Quality Assurance Practices – By Indian Manufacturing Organizations: MBA Report

 

Introduction

We hear a lot about quality management in the USA, in Japan, in England. But what about quality in the UAE, in Jamaica, in Ecuador? How does quality management look in state-controlled economies? In the former Soviet Union? In developing nations?

In the interests of comparative study and of fostering understanding and shared experience, I have conduct an in-depth research on Quality Management Practices Worldwide, from materials from the international journals TQM Magazine and Managing Service Quality and other sources form the net.

 

Related Topics

• An Investigation of the Implementation of ISO 9000 and TQM and their Relationships in Turkey
• Change for the Better via ISO 9000 and TQM
• Quality Assurance Practices by Indian Manufacturing Organizations: A Conceptual Framework and an Empirical Investigation
• A Study of ISO 9000 and TQM Implementation in Poland
• Survey on ISO 9000 Quality Management System Implementation in Hong Kong

 

These were the topics that I could find material on relating to the topic in hand, but my instructor restricted me to covering only quality management practices of Indians and The Polish.

 

Quality Assurance Practices By Indian Manufacturing Organizations: A Conceptual Framework And An Empirical Investigation

 

Abstract

The purposes of this study are two-fold. First, critical factors necessary to achieve effective quality management were identified. The second purpose was to obtain Indian managers’ perceptions of the quality assurance programs in their organizations. Seventy-three organizations participated in this study. The overall conclusion that emerged from this study was that, contrary to what was hypothesized, it is not necessary for all factors to be present to insure the success of the total quality program of the organization. Keywords: empirical, framework, India, quality

 

Introduction

During the past decade, managerial concern for quality reached unprecedented levels. Today, an increasing number of managers in more organizations than ever before view “quality as of bedrock strategic importance, rather than an abstract to be pulled out of the platitudes file and given lip service at the annual general meeting” Guaspari 1987. Research has confirmed the strategic benefits of quality. Quality has been shown to contribute to greater market shares and return on investments United States General Accounting Office 1991, Cole 1992, Morrow 1997 as well as lower manufacturing costs in the long run and improved productivity Garvin 1983. Although instilling higher quality characteristics in a product may result in higher manufacturing costs in the short run, and thereby result in higher prices for a product, this will not necessarily have a negative impact on consumer demand. When confronted with substitutes for products, consumers would prefer to pay moderately higher prices to ensure the purchase of a quality product Coulson-Thomas and Coulson-Thomas 1991, Coulson-Thomas 1992, New York Times 1983. For a company or country to compete effectively in the global economy, its products must meet a certain standard of quality. Distribution of inferior products can harm firms and nations, both at home and abroad, and can have severe implications for balance of payments Scagoline 1988. In India, too, industrial and service organizations are concerned with the need to upgrade the quality of their products and services in order to keep pace with competition within and outside the country.

 

The purpose of this study is to identify the degree to which quality assurance is being practiced in Indian manufacturing organizations and to locate the organizational areas where better management control can make the quality assurance system more effective. Specifically, this paper attempts to answer the following research questions:

1. What are the major manufacturing objectives of Indian organization? How does top management rank these objectives?
2. Do Indian manufacturing organizations have their own quality departments? What role does the department play?
3. Do Indian manufacturing organizations maintain clear, well-defined quality policies?
4. What are the major causes of quality problems faced by Indian manufacturing organizations?
5. Do Indian manufacturing organizations employ a quality cost reporting system? What are the major components of the total cost of maintaining quality?
6. Are there suitable training programs for the purpose of enhancing the effectiveness of quality assurance?
7. Do Indian manufacturing organizations work with their vendors to improve their quality systems?
8. Do Indian manufacturing organizations use employee involvement programs for tackling quality problems? If yes, are they effective?

 

In order to answer the above questions, the following two steps were undertaken. First, based on the synthesis of literature on quality concepts, critical factors that must be practiced to achieve effective quality management in an organization were identified. A framework to be used by organizations to evaluate their quality management practices was developed. Identifying and measuring the critical factors of quality management can be very useful. Managers can use the critical factors to: (1) obtain a better understanding of quality management practices; (2) determine the current quality position of an organization; (3) assign responsibilities within an organization; and (4) monitor quality and improvement programs Badri et al. 1995, Motwani et al. 1989. Decision-makers can thus isolate the critical factors that are necessary for organization-wide improvements in quality environments Saraph et al. 1989. Researchers can use the critical factors to build theories and models that relate these factors to the quality performance and quality environment of an organization.

 

Second, a field survey was conducted to identify the degree to which quality management practices are present in Indian manufacturing organizations and to locate the organizational areas where better management control can make the quality programs more effective. The results of the field study can be used to: (1) test the reliability and validity of the instrument developed by Saraph et al. 1989 in an international environment; (2) establish priorities for the quality control programs; (3) develop an adequate database for future cross-cultural comparisons; and (4) provide guidelines to Indian manufacturing organizations for planning and organizing effective control of their quality programs. This will not only help to increase the quality of their products and services and reduce costs but also help to utilize more effectively the availability of raw materials, equipment and human resources [Black and Porter 1996].

