Tuesday, March 27, 2012

TQM Implementation In Small Industry in Malaysia

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ABSTRACT


Many of the companies that have implemented TQM are large multinational corporations (MNCs) such as IBM, British Airways, Hewlett-Packard, Motorola, etc. Except for the very few, in small businesses many are still lagging behind when it comes to implementing new management techniques such as TQM.


This paper looks at the various TQM implementation issues particularly in a small and medium enterprises (SMEs)- Raya Plastik Industri Sdn. Bhd (RPI). The background section reviews the concepts of TQM, and some of the quality initiatives undertaken by RPI. A short description of small business characteristics is also given to provide an understanding of their problems.


1.0 INTRODUCTION


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TQM is a philosophy mainly dominated by large companies. Small businesses are lagging behind larger ones when it comes to introducing and adopting new managerial philosophies and advanced technology. Many small companies have stopped at quality system certification, such as ISO 000, in their quality journey rather than pursuing further continuous improvement efforts through TQM. Small businesses must understand the need to go beyond the quality system stage and work towards a total approach for quality. Only through this total approach will their quality effort be a success.


.0 PROBLEM STATEMENT


Do Raya Plastik Industri Sdn. Bhd (RPI) really have fail to totally implement Total Quality Management (TQM) . What is the issue


.0 OBJECTIVE


The objective of this paper


a. Why Raya Plastik Industri want to implement Total Quality Management ? Explaination why RPI want to implement TQM


b. RPI performance in terms of sales against manpower before and after implementing TQM.


c. The TQM element that RPI fail to follow. As TQM have so many element, which area thet RPI fail to follow.


d. To give recommedation to the management.


4.0 METHODOLOGY


For this paper the group have decided to use the following method


a. Primary Data


This will be through Interview with the top management and the executive.


b. Secondary Data


1.The TQM report that the company have every quarterly each year.


.The TQM Handbooks


.Journal, Academics books etc.


5.0 LITERATURE REVIEW


Different authors have given various definitions of TQM. Kanji (10) defined it as the way of life of an organisation committed to customer satisfaction through continuous improvement. This way of life varies from organisation to organisation and from one country to another but has certain principles which can be implemented to secure market share, increase profits and reduce costs.


Berry (11) defined the TQM process as a total corporate focus on meeting and exceeding customers expectations and significantly reducing costs resulting from poor quality by adopting a new management system and corporate culture. The principles of TQM have been described by many authors and encompass elements such as management leadership and commitment, employee involvement, supplier partnership, continuous improvement, etc. It is a way of managing an enterprise towards achieving business excellence (Dahlgaard et al., 18).


Early studies on quality initiatives in small businesses have largely focused on achieving product quality and on the application of statistical techniques. Dale and Duncalf (184) studied the quality assurance aspects of small manufacturing companies (less than 100 employees) and reported that they were less likely to have a coherent quality assurance policy, and a quality department than large companies. Very few had progressed from an inspection oriented function to the more advanced quality assurance concept. Nagpal and Twamley (18) reported on a case study of SPC implementation in a small plastics manufacturer as a way of initiating a quality improvement culture. They described the process from initial training to the application of control charts on the shop floor. Both these studies have related quality to product quality assurance and the statistical techniques aspects of TQM.


The idea of having a common standard, as proof of an organisations product assurance system to its customers is noble, but should not be seen as an end in itself. A company certified to the standard only has a documented product quality assurance system that complies to the prescribed requirements. Seddon (17) argued that it lacks the continuous improvement element vital for quality sustenance.


TQM in the small business


Studies of TQM implementation in smaller businesses are relatively scarce. There seems to be greater interest in the application of TQM in larger organisations, probably because they are seen as being more important than smaller ones. Much of the current published work is centred around the approaches that small companies have taken in their pursuit of TQM. Some of the literature relates to survey results regarding the motive for TQM implementation, measures adopted and the outcome of TQM implementation based on managers perceptions. A review conducted by Yusof and Aspinwall (000a) revealed that those previously developed implementation frameworks were far from suitable and did not fit the SMEs context.


Moreno-Luzon (1) concluded that small firms were lagging behind big ones in the application of TQM. Successful small firms were found to place more emphasis on product and process innovation, investing in new production equipment, and to have a highly motivated management team with better managing skills. They tended to have less qualified personnel than larger ones, and through TQM, were able to invest in the training of their staff which led to this improvement.


Ghobadian and Gallear (16) reported on the case studies of four SMEs where they investigated the reasons for adopting TQM, the main steps involved in implementation, the impact and changes resulting from its adoption and the difficulties in implementation. They concluded that SMEs could apply TQM with considerable success and they pointed out the strengths inherent in SMEs which were beneficial for this.


