Quality management systems

Quality management systems INTRODUCTION This chapter reviews and peruses various quality management systems (QMS) and other literature work in the area of research. It will try to inquire into the view points and thoughts of scholars and academicians in relation to the field of study. It will also give an overview of Information Systems (IS). Quality and QMS Defined Quality is defined by ISO 9000 series as the degree to which a set of inherent characteristics fulfils requirements. In other words, quality can be regarded as fitness for purpose or conformance to users expectations since the user determines whether a product is of the desired quality. (Ghana Standards Board, International Trade Centre, P 109) The quality of goods and services results from many interrelated activities. These activities need to be coordinated through a Quality Management System. As indicated by John Ruskin, â€Å"Quality is never an accident; it is always the result of intelligent effort. In order to survive in todays competitive marketplace, an organization has to consistently satisfy its customers needs and anticipate their future needs. This can be achieved by providing customers with the products they want, â€Å"getting it right first time†, without the need for rework. To satisfy customers, one must go higher along the production chain, right up to the suppliers not forgetting employee morale and commitment. Suppliers provide the raw materials or products for further processing by employees; if suppliers and employees do what is expected of them, â€Å"getting it right first time,† customers will be satisfied. As defined by the International Organization for Standardization (ISO): TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society. (ISO 8402:1994) A quality management system in the enterprise, based on prevention rather than cure, minimizes waste and rework by ensuring that products are made right first time and every time. In adopting a preventive approach by investing in plants and equipment, training staff and purchasing the appropriate raw materials/inputs, an organization can reduce inspection cost and more specifically, the costs of failure and/or delays. These costs arise from rework or discarding non-conforming in-process material and finished products. Quality Assurance (QA) and Quality Management (QM) Models The publication of the ISO 9000 series of standards in 1987 heightened awareness of the benefits of QA requirements among SMEs, many of which implemented ISO 9000 QA models to improve their competitive position as well as to join the ranks of suppliers to large companies. While both the 1987 and 1994 versions of ISO 9001, ISO 9002 and ISO 9003 were based on a QA model, the revised standard (ISO 9001) published in 2000 is based on QM principles (Ghana Standards Board, Export quality management, 2009) The broad relationships between inspection, quality control, quality assurance and quality management are summarized in the table below. System Objective Activities Applicability Nature Inspection Product conformance by screening out conforming products from nonconforming products Visual checks/ measuring; then testing and reporting the results. Generally, Production-related activities, such as checking incoming goods, in-process or final product, pre-dispatch, etc Detection after the event. Quality control Product Conformance by Eliminating causes of nonconforming products Inspection followed by appraisal of results and feedback to the process being controlled As above Detection and-or off-line correction. Quality assurance Generating confidence in product conformance Comprises all QC activities, plus documented quality systems and quality audits All functions of the company from design to after-sales service. Prevention. Quality Management Continual improvement of product conformance Continual improvement of processes in addition to all QA activities As above Prevention and improvement. What are the ISO 9000 series of Standards The ISO 9000 series consist of four primary standards supported by several other documents. The four primary standards are ISO 9000, Quality management systems Fundamentals and vocabulary; ISO 9001, Quality management systems Requirements; ISO 9004, Quality management systems Guidelines for performance improvements ISO 19011, Guidelines on quality and/or environmental management auditing. ISO 9000 is a starting point for understanding the standard, as it defines the fundamental terms used in the ISO 9000 family or set of standards for quality management. ISO 9001 specifies the requirements for quality management systems which enable you to demonstrate your ability to provide products that fulfil customer and applicable regulatory requirements; it also aims to enhance customer satisfaction. ISO 9004 provides you with guidance on the continual improvement of your quality management system so that the needs and expectations of all interested parties are met. These interested parties include customers and end-users, directors and staff in the organisation, owners and investors, suppliers and partners, and society at large. ISO 9001 and ISO 9004 are consistent pair of standards that relate modern quality management to processes and activities of an organization, and emphasize the promotion of continual improvement and the achievement of customer satisfaction. ISO 9001, which focuses on the effectiveness of the quality management system in meeting customer requirements, is used for certification or for contractual agreements between suppliers and buyers. By contrast, ISO 9004 cannot be used for certification as it does not prescribe requirements but provides guidance for the continual improvement of an organisations performance. ISO 9001 focuses on effectiveness, i.e. doing the right thing in the right way. The ISO 9000 quality management system is