Passing Thoughts

One has heard that in order for an organization to service today, it must meet and exceed the expectations of its customers. Organizations are told to be customer focused and driven with all of their systems designed to meet customer needs. On the personal front people only go back to restaurants that full satisfy them and they shop regularly at stores that meet their needs. They fly on airlines that provide friendly, efficient service. Industrial customer has the same range of emotions as a personal customer to being disappointed, cheated or shortchanged. The industrial customer’s response to poor service is similar – withdrawal of business and buying elsewhere. In the context of Nepal, it has happened in many established businesses. For example, Royal Nepal Airlines, Sajha Yatayat, Nepal Bank Limited, Gorkhapatra Sansthan to name few.

Royal Nepal Airlines has started its operation several decades ago and its first international flight was to Bangkok. Similarly Thai Airlines has started its operation at the very same day and its first international flight was to Kathmandu. At present the existence of Thai Airlines and its operation is world class and covers most of the popular destinations around the globe, whereas Royal Nepal Airlines in surrounded with controversies, has few airlines on hand and covers few destinations.

Sajha Yatayat was successful in its early days and created its brand image as being good service provider. At present, when we travel through long route of Nepal, we can seen one in three bus service being from Makalu or Agnee Yatayat. It is obvious we can ask ourserlves where is Sajha Yatayat these days or what happened to Sajha Yatayat? Similarly, Gorkhapatra Sansthan is facing high competition. Gorkhapatra Sansthan used to be only newspaper provider for the kingdom of Nepal. Now there are various other newspaper providers and they are successful too. In the past, where people liked to read Gorkhapatra, now love to read Kantipur, Spacetime Daily or Nepal Samacharpatra. Obviously we can straightaway raise the question, why it happened? Regarding Nepal Bank Limited, we can ask ourselves how come Nepal Bank Limited was not top ten tax provider to strengthen Nepalese economy. How come foreign banks were included in the top ten taxpayers of 2057/58? (Business Age, September 2001, Vol.3 No.9)

Do we ever realize that we should implement Total Quality Management (TQM) in these organizations? When we go back to history, there are successful examples of TQM implementation and its success. According to Henricks, M (1997), W. Edard Deming was the first American quality expert to tech Japanese managers methodically about quality. Leaders of companies that were to become household names in the world attended his messages including Sony, Nissan, Mitsubishi and Toyota. Meeting with Japanese leaders, Deming learned they were unable to feed or clothe their people because of the lack of foreign exchange. Before the World War II, "Made in Japan" was synonymous with junk. Deming told the Japanese they would have to improve the quality of their goods if they were to get the foreign exchange they needed. The result was the "Deming Method," a rigorous quality program that has driven Japanese industry ever since. Dr. Deming helped them to cut through the academic theory, to present the ideas in a simple way which was meaningful right down to production worker levels. Today, Japan’s Deming Prize is the most highly sought-after industry award in the country, and the model for the American Baldridge Award.

Henricks again mentioned that belatedly, after Japanese goods had driven American manufacturers out of many industry categories. America began its own quality movement, which has become known as "Total Quality Management," or TQM. TQM represents an organized effort to emulate in America what has worked so will in Japan.

Now it is essential to understand the meaning of Total Quality Management. Different authors have described TQM in various different manners, Rao et. al. (1996) describes, "TQM is the application of quantitative methods and human resources to improve the material and services supplied to an organization all the processes within an organization, and the degree to which the needs of the customer are met, now and in the future". Similarly, lves, B (1992, Pg.4) stresses, "TQM is an approach to improving the competitiveness, effectiveness and flexibility of a whole organization ... a way of planning, organizing and understanding each activity and it depends on each individual at each level. TQM is a way of bringing everyone into the processes of improvement". Another definition from Ms. Schlenker, J.A (1997, Pg.2) expresses, "The TQM philosophy of management is customer-oriented. All members of a total quality management (control) organization strive to systematically manage the improvement of the organization through the ongoing participation of all employees in problem solving efforts across functional and hierarchical boundaries."

