Total Quality Management Implementation - Literature review Example

TQM implementation (Name) (Institution) (Course) (Module) (Instructor’s Name) 11th September 2009 Contents 1.0 Introduction …………………………………………………. 1.1 Company background ………………………………………. 1.2 Committal ………………………………………………….. 2.0 Literature review……………………………………………. 3.0 Implementation process…………………………………….. 3.1. Phase I: Preparation…………………………………………. 3.1.1Step 1: Management commitment……………………………. 3.1.2 Step 2: Forming the steering committee- ………………………. 3.1.3 Step 3: Team building…………………………………………….. 3.1.4 Step 4: TQM training for the committee. ………………………… 3.1.5 Step 5: Create Vision and Plan Statement ………………………. 3.1.6 Step 6: Establishment of Objectives…………………………….. 3.1.7 Step 7: Communicating and publicizing TQM…………………… 3.1.8 Step 8: Identification of strengths and weaknesses……………….. 3.1.9 Step 9: Advocates of TQM ………………………………………… 3.1.10 Step 10: Employee satisfaction and attitude…………………… 3.1.11 Step 11: Customer satisfaction and attitude……………………… 3.2. Phase II. Planning …………………………………………………… 3.2.1 Step 12: Planning the implementation approach (Plan-Do-check –Adjust)………………………………………….. 3.2.2 Step 13: Identification of projects………………………………….. 3.2.3 Step 14: Establish Team Composition………………………………. 3.2.4 Step 15: Provide Team Training…………………………………... 3.3. Phase III Execution…………………………………………………. 3.3.1 Step 16: Team activation…………………………………………… 3.3.2 Step 17: Team Feedback Loop to the Steering Committee………… 3.3.3 Step 18: Customer Satisfaction Feedback Loop…………………… 3.3.4 Step 19: Employee Satisfaction Feedback Loop…………………… 3.3.5 Step 20: Modifying infrastructure………………………………….. 5.0 Conclusion……………………………………………………………. 6.0 Recommendations………………………………………………… References Executive summary The TQM implementation program centers mainly on enhancing the performance of our employees at all levels. Given the nature of the industry and prevailing conditions in the market, it is paramount that HRM strategies be incorporated in TQM. The program will take definitive steps with an evaluation of each step being carried out on its completion. Such evaluation will be continuous to ensure sustained benefits of TQM in the company. All steps considered in this report are practical and that that they shall be further modified minimally to fit with employee skills and knowledge and organizational culture. On the other hand, the implementation is not financially catered for and hence will require added funding form the parent company. Specifically, this report adopts eight fundamental concepts of TQM and the four elements that pertain to business performance improvement. These concepts of TQM are vision/plan statement, evaluation, education and training, recognition/rewards, supplier quality management, customer focus, quality system improvement and leadership. The overall business performance inclusive of strategic business performance, employee satisfaction, product quality and customer satisfaction, is the final target of TQM as shown by supporting literature. Such a framework is adopted with the support of existing literature that hypothesizes that TQM implementation plays a major role in employee satisfaction, customer satisfaction, product quality, and strategic business performance. 1.0 Introduction 1.1 Company background Fashion Wearhouse is an apparel stocking department store located in Mackay, Queensland. This is just one of the many apparel department stores under Fashion Heads Group. In the wake of a decline in sales, the Company is planning to implement some management strategies. As the manager of Fashion Wearhouse, I am charged with reporting to the Group’s CEO on the planned implementation of TQM that will see the involvement of 150 employees under me in improving the stores performance. The plan is slated for implementation for January 2010. 1.2 Committal Date: To: The CEO Fashion Heads Group, From: ……………….. Subject: Proposed TQM implementation report As requested, following is a report on the implementation of TQM plan at Fashion Wearhouse, Mackay. 2.0 Literature review There is no standard definition of TQM as various management experts, thinkers and experts have each developed own proposed various definitions, though with significant similarities, each gaining acceptance. Nevertheless, whichever model is adopted, there is congruence in the results expected in that by implementing TQM, firms can “improve their competitive abilities and provide strategic advantages in the marketplace” (Zhang, 2000, p.1). In addition Rategan (1992) as cited by (Zhang, 2000) says that implementation of TQM also leads to improvements in overall business performance, employee relations, business processes, customer satisfaction, and financial performance. However, the benefits of TQM are not limited to these as the managers are also involved in setting up specific goals of TQM (Hendricks and Singhal, 2000). They however, warn that managers should be careful to overestimate the benefits of