Application Of Total Quality Management And Six Sigma In Business Organizations

TQM 14 Points

The paper delves into the application of total quality management and Six Sigma in business organisations. Total quality management is defined as management of modes of operations and culture within organisations, which leads to production of higher quality products to customers.  Six Sigma is a collection of tools and techniques used to improve manufacturing methods. The industries of today combine this two quality management tools to obtain high quality products. Multinational companies like Ford Motor Company from the automobile sector, Philips from electronics sector and Motorola for the telecommunications sector use TQM. Six Sigma was introduced at Motorola by Bill Smith and Mikel J Harry and is still in use. Some of the other companies using Six Sigma are Bank of America from the financial industry, Amazon from ecommerce industry and Caterpilar Inc from the engineering industry.

Edwards Deming proposed fourteen criteria for TQM, which are as follows:

1. The manufacturing companies should aim towards improvement of their products.
2. They should always adapt to changes in the market and bring about necessary changes in their operations.
3. The companies should not be dependent on producing high quality products merely to qualify in quality audit. Quality should be used to gain customer satisfaction.
4. The business organisations should collaborate with a limited number of suppliers producing high quality raw materials at economic rates instead of working with multiple suppliers producing low quality materials. This will help them to reduce total cost and produce goods more economically.
5. Continuous improvement in all the processes and areas of operations.
6. The management, the HR departments and the departmental heads should offer trainings to the staff members on regular basis to improve their skills and efficiency.
7. The upper and middle level employees should exemplify leadership in the organisations by their actions like adopting diversity management.
8. The upper and the middle level employees should provide counselling to the lower level employees and deal with their fears and insecurities.
9. Every staff should establish and maintain a transparent and smooth communication channel.
10. The management should not coerce the lower level employees to achieve high level productivity and stop the middle level managers from doing so. They must ensure that the lower level employees and executives are not subjected to any sort of unethical practices.
11. The departmental heads should segregate the total target among the department employees based on their skills, knowledge, competencies and education.
12. The performance of the employees should be evaluated based on all round performance of the employees like their target achieved and innovative power. The superiors should give due credit to the subordinates for their performances to enhance their morale and self respect.
13. The apex management must create an environment to ensure all round development of the employees.
14. All the employees should have access to career planning and development opportunities.

Pyzdek and Keller (2014) state the adoption and application of Six Sigma requires initiation of a pilot project, which involves a team of employees. The new team members are required to be trained to follow the new policies. It requires installation of new plants, which are capable of giving high productivity. The management has to plan and evaluate the strategies of the Six Sigma, which is time consuming. Sarkar, Mukhopadhyay and Ghosh (2014) state that, compared to conventional methods of operation, Six Sigma requires huge initial investments in acquisition of plants, human resources and technology. This prevents the smaller firms from using Six Sigma.

Albliwi et al.(2014) mention that, technology plays a very important in adopting and implementation of Six Sigma. They state that companies install modern machinery to make their manufacturing processes faster and minimise defects in the finished products. Corrigan (2015) contradicts this opinion and states that technology is not the only important component of Six Sigma. The commitment of the apex management to offer high quality goods to customers, financial strength and skills of the employees also play significant role in achieving Six Sigma. Thus, technology plays a significant role in Six Sigma but its successful depends on the other important factors like financial strength of the organisation.

 

Figure 1. Diagram showing Six Sigma

(Source: sixsigmadaily.com, 2017)

As pointed out in the analysis above, difficulty in application of Six Sigma are of various categories. Six Sigma requires installation modern multitasking production plants and people having knowledge in operating them. Thus, the companies require spending immense funds to acquire the plants, the knowledge and skilled human labour (Prashar, 2014). The discussion clearly shows that the difficulty in application of Six Sigma pertain to high costs to acquire plants, human resource and knowledge which small firms cannot achieve owing to their limited resources.

Six Sigma has profound impacts on supply chains of companies using them. This is because application of Six Sigma requires the organisations install new machinery and plants which is capable of processing high quality materials. As a result, the firms have to restructure their supply chains to acquire high quality raw materials (Christopher, 2016). Moreover, the companies have to acquire new suppliers of the parts of modern machinery (Ellis et al., 2014). Thus it can evaluated that Six Sigma has profound influence on the supply chains of the organisations.

Six Sigma Some Companies do not Use it

Gap analysis refers to comparison between the target levels of performance compared to levels of performances actually achieved. The figure below shows that application of gap analysis in the manufacturing organisations. The project managers first define the objectives, which consist of the level of efficiency they want to achieve. The next step consists of measuring the current level of efficiency prevailing in the company. The business organisations judge the gap between the aimed and the actual level of performance achieved in diverse areas like business process and information technology (van Ittersum et al., 2013). They implement methods like Six Sigma and TQM to bridge the gap by improving their operation methods like installing modern machinery to produce goods.

