TOTAL QUALITY MANAGEMENT: A MODEL FOR CONTINUOUS QUALITY IMPROVEMENT Developments In Business Simulation & Experiential Exercises, Volume 20,1993 127 TOTAL QUALITY MANAGEMENT: A MODEL FOR CONTINUOUS QUALITY IMPROVEMENT Lee A. Graf, Illinois State University Masoud Hemmasi, Illinois State University Michael W. Winchell, Illinois State University ABSTRACT This paper outlines an eight-step process for utilizing customer input as a critical ingredient to be used in Total Quality Improvement programs. The details of and implications associated with each step are discussed. INTRODUCTION The search for quality will continue to be the most important consumer trend of the 1990s as consumers demand higher quality products than ever bef ore (Rabin, 1983). According to the prevailing Japanese philosophy, quality is “zero defects--doing it right the first time” (Crosby, 1979). An alternative view of quality that would apply to both material goods as well as intangible services focuses on a comparison of expectations with performance (Parasuraman, Zeithami, & Berry, 1985). That is, quality is a measure of how well the goods/services delivered match customer expectations. The purpose of this paper is to outline methods of measuring and monitoring customer perceptions as an input to a TOM program. In addition, the paper will present a systematic procedure for utilizing customer satisfaction data as a means of continuous quality improvement. FOSTERING TOTAL CUSTOMER SATISFACTION This section outlines a highly pragmatic methodology aimed at fostering continuous quality improvement. The framework presented here involves a multi-stage process that is designed to utilize customer feedback as its primary input and lead to total customer satisfaction. The first step in the process is to identify the customer--the party receiving the output of effort. Customers can be internal (i.e., other units within the organization) or external, (i.e., outside constituencies). When the number of customers is large, the process may be streamlined by concentrating only on those accounting for more significant portions of business/output. The second step involves identifying the product that the organization/unit creates or the service it provides. While this may appear to be obvious, it in fact is not, especially in the case of services and non-tangible products. This step is particularly important when the customer in question is an internal client. The focus of the third step is determining what the customer considers as important. That is, emphasis is placed on what the customers need and expect, not on what the seller thinks customers want. Any failure to meet these requirements is viewed as a defect. This step begins with developing a fairly comprehensive list of salient product! service attributes. For tangible goods these specific aspects or characteristics of a product may include such features as physical appearance of the product, adherence to performance specifications, timely delivery of product, and product warranty. For intangible services, according to Parasuraman, Zeithami, & Berry (1985), salient attributes may include such characteristics as reliability (consistency of performance and dependability), access (approachability and ease of contact), courtesy (politeness, respect, and friendliness), credibility (trustworthiness, believability, and honesty), and tangibles (appearance of personnel and physical’ facilities). Once a list of relevant product/service attributes is developed, customers must be surveyed to discern the relative importance of each attribute using a rating scale (e.g., 1 = not at all important, 7 = extremely important). Determining actual performance relative to each of the above attributes is the fourth step in the process. Here the current level of satisfaction with the company’s performance in meeting customers expectations’ needs relative to each salient product/service characteristic is obtained via similar rating scales (1 = extremely dissatisfied, 7 = extremely satisfied). In cases where the company is not a sole source/supplier of the product/service, the customer also could be asked to evaluate competitors’ performance on the same salient characteristics. The resulting information helps identify the company’s real strengths and weaknesses from the customer’s viewpoint and in relation to those of the competition. It is noteworthy that some quality-oriented companies, such as Motorola and Fairmont Minerals, not only recommend benchmarking of competitors, but also any other company that may be using similar processes. Step five involves combining importance and performance ratings obtained in steps three and four into a two-dimensional framework with the importance scale representing the vertical axis and the performance scale constituting the horizontal axis. Next, the mean importance and performance values for each attribute are plotted on the resulting importance-performance grid. The outcome of this step is a parsimonious framework with many practical advantages. It will provide the organization with information on the product/service characteristics to which customers attach the greatest importance and the qualities that are viewed by customers as most problematic. The outcome of the analysis will be useful in establishing priorities for managerial action as well as allocation of resources. Step six requires employee involvement in using the results of the data generated above in order to address identified problems. Team structures such as quality circles and cross-functional groups are widely used mechanisms for facilitating quality improvement efforts. Armed with the information generated in step five, team members can invoke systematic problem solving to not only understand root causes of problems, but also devise ways of eliminating them. The problem solving approach used here first focuses on defining the process for doing the work as it is currently performed. This involves specifying the ordered sequence of human and machine operations that are currently being used to produce the end result. Next, the quality circle/team working on the problem will shift its focus to modifying the process to improve the attributes of the product or service found by customers to be problematic. In the course of this procedure, attempts are made to mistake-proof the process and eliminate waste. To mistake-proof the process, the team must identify the types of errors (or potential defects) that occur at each step of each task. Then, methods should be found to lower the probability that such errors will reoccur. These could include measures to simplify key tasks, employee training to eliminate specific errors, standardizing procedures and formats, and providing work aids. Just as important as mistake proofing is the elimination of waste (unnecessary delays and