Prescriptive Literature

Much of the literature on quality focuses on the following areas: Japanese quality management practices Juran 1978, Schonberger 1982; the development of organization-wide quality improvement programs Crosby 1979; the application of various statistical quality control techniques Deming 1981, Deming 1982, Deming 1986, Gitlow and Hertz 1983, Wood 1981; the concept of organization-wide and total quality control Feigenbaum 1983 and the importance of critical factors such as top management leadership, process management, employment training and employee involvement in quality Feigenbaum 1986, Flynn et al. 1994, Flynn et al. 1995; Langevin 1977, Reddy and Berger 1983, Snee 1986, Takeuchi and Queslch 1983, . Research also highlights the Malcolm Baldrige Award, given to companies, which have pursued and achieved excellence in this area. The criteria for the award are reflective of the highest, most comprehensive quality standards Black and Porter 1996, Stundza 1992, Application Guidelines MBNQA 1991.

 

For the purpose of identifying critical factors, the philosophies of quality experts such as Deming 1981, 1982, 1986; Juran 1974, 1978, 1981, 1986, 1988, 1989; Crosby 1979, 1989; Ishikawa 1976, 1988; Feigenbaum 1983,1986, 1989; and Garvin 1983, 1984 were reviewed.

 

Deming stresses the necessity to top management involvement, attention to customers’ needs, involvement of all employees in the process of continual improvement, and the need to pay close attention to the entire manufacturing process as keys to corporate success Mann 1988, Scherkenbach 1988. The 14 points comprising Deming’s philosophy are designed to improve all aspects of manufacturing. Juran is famous for developing the “Juran Trilogy”, as a new model of strategic quality management. His trilogy states that managing for quality entails three quality-oriented processes:

 

1. quality planning and the annual quality program;
2. quality control and the control sequence;
3. Quality improvement and the breakthrough sequence.

 

The essence of Crosby’s quality involvement process is embodied in what he calls the “Absolutes of Quality Management” and the “Basic Elements of Improvement”. Ishikawa is popular for his emphasis on the concept of total quality control. According to Ishikawa, the quality function is the responsibility of all departments. Feigenbaum’s approach promotes the view that no quality improvement is obtained from a system that is not dedicated to quality in every aspect of its operation. Lastly, Garvin conducted an exploratory study to identify the causes of quality problems in the United States and Japan.

 

From the literature review several organizational requirements for effective quality management are generated. All the requirements can be classified into the following nine major critical factors:

1. top management;
2. quality policies;
3. role of the quality department;
4. training;
5. product design;
6. vendor quality management;
7. process design (statistical quality control);
8. quality data;
9. Feedback and employee relations.

All or nearly all of the authors in their philosophies as shown in Table 1 supports each of these factors. When combined, these factors define the important aspects of quality management practice.

 

The entire model developed for the purpose of this study is illustrated in Figure 1. The model presents, in a single schematic diagram, the dependent and independent variables that relate to quality management practices in organizations.

Specifically, the nine critical factors in quality assurance are the independent variables. To enable managers to indicate the degree or extent of practice of each item by their organization, a five-point Likert-type scale was used to measure these independent variables. For each critical factor, the level of practice was represented by the mean reported score for that factor. The effect of these independent variables on the dependent variable, or the level of quality, is measured in terms of the latter’s surrogates; assembly-line reject rate is defined as the percentage of total defects per unit produced. The term after delivery reject rate is represented by the percentage of defective items which require field service during the warranty period and/or which are returned by customers.

Methodology

In this section the methodology utilized in this research is presented. First, the research hypotheses are stated. Next, the subjects and the instrument used in the measurement of quality are defined. Finally, the data analysis procedures used are addressed.

 

Research Hypotheses

The review of relevant literature suggests the following specific null hypotheses:

H1. There is no association between corporate management support for quality and the level of quality achieved.

H2. There is no association between specific quality policies and the level of quality achieved.

H3. There is no association between the role performed by the quality department and the level of quality achieved.

H4. There is no association between the emphasis placed on training and the level of quality achieved.

H5. There is no association between systematic product design and the level of quality achieved.

H6. There is no association between the emphasis on vendor quality management and the level of quality achieved.

H7. There is no association between process design and the level of quality achieved.

H8. There is no association between the availability and use of quality data and the level of quality.

H9. There is no association between the extent of employee involvement in quality efforts and the level of quality.

 

Research Subjects

According to Nunally 1977, when a measuring instrument is used for data collection, the subjects used should be those for whom the instrument is intended. The organizations’ quality assurance managers or the general managers were the subjects used in this study because they are likely to be the most knowledgeable about quality management.

