Total Quality
Quality determines the satisfaction and dissatisfaction of customers. Consequently, an effective strategy for organizational success must include quality.
Not so long ago, the word quality meant primarily the absence of defects from a manufactured physical good. Several companies in India now realize that this "limited quality" or "little q" view is one reason we have made so little progress at improving quality. We must expand our approach to one of "Total Quality" or "Big Q" (refer Exhibit 1).
Total Quality Management (TQM) is the set of management processes and systems that create delighted customers, empowered employees, higher revenue, and lower cost (refer Exhibit 2).
Most companies commence the TQM journey by addressing lower cost. This strategy has merit in that it serves to motivate upper managers to perform unprecedented deeds -- with respect to quality management. These deeds demand time and leadership. The effort is not capital intensive and yields high returns on investment. Unfortunately, Indian companies have not yet developed sharper global visions to pursue the other results of a TQM strategy: higher revenue, empowered employees and delighted customers.
Lower Cost
If every task were performed correctly every time, there would be no need to check it; there would be no need to do it again; and the customer would never have reason to complain. In our normal experience, however, we must check people’s work, do much work over again, and work hard to reassure dissatisfied customers. Cost of poor quality are all costs that would disappear if tasks were performed correctly. We have documented these costs with several Indian companies (steel, textiles, engineering, electronics) to be between 20% and 40% of the total operating costs. Improving quality removes deficiencies. With fewer deficiencies, not only are the customers happier, but our costs are also dramatically lower.
Higher Revenue
Two different meanings of "quality" are important -- features, and freedom from deficiencies. Freedom from deficiencies reduces customer dissatisfaction while lowering operating costs. On the other hand, features add to customer satisfaction. Goods and services with more features are perceived to have higher quality. This in turn offers a company two avenues to higher revenue. Higher quality almost invariably commands a higher price. Higher quality at the same price will attract new customers and expand market share. The more a company can differentiate its quality from that of the competition, the more flexibility it has in improving its revenue by various combinations of premium pricing and expansion of market share. This effort is strategic and must be based on customer driven quality planning.
Empowered Employees
Organizations which seek to delight customers soon discover that external customers cannot be served effectively, unless the whole organization is involved. This involvement takes many forms and goes by many names including empowerment of employees. Before empowering, organizations need to update job designs to ensure that most employees are in a state of self-control. The implication is a move from a sharp pyramid organization, to something substantially flatter. Empowered employees, apart from being in a state of self-control, are trained for short-term recovery strategies and long-term quality problem solving. In the author’s opinion, this subject should not be addressed hastily. It is recommended that lower cost and higher revenue must be initiated, as a pre-requisite to empowering employees.
Delighted Customers
The features of a good or service determine the level of customer satisfaction. These features include not only the characteristics of the goods or services being offered but also the characteristics of the services surrounding them -- such as ordering, billing and delivery. Most features are provided in direct response to specific customer needs. However, some features attract and delight us because they provide a benefit in a particularly new and appealing way. The first remote controls for television, removable adhesive notes, and the first in-room movies at hotels provided strong attractive quality.
Dissatisfaction arises among customers when there are deficiencies in the goods and services they obtain. Satisfaction and dissatisfaction are not simply opposite directions along a single dimension. Adding more product features will not erase the dissatisfaction with the deficiencies. Delighted customers are satisfied with the features provided, attracted by the innovative approaches to their needs and not dissatisfied with deficiencies.
Quality Management
Quality is managed by three processes: quality planning, quality control and quality improvement. Quality planning identifies the quality features to be provided and plans for delivering them without deficiencies. Quality improvement reduces or eliminates deficiencies in current goods, services or processes. Quality control compares actual performance against the standard and takes actions to bring the two into agreement when necessary (refer Exhibit 3).
Effective quality planning, control and improvement require the support of an infrastructure of organization, resources and information. As a natural outgrowth of increasing interest in quality, nations have established various awards to recognize quality leadership -- for example: the Deming Prize in Japan, the Malcolm Baldrige National Quality Award in the US, the Canadian National Award, and the British Quality Award.
In addition, the International Organization for Standardization has authored a set of guidelines. "Quality Management and Quality System Elements" (ISO 9004). Exhibit 4 cross references Juran Institute TQM with the corresponding categories in the US National Quality Award (1991), the Japanese Deming Prize, and the ISO 9004 guidelines.
ISO 9004 is a guideline, not a standard to which a company can be certified. It includes more than the three standards, but is still far less than the US National Quality Award and Deming Prize. The ISO 9000 series relate primarily to quality control, with heavy emphasis on documentation. ISO 9000 certification demonstrates the existence of basic quality control capability. The path to customer delight is miles away.
CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.