- May 23, 2020
Can Total Quality Management (TQM) be effective in North America?
CanTotal Quality Management (TQM) be effective in North America?
Statement of the Problem 3
Critical Literature Review 4
Discussion and Analysis 6
Ford Motors and TQM Practice 7
General Electric TQM Practice 9
Apple and TQM Practice 10
Conclusion and Recommendations 12
CanTotal Quality Management (TQM) be effective in North America?
IntroductionStatement of theProblem
Qualitycan be termed as an abstract concept applied in everyday life, and itrelates to almost everything that may include food, clothing,shelter, education, and security. In fact, it transcends both basicand tertiary human needs and this explains why there have beenimmense strides focusing on quality improvement. The modern societyrelies on continuous reach for high levels of excellence, and this iscertainly why the idea of quality management was coined (Boulter,Bendell, & Dahlgaard, 2013). Quality management has become a toppriority in any type of business. Service providers and manufacturersstrive to ensure that they appeal to their customers by focusing onquality management. After World War II, there was a need to revivethe collapsed economies. It was during this period that renownedtheorists and philosophers came together to devise some of the bestconcepts utilized in the modern society. Theorists like EdwardDeming, Aramand Feigenbaum, Joseph Juran, and Philip Crosby have madeimmense contributions towards quality management.
Thefocus towards quality management has been exhibited in various forms.The introduction of such systems as Lean Manufacturing, ISO, SixSigma, Malcolm Baldrige National Quality Award, and the Deming Prizeand their adoption in various institutions across the world, showthat there is a need to ensure quality is improved. However, the mainchallenge that has impacted the proper utilization of the variousconcepts is that there is increasing difficulty in application ofoptimal quality management philosophy in modern organizations(Munechika, Sano, Jin, & Kajihara, 2014). Unlike the traditionaloperating model, the modern business environment is changing fastowing to the role of technology. Companies are no longer consideredas family property companies are now incorporating marketing plans,web and social media, and service based solutions to address theneeds of the customers. Organizational success in the modern societyis now pegged on the ability to embrace change. Due to the changingdynamics it is now more difficult for management to clearly choose aquality management system that can be used effectively.
Thestudy focuses on the theory of total quality management and itseffectiveness in North America. Relying on historical data casestudies and surveys, the research intends to determine whether TQMhas provable functional and overall positive impact in North Americaas a region. Some of the big corporations from North America includeFord Motor, General Electric, Apple, General Motors, Exxon Mobil,Chevron, Valero Energy, Phillips 66, Wal-Mart Stores, and BerkshireHathaway. The ten companies are also some of the top performers inthe global market. However, the study will review only three of thecompanies: Ford Motor, General Electric, and Apple. There will be areview on the companies over a period of ten years in a bid todetermine whether there has been an increase in performance or not,and what may have been the main contributing factor to the success ofthe companies. While it may not be easy to create a side to sidecomparison of the different quality management philosophies, theresearch aims at providing a comprehensive view on the effectivenessof TQM in North America.
Critical Literature Review
Theconcept of total quality management applies to every possibleindustry. TQM is a broad strategy that organizations use in a bid tomeet their goals and objectives (Munechika, Sano, Jin, &Kajihara, 2014). The use of TQM is different from each organizationand this is majorly reliant on specific goals and objectives or theoperating environment. In order to establish the effectiveness of TQMin industries in North America, it is crucial to look at the variousquality organizations and philosophies constantly used in thesociety. According to the America Society for Quality, TQM mainlyfocuses on meeting the needs of the customers and ensuring thatcustomers are satisfied by the products or services delivered. InTQM, the primary effort is to improve processes, products, services,and culture (Yasin, Augusto, Lisboa, & Miller, 2011). ASQ assertsthat TQM is a concept that is customer focused.
Atotal of eight principles that correlate to TQM are laid out and theyinclude: focusing on the needs of the customers, aligning to teamworkframework, involvement of employee in organizational processes,adoption of integrated systems, management ensuring thatorganizations are steered by strategic and systematic techniques,focusing on key processes, enhancing the principle of continuousimprovement, improved decision making, and communication. While allthe elements are orchestrated to work together and create an allencompassing system to improve every business segment, the end goalis always to improve customer satisfaction and meet the needs of thecustomers. TQM provides a platform that gives customers the power andability to dictate what they want. It is the customers who determinewhether efforts by management are worthwhile or not (Munechika, Sano,Jin, & Kajihara, 2014). In other words, if the customers are notpleased by work done by management, then it will be termed as a wasteof organizational resources.
