ISO 9000:2000 Supports EFQM Excellence Model - Case Study Example

Total Quality Principles Name: Tutor: Course: Date: Table of Contents Table of Contents 2 1.1 Introduction 3 1.2 Summary of key argumentation 3 1.2.1 ISO 9000:2000 supports EFQM Excellence Model 3 1.2.2 Leveraging capabilities and quality management systems 5 1.3 Specific recommendations for handling quality and excellence 6 1.4 Rationale/Justification for the recommendations 8 1.5 Conclusion 11 References 13 1.1 Introduction Quality systems apply principles, practices and techniques to ensure that organizations exceed the expectations of customers and other stakeholders. ISO 9000:2000 was established to focus on the customer in terms of business and process improvements, customer service and satisfaction which are fundamental concepts of EFQM excellence model. ISO 9000 guarantees daily quality performance while EFQM excellence model prepares the future. While the vision should be achievable, the strategy and objectives need to be actionable and measurable respectively. Moreover, communication between top management and employees should have a precise, clear and simple language. Indeed, senior management has a responsibility of establishing vision and overall goals, motivation for change, commitment and alignment and learning culture for continuous improvement. This report summarizes the key arguments about ISO 9000:2000 and the EFQM excellence model. It also discusses how organizations leverage quality management systems and capabilities towards sustainable competitive advantages. While making recommendations on quality issues, this report provides justification or rationale for these recommendations. 1.2 Summary of key argumentation 1.2.1 ISO 9000:2000 supports EFQM Excellence Model The international standard, ISO 9000:2000, focuses on quality management which in many ways mirrors the aspiration of the European Foundations for Quality Management (EFQM) model. EFQM aims at sustaining wealth creation under business management framework through monitoring, target measurement, continuous improvement and self-assessments (Russell, 2000). With the ISO 9000 providing requirements and guidance on quality management systems, it can be used to develop sustainable excellence in an organization based on their needs and functions (ISO Management Systems, 2003). On the contrary, EFQM model is non-prescriptive in the type of approaches that should be used to achieve excellence as opposed to ISO 9001:2000 (see figure below) which specifies requirements to be used in quality. Figure 1: ISO 9000:2000 quality principles While ISO 9000:2000 emphasizes on continuous improvement using tools such as Define-Measure-Analyze-Improve-Control (DMAIC), EFQM model goes beyond improvement to include innovation and learning. According to Edward Deming, top management should be committed to continuous improvement and leadership which is also a focus of EFQM model in ensuring constancy of purpose and leadership. In the EFQM model, new elements of quality management suggested by Deming have been incorporated. These include new requirements when handling suppliers and customers, customer feedback and the Plan-Do-Check-Act cycle proposed by Deming (Russell, 2000). Just like quality management that believes in the involvement of people in decision making, EFQM model (see figure below) prides in people development and involvement. Figure 2: EFQM Excellence model Nonetheless, ISO 9000:2000 is more of process oriented that results oriented as witnessed in the EFQM Excellence model. A quality management system, if poorly supported and implemented, can undermine the focus of an organization towards excellence (ISO Management Systems, 2003). This is because ISO 9000: 2000 does not encompass all the management techniques, tools and standards required to aspire to excellence. Yet, it provides standards that complement the holistic framework of the EFQM excellence model. Although standards are limited in terms of effort and focus, it determines how an organization effectively utilizes its current quality management system. While there is a weak link between ISO 9000:2000 in terms of results on people and society, it supports the model in terms of leadership, policy and strategy, resources, process and key performances (Russell, 2000). Interestingly, both models should be applied in parallel but due to resource constraints, they should be sequentially implemented. For example, companies can implement EFQM without the need to include ISO 9000:2000. The two models are needed side by side because they help uphold compliance, management practices, quality assurance, and performance, and the sense of discipline, opportunity and excitement. 1.2.2 Leveraging capabilities and quality management systems Most organizations fail to achieve desired revenue and sustainability due to poor organizational infrastructure and inadequate consideration of opportunities. A more responsive and dynamic organization is one that builds and leverages on unique capabilities and resources to create new market opportunities (Hussain et al., 2004). A mixture of resources and capabilities are manifested in customer service, innovation, quality, efficiencies and differentiated products (McGuire et al., 2015). Many large organizations, today, have resources such as tacit and explicit knowledge shared across functions and are oriented towards innovation or continuous improvement. However, progressive and successful organizations require organizational levers to influence their competitive advantages. As espoused in both ISO 9000:2000 and EFQM excellence model, leadership should be about promoting company mission, vision and governance to meet employee expectations and those of other stakeholders. This implies that the organization should articulate its commitment and appropriate corporate culture responsive to the needs of all the stakeholders (IAEA, 2006, p.21). Meanwhile, the level of engagement