TQM as their research indicates no correlation between TQM application and short term financial performance of organizations. Nevertheless, when applied effectively, TQM leads to long-term profitability and better stock returns for firms (Hendricks and Singhal, 2000; Zhang, 2000). Goetsch and Davis (2006) emphasize on the importance of TQM in employee management. They note that managing employees in a less than optimal way nourishes a negative attitude towards work for individual employees which hinders his performance and work output. In the long run, this negativity may permeate the entire workforce thereby lowering organizational performance. To eliminate the possibility of such a scenario, Goetsch and Davis (2006) suggest fostering of excellent communication, setting of clear employee expectations, setting an affirming environment, cultivating trust and employee empowerment and involvement in decision making. In his paper, Rahman (2002) also shows the importance and significance of leadership and the role played by the management if implementing TQM. He says that HRM is an integral part of TQM and as such the efficiency of the management determines the efficiency of TQM. Hendricks and Singhal (2000) add that the individual characteristics of an organization such as organizational culture determine the success of implementation and the benefits enjoyed. In a study of the use of TQM by Small and Medium Enterprises (SME’s) in Australia, Weisner, McDonald and Banham (2007) conclude that firms with smaller workforces are more conveniently placed at adopting change such as implementation of new management strategies such TQM that large organizations with large number of employees. They define small employees as those with less than 100 employees while medium enterprises are those with 200-100 employees. On the contrary, such small and medium sized forms have limited resources to enable them fully adopt such change and reap the benefits both in the long term and short term. Weisner et al (2007) also add that due to limited resources, SME’s have difficulties in planning in the long-term. Due to their moving focus as determined by short term goals, SME managers have difficulties in employing and providing strategic HRM. In a study of TQM implementation by South Africa clothing and grocery departmental stores, Vermeulen (1996) concluded that competition, shrinking market share and increase in cost of doing business were the major factors that forced these stores to invest in TQM with an aim of improving overall business performance. Levin and Toffel (2008) also add that successful implementation of TQM can earn firms ISO 9001 certification. They noted that out of 1,000 companies studied in California, firms with ISO 9001 certification in quality management realized higher growth in sales, employment, payroll, and average annual earnings. Therefore, Tari and Sabater (2006) argue that firms should first evaluate their TQM implementation against their set goals and targets before seeking to fulfill the TQM requirements of such quality evaluation bodies. Tari and Sabater (2006) and Weisner et al say that HR practices, strategies and policies must be aligned to quality polices. 3.0 Implementation process Zhang (2000), Hendricks and Singhal (2007), Total Quality Management Master Plan (1990) and Goetsch and Davis (2006) suggest different concepts of TQM. As guided by the nature of the industry and business and for convenience, Fashion Wearhouse shall adopt the following listed concepts. leadership vision/plan statement, employee participation supplier quality management, customer focus, evaluation, Various authors have developed various implementation programs. Zhnag (2000) suggests the one below though the idea is the same with what Goetsch and Davis (2006) suggest in their 20 step TQM implementation program. However, for simplicity, the company will adopt the Goetsch and Davis (2006) 20 steps program. The 20 steps are loosely divided into three phases Preparation Planning Execution 3.1. Phase I: Preparation 3.1.1Step 1: Management commitment The management must be wiling and committed to implement TQM. Huq (2005) and Mersha, Sriram and Herom (2009) warn that the desire by the management to maintain status quo is the greatest impediment in effecting change. Again, resources must be available to implement the program. If there is this commitment, the implementation program follows as below. 3.1.2 Step 2: Forming the steering committee- Members of the committee will comprise members of senior staff. The committee will be responsible for steering the whole implementation process from the initial stage and ensuring its application throughout hence it will be permanent 3.1.3 Step 3: Team building The steering committee will be transformed into a team through team building activities and training through a consultant. 