Goh and Ridgway (14) found that most of the companies, which they surveyed, viewed certification to ISO 000 to be the end point in their quality drive. Similar findings were also reported by Zetie et al. (14) and Meegan and Taylor (17). Goh and Ridgway (14) also advocated the need for a cost-effective framework to implement TQM in SMEs, but they did not expand on their idea. Zetie et al. (14) reported on a case study of a small companys experience in implementing TQM. They utilised an improvement infrastructure that was very similar to the quality circles concept and gave examples of the kinds of projects conducted.


Reasons for adopting TQM


Small firms have embarked on TQM for different reasons. Shea and Gobeli (15) cited some of the motives reported by a group of small companies which they studied. They were


1. promotion of growth - it is easier to convince the companys bankers to invest in them if there is evidence that the organisation is well run;


. management belief in the principle of customer satisfaction and employee empowerment which reflects the management style supporting TQM;


. changing customer expectations even for organisations seen to be doing well (competitive issue);


4. making work more enjoyable; and


5 to improve poor company performance if the company is not doing well (survival issue).


Even though these reasons looked varied, they all point in the same direction to improvement. Increasing profits is an important issue especially for small businesses. They must understand and realise that improvements in their business and in other aspects such as the working environment are important for survival. Brown (1) reported on a case study in a small company whose reason for adopting TQM was to develop a new culture as well as managements desire to return the company to profitability. One of the companies studied by Ghobadian and Gallear (16) cited trying to overcome internal problems such as poor delivery performance, quality related problems caused by a narrow functional approach and poor financial returns as the prime reasons for adopting TQM.


6.0 COMPANY BACKGROUND


Raya Plastik Industri Sdn. Bhd. was established in 5th May 18 with a paid-up capital of RM 0,000. RPIs operation commenced two years later, in August 18 with 8 manpower producing medicine bottle for government hospitals. They were then producing with 4 blow molding machines and 1 injection. In 185 They were awarded a contract to produce a complete telephone casing for Pernas NEC. But due to economic downturn, the project really never took off.


Then in 10, They became one of Protons pioneer vendor. From that year onwards, RPI had evolved from merely producing bottles to producing more technological challenge product. Started off by producing two types of plastic bottles under contract from Ministry of Health, Malaysia. RPI now become the first few vendors who supply local plastic components to the first and second Malaysian National Cars PROTON and PERODUA.


RPI MILESTONE


18 - Incorporated


184 - Start Operation at Off Jalan Kapar Klang producing medicine bottle for MOH.


185 - Received Pernas NEC contract to produce telephone casing.


Started with APK program


11 - Became Proton Vendor producing plastic injection molding parts.


Technical Assistant with Suriyo Plastic Japan


1 - Shift to a new plant in Section 4 Shah Alam


1 - Became Perodua vendor


15 - Received best Grant Vendor Award from Proton


16 - Selected to be a model company for TQM project between NPC & JSA.


17 - Received ISO 0014


Produced engineering blow product for Yashima Gomu, Japan


18 - Technical Assistant with OM corporation Japan to produce fuel filler cap.


001 - Awarded as most improved vendor from Perodua


00 - Became vendor for Hicom Teck See, Kayaba


00 - Received ISO 001000 and QS 000


7.0 TOTAL QUALITY MANAGEMENT IN RPI





7.1 HISTORY OF TQM IN RPI


ASEAN -JAPAN TQM PROJECT


It was way back in 15 when NPC nominate RPI as one of the company to be choosen as the TQM model company in Malaysia under ASEAN-Japan TQM Project. In April 16, RPI was officially been selected as the model company along with another company that was Ingress Engineering Sdn Bhd.


The objective of the project


i. To set up model factories in all ASEAN nation


ii. To research and develop TQM method which are suitable for each ASEAN country and can be commonly adopted internationally


iii. To set up TQM training courses in each ASEAN country.


iv. To share the fruits of this project through co-operative work.


Long before RPI adopted TQM, they already have a quality system management under SIRIM APK certification. With that base, they are confident that there can implement TQM. The reason are basicaly as follows


1. Enable the organisation to consistently meet the needs of customer.


. As strategic concept for organisational survival.


. As the key achieving competitives advantage whereby it provides direction, purpose and destination.





4. The consultation is free fully sponsored by the NPC (National Productivity Corporation) and JSA (Japan Standard Association)


5. Based for achieving ISO0014


The project started in 16 until 1 according to the financial year of the company. During the project, the JSA will send their consultant to the the model company twice a year. As guideline, there are 1 set of TQM handbook will be given to the model company for their reference. The consultant will give at least to set of the TQM handbook during each visit.


Refer to Appendix 1 for the list of the handbook and the area of application.





7. THE IMPLEMENTATION OF TQM


At the early stage, RPI was very excited about the program. At the same time RPI also preparing for the ISO0014 certification. This project concurrently done and in early 18, RPI get certified for ISO0014.


