations
Figure 1.1: Thesis Outline (Author's Illustration)
Starting from the research question `Why are quality management and a
customer focus crucial for a company's success today?' and `How to create a
competitive advantage by customer oriented quality management', the second
chapter explores the theory of Quality Management. First, the term 'quality' is
defined, followed by a short summary of the history of quality management. The
6
Customer-oriented Quality Management
main part of the second chapter describes the concept of Total Quality
Management (TQM) and looks at the costs of quality and methods to measure a
quality standard. The chapter also focuses on different perceptions of quality and
analyzes the fact why an efficient quality management will lead to a competitive
advantage of a firm.
The third chapter looks at customer satisfaction. This chapter intends to outline
why a customer focus is crucial to success and is pointing out its relation to
quality management as the bridge between customer satisfaction and quality is
built in the last section of this chapter.
The fourth chapter is concerned with the automotive industry to lead over from
the theoretical part to the practical dimension, which deals with the automotive
industry and Saab Automobile in particular. After giving a short account of the
market situation for automotives, a short company presentation of the car
manufacturer Saab Automobile AB is given. Thereafter some practices of quality
management in this industry are presented.
The fifth chapter contains an overview of the market research firm J.D. Power
and its Initial Quality Study since this study forms the basis for the comparative
analysis in chapter six. Saab's performance in this study is also presented.
Chapter six contains the empirical part of this thesis. The quality of the Saab 9-3
and 9-5 from the customer's perspective is analyzed as the results from the
internal Saab survey are compared to the results of J.D. Power's IQS.
The thesis closes with drawing conclusions in chapter seven.
7
Quality Management
8
2
Quality Management
The field of quality has become of importance as a strategic management issue
over the last decades. In the 1950ties quality work in the Western world was
restricted to inspection of the output after the production (Bergman et al, 2003).
This really defense way to check quality was replaced later by adding quality
control during the production in order to try to identify early signs of defects. The
next step was to look even at the production line before the start of the
production process to avoid later problems. These elements together comprise
what is today known as quality management.
In practice it concerns the development and implementation of systems to ensure
that the agreed quality requirements are adequately defined and fulfilled within
the organization. With more and more firms focusing on the customer, the quality
field has changed from being a narrow, technical discipline to a concept
overlapping with leadership and management.
2.1 Defining
Quality
There are various definitions of the quality concept to be found in the respective
literature. In general quality can be described from two different perspectives-
from the producer or the consumer point of view. The producer of the product is
looking for the faultless functioning of the product while the consumer is more
looking for the fulfillment of their needs. But during the evolution of the thesis it
will be shown that these two perspectives should not be looked at independently.
To introduce the field of quality, we start with the most formal definition: the ISO
9000-2000 -international standard for quality systems defines quality as "the
degree, to which a set of inherent characteristics fulfils the requirements, i.e.
needs or expectations that are stated, generally implied or obligatory" (ISO 9000
website, 2004). Sandholm (2000) states that the quality of a product can be
simply described by its appearance and performance. (2000) gives a more
customer-orientated definition by describing quality as the `Fitness for use'. This
Customer-oriented Quality Management
goes hand in hand with Gitlow (in: Hardie et al, 1994, p. 53) depicting quality as
`the extent to which the customer believes that the product or service exceeds
their needs and expectations'. Deming (2000) emphasizes the future consumers
in his definition that quality should be aimed at present and future needs of a
customer. When linking quality to brand loyalty it can be simply described by
"Quality is when the customers come back" (Erichsen, 1993, p.8). Quality can
also be regarded as an overall judgment of the product and the company behind
it. As Herrmann et al (2000, p. 82) look more at the perceived quality and defines
it "as a consumer's global judgment in relation to the fitness of a product for its
intended use."
As this thesis is going to analyze quality in the context of creating customer
satisfaction, a universal explanation is used to define the quality concept from the
customer-focused point of view. This can be well summarized by Bergman &
Klefsjö's (2003, p. 23) description: "The quality of a product is its ability to satisfy,
or preferably exceed, the needs and expectations of the customers". This
definition stresses the linkage between quality and customer satisfaction and
indicates that it is often not only sufficient to meet the customer needs but also to
surpass their expectations.
2.2 Perception of Quality
Since there are various definitions of the term quality, the perception of quality
can also vary among different consumers. According to Sandholm (2000), the
customer's perception of the quality of a product or service is based on three
factors:
·
characteristics that satisfy customer needs
·
characteristics which are not expected but have a positive influence
·
incidences of failures or malfunctions.