 

For the purpose of this study, only manufacturing organizations with more than 500 employees and a total sales volume of more than 251 million rupees (1 US dollar = 25 rupees) were considered since the quality management practices of such organizations were relatively more sophisticated, or at the very least more completely developed. The main source for the preparation of the sampling frame was Kothari’s Economic and Industrial Guide of India 1988. The organizations surveyed represent industries classified under the manufacturing division of the Standard Industrial Classification Manual (SIC) 1987, specifically sections 20-30. The SIC Manual is a standard reference volume in the United States. Its purpose is to offer a broadly accepted classification of businesses by industry-type for use in researching and publication. Use of the SIC Manual for researching Indian manufacturing organizations will facilitate and improve comparisons drawn in future cross-cultural research in the area of quality. For reasons of practicality, managers were chosen from organizations in the five major cities of India: Ahmedabad, Bombay, Calcutta, Delhi, and Madras. Managers of 75 manufacturing organizations were personally contacted twice. First, to participate in this study, and subsequently to assure response to the survey questionnaire.

 

Research Instrument

For the purpose of this study, the instrument developed by Saraph et al. 1989 to evaluate quality management practices in manufacturing or service organizations was used. This instrument was used because the measures are empirically based and shown to be valid and reliable, and the instrument measures directly or indirectly all the critical factors identified in this study.

The internal consistency method was used to test the reliability of the instrument. Internal consistency was estimated using the reliability coefficient Cronbach’s alpha (a). The reliability coefficients (a) of the measures ranged from 0.79 to 0.91 (see Table 2). Reliability coefficients of 0.70 or more are considered adequate Nunally 1977, Cronbach 1951, Murphy and Balzer 1989.

 

Data Analysis Procedure

For the purpose of analyzing the data, frequency distribution and basic statistics such as mean, standard deviation, and variance were computed. The means and standard deviation were calculated using Fisher’s Least Square Difference (LDS). Fisher’s least square difference procedure provides a measuring stick for comparing the amount of separation necessary between any two-sample means before a significant difference can be declared to exist between the corresponding population means.

 

The nine hypotheses formulated for this study were tested for statistical significance using the correlation coefficient. The Pearson coefficient of correlation is a measure of the strength of the linear relationship between two variables X (dependent variable – level of quality) and Y (independent variable – nine critical factors).

Data Analysis and Interpretation

The results of the statistical analysis are presented in this section. First, a summary of the characteristics of the sample is presented. Next, results pertaining to research questions and hypotheses testing are reported. Finally, the results are interpreted and discussed.

 

Characteristics of the Sample

Managers of 73 Indian manufacturing organizations served as respondents in this study (representing a response rate of 97 percent). The high response rate was a direct result of the personal contact approach used. Although this method is time-intensive and impracticable in many cases, it proved effective for this study. Table 3 provides summary information, in the form of frequency distributions, for the respondents who participated in the survey.

 

Interpretation of the Results

Manufacturing Objectives

The questionnaire used in this study identified for major manufacturing objectives: producing quality products, meeting production schedules, manufacturing low-cost products, and improving work productivity. Managers were asked to assign ranks to each category on the basis of their rating of its importance as a manufacturing objective. Though producing quality products and services is not the primary manufacturing objective, it does not lag for behind, as depicted in Table 4. In contrast, the objectives of low-cost production and improve work productivity were ranked lower. The respondents felt that these objectives had already been implemented successfully.

 

Causes of Quality Problems

The questionnaire identified seven causes of quality problems: workmanship or workforce, materials or purchased parts, maintenance or adjustments of process or equipment, poor design of process or equipment, poor product design, inadequate systems of controls, and management errors [Garvin 1984].

 

Managers were asked to assign ranks to each category on the basis of their rating of its importance as a cause of their organizations’ quality problems. Table 5 indicates the rank order of the causes of quality problems faced by Indian manufacturing organizations. Out of the seven causes stated in the questionnaire, materials or parts purchased and maintenance or adjustment of process of equipment were the most important causes of quality problems while an inadequate system of control and management errors were ranked the least important.

 

In order to solve the quality problems, Indian manufacturing organizations are adopting the concept of sharing or joint responsibility. Purchasing, design, marketing and productions departments are working together to achieve quality goals. Many organizations are also trying to involve vendors as part of this integral system.

 

Testing the Research Hypotheses

Tables 6 and 7 show the results of correlation analyses for these variables. From Table 6 it can be seen that there is a highly significant negative correlation between assembly-line rejects and quality policies, the role of the quality department, and quality data. Since training, vendor quality management, and process design were independent variables that resulted in decreased assembly line rejects, there exists a positive relationship is brought about by the reduction in the level of rejects. Similar results existed when studying the relationship between after-delivery reject rates and the independent variables – quality policies, role of the quality department, quality training, vendor quality management, process design and quality cost data (see Table 7). On the other hand, no significant relationship was found between after-delivery rejects and the independent variables – top management involvement, product design, and feedback and employee relations.