There are major activities to implement TQM in RPI


1. SETTING TQM POLICY DEPLOYMENT


To ensure thet the TQM being implenmented the management have set the target the mission statement, objective and all departmental goal and objectives. From there the deparment will have to list out all the policy deployment for each of the department until the section concern. They use the Plan do, check and action or they called it PDCA. To achieve the target set, all head of department will have to list out all the plan and in order to do that they have to know the current situation. Then they will do what they plan and check whether what they do is accordance to the target set. If there is something wrong with the implementation they have to take action or countermeasure. If the target set achieved they have to craete a benchmark or standard so that they can monitor their progress. In order to ensure that the management can control this process, they have set that every month , there will be a TQM Meeting. In this meeting all the Head of Department have to present their report to the management. This is also the time where the Kaizen (continous improvement) activities will be reported.


Refer to the Appendix for the sample of the format for the TQM project.


. DEVELOPING STANDARDIZATION


RPI then try to develop standadization system whereby all the work process, rule and regulation in the company being standardize. This standadization will help employer and employee to follow same work processs, rule and regulation. This standardization have cause a big changes in the company and during the process there are a lot of ressisstance from the staff especially the executive level. One of the example of the standardization is the standard operating prosedure or work instruction.


Refer to the Appendix for example of work instruction.


. DEVELOPING THE QCC AND 5S GROUP.


They start with setting the committee for the project and they set the goals and objective for the company. The campaign for 5s and the Quality Control Circle being scheduled and being conducted accordingly. The project really bring changes to the company. For the QCC group, the company sent them for training and for competition.


7. PROBLEM WITH TQM IN RPI


From the data gathered the average age in the executive level in RPI is not balance. The average age for the manager and executive will be 5 years old. The actual situation is that the person who incharge of the TQM in RPI change. The previous employee left and the new person incharge have different view and perspective compare to the one that left. This new person incharge have a very high expectation in implementing TQM. At this stage there so many chnages been done. The structure of the organization change and there are employee especially the executive level resigned and the new executive find that this TQM thing alien to them. The ressisstance to this new changes disturbed the implimentation of TQM. This was the time when all the QCC group and 5s implementation was done at all. Most of the executive dissapointed when all their efforts were not been recoznized by the management. This person incharge have a great influence in the company.


Nevertheless with all the obstacles in the implementation of TQM, RPI manage to get their certification for QS 000 intergrated with the ISO 00000.


Refer to the Appendix 4 for the company performance according to the sales against manpower.


From a few interview done with the senior manager, in their opinion RPI can do better than what been done. They said that the problem in implementing TQM in RPI basically because of


1. Resistance to change;


The staff reluctant to change because they do not what is for them.


. Lack of experience in quality management;


The person in-charge to dependent on his theories, he seldom want to give other people the chance to use their experience.


. Lack of resources especially financial;


Currently all improvement to be done need resources especially finacially but currently budget is tight.


4. The prevalent quality system based on detection (i.e. difficulty in moving to a prevention-based system);


5. An emphasis on short-term objectives;


6. Put a very high expectation


When people ids adapting to new thing there will some learning curve that they have to go through, but in this case the good result needed right away. This make the staff dimotivated.


7. Top management do not take responsibility if anything goes wrong- pointing finger to everybody


When there are project that fail the management do not want to take the resposibility, for example fail to maintain QCC group burden been put to certain division without considering the reason behind it.


8. Like to interupt other people project or even daily management


The staff idea seldom been considered and when the staff did not follow their for some other reason , they been labeled not performing.


8.0 CONCLUSION


The review revealed that there are several major problems generally faced by most small businesses. The most important thing is financial and the second is a more general resource constraint, which in a broad sense includes time, manpower, technical expertise and managerial expertise. A full-blown TQM approach will involve many improvement projects running concurrently, which in turn requires training of everyone in TQM concepts, tools, supervision, and teambuilding to name but a few. All these require a considerable investment.


In RPI case, they are not totally fail in implementing TQM is just that the need to improve a few thing like the enforcement, the top management must play important role and give some space for their subordinate to work rather that interupt it all the time. Since the company implement TQM there must be some improvement in the company they must change their culture of working.


.0 RECOMMENDATION


Actually RPI have a lot ofroom for improvement to do in order for them to be perfectly succes in implementing TQM. Some of the thing is as below


1. high management commitment level;


. tangible improvement projects;


. continuous improvement strategy; and


4. not being complacent at one level


The need to get people involved early in the process and to empower the operatives to make them part of the process. Another piece of advice given, was to give the workers the direction of the way forward, to make them understand the improvement process and the benefits to be gained. Make them feel early in the journey/process that good things are going to happen. Involvement is not enough, but the need to gain peoples support is crucial for success.


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