It reflects the consumer's purchase and consumption experiences and can be
described by the "consumer's global judgment in relation to the fitness of a
product for its intended purpose" (Hermann et al, 2000, p. 82).
9
Quality Management
10
According to the respective literature there are different dimensions that have an
effect on a product's quality. In the previous section product quality was just
defined as the performance and appearance of a product. Bergman et al (2003)
and Hansmann (1997) show that product quality has even more dimensions.
According to the authors product quality consists of the following dimensions:
·
Appearance-
aesthetics of the product as design, color or form
·
Convenience- in handling and operating the product
·
Durability-
the long-lastingness of the product
·
Environment-
how the product effects the environment, e.g. emissions
·
Flawlessness-
the faultlessness of the product at the time of purchase
·
Maintainability- how easy is it to localize and take care of the problems
·
Performance-
characteristics like capacity, usefulness, size or speed
·
Price- the value for money of the product
·
Reliability-
how often do problems occur and how serious are these
·
Safety-
the product should not causes any damages or dangers.
It has to be kept in mind that the importance of each dimension will be evaluated
differently from consumer to consumer. The perception can vary with
demographics like age, gender or income, but also qualitative aspects like
personal interests or cultural background influence the perception. That quality
is perceived differently becomes very obvious when comparing different countries
and cultures. In her study Maruca (2000) found out that the drivers of customer
satisfaction can vary greatly from country to country. According to the author,
price has a great influence on the customer's perception of quality in Asia, North
and Southern Europe but not in Latin America. As most companies do business
worldwide, they have to ask themselves the question if `satisfaction' means the
same thing for their customers all over the world and if the factors that drive
repeat purchase are the same in all countries. Thus researchers from the
University of Bologna in Italy have developed a tool that should help to discover
the cultural differences that drive customer behavior. In this model customers
from different regions- Asia, Latin America, Southern and Northern Europe were
asked to rate certain products and service given of a company. The quality rating
was consistently high across all customer groups, but the factors that created
Customer-oriented Quality Management
this image differed. Quality drove repeat businesses in all markets except
Southern Europe, while price drove repeat purchases only in Latin America.
When offering a global product around the globe it is complicated to meet the
diverse wishes and expectations from geographically dispersed consumers in
different socio-economic environments.
Another example can be taken from the `New Car Buyers Survey' (NCBS, 2003),
where buyers from Europe are asked to state the most important aspects for
buying a car. According to the survey, prestige and reputation of the
manufacturer are of higher importance in the Southern parts of Europe than in
the North. But Southern European consumers also look for good performance of
the car in acceleration, braking and road holding. Countries in Northern Europe,
as well as Germany and the UK, rather emphasize features like safety, exterior
and interior styling, reliability and level of equipment.
2.3 History of Quality Management
Every management discipline has its `gurus' and this section likes to give a brief
account of the history of quality studies and introduces some persons who have
played an initial role in its evolution.
The roots of quality management are to be found in Japan. It has a long tradition
in the field of quality. Japan is telling the story of a country rising out of the ruins
of the World War II to become a world economic leader by focusing on quality in
the manufacturing of products. Especially in the US, the companies regarded the
threat from Japanese products first more as a price threat than a quality threat.
In the 1980ties the Americans had to realize that also the Japanese product
quality was superior (Bauer et al, 2002). A lot of companies in the Western
countries, particularly in the sector of home electronics, cameras and watches,
started to loose market shares to Japanese competitors. But also the automotive
industry, mainly in the USA, suffered. They tried to avoid the invasion of
Japanese cars by import quotas. To counterpart these the Japanese car
producers started to set up car factories in the US in the 1980ties (PWC, 2002). It
was evident that the Japanese success originated from concentration on product
11
Quality Management
12
quality. Soon the `West' started to imitate some production methodologies from
Japan. They began to estimate costs of poor quality and to implement quality
control systems and concepts like lean management and TQM became buzz
words on the Western production sites.
But it has to be taken into account that the Japanese have a specific business
culture and the methods can not be simply transferred to the Western culture.
Japanese work organization is stamped by the human relations with an emphasis
on harmony and mutual interests, practicing a great respect for the people
(Chase et al, 1995). Their emphasis on market share instead of profit, as it is
common in the Western world, leads to a focus on product quality and customer
service (Fang et al, 2003). Their open office environment as well as team
orientation and Kaizen-practices (see chapter 2.5.2.3) translate into a high level of
productivity through empowered people.
The prominent philosophers of quality management are researchers as W.