generic in nature: it is applicable to both the manufacturing and services sectors, and to enterprises of all sizes, including the single entrepreneur. ISO 9001 specifies what an enterprise is required to do, but it does not indicate how this is to be done thus giving the enterprise much flexibility in running its business. (Crosby, 1992) Worldwide use of ISO 9000 The ISO 9000 standards are widely used around the world. A survey conducted by ISO indicated that at least 4008,631 ISO certificates were awarded in 158 countries in 2000, up by 64, 988 certificates over the figure for end of December 1999, when the total stood at 343,643 for 150 countries. The figures were also significantly higher than the 27,816 certificates issued in 48 countries by 31st January 1993, when the survey was first conducted. The number of certificates issued in Europe in 2000 was 220,127 or 53% of the total. The Far East had 20.05%, North America 11.82%, New Zealand and Australia 6.68%, Africa and West Asia 4.94%, and Central and South America 2.64%. Information on the sector covered by the certificates at the end of 2000 was obtained for 317,126 certificates. The highest number recorded was for basic metal products (40,713 certificates or 12.84% of the total), and the smallest number for nuclear fuel (115, 0.03%) The figures for various other sectors are as follows: electrical and optical equipment, 38,148 (12.0%); food products, beverages and tobacco, 11,440 (3.6%); information technology, 11,067 (3.5%); textiles and textile products, 5, 178 (1.6%); and hotels and restaurants, 1,187 (0.4%) Is quality management an issue only for management? A glance at the definition of quality Management-â€Å"coordinated activities to direct and control an organisation with regard to quality† gives an impression that it is an issue for management only. This impression is reinforced by the fact that the eight quality management principles that form the basis of the ISO 9000 series are all used by senior management as a framework for guiding the organisation towards improved performance. The eight management principles are: Principle 1 Customer focus Principle 2 Leadership, Principle 3 Involvement of people Principle 4 Process approach Principle 5 System approach Principle 6 Continual improvement, Principle 7 Factual approach to decision-making, and Principle 8 Mutually beneficial supplier relationships Herbert Simon argued years ago that the core of managing lies in decision making, which is best thought of as process comprising three phases: Finding occasions for making decisions, Finding possible courses of action, and Choosing among courses of action Looking at the quality management principles again, but from Simons point of view, one finds that some of them provide workers with ample scope for making decisions that influence quality. It would appear that the principles related to customer focus, leadership, system approach to management, and development of mutually beneficial supplier relationships are issues for management only. The other principles apply to employees at all levels in the organisation. Employees accept ownership of problems and their responsibility for solving them. The process approach is applicable to everyone, each person having a triple role (i.e. everyone in an organisation is seen as a customer, processor and a supplier). Continual improvement is within the reach of employees at all levels as they can be trained in the methods of continual improvement and the tools involve. Everyone can base his or her decision on accurate and reliable data, this being made available wherever decisions have to be taken. If everyone looks at quality management as managing of quality, then quality management is within the decision-making scope of both managers and workers. There is a Japanese rule that attributes quality problems to poor product design (40%), errors made during the manufacturing process (30%), and nonconforming materials purchased from suppliers (30%). Generally design and purchasing problems can be solved only through managerial intervention. One can say that quality problems in manufacturing are caused in equal proportion by managers (e.g. inadequate training of workers) and workers (e.g. inadequate attention to machine setting). One can conclude that 85% of the problems come under management control and 15% are under worker control. This ratio of 85:15 has been substantially documented in the literature of quality management. Only 15% of defective products can be attributed to production operators while the other 85% are caused by management. System problems like inadequate maintenance of equipment and faulty raw materials/components can be resolved only by top management. Quality management is regarded in ISO 9000 as comprising four elements: Quality planning, Quality control, Quality assurance and Quality improvement While all four elements are within the purview of management, workers are directly responsible for quality control conducted at the operational level. It should be noted that workers could also contribute to quality improvement if they have been trained in simple problem-solving techniques. FOOD SAFETY QUALITY MANAGEMENT SYSTEM Food safety is related to the presence of food-borne hazards in food at the point of consumption, (intake by the consumer). As the introduction of food safety hazards can occur at any stage of the food chain, adequate control throughout the food chain is essential. Thus food safety is ensured through the combined efforts of all the parties participating in the food chain. The following are generally recognised key elements to ensure food safety along the food chain, up to the point of final consumption: Interactive communication; System Management; Prerequisite programmes; HACCP principles Communication along the food chain is essential to ensure that all relevant food