Understanding, Managing and Implementing Quality

Frameworks, Techniques and Cases

Jiju Antony, David Preece

• Publisher: Routledge
• Year: 2002
• ISBN:
  9781134596157
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book considers strategic aspects of quality management and self-assessment frameworks, and provides an in-depth examination of a number of the main quality improvement tools and techniques. Incorporating a critical orientation and drawing upon original case-studies, it also reviews the implementation of a variety of quality management programmes in a range of organisational contexts, including manufacturing, higher education, health care, policing and retailing.

Part I
Developing a strategic orientation for Quality Management

1 Promoting a strategic approach to TQM using a case-based intelligent system

Andreas J. Frangou

Introduction

Intelligent systems research is an area of artificial intelligence (AI) dedicated to the study and development of machines (notably computers) that can display and replicate human intelligent behaviour such as understanding, learning, reasoning and problem-solving (Michalski and Littman, 1991: 64; Schank, 1990). Traditionally AI research is concerned with the broad study of human intelligence and its replication. This can have more theoretical, technical and philosophical implications for AI research such as the following:

• the nature of intelligence itself (i.e. what is intelligence and what are its components);
• the development of models of human reasoning, problem-solving, knowledge representation and cognition;
• the development of tools and techniques such as AI programming environments (i.e. LISP and PROLOG) and learning algorithms to assist knowledge elicitation.

The field of intelligent systems is distinct from other areas of AI, only in that it focuses on the advancement of methodologies and tools that can aid in the development, application and evaluation of systems to real world systems. This chapter therefore does not aim to provide a deep theoretical and philosophical understanding of AI, rather, it focuses on the application of intelligent systems to business, by reporting on research into the development and evaluation of a prototype intelligent system called ESAS (Enterprise Strategic Advisory System). ESAS is a case-based intelligent system¹ designed to provide support for TQM and competitive advantage. The overall goal of the system is to encourage proactivity and creativity in organizations during strategic quality problem-solving and decision-making.

In sharing the experiences of developing and evaluating ESAS, this chapter aims to demonstrate to the reader the potential of AI and intelligent systems for business through the following:

• an analysis of the strategic significance of quality to firm performance, and the potential benefits of using intelligent systems to promote and encourage strategic thinking within organizations;
• an introduction to some of the theoretical and technical issues in developing intelligent systems, including a detailed discussion of the appropriateness of case-based reasoning for TQM applications;
• a description of ESAS’s scope and development process, including the systems evaluation;
• a summary and conclusion discussing both what has been learnt from ESAS’s development, and the future potential of such systems to business.

Linking TQM and performance: a strategic perspective

TQM and competitive advantage

Quality as a means of creating and sustaining a competitive advantage has been widely adopted by both public and private sector organizations (Frangou et al., 1999). This strategic stance has been fuelled by the growing attention to strategic quality (Leonard and Sasser, 1982; Jacobson and Aaker, 1987; Brown, 1996; Wilkinson and Willmott, 1995) arising from the international successes of Japanese and other South Eastern Asian countries (Powell, 1995) and research that has focused on the link between quality (TQM) and business performance (Reed et al., 1996; Powell, 1995; Buzzell and Gale, 1987; Jacobson and Aaker, 1987; O’Neal and Lafief, 1992; Capon et al., 1990; Curry, 1985). Furthermore as Morgan and Piercy (1996: 231) state ‘Consequently, quality improvement has been widely cited as a basis for achieving sustainable competitive advantage.’

To improve quality, businesses have applied ‘Total Quality Management’ (TQM) to their organizations to help them plan their efforts. The promise of superior performance through continuous quality improvement has attracted a wide spectrum of business to TQM, with applications reported in domains such as: finance (Wilkinson et al., 1996), utilities (Candlin and Day, 1993), federal agencies, healthcare, education and research, environment and manufacturing (Lakhe and Mohanty, 1994).

A number of studies have focused on the effectiveness of TQM initiatives (in particular the use of self-assessment frameworks) in improving performance (General Accounting Office (GAO), 1991; Wisner and Eakins, 1994; Davis, 1992; Johnson, 1993). The US General Accounting Office (GAO) in 1991 studied the performance of the twenty highest scoring Baldridge Award applicants. It found that organizations had achieved improvements in the following areas: employee relations, quality, costs, market share, profitability, and customer satisfaction. The GAO also identified common features among these organizations which included strong leadership, employee involvement, customer focus, open cultures, and partnership programmes (Powell, 1995). An International Quality study conducted jointly by the American Quality Foundation and Ernst & Young sampled over 500 organizations operating in various industries such as computer, automobile, banking and healthcare (American Quality Foundation, 1991). Their findings showed that process improvement and supplier accreditation practices did improve performance.²

Although evidence exists which supports the effectiveness of TQM initiatives, a large number of studies have shown that between 60 per cent and 80 per cent of TQM initiatives fail, or fail to show significant impact on business performance. Wilkinson et al. (1996), state that a recent survey of 80 major financial institutions conducted by KPMG Management Consulting found that 80 per cent of participants had implemented some form of quality initiative that had little impact on ‘bottom-line profits’. They also point out that another survey conducted by Tilson (1989) showed that few initiatives ‘had any significant impact, either on customer perceptions or commercial results’. Wilkinson et al.’s (1996) own survey of quality initiatives within the financial services sector (122 companies being surveyed) highlighted the lack of impact on financial benefits with only 35 per cent of respondents reporting that profitability had improved. Knights and McCabe (1997: 38) point out that ‘management may not always understand the implications or appropriateness of the quality initiatives they adopt’. Their study of TQM initiatives within the financial sector also highlighted the ‘conformance to requirements’ approach taken during quality improvement programmes, which they state is inconsistent with the strategic intentions of the business which should focus on ‘customers’ and ‘culture’.