Ooi(2012) provides a different aspect on the implications of TQM. Ooipoints out that TQM is a principle that is founded on the idea ofperformance in achieving high quality results. The researcher goesfurther to say that quality performance is only achieved byperseverance and inclusion of an entire organization. The objectiveof TQM is always to bring about efficiency and effectiveness inmeeting the needs of the customers. Further, the author concludes bysaying that the concept of TQM is an integrated approach thatconsolidates all functions of an organization towards quality andcontinuous improvement. The key elements that lead to successfulimplementation of TQM according to Ooi include: teamwork, training,recognition, communication, and confidence. Thus, in order to fostera continuous flow and progressive improvements there is a need toimplement and embody the elements. Taking the various factorscorrelated to TQM, it is possible to illustrate the key components ofTQM. While each source points out different aspects of TQM, it ispossible to depict that there are three main components associatedwith TQM and they include total employee involvement, continuousimprovement and customer Focus. In addition, communication is seen asan essential factor associated with TQM (Boulter, Bendell, &Dahlgaard, 2013).
Discussion and Analysis
NorthAmerica is home to some of the largest companies in the world both interms of revenue and customer base. Some of the top companies in theregion based on market share and revenue generation include FordMotor, General Electric, Apple, General Motors, Exxon Mobil, Chevron,Valero Energy, Phillips 66, Wal-Mart Stores, and Berkshire Hathaway.These companies have in one way or another implemented the concept ofTQM in a bid to compete effectively in the market. Companies likeFord Motors and General Motors face off with such companies as Toyotaand Nissan that have massive operations both in Asia and the otherparts of the world. Thus, in order to ensure that they competefavorably and meet the needs of the customers, General Motors andFord Motors implemented the TQM system. Apple’s fierce competitoris Microsoft which has immense operations across the world. Bothcompanies have pushed their strategies to align with the provisionsof TQM in a bid to address the needs of the customers. The same caseapplies to other companies in North America that compete withcompanies in Asia, Europe and other parts of the world. Therealization that efficiency, reliability and convenience areessential has compelled corporations from North America to adhere tothe provisions of TQM (Palm, Lilja, & Wiklund, 2014).
Ford Motors and TQMPractice
FordMotors is the world’s 5thlargest automaker based on sales. The company was founded in 1903 byHenry Ford. About two decades ago after the expansion of Japanesebased companies in the Automobile industry Ford Motors reviewed itsquality management process, and this gave rise to the total qualitymanagement program at Ford. The results of the program werespectacular as the company achieved higher sales than before. Owingto the TQM principles, the company became the most profitable in1986. Ford Company leverages on the TQM principles to ensure that itreleases quality products to the customers. The company tries to comeup with new products that meet the needs of the customers. Some ofthe major attributes taken into consideration in product designinclude efficiency, high speed, safety systems, and entertainmentfacilities (Akdere, 2011). Further, the company uses 8D problemsolving tool which was published in its 1897 manual. The 8D problemsolving technique was meant to assist the staff members deal with theissue of quality and safety.
Ford’semployees are also viewed as customers and brand ambassadors. Thecompany has an information session termed as “Go Further EmployeeEvents” held to provide a platform for the employees to engage withthe company. Through such programs management is able to provideessential information to the employees who in turn communicate withthe customers on the significance of Ford’s products. Based on theTQM principles, Ford uses the Altair Product Design to aid theprocess. Altair Hyper Dynamics is an essential tool that facilitatesthe production of the company’s core products. Ford Motors hascontinuously tried to ensure that it remains to be one of the mostsuccessful companies in the market, and this explains why it iscontinuously reviewing and upgrading its TQM program (Boulter,Bendell, & Dahlgaard, 2013).