should allow for be highly compelling across the organization. Organizational leaders are those who face the reality of critical thinking in managing diverse people and ensuring quality is practiced throughout the organization. Improving quality in the organization involves quality recruitment process, sourcing of quality raw materials and services, innovative processes and systems, less defects and rejects and teamwork among employees (Russell, 2000). In achieving sustainable outstanding achievements, organizational leaders need to demonstrate abilities to optimize and prioritize resources that deliver high quality products while reducing time and costs. Quality programs under ISO 9000:2000 are entrenched in continuous incremental improvement within the framework of existing processes. While processes may not require dramatic or radical changes, they need fine tuning and minor adjustments (McGuire et al., 2015). However, massive resources are required sparingly and within a limited time. In many organizations, expertise and resources are the driving force of quality improvement and excellence. Orienting towards customers adds value while committed leadership irks the process of change. On the other hand, process orientation ensures that work organization, final products and workflow achieve high output quality. Continuous improvement in products and processes not only develops efficiency but also creates competitive advantage to progressive organizations. 1.3 Specific recommendations for handling quality and excellence Managing knowledge: Good management requires effective management of knowledge. By acknowledging the power of knowledge in the organization it is possible to have high-quality services and products, efficient structuring of work, attention to customers, savvy marketing and sound planning. Organizations should build on tacit and explicit knowledge to manage resources and gain competitive advantage. Culture: Management actions and policies reflect the culture practiced by firms. Organizations should believe in performance excellence, teamwork, continuous improvement and the principles of quality for successful implementation of the practices. While their actions set in motion the organizational culture, it is the quality practices that must be applied routinely within the organization. This will help people to accept and internalize the cultural changes and principles in transition. Leadership: Organization should engender a laboratory for leadership development where strategic approach to improvement is encouraged. This should begin with assessing emotional intelligence of individuals. Vital elements of a leadership process should include mentoring and one-on-one coaching alongside hands-on learning experiences to improve quality and enhance continuous improvement of processes, systems and procedures within the organization. Organizational design and customer focus: An organization should strive towards excellence through effective working partnership among external customers. Through teamwork, inter-company teams can develop innovative products and collaborate more closely. Furthermore, a collaborative spirit is needed to implement and sustain new models of organizational design. The culture and systems of an organization should encourage learning and innovation to sustain or build competitive advantages. Quality performance management:  An important source of status and success is individual quality performance that produces quality work the first time. Firms should emphasize on independent actions within workgroups or functions towards open disagreements and calculated risks. Growing core business starts from cooperation with suppliers, seamless production systems and measuring quality based on defects and number of rework. For existing products, quality products increase market penetration. Furthermore, growth drivers must be managed, monitored and measured. Although it may not be possible to have precise measurements, then proxy indicators can be engaged in an open and thoughtful manner. Organizational capabilities: Customer value across the organization should be delivered at a superior level with minimal interruptions on its flow. It is necessary to break down departmental silos by eliminating barriers to flow. Building strategic capabilities of an organization, regardless of the specific capability, emanates from outstanding level of customer service and successful entry into new markets. These organizations appeal to customers because of excellent new products or services. Information technology infrastructure: Information technology (IT) infrastructure of a firm should extend beyond its boundaries to include customers and suppliers to sustain competitive advantages. ERP systems or Enterprise Resource Planning should be accessible, more streamlined and must incorporate integrated business logistics. This will help not only to analyze a variety of business applications but also maintain all the relevant data in a single database.   1.4 Rationale/Justification for the recommendations This report recommended knowledge management as an important facet in corporate excellence. In the current business environment, firms are facing stiff competition from good performers. Managing knowledge may be a necessary dimension that differentiates how companies perceive success and failure (Hussain et al., 2004). While linking industry value or economic performance, managing knowledge is one of the success factors. This requires a clear language and purpose, flexible knowledge structure embedded in the organizational and technical infrastructure. Theoretically, people are extrinsically and intrinsically motivated with the latter being the most powerful (Russell, 2000). Organizations and Corporate have the potential to effectively manage knowledge based on the EFQM model. Under the contextual dimensions of organization, special attention should go towards culture, technology and