PRODUCTION AND OPERATIONS MANAGEMENT Vol. 3. No. 3. Summer 1994

Prinrd in U.S.A

IMPLEMENTING INITIATIVES ON QUALITY: AN INTRODUCTION TO THE SPECIAL ISSUE

ON TOTAL QUALITY MANAGEMENT

KALYAN SINGHAL Department of Management, University of Baltimore,

Baltimore, Maryland 2 120 1, USA

In the early 1980s companies around the world, learning from the Japanese experience, saw that they could address their severe competitive problems related to productivity and quality only by looking at the entire set of processes and organizational relationships in the context of the customer’s needs. This approach was termed total quality management (TQM).

As companies pursue quality-related initiatives, they must deal with a number of issues; some of these issues are addressed here: measurement of benefits, feedback and recognition, work-teams, teaching continuous improvement, and enhancing the effectiveness of statistical process control charts. (TOTAL QUALITY MANAGEMENT; CONTINUOUS IMPROVEMENTS; PRO- DUCTION AND OPERATIONS MANAGEMENT)

In the journal’s inaugural issue, in describing its vision, I noted that a few decades ago some Japanese firms had recognized the critical role of production and operations management, particularly the management of quality, in meeting their overall ob- jectives (Singhal 1992). They transformed world competition. Their success pushed companies around the world to recognize its importance as well (Robinson et al. 199 1; Singhal and Hayes 1992). In the early 1980s many companies saw that they could not treat their severe competitive problems related to productivity and quality separately from each other, from the rest of the organization, or from their external partners, Nor could they solve them using such traditional approaches as trying harder, tinkering with the current system, or investing in equipment and computers. The solution required looking at the entire set of processes and organizational rela- tionships in the context of the customer’s needs. This approach, with many of its elements borrowed from the Japanese experience from about 1955 to 1980, was termed total quality management ( TQM), a term partly taken from Feigenbaum’s pioneering book, Total Quality Control ( 195 1) .

As an increasing number of companies embraced it, total quality management became a movement without a formal framework. It received considerable attention not only from the business community, but also from national governments, the academic community, and the press. Leaders from various communities exhorted

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their members and those of other communities to adopt the TQM approach (Robinson et al. 1991; Singhal and Hayes 1992). During the last 10 years, academic journals and trade magazines in such diverse areas as business, education, economics, engi- neering, government, health care, and legal services, have published articles in this area, and so have most leading newspapers and magazines around the world. Such national magazines as Business Week in the United States have published special issues dedicated to TQM .

Like many movements, this one began partly as a fad and partly as a powerful approach to change. Its backbone included the Japanese experience since 1955 (Ishi- kawa 1985), more recent writings of the quality gurus Deming ( 1985 ) and Juran ( 1979), and the tools of statistical process control. As the movement grew, more and more issues were added, some faddish and some important. Now as the move- ment matures, people are having second thoughts about the contents of TQM and its relationship with other factors, especially human resources, strategy, and innovation.

The quality movement has spotlighted the role of the production and operations management community in both business schools and industrial engineering de- partments. It had been carrying the burden of teaching both the statistical and the organizational aspects of quality, with little recognition of its critical role in almost all organizations.

As more and more companies pursue quality related initiatives, they need answers to a broad range of questions. Some of these questions are addressed in this special issue: How does one estimate the direct and indirect costs of poor quality and hence the benefits of improving quality? What kind of structured external evaluations can provide feedback or recognition? How does a company introduce quality-related innovations, such as work teams, and how does it measure outcomes? What ap- proaches are effective in teaching the important principles of continuous improve- ment? How can one enhance the effectiveness of statistical process control charts? The answers to these questions are critical to organizations pursuing quality initiatives.

Measurement of Benefits from Quality Initiatives

In the first paper, “An examination of the indirect productivity gains from quality improvement,” Christopher Ittner uses time-series data from two plants manufac- turing consumer durables to estimate indirect productivity gains (significant reduc- tions in quality-related bottlenecks, schedule interruptions, and work-in-progress in- ventory) from quality improvements. The results show that these gains are at least two to three times the direct benefits attributable to lower scrap, rework, and inventory holding costs. To measure their performance, companies must identify the sources of indirect benefits from quality improvements and develop incentive mechanisms to motivate managers to achieve these gains.