other wasteful activities). Waste includes any non- value-added task or activity as well as essential tasks performed at less than peak efficiency. The outcome of this step (step six) should include a flowchart representing the revised process, measurement points for bath defects and cycle time, and redefinition of quality and timing of inputs based on process revision. Step seven involves integration of suppliers into the system. Often time’s quality problems result from using defective, low-quality, or high- variability materials and parts as inputs into the operation. The process revision described in step six may suggest modification of inputs into the process. As such, required changes regarding quality and timing of inputs must be communicated to suppliers, both internal and external. The final step (step eight) is aimed at achieving continuous quality improvement and ensuring continuous customer satisfaction. This step is based on the realization that product and service demands of customers are not static. Customers’ changing needs and expectations have to be continuously/periodically monitored, anticipated, and responded to. Table of Contents Volume 20, 1993 Dominant Personality Types and Total Enterprise Simulation Performance Shelf Wars: A Grocery Channel Simulation Shared Cultural Perspectives: An Experiential Exercise Utilizing International Students to Globalize the Classroom An Instrument for Investigating the Effectiveness of Teaching Methods in the Business Policy and Strategy Formulation Course Providing Better Trained Graduates for Accounting Employers The Ambition Gradient Approach to Evaluation of Computer Simulation Game Team Performance Alphatec: A Negotiation Exercise with Logrolling and Bridging Potential Using the Ideafisher Idea Generation System as a Decision Support System in Marketing Strategy Courses A Dynamic Market Share Allocation Model For Computerized Business Simulations Multi-Cultural Adaptability Using Experiential Learning in a Graduate Course Development of Experiential Applications in HRM: Practicing What Preach and Preaching for Practice Linking Students and Business Leaders Through Portfolios Debriefing International Experiential Learning Exercises: Road Signs for Effectiveness Sales Manager: A Simulation Modeling Interactive Effects in Mathematical Functions for Business Simulations: A Critique of Goosen's Interpolation Reducing the Complexity of Interactive Variable Modeling in Business Simulations Through Interpolation Antecedent Biases of Experiential Learners: Trainee Occupation and Subgroup Diversity Pax in Terra Sancta: Simulating the Middle East Peace Negotiations A Multiple Regression Case In Experiential Learning Changes in Ethnocentric/Geocentric Orientation by Business Students after Exposure to a One Summer Course in International Marketing's A Systematic Approach to the Development and Evaluation of Experiential Exercises Entrepreneurs Evaluate Experiential Education A Linear Programming Approach to Open System Total Enterprise Simulations Reflecting Leader Behavior from the Looking Glass, Inc. Simulation Linking Cognitive Styles, Teaching Methods, Educational Objectives and Assessment: A Decision Tree Approach Restructuring Management Education in Post-Communist Countries: How Western Experts Can Help Managerial and Cultural Pre-Conditions for Superior Performance in a Global Setting: An Experimental Study with the Aid of Business Games Multiple Industries in Computerized Business Gaming Simulations Content or Process? - Content and Process! Some Observations and Reflections About Management Education in Central Europe Out-of-Class Experiences to Promote Volunteerism Enacting the Linguistic Consciousness of the Modern Managerial Mind: Post-Modernism and Experiential Learning Intergrating Experiential Exercises into the College Curriculum: The Case of Internationalizing the Business Curriculum Simulation Marketing Oversights Incorporating Advertising Creative Strategy into Computer-Based Business Simulations The Dynamics of a Partnership Between Business and Education Collaborative Education Done Globally Experiential Systems Analysis CADPLAN: A Simulation for Comparative Advertising A Doctoral Symposium: Preparing Students for Conference Behavior Comparing the Simulation with the Case Approach: Again! Total Quality Management: A Model for Continuous Quality Improvement The Quality Audit: An Experiential Exercise for Business Students Extending the Reach of Simulations: DECIDE Heads for the Inner City Lessons Learned from a Customized Management Development Simulation The Foreign Exchange Spot Trading Simulation Using Lotus 1-2-3 to complete a Triple Play in a Simulated Competition International Business Education: Is Enough Being Done? Matching of Student-Teacher Cognitive Style as a Factor in Student Success in an Introduction to Information Systems Course Breathing (More) Life into the Case Approach Lord of the Flies: A Live Case Approach to Leadership Cooperative Case Studies: Experiential Tools for Teaching Business Problem Solving Tools Strategy Simulations in Context: An Evaluation of Key Dimensions The Distribution Channel Game Evaluation of a Simulation Game as an Education Tool for Utility Professionals The Relationship Between Total Enterprise Simulation Performance and Learning Total Quality Management does not Happen by Magic, but it can be Taught Using a Pedagogical Methodology that Utilizes Magic Effectively Preparing Students for Careers in a Global Environment by Integrating Total Quality Management Thoughout the Business Curriculum An Empirical Investigation of Cognitive and Performance Consistency in a Marketing Simulation Game Environment Using MARSGAP with LAPTOP: (A Marketing Simulation Game Analysis Program) with LAPTOP: A Marketing Simulation Adapting TQM Implementation to Organizational Level An MBA Business Simulation: Executive Interaction Experiential Exercises and Pedagogy Track Workshop: Experiencing Cultural Diversity in the Classroom (and the Hotel Meeting Room) Closing the Gap between Corporate and National Culture The Dynamic Manufacturing Company The Use of Experiential Techniques in Corporate Training The State of Simulation Gaming in Easter European Countries- Principally Russia An Experiential Exercise in Cross-Cultural Training Valuing Differences: A Conceptual Framework Demonstration of an Experiential Exercise Effectively Using Experiential Learning to Impart TQM Concepts in a High Technology Environment The Older Worker Questionnaire: An Exercise Concerning Older Worker Stereotypes and Behaviors The Crime Fighting Task Force: An Exercise in Organizational Politics Welcome to the Party! An Expression of Vocational Preference Experiential Exercise for Imparting Cross-Cultural Appreciation Six Swift Simulations on Globalization Overview of BASF Delegate Program