safety hazards are identified and adequately controlled at each step within the food chain. This implies communication between organizations both upstream and downstream in the food chain. Communication with customers and suppliers about identified hazards and control measures will assist in clarifying customer and supplier requirements (e.g. with regard to the feasibility and need for these requirements and their impact on the end product). Recognition of the organisations role and position within the food chain is essential to ensure effective interactive communication throughout the chain in order to deliver safe food products to the final consumer. The most effective food safety systems are established, operated and updated within the framework of a structured system and incorporated into the overall management activities of the organization. This provides maximum benefit for the organisation and interested parties. ISO 22000:2005 has been aligned ISO 9001 in order to enhance the compatibility of the two standards. ISO 22000 integrates the principles of the Hazard Analysis and Critical Control Point (HACCP) system and application steps developed by the Codex Alimentarius Commission. By means of auditable requirements, it combines the HACCP plan with prerequisite programmes (PRPs). Hazard analysis is the key to an effective food safety management, since conducting a hazard analysis assists in organising the knowledge required to establish an effective combination of control assist in organising the knowledge required to establish an effective combination of control measures. ISO 22000 requires that all hazards that may be reasonably expected to occur in the food chain, including hazards that may be associated with the type of process and facilities used, are identified and assessed. Thus it provides the means to determine and document why certain identified hazards need to be controlled by a particular organisation and why others need not. BUSINESS PROCESSES AND INFORMATION SYSTEMS In order to operate, businesses must deal with many different pieces of information about suppliers, customers, employees, invoices and payments, and of course product and services. They must organise work activities that use this information systems to operate efficiently and enhance the overall performance of the firm. Information systems make it possible for firms to manage all their information, make better decisions and improve the execution of their business processes. (Laudon and laudon 2006). BUSINESS PROCESSES Information systems are all about improving business processes which lie at the very heart of a business. So it is important to understand what is meant by â€Å"business processes† Business processes, refer to the manner in which work is organised, coordinated, and focused to produce a valuable product or service. Business processes are workflows of materials, information, and knowledge-set of activities. Business processes also refers to the unique ways in which organisations coordinate work, information and knowledge, and the ways in which management chooses to coordinate work. Every business can be seen as a collection of business processes. Some of these processes are part of larger encompassing processes. For example, almost every business has a way to hire employees. The process of hiring employees is a business process in the sense that it is a set of activities that a firm uses to hire new employees. To a large extent the performance of a business firm depends on how well its business processes are designed and coordinated. A companys business processes can be a source of competitive strength if they enable the company to innovate or to execute better than its rivals. Business processes can also be liabilities if they are based on outdated ways of working that impede organisational responsiveness and efficiency. Information systems enhance business processes primarily in two ways: Increasing the efficiency of existing processes and Enabling entirely new processes that are capable of transforming the business TYPES OF BUSINESS INFORMATION SYSTEMS There are different systems depending on the different business processes but all the systems could be viewed from two different perspectives: a functional perspective identifying systems by their major business function, and a constituency perspective that identifies systems in terms of the major organisational groups that they serve. Systems from a functional perspective From a historical perspective, functional systems were the first kinds of systems developed by business firms. These systems were located in specific departments, such as accounting, marketing and sales, production, and human resources. There are four main types of information systems that serve different functional systems: Sales and marketing information systems help the firm with marketing business processes (identifying customers for the firms products or services, developing products and services to meet their needs, promoting products and services) and sales processes (selling the products and services, taking orders, contacting customers, and providing customer support). Manufacturing and production information systems deal with the planning, development, and production of products and services, and controlling the flow of production. Finance and accounting information systems keep track of the firms financial assets and fund flows. The typical finance and accounting information systems found in large organizations. Senior management uses finance and accounting systems to establish long-term investment goals for the firms and to provide long-range forecasts of the firms financial performance. Middle management uses systems to oversee and control the firms financial resources. Operational management uses finance and accounting systems to track the flow of funds in the firm