 

Factor 1: Top Management

According to quality experts, successful quality performance requires that top management is dedicated to that goal Crosby 1979, Juran 1989. In other words, those in top management must provide the initiative for successful quality assurance practices and must support the quality program in the organization if such a program is to be successful. This study suggests that top management of Indian manufacturing organizations was involved in developing quality policy; however, implementation was strictly accomplished by the efforts of the quality department personnel. This could be attributed to several reasons; First the primary manufacturing objective of Indian organizations surveyed is meeting the production schedule. Second, the quality department personnel are responsible for quality performance rather than the top management. Third, cost and schedule objectives take precedence over quality objectives at the top management level. Finally, quality issues are not reviewed on a regular basis at top management meetings.

 

Factor 2: Quality Policies

Research has shown that attitudes and philosophy alone are seldom enough to improve quality. A company’s program, policies and systems are the practical representations of its attitudes towards quality Garvin 1983, Juran 1978, Mohanty 1988. Quality policies give substance to more ethereal attitudes and philosophies, providing support and directions. Ninety-six percent of the organizations studied maintained formal quality policies (Table 3). These policies were in written form and were approved and endorsed by top management. Also, a consistent operational definition of quality existed throughout the organization.

 

This study offers significant statistical support for the hypothesis that specific quality policies are the practical embodiments of an organization’s attitudes towards quality, and therefore help in improving the level of quality. This can be attributed to several reasons. First, in the Indian organizations surveyed, well-documented quality policies with clear objectives existed for each and every department in the organization. The quality policies were oriented mainly towards customer satisfaction. Second, the organizations’ policies concerning quality were determined by the achievement of the following goals: compliance with government regulations and profitability. In order to satisfy customer needs, the organizations tried to meet the specifications provided by the customers and the standards stipulated by the Indian Statistical Institute. Finally, these quality policies were reviewed periodically. According to the respondents, all levels of personnel were aware of their responsibilities towards quality.

 

Factor 3: Role of the Quality Department

Research has shown that for organization to be efficient, the quality department should be visible, autonomous and have direct access to top management [Crosby 1989, Leonard and Sasser 1982, Mondon 1982. Ninety-six percent of the organizations studied operated independent quality departments (Table 3). In most organizations the quality assurance department was managed by the General Manager of Quality Assurance. In others, it was under the control of the Industrial Engineering or Manufacturing Manager. Some organizations also had separate inspection departments in each plant directly under the Technical Manager of that plant.

 

This study offers significant statistical evidence to support these results. The major responsibilities of the quality departments in Indian manufacturing organizations include formulating and improving major quality improvement programs and working closely with other departments. Procedures for quality control covered the entire business, from development to marketing, purchasing, manufacturing and distribution. The quality departments also prepared various types of summary reports of defects and failures at the various stages of processing and final inspection.

 

Factor 4: Training

This study extended significant statistical support for the hypothesis that emphasis on quality training improves the level of quality. This evidence is consistent with the finding of Juran 1978, Crosby 1979,Deming 1986, Mondon 1982 that, if an organization is to grow and prosper, a formal quality training program must exist. Effective and efficient training programs to educate and communicate a focus on quality to managers and employees were present in each of the organizations studied. In addition to on-the-job training, off-the-job training programs, specifically in the form of classroom exercises, were being used. Training in special processes, advanced statistical methods, and the use of sophisticated measuring equipment also existed. Even though some managers complained that the training programs were merely academic exercises and were not understood by the illiterate workers, most of the respondents to the survey indicated that the training programs played a significant role in improving the quality of the organizations’ products and services.

 

Factor 5: Product Design

This study provided no significant statistical support for the hypothesis that systematic product design improves the level of quality. This contradicts earlier results reported by Adam et al. 1981, Mondon 1982, that product design practices provide the ideal starting point for a study of quality performance. In Indian organizations, the development of products and the establishment of product and process design are the activities of the research and development department. However, about 30 percent of the organizations surveyed did not operate their own independent research and development department. Research and development activities were present only in some organizations at corporate level, whilst in most they were at lower levels. This supports the finding of Mohanty 1988. Other complaints included the lack of sufficient interaction between the research and development department and the quality assurance and manufacturing departments.

 

Factor 6: Vendor Quality Management

Most Indian organizations have realized that working with vendors to improve their quality systems, as well as improving their own systems, is a key to success. This study provided significant statistical support to indicate that organizations that worked closely with their vendors had fewer problems with materials or parts purchased and had a higher level of quality, and vice versa. This evidence supports the findings of Adam et al. 1981, Juran 1978. In India, unlike Japan, there is a desire to have alternate vendors (in relation to a single source) for as many materials as possible in order to ensure availability of supply and to provide purchasing leverage. More than 90 percent of the respondents indicated that price, given a certain minimal level of quality, was yet the foremost criterion for selecting vendors. However, respondents also indicated that a standard system of providing feedback to suppliers concerning the quality of their raw materials existed, that technical assistance was also provided to vendors, and that plant personnel often visited vendors to help in problem definition and resolution.

