The Hindu Business Line : Take quality management to a higher plane

IN TODAY'S world of rollercoaster markets, rapidly shifting competitive structures, escalating customer demands, emerging technologies and intensifying competition, businesses need to respond swiftly.

With a paradigm shift away from industry structure and competitive positioning to internal, firm-specific process capabilities, decentralised/group decision-making and organisational learning, quality management has become key to addressing such challenges.

Competitive dynamics require total quality management (TQM), reengineering, benchmarking and other business-transformation measures for greater customer loyalty, larger market-share, higher stock prices, reduced service cost, higher prices and greater productivity. While it is important for a firm to fulfil the needs and preferences of its customers, it is equally essential to build a quality culture within the organisation, as in companies such as IBM, Hewlett-Packard, Procter & Gamble and Johnson & Johnson.

Against the backdrop of the World Trade Organisation's stipulations on product standardisation and strict adherence to international quality standards, a global convergence towards common standards can easily be discerned. Liberalisation and the consequent need to craft key strategies to leapfrog ahead of competition brought to the fore issues coalescing into the central theme of quality management.

Crosscutting strategic issues include speed, customer preference, quality certification, technology upgradation, cost reduction, professional learning, innovation and social awareness. No wonder some companies in India, as indeed globally, have made this a credo.

ISO 9000 standards

ISO 9000 series consist of core and supplementary guidance standards. Without altering its basic framework of 1987, the revision in 1994 specifically clarified some requirements. ISO 9004 attempts to benefit all stakeholders groups through sustained customer satisfaction.

Some supplementary standards provide guidance for establishing quality assurance system in specific product/sectors for guidance in calibration of test equipment, preparation of documents and audit of quality systems.

Quality management in service industry

In conformity with rapidly transforming financial architecture, the significance of services increased globally. Service companies long suffered from haphazard approaches to innovation. But several cases (for example, Bank of America's path breaking experiments) demonstrated that service development could be rigorous.

Accordingly, service management research transcended the initial classification/theory development stage to the theory validation stage. Service encompasses several things, including speed and completeness of response to enquiries, extent of meeting customer's special requirements, greeting customers and hospitality.

The service sector is an integral part of business operations in India. Yet, challenges remain. The inherent peculiarities of services require a holistic approach encompassing both qualitative and quantitative aspects in creating an enduring image of high-quality service. Some basic aspects include meeting customer's expectations, senior management commitment, consciousness raising, spontaneity/flexibility in decision making, skill building and teamwork building forums, constant follow-up and monitoring, speedy solutions, revaluation and modification of the firm's organisational effectiveness and continuous market assessment.

The responsibility of delivering high-quality service ultimately rests on all employees. Service employees impact quality perception because of their influence on reliability, responsiveness, assurance, empathy and tangibles.

Differing prisms of developed and transition economies

Quality concerns drive operations management across countries. But the perspective of developed and transition economies differs because of different concerns. Developed countries use ISO 9000 primarily as a tool for institutionalising their work practice into a formalised system for effective internal management. Most transition economies, however, consider ISO 9000 as an instrument of maximising production with little thrust on quality. While attainment of an appropriate level of quality is an operations management objective, appropriate level of quality is a function both of the type of industry and its growth strategy.

Despite some modernisation and technological upgradation, many industries in India continue to lack proper quality management. Contrary to the widely held belief that implementation of ISO 9000 is difficult because of lengthy documentation, inadequate personnel to devote undivided attention to TQM and huge expenditure, the pursuit of quality management is desirable and indeed eventually cost-effective.

TQM paradigm — compelling business case

In TQM, the emphasis shifts from the earlier concepts of orientation towards the quality of product/service to the process itself. TQM implies an all-encompassing, quality-focussed management approach to provide products and services to satisfy customer requirements and the relationships of organisations with their employees, shareholders, customers and communities in which they operate.

TQM encompasses four principles and eight core concepts of repositioning organisations in their pursuit of leading the pack.

Several tools, techniques and procedures are used for high-quality products and services with thrust on prevention rather than detection. This end-to-end integration includes employee participation, inspection process and use of statistical tools such as acceptance sampling and control chart. The thematic pattern of TQM needs to cut across all areas to become "the driving force for sustainable excellence" in organisations by initiating improvement activities leading ultimately to excellence in customer satisfaction, employee satisfaction, and impact on society and business results.

Enabling framework

The process of Structural Adjustment Programme, which transformed the Indian business environment from one of state-centred, control orientation to a free open-market orientation, boosted quality management. But quality management is not an end in itself; the ultimate aim being to achieve improved customer satisfaction, reduced control, shorter cycle time, enhanced productivity, widened customer base or improved comfort level of customers.

Development of quality management, against the background of utter historical neglect, is a complex and multi-dimensional task and requires the co-operation of all persons in an organisation and associated business processes.

However, some basic elements of technology-driven, customer-focussed and market-driven strategy are using a structured survey to rectify ills; determining cost of poor quality and non-value-adding activities; emphasising research and development (R&D); streamlining test laboratories and government establishments; proactive banks and financial institutions; developing holistic strategies, creating synergies and forging institutional alliances among industry and government agencies, centres of excellence such as the Indian Institutes of Technology (IITs), the Regional Engineering Colleges (RECs), the Council of Scientific and Industrial Research (CSIR), and so on.

Critical success factors include ability to identify customer needs and quick response, developing a reputation for being the best in class, product quality, shortest cycle times for new product development, developing managerial and technical capabilities, low maintenance, strengthened supervision, extensive training, recognition of performance and array of products and services to meet customer requirements.

Over the long haul, quality management has justifiably been seen as a growth trigger in both national and corporate strategies. While availability of quality management tools and techniques is crucial, a deeper sense of responsibility and a higher degree of understanding to ensure effective implementation of quality management practices with supportive organisational culture is necessary to transform Indian industries.

(The author is chief economist, Canara Bank, Bangalore.)

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