Objectives	Current Standing	Deficiency	Action Plan
1. To be filled by the project managers	To be filled by the project managers	To be filled by the project managers	To be filled by the project managers
2. To be filled by the project managers	To be filled by the project managers	To be filled by the project managers	To be filled by the project managers

Figure 2. A Gap analysis chart

The above flowchart shows that steps of gap analysis in operations in companies. The first step is to plan to conduct a gap analysis. This can be done by comparing the present skills of the employees to the skills, which they may require in the future. The second stage comprises of recognising the gaps in the present skills, which the employees need to enhance to operate successfully in future projects.  The managers after identifying the skills employees possess and the skills they would require to possess, take appropriate actions like offering training facilities to the employees.

True quality can be defined as the attributes in products, which makes them superior to the products of similar category. The business organisations apply the concept of quality closely to engineering or technology, which they use to manufacture products. The concept of quality is subjective and consumers often perceive quality as an outcome of total quality management by the producers (Flanagin et al, 2014). These perceptions of customers today have led to multinational companies regard true quality as a tool of ensuring customer satisfaction and revenue generation.

The term global quality refers to the uniform high quality of the products, which multinational companies maintain in all their markets. True quality is applicable for the all the firms irrespective of the sizes and industries of operation (Netland & Sanchez, 2014). However, global quality is applicable only for the multinational companies, which manufacture, market and sell products throughout the world. These companies have predetermined quality parameters, which they maintain for their products in all their markets. An analysis of the business operations of these companies reveal that global quality embraces various aspects like supply chain management and employee management (Brettel et al., 2014).  

The manufacturing companies today incorporate the requirements of the consumers in their techniques of production. The production departments use charts and figures representing consumer expectations, which they incorporate in appropriate stages (Baily & Bosworth, 2014). Bi, Da Xu and Wang (2014) state that compared to the traditional production process, modern production essentially integrates marketing and production departments. The production department incorporates the customer knowledge from the marketing department to create products with functional quality capable of meeting customer expectations.

The following are the steps of recognition of errors in flowcharts:

1. Define the target:

Role of Technology in Six Sigma

The production manager should define the target quality of products the company wants to achieve. They should set the parameters of quality which every product should meet to satisfy the customers.

1. Recognise the path:

The production manager should define the path the production process should follow. He should ensure that every step of production follow the predetermined steps.

1.  Measure the actual flow of process:

The production manager should measure the actual flow of the process of the production. If he locates any discrepancy, must take steps to rectify them.

The mistakes which the production processes can meet with are human error, technological error and design error. Human error refers to mistakes in inputting instructions while operating machines. The technological error refers to faults in machines and sudden blockages, which influences smooth production. The design errors refer to errors in designing the finished products. The production managers should be careful to avoid these errors to ensure production of high quality products.

As discussed, mistakes can be in three areas namely, human, technological and design. The production managers in case of technological mistake or machine breakdown must investigate the reason for the breakdown, frequency of the breakdown and the dealers who supply the machine parts and the pieces of machines (Baily & Bosworth, 2014). The managers should take steps to ensure that the breakdown is rectified and minimised.

The production managers should inspect the causes of human mistakes and if they are chronic or exceptional. If the mistake is chronic, they may take initiative to train their employees. Responsible and skilful employees to avoid such mistakes in future may replace the irresponsible employees.  The managers may consult external consultants to deal with exceptional errors like data thefts to avoid such mistakes for recurring.

A decision tree is a flowchart which contains the possible strategies of production which shows and their outcomes. The tree shows costs, resources to be allocated, the risks the plans can face. They also show alternative ways which managers can choose to avoid these mistakes. The figure below shows that measurements, counts, count pieces and count occurrences. Ech of these steps can be divided into two steps like one step leads production units range between 2-9 while other step leads to production of  10 units and above. The production managers take decisions as per their requirements. For example, if the demand is high, they would prefer the process leading to 10 or more units. They would normally prefer production method leading to 2-9 units in the lean season to avoid overproduction.

 

Figure 4. Decision tree

(Source: qualitydigest.com, 2017)

The quality issue arises in the business organisations because they perceive quality as a tool to maximise customer satisfaction. The organisations spend a huge amount of money to manage quality of the finished products. The six quality issues which business organisations face are duplicate products, incomplete data about the product which hinders production, the product design varies from the customers’ preferences, the raw materials are difficult to acquire, system up gradation and loss of manufacturing data and loss or theft of data about products.