 

Factor 7: Process Design (Statistical Quality Control)

Statistical quality control provides means for analyzing the process, continually improving the process, and controlling the product quality through control of the process Deming 1982. This study offered statistical support for the hypothesis that a comprehensive process design improves the level of quality, thus supporting the earlier findings of Crosby 1979, Deming 1981, Garvin 1983, Juran 1978, Mondon 1982.

 

Quality control activities in India are based mainly on the application of statistical quality control techniques. Most organizations studied maintained an effective system for monitoring incoming raw materials, checking in-process production, and reviewing finished products. Statistical quality control techniques were extensively used by these organizations to:

1. decide whether to accept or reject lots of products purchased or made within the company; and
2. Spotlight and correct process discrepancies.

The Indian Statistical Institute also helps these organizations by providing services for the installation of statistical process control systems and also providing training for personnel involved with such systems.

 

Factor 8: Quality Data

Availability and the use of quality data, especially quality cost data, is an essential ingredient of a strong quality program Crosby 1979, Deming 1979, Juran 1978. This study provides significant statistical support to the hypothesis that the availability and use of quality cost data improves the level of quality. This could be attributed to several causes. First, most of the organizations surveyed reported having an efficient quality cost reporting system that maintained data on vendors, defect or failures, error rates, scrap, warranty reports, cost of prevention, cost of appraisal, and customers’ complaints. Second, these data were available for all divisions and were updated on a regular basis, Third, the quality data were not only available to managers and supervisors but also were displayed in the form of control charts at employee workstations for full-time and hourly employees to examine. Finally, quality data were used by organizations as tools to manage quality and to make necessary quality improvements.

 

Factor 9: Feedback and Employee Involvement

This study offers no statistical support for the hypothesis that proper feedback and employee involvement in quality efforts improves the level of quality. This contradicts earlier findings of Ishika 1976, Leonard and Sasser 1982,Mondon 1982 and supports the findings of Mohanty 1988. This may be attributable to the following causes. First, among the organizations, which had introduced employee involvement programs such as quality circles for tackling quality-related problems, some indicated that their circles had become non-functional. Second, in most organizations what was most lacking was the appreciation for quality performance at all levels. In most organizations, employee promotions were not based solely on quality performance. Finally, even though individuals in some organizations were honored with rewards for superior performance in their tasks relating to quality, this was often done on a random basis and did not form a part of the documented quality policy.

 

Managerial Implications

The model and the research methods used in this study have several important implications for managers. First, this method can be very useful to an organization attempting to identify those characteristics often mentioned in the quality literature that may provide an opportunity to increase the level of quality in a specific environment. The model developed in this article (see Figure 1) illustrates one approach to implementing quality assurance programs. The approach described in this research begins by identifying these significant operating variables to obtain a better understanding of the existing quality management practices and to assign responsibilities within the organization for achieving organization-wide improvements in quality. Finally, after plans for improvement have been made and implemented, the methodology reported in this study can again be used by managers to re-evaluate the organization’s position and to evaluate the cost-effectiveness of further improvements. The analysis of the new organization position may point to variables where further actions could bring about quality improvements.

Conclusions and Future Directions

Two major conclusions emerged from this study. First, contrary to what was hypothesized in the model, it is not necessary for all the factors to be present to ensure the success of the total quality program of the organization. In other words, even if a few of the factors were not present, it was possible to obtain the required level of quality. For example, in the organizations studied effective quality levels were obtained even in the absence of top management support, proper product design and continual feedback about quality processes.

 

The second conclusion relates to the practical application of some of the findings. Managers, regardless of their position, expect an organization to implement these critical quality factors to a great extent. Thus, the factors seem to be somewhat universally acceptable and consistent with the findings of Garvin 1984, Saraph 1989 and other quality philosophers. To remain competitive in quality, managers must carefully review how these critical areas of quality assurance fare in organizations and must constantly improve practices in areas where deficiency is perceived.

In an exploratory study such as this, recommendations for future research should address the issues generated in this study. First, a replication of this study should prove helpful in re-examining the validity of its findings. Further empirical studies using larger sample and greater geographical diversity may be helpful in validating specific parts of the model proposed in this study.

 

Another area of future research should be to expand on this study and include more variables so that the applicability of the findings could be improved. This study did not include behavioral and cultural factors in the formulation of the propositions. Future researchers should use the same general format of this study, and include some of the variables mentioned above.

Finally, based on the results of the study and the data collected, cross-cultural comparisons of Indian quality management practices with quality management practices incorporated by manufacturing organizations in other countries can be useful for both organizations and countries wanting to compete effectively in the global market. Studies of such a nature would help in identifying successful organizational factors or successful quality practices that lead to superior quality performance.