From the above-explained definitions we can concluded that TQM lies on three main concepts;

Comparing one company’s performance with that of another is another reflex of TQM. Competitive benchmarking is a continuous management process that helps firms assess their competition and themselves and to use that knowledge in designing a practical plan to achieve superiority in the market place. To strive to be better than the best competitor has to be the target of every business. "The measurement takes place along the three components of total quality program – products and service. business processes and procedures, and people" (John, B., 1992, Pg. 30). When done correctly competitive benchmarking produces the hard facts needed to plan and execute effective business strategies that fully satisfy agreed customer requirements.

According to Bank, J (1992), Scandinavian Airlines Systems (SAS) provides a clear illustration of customer focus. In 1981 Jan Carlzon became president of SAS and began to analyze why his company was about to lose $20 million. By looking at customer requirements like introduction of frequent flyer points, cheap airfares, more cheap flights to popular destinations and meeting them head on Carlzon turned the loss making threat into a $54 million profit in one year.

Rao et. al (1996) has mentioned that, in 1977 David Kearns was made president of Xerox. By the late 70s, Kearns began to realize the problems facing Xerox. Xerox leased many of its machines, but the lease base was shrinking rapidly. Margins had dropped from 70 percent to 10 percent. The Japanese had taken over the low end of the market, and in 1981 Canon began to attack the middle-volume portion of the market. But the Xerox could not understand how the Japanese were able to price their products so low. Kearns dispatched a team to Japan and found (lves, B., 1992, Pg. 2):

Again, Rao et. al. (1996) has illustrates that in 1989 Kearns came up with the concept of improving business effectiveness based on two tools: benchmarking and employee involvement. The study of the Japanese affirmed that they had to look at the products built by competitors. Kearns had committed to Total Quality Control and end up winning Deming prize. Kearns was able to manage a remarkable turnaround in its business, with increase in market share, revenues and profits.

Another best way to discover best practice and bring that practice back to one’s own company is through employee participation. The sticky yellow notes called Post-it notes, one of 3M most successful global products, came from Arthur Fry and Ben Siler, two 3M employees boot legging (Rao et. al. 1996, Pg.464), Rao et. al. has also mentioned, trying reward into organizational performance is a way of ensuring that employees care and work to improve organizational performance.

In the last decade most major companies have launched full-scale quality programs. A few of them are the following (Bank, J., 1992, Pg. 22):

In general, whenever we raise questions on quality management in any organization, we will ask ourselves whether it has been ISO registered or not? ISO registration is not an end in itself. This might be a mistake that many make. Rather it is very important element in a total quality environment. It provides a structure for the quality process, provides a publicly recognized benchmark, a measurement systems and a means to manage the business more effectively. What this means, is that there must first be an awareness of the importance of quality to the organization, the process required to try to obtain it and the need to continually improve. There must be recognition of what the costs are in not being a quality organization. Most importantly, there must be an emphasis placed on the role of each employee in the process and the recognition of each employee’s contribution. The obvious answer is that if an organization wants to continue to be successful, it needs a business approach that will assist it and help distinguish it from its competitors.

Finally, TQM can affect almost every area of a firm’s operations, but it rests on one principal idea: It calls for continually improving quality by using statistical measures to track both problems and the results of efforts to fix those problems. It helps many businesses greatly cut costs by, among other things, reducing waste and scrap while boosting customer satisfaction.

We have understood the principles of TQM and read about its success stories, why not we should take an initiative to implement it before it gets too late. There are many other businesses besides the above-mentioned organization, which are struggling to survive. Let’s forget about political instability and existing bureaucratic environment. We have got talents, resources and infrastructure to be successful and it is certain we can do it.

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Are we stressing on Total Quality Management?

By Anil Thapa