Figure1: Ford Motors %Revenue increase
Fromthe figure above it is imperative to conclude that despite the factthat Ford Motors has implemented the TQM program and correlated itsoperations towards improving quality, there has not been a sharpincrease or it has not been able to maintain a steady incomeperformance. However, there are a wide range of factors that impactthe company’s performance that may explain the wavy nature of itsincome. Some of the major factors include oil price fluctuations,financial crisis in the region, exchange rate risks, liquidityproblems, and tighter rules and regulations. As much as it can beargued that the company has not steadied its income over the last 10years, it can also be argued that TQM has been a major factor inensuring its current performance. Customers in the modern society aremainly driven by quality, and failure to address quality paradigmscan lead to collapse of companies (Boulter, Bendell, & Dahlgaard,2013). At the same time, in order to balance between costs andprofits, there is a need to improve on efficiency and reliability ofthe production process. Success of Ford Motors has been mainlyattributed to its ability to meet the needs of the customers.
General Electric TQMPractice
Overthe years there has been a decline in the interest over the use ofTQM. GE is one of the major companies that have tried to improve theuse of TQM. The use of the six sigma improvement program was adoptedby GE in a bid to improve its processes in the market. However, thisdoes not mean that GE has dropped the use of the TQM approachinstead the company has integrated its six sigma approach with theTQM framework. Since its inception, GE has grappled with stiffcompetition in the market. Management in the company struggled tokeep the company afloat through the integration of the popular TQMframework however, the approach did not position the companyappropriately. Actually management in the company did not have aclear picture on what entailed TQM and this explains why theyresorted to the six sigma framework which is argued to be animprovement of the TQM program.
TheSix Sigma is a process that aid GE to develop near perfect products.Although it has great resemblance with the TQM process, it has anumber of differences that GE management depicts as more superiorthan the TQM practice. The argument of using the Six Sigma program ispegged on the need to measure how many defects a particular producthas and devise reliable strategies to prevent such defects in thefuture. The key concepts of the Six Sigma practice includeconsideration of attributes that are critical to quality, defects,process capability, variation, and stable operations. A critical lookat the key factors considered under the Six Sigma process illustratesthat there is a bit of cohesion to the TQM process. The informationis crucial because it elucidates that GE has in one way or the otherrelied on the use of TQM to enhance its operations in the market.This is particularly important to the company since over the years ithas tried to address the needs of the customers, but this has notbeen clearly illustrated by the sales margin (Boulter, Bendell, &Dahlgaard, 2013). Instead of the company registering higher sales, ithas continuously registered lower sales. In contrast to Ford Motors,GE has not fully immersed itself in the TQM framework.
Figure2: GE Sales Margins
Apple and TQMPractice
Totalquality management has been a major aspect that has pushed theperformance of Apple over the last years. Just like Ford Motors,Apple implemented the TQM approach in a bid to boost its sales in themarket. The main focus of management was to ensure that the customersget the products that meet their needs. The center of the developmentprogram was to ensure that the company recovered customer trust andloyalty. Through quality management process, Apple is able to utilizethe problem solving methods to study and recognize and get rid of anyweak segments of the company. TQM is an all inclusive process thatintegrates all stakeholders ranging from suppliers to the customers.Apple leverages on constant inventions and innovations to cement itsposition in the market. Owing to the adoption of the TQM program,Apple has attained flexibility, high efficiency, improved marketprice, removal of deficiencies, higher productivity and reducedexpenses and costs (Danyen & Callychurn, 2015).
Theuse of TQM in Apple has not been all success. The program failedconsiderably when the company unveiled its iPhone 4. The stock of thecompany plunged immensely when the customers rejected the product.Although the company had adopted the TQM practice, it had failed toproperly address the needs of the customers. However, from a broaderperspective the merits of TQM at Apple outweigh the demerits in thecompany (Das & Mukherjee, 2016).
Figure3: Apple Sales Margin (millions)
Fromthe figure above it is imperative to note that the use of TQM inApple has had a huge impact in the performance of the company. AppleCompany is one of the leading innovators in the market. Managementhas always correlated its strategies to meeting the needs of thecustomers and this explains why it has maintained an upward growthwhen it comes to sales and revenue generation (Palm, Lilja, &Wiklund, 2014). Apple Inc. has a dedicated research and developmentdepartment that immerses itself into trying to establish what thecustomers want and inform the production department to designproducts and services that meet the needs of the customers.