Feedback and Recognition

In “Understanding the important differences between the Malcolm Baldrige Na- tional Quality Award and ISO 9000 registration,” Curt Reimann and Harry Hertz, who serve as director and deputy director of the Baldrige Award, note that the Baldrige Award and ISO 9000 standards differ in focus, purpose, and content. Since, despite their major differences, the two are often confused and often depicted as equivalent, the authors analyze their important differences in focus, purpose, meaning of quality,

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improvement results, role in the marketplace, nature of the assessment, feedback, criteria improvement, responsibility for information sharing, service quality, scope of coverage, documentation requirement, and self-assessment. For companies re- quired to or electing to seek ISO 9000 registration, this analysis offers insights on how they can integrate their efforts to conform to the ISO 9000 with the Baldrige Award framework.

Work-Teams in Implementation of Total Quality Management

In the third paper, “Excellence at Rohm and Haas Kentucky: A case study of work-team introduction in manufacturing,” Yash Gupta and Daniel Ash describe the rapid introduction of work-teams by Rohm and Haas as a part of implementing a total quality management system. This innovation transformed the manufacturing environment, changing the structures within which work is performed, the decision- making process, relations between labor and management, and the bottom line pro- ductivity and quality. Specific outcomes include a decline in worker grievances and turnover and an improvement in the safety record of the plant. The authors provide some valuable guidelines for companies that plan to pursue such innovations.

Teaching Continuous Improvement

In the fourth paper, “On the tabletop improvement experiments of Japan,” Alan Robinson and Margaret Robinson describe experiments that were originally designed by Frank and Lillian Gilbreth to teach continuous improvement. The experiments communicate their lessons in a striking and memorable way. The work-related ex- periments categorize the sources of resistance to change and show how to neutralize them. The process-related experiments sharpen understanding of where the biggest opportunities for process improvements usually lie. The authors also document the history of the experiments for the first time.

Enhancing the Effectiveness of Statistical Process Control Charts

In “Using run-length distributions of control charts to detect false alarms,” Herbert Moskowitz, Robert Plante, and Don Wardell use run-length distributions to compute likelihood ratios that indicate whether an out-of-control signal is a true signal or merely a false alarm. The ability to distinguish between true and false signals is important, especially when investigating the causes of out-of-control conditions is costly. The authors also show that the performance of the traditional charts, in terms of their average-run length, can often be enhanced by using the likelihood ratio procedure.

This special issue on TQM is a result of our continuing commitment to encourage research on managing quality from both theoretical and practical perspectives. An- other special issue is planned for 1995. I take this opportunity to thank the colleagues who served as associate editors for this special issue: Veena Adlakha, Gary Burchill, Amiya Chakravarty, Robert Cole, Burton Dean, Sudhakar Deshmukh, James Evans, Charles Fine, Paul Kleindorfer, Peter Kolesar, Robert Markland, Herbert Moskowitz, Robert Plante, Harry Roberts, Richard Schonberger, Roger Schroeder, and Don Wardell. Two men of excellent vision helped us in getting critical financial and administrative support: Daniel Costello, Dean of the Merrick School of Business at

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the University of Baltimore, and George Creel, Senior Vice President of the Baltimore Gas and Electric Company.

I hope that all members of the community from business, government, and aca- demia will find this issue useful. I look forward to your comments and suggestions.

References

DEMING, W. E. (1982), Out of the Crisis, MIT Center for Advanced Engineering Studies, Cam- bridge, MA.

FEIGENBAUM, A. V. ( 195 I), Total Quality Control: Principles, Practice, and Administration, McGraw- Hill, New York.

ISHIKAWA, K. (1985), What is Total Quality Control? The Japanese Way, Prentice Hall, EngIewood Cliffs, NJ.

JURAN, J. M. ( 1979), Quality Control Handbook, 3rd ed., McGraw-Hill, New York. ROBINSON, J. D. III, R. W. CALVIN, H. A. POLING, E. L. ARTZT, J. F. AKERS, AND D. P. A. ALLAIRE

( 199 I ), “An Open Letter: TQM on the Campus,” Harvard Business Review, 69, 6, (November- December), 94-95.

SINGHAL, K. (1992), “Introduction: Shaping the Future of Manufacturing and Service Operations,” Production and Operations Management, 1, 1, 1-4.

SINGHAL, K. AND R. HAYES ( 1992), “An Open Response to ‘TQM on the Campus’: We Need TQM . . . and More,” Harvard Business Review, 70, 1 (January-February), 148.