strategy. Just as adopting and supporting a strong culture will build knowledge, efficiently using all knowledge resources results from effective strategies. Knowledge management systems emanate from information technologies such as expert systems, intranets and digital documents. New ways of working are actively enhanced through capabilities which are the goal of culture change (Hussain et al., 2004). Organizational success results from a paradigm shift towards new production processes, tools, beliefs and ways of thinking. These three foundations or dimensions can help build the knowledge infrastructure. Before one practices knowledge management, it is important that they first consider culture as the first foundation (Russell, 2000). While having a strong human component, knowledge management, stands at the core of organizational success. Hussain et al. (2004) observes that unless organizations trust knowledge culture, their purposed knowledge management strategies may not work. Such strategies should reiterate value and role of knowledge in business enterprises and decisions on day-to-day basis. This culture should tend towards scrutiny and reflection, experimentation in quality processes, learning, and one that rewards innovation. Conducive culture in the organization is one that allows for effective use, transfer and creation of knowledge. Changing organizational values and norms has seen modern firms engage general and high-level efforts towards knowledge (Andersen, 2006). This valuable asset is at best understood through personnel efforts. There should be a good fit between knowledge management initiatives and the culture of the organization for effective knowledge management. In general, no amount of technology or knowledge management initiatives while culture is not supported in ISO 9000:2000 and FEQM model. Success will be realized through good knowledge management and knowledge content practices. With regard to knowledge, the culture of the organization should not inhibit sharing knowledge about quality but should create a positive orientation to knowledge (Russell, 2000). Orienting positively to knowledge requires employees who are free and willing to explore, intellectually curious and bright. Moreover, knowledge use and creation should be encouraged by executives. Moreover, people should not feel resentful or alienated that by sharing knowledge with the company; it will cost them their jobs. Therefore, a prerequisite for effective management of knowledge is a healthy and conducive culture. Leadership, under ISO 9000:2000 requires emotional intelligence at all levels since successful leaders will require this key predictive attribute. Leaders are required not only to change the culture but also to change themselves if there is any meaningful organizational change anticipated (Andersen, 2006). Today, senior executives experience significant personal transformation as they seek to transform the organization. To compete in terms of cost or differentiation strategies, senior managers should be committed to personal change, manage challenges of change and become a fundamental part of their readiness towards sustainable leadership and future (Labotis, 2007). For organizational excellence and total quality management, senior leaders should create conditions of teamwork, brainstorming and identifying quality risks at the earliest time. They should encourage all employees to join in and set the overall direction in executing the strategy. Senior leaders should continually reinforce all employees to exhibit leadership behaviors and responsibility in managing quality in all the organizational functions. While leaders in non-managerial and non-titled positions exist, it is important that all levels in organizations embrace quality and be owned by all employees. Rather than the hierarchical position, leadership in quality management is a necessary traction to maximize synergy (KPMG, 2012, p.3). For example, coaches and mentors help employees to identify defects, research on cause-and-effect and help develop a network to increase productivity. For leaders to truly succeed in managing people, processes and systems to comply with customer requirements, they require a combination of philosophies of good leadership, characteristics, and traits of quality of leadership. If one is to be honest, they must display candor, integrity and sincerity. A humble leader is one who rises above political behavior and posturing to display a higher degree of self confidence (Andersen, 2006). Based on moral principles and reason, a competent leader takes actions for failures within the production floor or resolves quality problems before they arise. Having a vision of the future is for those leaders who are visionary. They appeal and engage people’s higher values as well as sets clear goals. Quality issues within the organization are better resolved through organizing cross-functional teams (Burgelman, et al., 2003). While lightweight teams attend to needs as they arise, heavyweight teams are functional groups highly dependent on organizational strategies. Effective teams are those composed of individuals within the team environment who possess a high degree of mutual respect. They should also be skilled in their own functional areas. To reduce communication challenges in quality management, matrix organizations have functional manager who resolve inter-group conflicts while encouraging quality inspection priorities in the production floor (Booleman et al., 2001). Having goal alignment based on collaboration is necessary for effective cross-functional success in quality management. As the market and industry desire superior and quality products and services, it is important that organizations re-engineer themselves and become responsible to people across the functions. By acknowledging the value of new opportunities and meeting new challenges, organizations can optimize resources and realign process kicks to maximize