Edwards Deming (1900-1993), Joseph M. Juran (born 1904), Armand
Feigenbaum (born 1920) and Philip B. Crosby (born 1926) as well as the
Japanese Kauro Ishikawa (1915-1989), Noriaki Kano and Genichi Taguchi (born
1924).
Crosby introduced the notion that quality is free and the concept of zero defects,
a long-term goal that implies the need for never-ending improvement (see 2.6)
(Crosby, 1988). Deming had a statistical educational background which is also
reflected in his work. He thinks that statistical methods are necessary to be able
to identify the problems that cause a weak quality (James, 1996). Ishikawa
adopted this idea and started an approach to teach supervisors simple statistical
methods that are useful for improvement work. This is how the `seven quality
control tools' were introduced (see chapter 2.5.2.5). Deming is also known for his
PDSA (plan-do-study-act)-cycle of solving problems in the process of continuous
improvement. Juran has been called the father of quality as he revolutionized the
Japanese philosophy of quality management. He was the first to add human
dimensions as empowerment and commitment to quality management which is
now embraced within the concept of TQM and broadened the field from a single
Customer-oriented Quality Management
statistical foundation (Juran Homepage, 2004; Bauer et al, 2002). His book, the
Quality Control Handbook, is a classic reference for quality engineers. His
description of the quality management process, the JuranTriology (see chapter
2.4.), is also a well-known model in the field of quality. In addition, Juran, as well
as Deming, were known for stressing the role of the top management in the
quality process. Juran believes that the majority of quality problems are the fault
of poor management, rather than poor workmanship in the production. In his
opinion the management controllable defects account for over 80% of the total
quality problems (Juran Website, 2004). Thus he opposes Crosby's zero defects
approach, since it is, from his point of view, mistakenly based on the idea that
the most quality problems arise because workers are careless and not properly
motivated. Therefore he claims that long-term training to improve quality should
start at the top. Similar to Juran, Feigenbaum's research moved quality control
as a technical method to a business method as he stressed the need to involve all
departments in the quality process and called it `total quality control' (Bauer et al,
2002). Ishikawa enlarged Feigenbaum's ideas to include all employees. Taguchi's
work concerns more the design stage of the product. He provided a prototyping
technique to enable the engineers or designers to identify the optimal machine
settings to produce a robust product that provides the functionalities required by
the customers. Noriaki Kano introduced a model of customer satisfaction that
classifies the different types of customer needs. This model is explained in detail
in section 3.2.
The quality movement developed from two different schools. The `school of
continuous improvement', where Juran, Deming and Ishikawa belong to,
emphasizes the process improvement (Bergman et al, 2003). Crosby was a
representative of the `deterministic school'. The idea of zero defects as well as
using standards and specifications like the ISO-9000 as management guidelines
are characteristic for this point of view. Over the time these two views approached
each other. Today the quality work is based on mutual values focusing on
improvement as expressed in the TQM-concept (see section 2.5). This view is
supported by the introduction of several quality award (e.g. the Malcolm Baldrige
Quality Award see section 2.7.2) to motivate companies to take part in the quality
movement.
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2.4 The Quality Management Process
Since quality is an end result of a process, the process of quality management
will be examined in this part. The general outline of the quality management
process can be described by the `Juran Trilogy' created by Joseph Juran in the
1950'ies (Juran Homepage, 2004). It provides a model of how to get a better
understanding of the relationship between procedures that plan, control and
improve quality and hence business results.
The so called `Juran Triology' describes the framework of quality management by
the following three-step approach (Sandholm, 2000; Juran Website, 2004, Juran,
2000):
·
Quality Planning- the process of designing products and processes.
It includes all planning activities that are necessary to achieve the agreed
quality standard, like identifying and determining the customers and their
needs as well as the development of product features that meet these
needs. The development of processes that produce these product features
are also a part of quality planning.
·
Quality Control- the process of meeting goals during operations.
The activities in this step should evaluate the actual performance and
ensure that the quality targets will be achieved. This incorporates the
choice of control subjects and the establishment of measurements and
performance standards to identify the differences between actual and
standard quality. Firms often use quality audits for the quality control. A
quality audit is a systematic review to determine whether quality activities
comply with the requirements (Bauer et al, 2002). A typical quality audit
would be an audit that follows certifications in accordance to the ISO 9000
standards (see chapter 2.7.1).
·
Quality Improvement- the process of creating breakthroughs for better
performance.
This step involves improvement activities in order to achieve a better
Customer-oriented Quality Management
quality than in the past and to keep the differences between actual and
standard quality as low as possible.
This general outline of the quality management process leads to the concept of
Total Quality Management, which will be presented in the next section.