Followingthe analysis of the three companies situated in North America, it isimportant to note that the establishment of TQM is not an easyprocess. TQM demands an overhaul of an organization’s culture (Das& Mukherjee, 2016). Organizations that would want to benefit fromthe use of TQM must be able to focus on continuous processimprovement and customer satisfaction. The use of TQM also calls fora change in attitude and reprioritization of the daily activitiescarried out by an organization. There must be a long term commitmentand constant employee involvement for the technique to be a success.Most organizations fail to take into consideration these importantfactors and this is why most companies fail to thrive despite theadoption of TQM (Pourrajab, Basri, Daud, & Asimiran, 2015).Further, a good TQM takes years to implement and this is immenselytied to strategic planning, time and long term resource planning. Thecomplication of using TQM is heightened by the fact that quality isexpensive and often comes around with high costs training costs,team development costs, consultancy costs, and infrastructural costs.
TQMtechnique encompasses such elements as leadership, employee’sinvolvement, continuous improvement, quality management, andeducation and training of the employees. Success of a company isanchored on its ability to manage and fulfill the needs of thecustomers. It is impossible to manage the customers without properleadership, employee training and involvement programs or continuedimprovement programs. Thus, it can be concluded that TQM is aneffective tool in the modern society especially when an organizationwants to meet the needs of the customers (Valmohammadi, 2011). Theuse of TQM is not restricted to a single industry. Over the years theuse of TQM has been immensely reflected in the motor vehicle industrywith companies like Toyota and Ford Motors competing fiercely for themarket segment. However, companies like Apple and GE have also comeforth and illustrated that the use of TQM can be implemented in otherindustries. From the review of existing literatures and consideringthe performance of companies in North America, it can be concludedthat companies that have adopted TQM and complemented the model withother techniques like the Six Sigma have registered improvements intheir performance. TQM affects quality improvement, innovations andperformance that show that TQM has a positive impact in North Americaand leads to improvement of all industries in the region if properlyadopted.
Astudy of Apple Inc. performance shows that TQM has a huge impact oninnovation as opposed to quality however, there is a significantconnection between quality and innovation. It is impossible to comeforth with quality products or services without focusing oninnovation. The use of technology particularly can enhance the use ofTQM (Valmohammadi, 2011). In the modern society characterized byconstant innovations and the use of technological systems, there areavenues to continuously monitor the performance of products andcustomer attitudes and perceptions towards products or services.North America is one of the developed regions in the world and hometo a number of multinationals however, just like other parts of theworld, there is a need to focus on TQM in conjunction with otherapproaches like the Six Sigma techniques (Yapa, 2012). Quality alonecannot suffice as a solution to the numerous challenges faced bycompanies in North America. In order for the TQM practice to besuccessful, companies in the region need to focus on constantinnovations. The research indicates that quality performance,innovation and organizations performance can be effectively improvedby the adoption of the TQM framework. Therefore the adoption of TQMin North America will have a number of positive outcomes in theregion (Zairi, 2013).
Thestudy also illustrates that improvement of products is not enough toascertain that TQM will have a huge impact in North America. Thereshould be a connection between quality performance and creativity.Companies in North America can only perform and outdo competitors ifthey go outside the operating spectrum and adopt additionalstrategies to enhance their activities. There is no doubt that TQMcould positively and immensely affect the performance of NorthAmerica as a region. The effect of TQM can be measured from the basisof quality, innovation and creativity and the processes willeventually improve regional performance. From the research it can bestated that TQM will have a huge impact in North America if properlyadopted. The sole reason why the use of TQM has not flourished in theregion is pegged on reluctance and lack of information by management.If these hurdles are removed successfully, then TQM will be able tobe used effectively in the region as there are companies like GE, GM,Apple and Ford Motors that have illustrated that it is possible toadopt the strategy. The benefits of TQM adoption and successfulintegration with other tools like the Six Sigma strategy cannot beforfeited they enhance performance and productivity.
Successdoes not always come easy. In order for an organization to besuccessful it must lay down strategies, plan, implement andconstantly review the strategies to accommodate the changing demandsin the market. Constant employee training and development will alsoenhance the adoption of TQM. If the employees are well informed theystand in a better position to catalyze the adoption andimplementation of the required strategies. Management must assume themantle and clearly understand and lay down the foundation to adoptthe TQM practice. If a political goodwill is instituted the TQMpractice will be a success. Finally, there is a need to integrate TQMwith other tools like Six Sigma in order to ensure that optimality isachieved.
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