3.1.4 Step 4: TQM training for the committee. The management and the committee must lead from the front. Mersha et al (2009) say management’s participation in TQM inspires employees and teams to be actively involved. To do this, the steering committee will undergo training on the essentials and applications of TQM. The training may also involve visits to firms already employing TQM and borrowing some successful strategies. Duration: two hour sessions three days a week for a month. 3.1.5 Step 5: Create Vision and Plan Statement A vision statement serves as a guiding mantra for an organization which is a short but concise statement that shows the desired future state of the business. It also serves as the foundation of all business strategies and objectives. This will be conducted by the steering committee and approximately take one day. 3.1.6 Step 6: Establishment of Objectives The steering committee will draft the objectives and ensure that they are concise and time framed. They will be smaller versions of the vision statement. Some suggested ones are Increase monthly sales by 5% Increase the level of customer satisfaction to 8/10 in 18 months Increase our Christmas season sales by 5% this year Increase employee satisfaction by 10% in the first one year. Increase individual employee output by 7% within one year after TQM training. Takes approximately three weeks 3.1.7 Step 7: Communicating and publicizing TQM This will entail communication with our employees and suppliers and other stakeholders. While our employees are naturally part of our TQM implementation, our suppliers will be brought onboard. Zhang (2005) and Goetsch and Davis (2006) say that firms should consider and treat their suppliers as their own branches and hence the ideals of TQM shall also be imparted on the suppliers such as just in time deliveries. It is a continuous process throughout. 3.1.8 Step 8: Identification of strengths and weaknesses The steering committee must be open minded and objective in identifying the strengths and weaknesses of the firm. This will be important in guiding the application of TQM. The process also highlights areas where TQM is needed most. 3.1.9 Step 9: Advocates of TQM The management must identify factors and process that will welcome and boost efficiency of TQM. Similarly, factors and process that are expected to offer resistance to TQM must be identified. The advocates must be enhanced and resisters eliminated or adjusted. 3.1.10 Step 10: Employee satisfaction and attitude This entails an assessment of the prevailing levels of satisfaction in employees. This is best carried out by circulating forms for employees to fill out. With the results, Fashion Wearhouse will be able to measure change induced by TQM. With prior preparation of forms to fill out, it takes a few hours and should be done annually. 3.1.11 Step 11: Customer satisfaction and attitude This entails an assessment of the prevailing levels of satisfaction in customers. For efficiency, the services will be outsourced from a consultancy firm. With the results, Fashion Wearhouse will be able to measure change induced by TQM. Takes two months in order to assess customers’ satisfaction and will be done annually thereafter. 3.2. Phase II. Planning 3.2.1 Step 12: Planning the implementation approach (Plan-Do-check –Adjust) The steering committee shall plan the implementation by applying each step at a time and then checking and adjusting where necessary. As such, it becomes continuous. Corrections may be elimination of some resisters realized after implementing a particular step. 3.2.2 Step 13: Identification of projects Taking account of the strengths and weaknesses of the firm, and the personalities involved together with company vision and objectives, the steering committee will identify initial projects for TQM implementation. These initial projects must be handle s with care and success ensured in order to set a positive spirit. Takes place in the first few days depending on projects identified. 3.2.3 Step 14: Establish Team Composition Teams shall cut across all departments to almost represent the firm’s model workforce. This also helps in identifying advocates and resistors. 3.2.4 Step 15: Provide Team Training The steering committee shall handle the training before embarking on a particular project. The training shall cover all the basics of TQM and other essentials needed in the project. Training continues until all employees are covered. 3.3 Phase III Execution 3.3.1 Step 16: Team activation The steering committee gives the job descriptions to each team and stimulates them into action. From this point onwards, teams will be recognized by the organizational chart and regarded as formal entities in the company. This will be made as an announcement by the management and also mark the commencement of TQM implementation. This will only take place when all systems are ready as per the steering committee timing. 