2.5 Total Quality Management
Starting in the 1980ties, manufacturing businesses began to focus on quality
improvement efforts to enhance their competitiveness and profitability (Mehra et
al, 2003). Total Quality Management (TQM) is one of the most common
management concepts that companies use to boost their product quality. In
general it is a philosophy about how a business should be run and consists of an
overall planning system that implements change (Plenert, 1996). As most of the
management concepts in the quality field, TQM has its roots in Japan. The
Japanese idea of quality control during operations was further developed into
TQM, as the quality idea should be spread to all departments of the company.
2.5.1
Defining the Concept
The concept of TQM is introduced by some definitions that describe its main
ideas. James (1996, p. 46) explains TQM as "a management philosophy that
seeks continuous improvement in the quality performance of all processes,
products and services of an organization." Bergman & Klefsjö's (2003, p. 34)
definition is more complex as they clarify TQM as "a constant endeavor to fulfill,
and preferably exceed, customer needs and expectations at the lowest costs, by
continuous improvement, to which all involved are committed, focusing on the
processes in the organization". This indicates that the TQM-concept combines
values and tools to accomplish higher customer satisfaction with less resource
consumption. Miller (1996) stresses the word `total' as the concept has to be
spread over all business functions. In his opinion TQM is an approach to improve
the effectiveness and flexibility of organizations as a whole and `total' refers also
to the involvement of all individuals in the organization. From the customer
orientated perspective, it can be described as managing the entire organization so
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that it excels in all dimensions of products and services that are important to the
customer (Chase et al, 1995).
The TQM-concept is based on five core ideas. These cornerstones are: (Bergman &
Klefsjö, 2003; see also: Juran, 2000 or Deleryd et al., 1999)
·
Focus on the customer
The customers are the central concern of the concept. To focus on the
customers implies to find out about their needs and wants and to try to
fulfill these in the development and production of the product already in
the stage of quality planning.
·
Base decision on facts
The information used should be well-founded and random factors should
not be of decisive importance. It implies to look actively for relevant
information and to structure and to analyze these data.
·
Work for continuous quality improvement
The customer demands in regard of quality are growing continuously and
new technologies are appearing on the markets on a regular basis. But
even without this external pressure, quality improvement is justified from a
cost point of view. The basic rule of continuous improvement states that it
is always possible to improve products or processes further (Bergman et al,
2003). It should be the goal of a TQM-orientated organization to achieve
higher quality at lower costs.
·
Work with quality processes
A process can be described as "a set of interrelated activities that are
repeated over time" (Bergman et al 2003, p. 40). The process transforms
input, such as information or material, into a product. This process must
be created in a way that it minimizes resources and satisfy the customers
at the same time.
·
Let everybody be committed and involved
Quality management is also a question of the leadership style of the
company. Empowerment, commitment and training of the employees are
the key words of the human aspects of the TQM concept. The top
management has to create a positive climate for changes and to involve the
employees (Grimsdal et al, 1993). The environment should enable the
Customer-oriented Quality Management
employees to be committed and participate actively in the decision-making
and improvement processes. The workers should be given clear objectives
and the final responsibility for their work. Communication within the
organization and feedback on the work are essential for success. The
training of the workers towards the quality requirements and regulations is
also of great importance. The involvement of the employees is vital for the
success of TQM. To reach this goal the employees need to be trained how to
carry out these quality controls and how to address and resolve problems
that might arise (Forza et al, 1998). These process controls together with
adequate feedback to workers as well as to managers will lead to a lower
level of defects. The more information on product quality circulates around,
the more employees will aim towards higher quality levels. A successful
TQM project should result in the ability of employees to work more
efficiently together.
2.5.2
Total Quality Management: Implementation & Tools
The previous section explained the main elements of TQM. This following section
is looking at ways to put TQM into practice. According to James (1996) it is
crucial to pursue the following steps when implementing TQM:
·
Generate the commitment of the top management and develop a quality
vision. TQM supports a top to bottom corporate strategy which implies that
without the dedication of the top management no change will take place
and TQM will be doomed to failure (Plenert, 1996).
·
Form a quality council, planning teams and quality improvement teams.
·
Collect data to estimate and analyze the costs of quality. To apply quality
control processes measurements, data collection and its analysis, such as
monitoring the percentage of defectiveness and the frequency of mechanical
breakdowns, is necessary in order to get to the roots of the problems and to
improve the manufacturing process.
·
Develop effective processes for the quality assurance
·
Empower the base workers through increased communication and training
to have them participating in the quality improvement. This step goes along
with the cornerstone `let everybody be committed'.
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