 

Table 1: Organizational Requirements for Effective Quality Management

Concepts	Deming	Juran	Crosby	Ishikawa	Feigenbaum	Garvin	Saraph
Top management	X	X	X		X
Quality policies	X	X	X		X	X	X
Role of the quality department	X	X	X	X			X
Training	X	X	X	X	X		X
Product design		X	X		X	X	X
Vendor quality management	X	X				X	X
Process design	X	X	X	X		X	X
Quality data	X	X	X	X		X	X
Feedback and employee relations	X	X	X	X	X	X	X

 

 

 

Table 2: Reliability of Factors Affecting Quality

	Number of Items
Factors	per factor	Alpha(a )
Top management	7	0.7989
Quality policies	6	0.8870
Role of the quality department	5	0.8763
Training	8	0.7978
Product design	6	0.8146
Vendor quality management	8	0.7988
Process design	11	0.9066
Quality data	8	0.8487
Feedback and employee relations	8	0.8500

 

A Study of ISO 9000 and TQM Implementation in Poland

Abstract

The globalizing of markets, increased expectations of customers, growing competition on all levels of the customer-seller relationship are the factors which now, and in the future will even more, force companies to stress the importance of quality in their strategies. In a modern company, the process of quality creation should be based on total quality concept. This study aims to investigate the current situation of the implementation of TQM and ISO 9000 Quality Assurance Standards in Polish organizations. Keywords: ISO 9000, TQM, Poland

 

We are often asked about a relationship between the Standard of Quality Management ISO 9000 and TQM. The numerous factual examples show that it is possible to be awarded ISO 9000 certificate without having undertaken actions aiming at TQM introduction, and vice versa – there are companies, which carry out TQM and do not have ISO 9000 certificate. On the other hand, there are also some companies which have been awarded ISO 9000 certificate, and only then they stared to introduce TQM approach; and those which endeavor to obtain ISO 9000 certificate and at the same time introduce TQM [1995]. Irrespective from the practice, which might indicate that ISO and TQM intermingle, one should be aware of the differences, which occur between the two.

 

ISO 9000 is a system of quality management depending on setting up some formal procedures and work instructions for the employees. It is expected that all employees shall implement the adopted procedures to ensure that the work they perform is correct. External and internal inspections are carried out in order to investigate if the employees apply the procedures (follow the instructions). Some amendments are introduced in order to eliminate the incorrectness. The actions undertaken focus on the technical system and the way it functions.

However, an organization is something more than a technical system. It is also a social system within which people function, all groups of employees interact, and there are differences and a variety of work ‘approaches’, ambitions, motivations, etc. It is not possible to develop the quality of products and services, as well as the quality of work processes, without taking into consideration the fact of the social system differences. Technical systems must be integrated with social systems for creation of quality refinement. TQM depending on integrating of social and technical systems by including the two into the management process, is focused on customer demands, employee and shareholder needs and on the organization. The companies awarded ISO 9000 certificate do not have to focus on identification and meeting their customer demands or on including the employees into a continuous process of changes.

 

Experience of numerous economic entities shows that the best way of performing for a company which intends to introduce TQM is to find the relationship between TQM philosophy and ISO 9000 standard. The synergy which appears at a mutual introduction of TQM and ISO 9000 may be seen as a never ending quest for improvement, where TQM may bring innovation and advancement of knowledge, and ISO 9000 may guarantee consolidation and discipline.

 

TQM issue in Poland

The requirement of meeting by Polish economic system the standards put to use in the European Union calls, among other things, for starting and implementing some undertakings related to the quality issue. The endeavors pertain not only to the work of some authorized groups along with an appropriate government legislation of unification of standards and law

According to the research carried out by Manchester Business School for SGS Yarsley – one of the leading certificate awarding units in Great Britain, for some 30% of British companies the introduction of ISO 9000 standard had been taken as a part of TQM program. It is interesting that as many as 60% of the companies which adopted ISO 9000 standard before the laps of 12 months since the research time, declared using the standard as a part of TQM. The work undertaken and carried out in connection with the quality issue is scrutinized by the political and economic gatherings of the countries of the European Union [1995].

 

The issue of quality, and especially its importance for industry, had been considered by Polish scientific institutions as early as before the World War II, and the companies had been well advanced in promoting the possibly highest quality. For over forty years, the political system called the realistic socialism, which was dictated to Poland against her will, simply generated the tendency to lower the quality. There was a paradoxical situation. On the one hand, the government officially carried out a central strategy of quality improvement, and on the other hand, the command and distribution system along with the strong supply limitation made the self-acting mechanisms of promoting high quality disappear. That resulted in a growing tendency of diminishing the importance of the quality factor in the home economy.

 

Along with the political and economic changes of 1990, a new coherent quality system, compatible with legal standards of the European Union, was stared in Poland. In the result of working on the problem in question, in April 1993, the Parliament of the Polish Republic adopted the bill, which gave the basis to initiate a modern quality system assurance meeting the international requirements.

 

Since 1994, a rapid increase of stressing the importance of quality issue by Polish companies, including obtaining ISO 9000 certificates, has been observed. Before 1994, during the period of four years, only six companies were awarded ISO 9001 certificates and eight companies obtained ISO 9002 certificates. Four years later, during 12 months, over 150 entities were awarded ISO 9000 certificates. The number of companies, which were awarded ISO 9000 certificates in 1990 – 1997, is shown in diagram 1.