through transactions, such as paychecks, payments to vendors, securities reports, and receipts. Human resources information systems maintain employee records, track employee skills, job performance and training, and support planning for employee compensation and career development. The system can produce a variety of reports, such as list of newly hired employees, employees who are terminated or on leaves of absence, employees classified by job type or educational level, or employee job performance evaluations. Systems from a Constituency Perspective This is a perspective that examines systems in terms of the various levels of management and types of decision that they support. Each of these levels has different information needs given their different responsibilities, and each can be seen as major information constituents. Senior managers need summary information that can quickly inform them about the overall performance of the firm. Middle managers need more specific information on the results of specific functional areas and departments of the firm. Operational managers need transactional-level information, such as number of parts in inventory each day. Knowledge workers may need access to external scientific databases or internal databases with organisational knowledge. Production or service workers may need access to information from production machines, and service workers may need access to customer records in order to take orders and answer questions from customers. There are four main categories of systems from a constituency perspective. Transaction processing systems (TPS) are basic business systems that serve the operational level of the organization by recording the daily routine transactions required to conduct business, such as payroll and sales receipts. Management information systems (MIS) serve middle managers interests by providing current and historical performance information to aid in planning, controlling, and decision making at the management level. MIS typically compress TPS data to present regular reports on the companys basic operations. Decision Support Systems (DSS), or business intelligence systems, help managers with non-routine decisions that are unique, rapidly changing, and not easily specified in advance. DSS are more analytical than MIS, using a variety of models to analyze internal and external data or condense large amounts of data for analysis. Executive support systems (ESS) provide a generalized computing and communications environment that help senior managers address strategic issues and identify long-term trends in the firm and its environment. ESS addresses non-routine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. ESS present graphs and data from many internal and external sources through an interface that is easy for senior managers to use. Often the information is delivered to senior executives through a portal, which uses a Web interface to present integrated personalized business content. INFORMATION SYSTEMS AND TQM The importance of information technologies and the information systems function is no longer of debate among business people. The question, rather, is how an organization can take best advantage of IT in order to support its operations, add value to its products and services, and gain a competitive edge in the marketplace. To be able to perform up to such high expectations, the IS function must develop an intimate understanding of the expectations of its varied clientele. As organizations embark on their journey to be more responsive to their customers and to continuously improve the quality of their products and services, IS must do the same. Unfortunately, it seems that despite the importance of IT to the success of most organizations, the function is not proactive when it comes to actively pursuing and implementing quality principles. Surveys of IS managers found that a minority of IS managers (41%) understood the basic principles of Total Quality Management (TQM), and thought the y will beuseful to the IS function. Even in the cases where TQM principles were understood, they often were not implemented in the IS function. Total IS quality is a multidimensional concept. (Antonis C. Stylianou and Ram L. Kumar, September 2000) Dimensions Of Information Systems Quality Infrastructure Quality: The quality of the infrastructure (hardware and enabling software) that is fielded and maintained by IS—includes, for example, the quality of the networks, and systems software. Software Quality: The quality of the applications software built, or maintained, or supported by IS. Data Quality: The quality of the data entering the various information systems. Information Quality: The quality of the output resulting from the information systems. In many cases, the output of one system becomes the input of another. In that respect, information quality is related to data quality. Administrative Quality: The quality of the management of the IS function—Includes the quality of budgeting, planning, and scheduling. Service Quality: The quality of the service component ofthe IS function—includes the quality of customer support processes such as those related to a help desk. These dimensions overlap considerably, and what impacts one dimension will in many cases impact other dimensions as well. For example, a decline in infrastructure quality (for example, persistent network service interruptions) is likely to cause real or perceived problems with data and service quality. And even though in the eyes of some IS customers the distinction may be insignificant, it is nevertheless important in being able to respond appropriately. An appropriate response may include actions to address infrastructure quality (such as replacing a defective network component), data quality (such as more frequent backups), and service quality (such as improved communication on cause