output (Burgelman, et al., 2003). Quality product development groups periodically apply a networked structure to exploit the individual expertise and create solutions with higher intrinsic value. Quality problems in the production floor that extend over a period of time demand that leadership teams become receptive to change by focusing on the change culture (Booleman et al., 2001). An organizational long-term strategy must consider the input of modern organizational designs and the impacts of globalization. Firms need to look for new opportunities and solutions in the increasing pace of globalization. Superior products extend or even augment the capabilities or resources of the firm (Labotis, 2007). As multinational companies continue to overcome entry barriers, new geographical locations become attractive for expansion. Process shifts in the factory floors come with reasonable level of confidence on how to increase efficiency and reduce costs. Particular attention is given to when and how performance is measured, access by those directly responsible and if necessary a follow-up action. Successful organizations utilize EFQM models in their work systems and processes drawn on performance management systems which serve to eliminate errors, lag-time and defects. For example, most firms in the banking sector utilize performance scorecards to meet the needs of shareholders, employees, customers and communities. By using monitoring and measuring as leading indicators, they maximize financial results, employee engagement and customer loyalty. Continuous improvement is seen in the effort of senior managers to steer performance and continuously measure satisfaction levels of customers (Wong & Yung, 2005). Total quality management (TQM) or ISO 9000:2000 assessment and company resources and capabilities work side by side. In essence, exceptional value is provided by highly visible to key individuals who provide products and services that potential and present competitors find it difficult to replicate. Success in meeting quality expectations by customers not only requires a high level of cross-departmental collaboration but cooperation with suppliers within the supply chain. Organizations with rigid vertical structures may find meeting quality problems rather challenging. Special customer requirements, under ISO 9000:2000 are not met when structures make adaptation and responsiveness difficult for employees. Employee’s commitment shifts to their profession or department, under these conditions, from the firm (Labotis, 2007). This implies that senior leaders should always bank on organization capabilities as corporate and business strategies that strives the organization to excellence. Driving new business growth is about leveraging the organizations’ capabilities and continually building on process improvement through quality tools like TQM, Six Sigma and performance scorecards (IAEA, 2006). According to Srivastava et al. (2013), Information and technology infrastructure is important in achieving organizational excellence. Modern organizations are using new technologies to create competitive advantages. While technologies such as ERP systems have been used to configure and test effectiveness and efficiency of system and processes, it requires change in behavior and attitudes for these technologies to have a company-wide impact. Technologies have not only improved ways of communication but have also increased levels of performance per hour while reducing errors and defects in production lines (Wong & Yung, 2005). Quality recruitment makes use of ISO 9000:2000 principles on employees and managers’ skills, accuracy and higher levels of diligence. To retain competitive advantages, firms will have to build accuracy of systems and processes especially in forecasting and risk management as well as enterprise system. Eliminating inventory buildup demands that the production floor adopts Just-in-Time, methodologies for efficient manufacturing processes. 1.5 Conclusion This report compares and contrasts the foundations of ISO 9000:2000 and EFQM excellence model. While the former is based on meeting certain requirements of the customer, EFQM model is designed for the future and is founded on organizational excellence and achievements. Improved quality of products or services at low prices emanates from standardized processes and related technologies. In addition, excellence performance in an organization should reflect on methodological approaches in effective measurement of results, good communication, defined targets and utilize clear objectives. The report recommends that organizations should embrace a knowledge-friendly culture supported by senior management. This is because with multiple channels of knowledge transfer, change in motivational practices is possible. Change will not thrive if they do not fit the culture. Therefore, quality management needs to pursue long-term effort to culture change or align the existing culture to the new approach. Under ISO 9000:2000 and EFQM model, special consideration should be given to relationship within the organization that involves senior leaders and other leaders. Research and development into new manufacturing methods, processes and techniques leverages organizational level of output and utilizes locally skilled workforce. By working as teams and incentivized groups, companies would be able to wade of competitors who always attempt to replicate key organizational capabilities and products. Besides, there is greater accountability among managers and employees towards IT systems like ERP systems would help eliminate poor management practices and uncover errors. References Andersen, J. (2006). Leadership, personality, and effectiveness. Journal of Socio-Economics, 35: 1078-1091.  Booleman, M., Bergdahl, M., Brakel, R. & Grunewald, W. (2001). The interrelationship of different quality management mainframes. 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