Diagram 1: ISO 9001, ISO 9002 certificates in years 1990 – 1997

 

There are twenty firms, mainly European ones, awarding certificates in Poland. The biggest number of ISO 900 certificates, the total of 109, were awarded to the companies by the Polish Center for Research and Certification. German and British companies are especially active on the Polish market. Four German entities have awarded to Polish economic entities 149 certificates, including the highest number of 66 awarded by RW T† W. The British firms awarding certificates are only slightly behind the German ones. They have awarded 142 ISO 9000 certificates. It is also worth mentioning that the British entity BVQI QA, which has awarded to Polish companies 73 certificates, takes the second place on the Polish market in the field under consideration. Out of awarding foreign firms only Dutch KEMA awarded over 10 ISO 9000 certificates. Diagram 2 shows the number of the awarded ISO 9000 certificates according to the country of origin of the awarding firms.

 

Diagram 2: ISO 9001, ISO 9002 certificates awarded to Polish companies by foreign entities according to the country of origin of the awarding firms

 

Joint stock companies and limited liability companies are the entities, which are most often interested in being, awarded ISO 9000 certificates. Out of these, the entities connected directly or indirectly with foreign capital predominate. Out of government owned companies, nearly exclusively those which have considerable financial resources are interested in obtaining certificates. So far, cooperatives and natural person companies have not shown to have been interested in introduction of ISO 9000 standard.

 

An interesting principle may be noted when comparing numbers of joint stock companies and limited liability companies which have one of ISO 9000 certificates. In case of ISO 9002 certificates, the number of either type of companies is nearly equal, however, ISO 9001 certificates have been awarded to over two times more joint stock companies. Besides, it should be mentioned that only one Polish company has been awarded ISO 9003 certificate so far. The Polish companies which have ISO 9000 certificate broken down according to the incorporation form are shown in diagram 3.

 

 

The growing number of Polish companies, in a similar way as the companies from the countries of the European Union, declare the need of TQM philosophy introduction, for fulfilling of which the first stage is normally an undertaking aiming at obtaining ISO 9000 certificate. It is so, because the companies are aware that the correct functioning based on ISO 9000 certificates does not guarantee either an advantage over the competitors or surviving under the circumstances of the global competition. The Polish companies, under the pressure of foreign competitors, have to focus not only on issues related to new technologies, on attracting capital, winning markets, and most of all on finding effective and verified methods of management. For many of them TQM may prove to be the most important way for their further fruitful existence.

Factors of introduction of TQM in Polish companies

The circumstances connected with introduction of TQM in Polish companies may split into external – closely related to the factors originating from the company’s surrounding and internal – which depend on the situation inside the company.

 

In order to characterize the external factors of TQM introduction in Polish companies, it is necessary to consider the historic circumstances (influence on the present status of the economic, as well as, social and political situation) and the current particulars – deriving mainly from the globalization and internalization of economy and the changing situation in Europe under the processes of unification. The key factor connected with the introduction of TQM to Polish companies is considered to be the reconstruction of the entire economy and its reorientation into quality aims. In the result of the carried out inquiry, the following factors are conducive to arrive at the objective goals:

– a total withdrawal from a command-instruction kind of management,

– a socially accepted, coherent and unanimously pro-quality concept of management,

– a considerable influx of foreign capital,

– a consistent implementation of the adopted economic concept.

 

A deep analysis of the above factors shows that the importance of a consistent implementation of pro-quality concept of management dominates over the changes of the management mechanism and the influence of foreign capitals. The external factors may be analyzed looking into the following: system approach, aiming at strategic objectives, capability of introducing improvements in a permanent way, an active group cooperation of the entire personnel, and cultural changes.

 

A system approach has not been pursued by Polish companies but it has been followed especially by some model Japanese economic entities. The policy promoting activities, which give hasty profits, and wrecking long-term undertakings, is undoubtedly one of the major problems of Polish companies. Nearly 80% of the companies affirm that they posses a development strategy, however, for 70% of them the strategy is of a short-term character. The issue of instigating the entire personnel of a company to work for quality improvement is the most significant challenge when effecting TQM. The awareness of the fact how important the quality factor is for an economic success of a company is generally a low one. Therefore, education is indispensable here. In case of the managers, a permanent increase of understanding the importance attached to the quality question for functioning of any organization has been observed. The level of knowledge concerning the quality issue may be found insufficient but it is characteristic of a continuous headway. It is also essential to implement expert tools to be able to identify the range of accomplishment of the quality management policy in a given company. Unfortunately, the only tool implemented by numerous Polish companies is a statistical quality inspection. The cultural changes, without which the introduction of TQM philosophy is a very difficult one, take place too slowly in the Polish economic reality. Many companies aim mainly at quantitative and financial objectives. There is no quest for higher standard of efficiency but the one which may lead to the above goals. As presented in brief, the issue of quality systems introduction based on ISO 9000 standard, and first of all the implementation of TQM philosophy gather impetus in Poland in the period of last years. It is presupposed that the problems and predicaments that occur in Polish companies on the way towards the total quality will have to be on the wane in parallel with the growing popularity of TQM philosophy. Both, own experience and a possibility to watch achievements of some foreign entities following the example in question shall be conducive to the issue.