and resolution of the problem). So far, research on IS quality has addressed individual components of quality and not the big picture. Pearson et al.s framework for introducing TQM into the IS function, although broad, does not provide an integrated and detailed enough perspective for managing quality in key processes and products. Also, Pitt et al. present a model of IS success that is broad but incomplete. That model does not capture the variety of stakeholders affected, the interaction between IS and business processes, the administrative component of IS quality, and environmental influences on quality. An extensive literature exists on data and information quality, and software quality. Administrative IS quality, although it has not received as much attention on its own, is very similar to the quality of other management processes examined in the general concept. INFLUENCES ON INFORMATION SYSTEM QUALITY While IS quality is a general concept, there may be significant differences between organizations in terms of how quality is defined. Different organizations may emphasize different dimensions of IS quality. Environmental factors, such as industry type and the nature of competition, affect the importance of IS in the organization. Managing IS quality is more complicated in IT-intensive industries such as banking because of the large number of IS-supported processes and the high degree of integration between IS and business processes. The impact of organizational investments in IT on IS quality may vary depending on organizational factors such as culture, politics, and senior management support. Stakeholder perceptions of what constitutes acceptable quality may also vary depending on those factors. Departmental factors such as differences in leadership style, employee skills, and IT intensity also impact IS quality perceptions and management. These environmental, organizational, and d epartmental factors impact the relative importance of different stakeholder groups, the weights assigned by each stakeholder group to different quality attributes, and the metrics used to measure them. As a result, deciding how to configure and manage the IS quality program requires sensitivity to these factors. (Antonis C. Stylianou and Ram L. Kumar, September 2000) HOW INFORMATION SYSTEMS IMPROVE QUALITY Reduce Cycle Time and Simplify the production Process Studies have shown that probably the best single way to reduce quality problems is to reduce cycle time, which refers to the total elapsed time from the beginning of a process to its end. Shorter cycle times mean that problems are caught earlier in the process, often before the production of a defective product is completed, saving some of the hidden cost of producing it. Finding ways to reduce cycle time often means finding ways to simplify production steps. The fewer the steps in a process the less time and opportunity for an error to occur. Information systems help eliminate steps in a process and critical time delays. A company selling flowers by telephone or over the Web, used to be much smaller company that had difficulty retaining its customers. It had poor service, inconsistent quality, and a cumbersome manual order-taking process. Telephone representatives had to write each order, obtain credit card approval, determine which participating florist was closest to the delivery location, select a floral arrangement, and forward the order to the florist. Each step in the manual process increased the chance of human error, and the whole process took at least a half hour. A new information system that downloads orders taken in telecenters or over the Web to a central computer and electronically transmits them to local florists was installed. Orders are more accurate and arrive at the florist within two minutes Benchmark Companies achieve quality by using benchmarking to set strict standards for products, services, and other activities, and then measuring performance against those standards. Companies may use external industry standards, standards set by other companies; internally developed high standards; or some combination of the three. An outdoor clothing company used benchmarking to achieve an order-shipping accuracy of 99.9 percent. Its old batch order fulfillment system could not handle the surging volume and variety of items to be shipped. After studying Germans and Scandinavian companies with leading edge order fulfillment, the company redesigned its order fulfillment process and information systems so that orders could be processed as soon as they were received and shipped within 24 hours. Use Customer Demands to improve Products and Services Improving customer service, making customer service the number one priority, will improve the quality of the product itself. Improve Design Quality and Precision Computer aided design (CAD) software has made a major contribution to quality improvements in many companies, from producers of automobile to producers of razor blades. A computer-aided design (CAD) system automates the creation and revision of designs, using computers and sophisticated graphics software. Improve Production Precision and Tighten Production Tolerances For many products, quality can be enhanced by making the production process more precise, thereby decreasing the amount of variation from one part to another. CAD software often produces design specifications for tooling and manufacturing processes, saving additional time and money while producing a manufacturing process with far fewer problems. The user of this software is able to design a more precise production system, a system with tighter tolerances, than could ever be done manually. IMPLEMENTING AND MANAGING INFORMATION SYSTEM QUALITY In instituting an Information System quality program, lessons could and should be drawn from both successes and failures in quality programs implem