3.3.2 Step 17: Team Feedback Loop to the Steering Committee The various teams will report progress, results and feedback to the steering committee through their team leader. In the very first few weeks, team leaders will prepare a report to the committee on their progress and results of the TQM implementation. Such progress will entail how individual employees are responding to the implementation. Team leaders shall also give recommendations and suggestions in their reports. The process is continuous though frequency of reports is maintained on a monthly basis. 3.3.3 Step 18: Customer Satisfaction Feedback Loop A special team will established that will track the progress in customer satisfaction. Such data will be obtained from customer satisfaction surveys, number of weekly complaints, returning customers, sales etc. The team will present such data and recommendations to the steering committee that through the PDCA cycle will deliberate the right action. Continuous throughout. 3.3.4 Step 19: Employee Satisfaction Feedback Loop, Employees will fill out job satisfaction survey forms annually that will be used to track the progress. This will be carried out by a special team that will collect and present the data to the steering committee for analysis and action. Such a report may recommend review of reward system or work allocation among employees. To be carried out continuously. 3.3.5 Step 20: Modifying infrastructure This is part of the PDCA cycle from the discussed loops. It entails modifying problematic areas in the said areas until the optimal combination is achieved. Due to changes in market condition and the organizational structure among others, the optimum level keeps on shifting and hence the process remains continuous. 5.0 Conclusions Fashion Wearhouse should set practical goals, formulate effective improvement plans, get the pilot projects up and running, and get the people involved and motivated continuously for the success of the implementation. There is no universal procedure in implementing TQM but that individual business firms have to develop their own that fit their core business function and vision. Much of the literature on TQM dwells on implementation of TQM in manufacturing firms noting that due to the people factor in the service industry, success of TQM heavily relies on how well the philosophy of TQM is embraced by the people and not how much it fits with business processes. For Fashion Wearhouse, the relationship with suppliers and employees understanding and commitment to the cause is most critical in implementation of TQM. 6.0 Recommendations 1. Incorporation of suppliers in TQM training. 2. Increase investment in HR by 15% to facilitate further employee training. 3. Impose penalties on suppliers failing to meet delivery deadlines and quality levels that hinder TQM implementation. 4. The management at Fashion Wearhouse to have a vote in selection of suppliers. 5. Introduce a reward system for returning customers and allocation of an IT support system to run the project. 6. Introduction of online retailing capability in the next one year. References Goetsch, D. and Davis, S. (2006). Quality management: introduction to total quality management for production, processing, and services, Sydney: Prentice Hall, Hendricks, K. & Singhal, V. (2000), Firm characteristics, total quality management, and financial performance, Journal of Operations Management Vol. 238, No. 1, p. 1–17, Huq, Z. (2005) Managing change: a barrier to TQM implementation in service industries, Managing Service Quality Journal, Vol. 15, No. 5, p. 452-469, Emerald Insight database Levine and Toffel (2008), Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers, Institute for Research on Labor and Employment Working Paper Series (University of California, Berkeley) Mersha, T., Sriram, V. & Herron, L. (2009), The impact of TQM implementation in a human service agency, International Journal of Productivity and Quality Management   Issue:  Vol. 4, No. 1, p. 1-19 Rahman, S. (2002), Leadership and HR Focus in TQM Research in Australia: An Assessment and Agenda, (Online). Available: ws.econ.usyd.edu.au/itls/wp-archive/ITLS-WP-02-07.pdf Tari J. & Sabater, V. (2006) Human aspects in a quality management context and their effects on performance, International Journal of Human Resource Management, Vol. 17, No. 3, p.484–503 Total Quality Management Master Plan (1990) An Implementation Strategy, GOAL/QPC Research Committee, Research Report No. 90-12-02, (Online). Available: www.goalqpc.com/media/pdf/tqmMasterPlan.pdf Vermeulen, W. (1996) TQM in retail departmental grocery and clothing chain stores in South Africa, The TQM Journal, Vol. 8, No. 6, p. 20-23, Emerald insight database Weisner, R. McDonald, J. & Banham, H. (2007) Australian small and medium sized enterprises (SMEs): A study of high performance management practices, Journal of Management & Organization Vol.13, No.1, p. 227–248 Zhang, Z., (2000) Implementation of Total Quality Management: An Empirical Study of Chinese Manufacturing Firms (Online). Available: http://dissertations.ub.rug.nl/FILES/faculties/management/2001/z.zhang/ Read More