Polish experience in the implementation of ISO 9000 and TQM

One of the most important aims of this paper is the presentation of the latest results of an inquiry carried out within the frame of the research program entitled ‘TQM – aims and circumstances in the practice of Polish companies’ and financed by The Polish Committee for Scientific Research. The research in question covered 385 Polish companies – all had been awarded ISO 9000 certificates by 01 February 1998. 44.4% of the companies have taken part in the research. Collected data was analyzed by using standard statistical methods. There are the initial results of the analysis of the most significant data.

 

The companies broken down according to their legal status: 10% companies managed by the government, 59% joint stock companies, 22% limited liability companies, 9% other companies. 19.4% out of the inquired companies were financially linked to some foreign investors.

 

The companies divided according to their main activities are as follows: 5.4% trade companies, 16.8% rendering services and 77.8% production ones. 17.3% of the companies recorded 0% of export in the total sale, for 28.1% of the companies their export accounted for less than 15% of the total sale, for 42.1% of the companies their export was within the range 15% – 50%, and for 12.5% of the enterprises the export accounted for over 50% of the total sale.

 

45% of the companies indicated that in order to obtain ISO 9000 standards they had had to introduce some considerable adaptations to the existing norms, whereas 51% of the companies found the adjustments insignificant, and only for 4% of the companies no arrangements concerning adjustments to ISO 9000 standards were necessary to be introduced. Among the reasons which made the companies start activities aiming at obtaining ISO 9000 certificates the following were mentioned most often:

– the requirements of their contractors,

– the improvement of competitiveness both on domestic and foreign markets.

 

The inquiry on what influence the introduction of ISO 9000 has on the improvement of the quality of products, 3.7% of the companies responded in a negative way, and 94.3% found out that the introduction of the standard caused some improvements of the product quality – out of which 32.5% of the companies reported the influence to be a small one, 54.6% of the companies said it had been significant and 9.2% noted the influence as a very considerable factor. The similar findings are in reference to the question concerning ISO 9000 influence on an advancement of the quality of functioning of a given company. We received only 1.2% of negative responses, and out of 98.8% of those companies which responded positively 17.2% found out that the introduction of the norm had had an insignificant influence on the company’s operation, 66.9% said the influence was significant and 14.7% considered it to be a very meaningful one. The companies reported that the most important consequences of ISO 9000 standard introduction were a more competitive market position and a better satisfaction of their customers.

 

For 26.4% of the companies ISO 9000 standard introduction had not resulted from an element of TQM philosophy introduction. For over 52% of the companies ISO 9000 introduction proved to be the first stage on the way to the total quality target, whereas for 21.5% ISO 9000 had been an element of TQM philosophy. 8.1% of the companies are not going to introduce TQM, 33.5% are planning and preparing for TQM implementation, 27.3% are presently introducing TQM, and over 31% of the companies are well advanced in the total quality management introduction.

The inquiry about evaluation of TQM from the point of its influence on the improvement of the products/services – 4% responded that they did not find any relations. According to 96% of the inquired the influence does occur, out of which for 29% the influence is a small one, for 58% – significant, and for 10% it is a very considerable one. A similar question concerning TQM influence on an effective operation of a company was answered negatively by 1.5% of the inquired. Out of 98.5% of the companies which confirmed an influence of TQM on an effective operation of a company – 23% saw the influence on the problem in question as an insignificant one, 65% as considerable and 10% as a very considerable one.

 

 

As the most meaningful internal effects of TQM introduction, the companies included as follows:

– improvements of management effectiveness,

– an increased awareness of procedure issues,

– an improved organizational culture.

The external effects of TQM introduction most often included:

– improvements in the effectiveness of customer services

– improvements in the effectiveness of consumer satisfaction,

– improvements of market competitiveness and a betterment of the company’s image.

Conclusion

At the time, when the struggle for the possible highest quality of products has been an unattainable goal for the most companies of Middle-East Europe, and while endeavoring to arrive at the aim they make many mistakes, it has become clear that the quality of a product is only one circumstance which is evaluated while purchasing goods. The increasing unification of demands and of product properties make the other factors considered by customers when deciding about the purchasing options more and more valid. The necessity of a continuous scrutiny of those factors, and at the same time the increased awareness of the need of dominating over the competitors at all levels of activities of a company under quality evaluation, has caused the new ‘philosophy’ of quality to bee seen not only as an aim, but as a way of functioning of the whole organization. This way of viewing the quality gives a great chance for a dynamic predomination of the Total Quality Management (TQM) concept in this part of Europe.

 

 

Bibliography and References

 

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• Conference discussion by Robert Karaszewski, Nicholas Copernicus University, Faculty of Economic Sciences and Management, courtesy of the virtual conference centre.