Difficulty some Companies Face in Application of Six Sigma

The companies aim to gain sustainability to reduce cost of operation and issue has become a very crucial issue. With the increasing in operating costs, the companies are trying to introduce TQM to improve the all round development of the operations in them.  The companies consider it prudent to follow lean management and reduce their expenditure (Frias?Aceituno, Rodríguez?Ariza  & Garcia?Sánchez, 2014).

The necessary issues consist of those requirements, which have become important for companies to enhance customer satisfaction like providing after sales supports. The necessary issues do not form  a part of production processes ore are related to cost issues. They are those issues which have become crucial for companies to maintain the consumer base and earn huge revenue from them.

Keeping the above discussion into consideration, one can make the following recommendations:

1. The multinational companies should use combination of TQMand JIT or just in timeto manage these related to breakdown and human error. For example, they should install modern and multitasking machinery to produce their products.  This would help the production departments produce products using less number of machinery. They should train their employees and the mangers should monitor the junior.
2. The production manager should manage the resources efficiently to ensure that the raw materials are orders at correct time so the production process can continue smoothly. They should apply software to manage the inventory and finished goods. This would help them to minimise wastage of resources due to over production and fall in demand on temporary basis.

Summary/Conclusion

The business organisations should adopt total quality management and Six Sigma to ensure high quality finished products. They must maintain high quality for their finished products sold globally. The companies must stress on adoption of modern technology, which would allow them to locate defects in production and take steps to rectify them. The companies must take steps to manage materials more accurate to minimise excess storing of materials and ensure liquidity in production.

References

Albliwi, S., Antony, J., Abdul Halim Lim, S., & van der Wiele, T. (2014). Critical failure factors of Lean Six Sigma: a systematic literature review. International Journal of Quality & Reliability Management, 31(9), 1012-1030.

Baily, M. N., & Bosworth, B. P. (2014). US manufacturing: Understanding its past and its potential future. The Journal of Economic Perspectives, 28(1), 3-25.

Bi, Z., Da Xu, L., & Wang, C. (2014). Internet of things for enterprise systems of modern manufacturing. IEEE Transactions on industrial informatics, 10(2), 1537-1546.

Brettel, M., Friederichsen, N., Keller, M., & Rosenberg, M. (2014). How virtualization, decentralization and network building change the manufacturing landscape: An industry 4.0 perspective. International Journal of Mechanical, Industrial Science and Engineering, 8(1), 37-44.

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Corrigan, J. S. (2015). Investigating the Use of RFID Technology in the Reverse Logistics of End-of-Service-Life Helicopters: A Hybrid Approach Based On Design for Six Sigma and Discrete-event Simulation (Doctoral dissertation, Concordia University).

Ellis, S. C., Goldsby, T. J., Bailey, A. M., & Oh, J. Y. (2014). Teaching lean six sigma within a supply chain context: The airplane supply chain simulation. Decision Sciences Journal of Innovative Education, 12(4), 287-319.

Flanagin, A. J., Metzger, M. J., Pure, R., Markov, A., & Hartsell, E. (2014). Mitigating risk in ecommerce transactions: perceptions of information credibility and the role of user-generated ratings in product quality and purchase intention. Electronic Commerce Research, 14(1), 1-23.

Frias?Aceituno, J. V., Rodríguez?Ariza, L., & Garcia?Sánchez, I. M. (2014). Explanatory factors of integrated sustainability and financial reporting. Business strategy and the environment, 23(1), 56-72.

1. Netland, T., & Sanchez, E. (2014). Effects of a production improvement programme on global quality performance: The case of the Volvo Production System. The TQM journal, 26(2), 188-201.

Prashar, A. (2014). Adoption of Six Sigma DMAIC to reduce cost of poor quality. International Journal of Productivity and Performance Management, 63(1), 103-126.

Pyzdek, T., & Keller, P. A. (2014). The six sigma handbook (p. 25). New York: McGraw-Hill Education.

Sarkar, A., Ranjan Mukhopadhyay, A., & Kumar Ghosh, S. (2014). An outline of the “Control Phase” for implementing Lean Six Sigma. International Journal of Lean Six Sigma, 5(3), 230-252.

Sixsigmadaily.com. (2017). Cite a Website – Cite This For Me. [online] Available at: https://www.sixsigmadaily.com/topics/videos/ [Accessed 1 Dec. 2017].

SPC Guide. (2017). Qualitydigest.com. Retrieved 1 December 2017, from https://www.qualitydigest.com/feb98/html/spctool.html

van Ittersum, M. K., Cassman, K. G., Grassini, P., Wolf, J., Tittonell, P., & Hochman, Z. (2013). Yield gap analysis with local to global relevance—a review. Field Crops Research, 143, 4-17.