Quality Management Journal Executive Briefs - July 2002 - ASQ

Quality Management Journal Executive Briefs - July 2002

Contents

Quality in U. S. Manufacturing Industries: An Empirical Study

Christopher Roethlein, Bryant College, Paul Mangiameli, University of Rhode Island, and Maling Ebrahimpour, University of Rhode Island.

This article presents the results of a research study that was done to determine the quality management practices that contribute to a higher level of quality. It also determines if quality management practices change with respect to level in the manufacturing supply chain. Specifically, the authors answer these questions:

  • What are the current quality management practices of U. S. manufacturing companies?
  • What are the most and least applicable categories of quality management in U. S. manufacturing companies?
  • Do categories of quality management vary with respect to a firm’s level in the supply chain?

The authors mailed out surveys to 3375 managers representing 3285 different manufacturing companies. Six hundred thirty-four were returned. The responses were examined with respect to each organization’s self-reported level in a five-level manufacturing supply chain (base-level supplier to end-product producer). The results indicate that the level of the supply chain does not influence how quality is managed.

In this study, quality management practices were determined from previous research, in-depth interviews, multiple case-study analysis, and an empirically based survey. The authors came up with a list of 12 categories of quality management practices:

  1. Top management support
  2. Customer relates with responding entity
  3. Responding entity relates with customer
  4. Statistical control/feedback
  5. Rewards to employees for quality improvement
  6. Impact of increased quality
  7. Work attitudes
  8. Product design process
  9. Process flow management
  10. Supplier relates with responding entity
  11. Responding entity relates with supplier
  12. Information technology

The authors identified the most applicable quality management practices as: 1) customer relates with responding entity, 2) top management support, 3) work attitudes, and 4) impact of increased quality. The least applicable practices were determined to be: 1) responding entity relates with customer, 2) product design process, 3) responding entity relates with supplier, and 4) rewards to employees for quality improvement.

A successful manufacturing company is usually indicative of a successful manufacturing supply chain. By identifying the quality management practices that are considered important to each level in a supply chain, one level of a supply chain can better communicate and understand another level. Better communication creates a competitive advantage for individual entities and their connected supply chain.

 

The Role of Quality Tools in Improving Satisfaction with Government

S. Thomas Foster Jr., Boise State University, Larry W. Howard, Middle Tennessee State University, and Patrick Shannon, Boise State University.

While there is an established quality management literature in business, little has been written about quality improvement in government. Much of the existing literature is anecdotal, and, as a result, there is little understanding of the variables leading to quality improvement in government. The primary difference between business and government is the lack of profit in government. Because of this, there are different choices in quality improvement methods between government and business.

There is a great need for more research in government quality management for a number of reasons. First, the demand for government services is increasing, while budgets are stagnant and decreasing. Therefore, process simplification is needed to respond to increasing demands. Second, there is increasing competitive pressure on government service providers as pressure mounts to privatize government services. Third, leaders in government employees are internally motivated to provide service that is on par with the private sector.

This article presents the results from a study performed in a city government. The city studied had been implementing teams and quality improvement tools for a number of years. The primary research question is, “Were the applications of quality tools effective in improving quality-related outcomes in this city government?” In this article, the authors propose a model of quality tool usage in government.

The authors’ research shows that for this city government, employees believed that quality knowledge was necessary for improving quality. The results show that department leadership was positively associated with teamwork, process improvement, and employee satisfaction. From a managerial perspective, the authors find that for quality tools training to be effective, it should be followed up by application through team processes. Leadership is critical to the development of quality tools knowledge, but teamwork is the vehicle through which this knowledge is translated into application. Both leadership and teamwork are important concerns for quality management in the public sector.

The findings associated with improved employee satisfaction are important for government agencies since budget limitations often require nonmonetary approaches to improve morale. This also suggests that government workers, like private-sector workers, want to perform work effectively and feel satisfaction when they achieve positive results.

 

An Activity-Based Costing Model to Reduce COPQ

V. M. Rao Tummala, Eastern Michigan University, K. S. Chin, City University of Hong Kong, and W. K. John Leung, Motorola Semiconductor.

Based on company practices and costs of poor quality models formulated by others, an activity-based costing program is introduced in this article to identify the opportunities to develop and implement appropriate improvement projects to reduce the costs of poor quality and increase the quality of products and services. This program consists of three phases:

  • Determining the costs of poor quality
  • Initiating improvement projects
  • Evaluating the improvement projects

These three phases, in turn, involve the following 12-step process of implementing an activity-based costs of poor quality program:

  1. Define the scope
  2. Identify quality-related activities
  3. Establish activity and cost-driver relationships
  4. Collect overhead costs information
  5. Assign costs to activities
  6. Assign activity costs to the product line
  7. Include direct material costs
  8. Determine the four categories of COPQ
  9. Identify opportunities for improvement
  10. Prioritize improvement areas
  11. Initiate improvement projects
  12. Keep track of improvement projects

This 12-step process is used to determine the costs of poor quality and to initiate improvement projects to reduce the identified quality costs. The results indicate that the proposed program can be applied to reduce costs of poor quality significantly.

J. M Juran (1989) defined the costs of poor quality as those costs incurred because of poor quality that would not have been incurred if every aspect of a product or service were perfectly correct the first time and every time. These costs of poor quality include internal failure costs, external failure costs, appraisal costs, and prevention costs. Armand Feigenbaum (1991), on the other hand, said the costs of poor quality comprise two major categories: costs of control, such as prevention and appraisal costs, and costs of failure of control, such as internal failure and external failure costs.

The costs of poor quality can be determined systematically in terms of internal and external failure costs, and appraisal and prevention costs by using the level of activity cost drivers and the corresponding activity-cost rates related to each micro activity. This enables managers to obtain product cost information that could be used for developing appropriate cost of poor quality programs to suit company-specific experience and environment. Implementing cost of poor quality programs can be an effective way to reduce the costs of poor quality.

 

Proposing a Compact Instrument to Measure Supplier-Customer Relationships in the Context of TQM Activities

Mohammad Aghdasi and Hamid Noori, Wilfrid Laurier University.

This article reports on a study of the factors that characterize a complete supplier-buyer partnership, and a more cooperative orientation in the channel. In general, many academics and practitioners view supplier partnerships as a key element in enabling both suppliers and buyers to reach levels of world-class competitiveness in a demanding competitive environment.

Data were collected for 33 elements of supplier-customer relationships from 205 Canadian manufacturing organizations. The authors used principal component analysis to provide a relatively compact instrument that allows researchers and practitioners to measure supplier-customer relations more effectively and efficiently. This model of factor extraction indicates that three major components account for most of the scale variance: 1) improvement activities, 2) long-term purchasing, and 3) market adjustment.

The results presented in this article are based on a continuing study by the Social Sciences and Humanity Research Council of Canada. The overall study looks at the extent to which continuous collaborative improvement (CCI) activities are being implemented in the supply chains of Canadian industries. A questionnaire was developed using the CCI model to determine how supply chain members are collaborating. The survey focused on the following six categories: 1) demographics, 2) requirements imposed by customers, 3) requirements imposed by suppliers, 4) collaborative efforts, 5) strategy, and 6) results.

It was determined that all three of the aspects of supplier-customer relationships mentioned previously need improvement. “Improvement activities” was found to need more attention than “long-term purchasing” and “market adjustment.” The authors’ study also indicated that the relationships between suppliers and downstream customers in the Canadian manufacturing sector focus primarily on long-term purchasing and supply agreements, and market adjustment activities.

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