Tatikonda and Tatikonda (1996) report on surveys of quality improvement programmes carried out by the Boston Consulting Co., McKinsey Co. and the Electronic Assembly Association. These surveys highlighted the problems associated with TQM implementations, the high rate of failures and lack of impact on performance. Boston Consulting Co. (Schaffer and Thomson, 1992) found that only one-third of the organizations attributed their improved competitiveness to TQM. Tatikonda and Tatikonda’s (1996) own findings suggest that in many cases TQM programmes lack focus on critical business areas that have a good ‘return on quality’. Tatikonda and Tatikonda’s (1996: 7) argue that organizations must measure the ‘cost of quality’ (COQ), otherwise there is a danger that resources are spent on improvements customers do not care for, and pick projects with only marginal benefits. They also advocate extensive COQ reporting as a means of accurately communicating the impact of quality projects on the business, thus enabling the prioritizing and coordination of valuable resources, and the motivation of personnel. Other commentators also report on the poor rate of quality initiatives, and have suggested the reasons shown in Table 1.1.

The suggested reasons for the reported failures summarized in Table 1.1 raise some important issues for TQM. Writers have identified a lack of focus and effective enterprise guidance in targeting critical areas for change during quality improvement programmes. Thus for programmes to be successful, organizations need concise guidance to implement quality improvements effectively. They also need to assess the costs of the programme and its potential outcomes (Tatikonda and Tatikonda, 1996). Furthermore, the lack of strategic focus and integration shown in TQM suggests that quality initiatives are carried out in isolation, and do not involve other departments and functions such as marketing and strategic planning (Schmalensee, 1991). For example, Law and Cousins (1991) claim that marketing and business strategists are usually neglected in quality improvement programmes which are considered to be primarily the concern of manufacturing. This approach may affect whether or not critical/strategic areas are focused on, where there is the greatest potential for return on investment (ROI) (Tatikonda and Tatikonda, 1996), bearing in mind that it is mainly the marketing function that gathers strategically important market intelligence (Butz, 1995). Hubiak and O’Donnell (1996: 20) argue that American organizational ‘mind-sets impose serious constraints on the implementation of TQM’, because they are usually individualist in nature, internally competitive, problem-solving and crisis orientated, linear thinking, and control orientated. Furthermore, they claim that management practices that try to create order through the development of guidelines and procedures constrain the organization’s ability to grow and learn:

Table 1.1 Reasons for TQM failures

An organization needs to learn how to anticipate and stay ahead of change. Rules and procedures can rigidify a system, which channels thinking into the most obvious paths and inhibits creativity. The creation of a learning organization demands a proactive, curious, self-directed learner, able to take the perspective of the entire system to address problems or new initiatives. (p. 23)

Strategic quality, focus and dynamism: the missing links in TQM

Porter (1996) claims that quality improvement programmes usually focus on improving operational effectiveness. This, and the ability to satisfy both customers and stakeholders, is an important factor in the battle for competitive advantage. However, improvements in these areas are not enough to make an organization competitive. Furthermore, ‘few companies have competed successfully on the basis of operational effectiveness over an extended period, and staying ahead of rivals gets harder every day’ (1996: 63). The reasons for these long-term failures are that ‘competitors can quickly imitate management techniques, new technologies, input improvements and superior ways of meeting customer needs’ (p. 63). Porter argues that the missing link in quality improvement programmes is strategy. Butz (1995) also takes this view, suggesting that the root cause of many TQM failures is the limited integration of TQM programmes with the fundamental strategies of the business. This view is consistent with other researchers within the TQM field who have also identified the lack of a strategic focus in quality initiatives as a main cause of failures (Foster and Beardon, 1993; Atkinson, 1990; Gallaher, 1991; Erickson, 1992; Dyason and Kaye, 1996).

Self-assessment frameworks (and their associated models) can be key drivers of TQM initiatives, and useful tools for guiding organizations through the process of quality improvement, as they provide a structured approach to developing a philosophy of continuous improvement (Davis et al., 1996). However, issues have been raised about their validity, and their real effectiveness in improving the performance of organizations (Black and Porter, 1996; Wiele et al., 1995). Conti (1997) also expressed concerns regarding their lack of a strategic focus, suggesting that company mission, goals and objectives should be systematically considered more within the frameworks. Quality Management researchers have found that quality initiatives are generally too introspective and internally focused (Foster and Beardon, 1993). Wiele et al.’s (1995: 15) own study of self-assessment in European organizations confirms this view, in that the highest ranking reason for starting self-assessment is ‘internal issues’.

The above discussion has raised some important issues relating to the lack of strategic and market focus...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Figures
• Tables
• Contributors
• Acknowledgements
• Glossary
• Introduction
• Part I: Developing a Strategic Orientation for Quality Management
• Part II: Quality Improvement Tools and Techniques for the Twenty-First Century
• Part III: Case Studies In Quality Management