Quality management H. Sheppard Mzrma frq/ecfj (7\^) 1^ f.o. ^ox.w 027, Auckland, New Zealand. Abstract

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1 Quality management H. Sheppard Mzrma frq/ecfj (7\^) 1^ f.o. ^ox.w 027, Auckland, New Zealand Abstract There has been a management "revolution" in recent years and management that is effective and accountable has had to adapt to new market conditions to maximise success. The current style of leadership/management has developed into a progressively improving process and no doubt will continue to do so in the years ahead, as management accepts the challenge and continues to pursue quality and excellence. Customers have become more demanding, more instant, and management is more accountable than ever. With these demands, management has had to consistently explore new and better ways of improving efficiency, customer relations and of course quality returns that are stable and sustainable in relation to the market value of all the assets that are employed including intangibles. Whilst returns are important, so to is cashflow. Cashflow is a key indicator in determining management's performance. As if all this was not enough, management has also had to develop a new awareness in respect of the environment, legislative changes, the community and employment terms. The Broad Issues For many years marina operators enjoyed effective protection in their market, with demand out-stripping supply. This market phenomena has led in many instances to a false sense of security and has at times been evident in the almost indifferent attitude demonstrated to customers. Of recent years this position has moved considerably, and we now find facilities with capacity under-utilised and management struggling to determine what they should do to "sell" this surplus capacity. All too often management adopts the attitude of "buying" future business which has short and long term down side effects on both their facilities and the industry. Buying business is not an accepted

2 82 Marina measure of achieving revenue. margins is the objective. Banking dollars is one thing, but banking Yesterday's management has had to review its basis of operation and to determine what means are available for them to upgrade their method of operation in order that they can achieve the stated objectives. Whilst the matter of a business plan has been accepted for many years, there is now a clearly defined case that this becomes the living corner stone of the business, in terms of providing strategic direction over a five plus year period as well as a detailed plan for the year ahead, which will include a developed profit forecast and cashflows, together with a detailed marketing plan and an organisation strategy of how physically the objectives can be achieved. Those who have adopted the principals of "I've done it this way for years and I don't intend to change now" or "I know it all" have found or will find their job security and business viability threatened. There are many ways of describing "being successful". I recently heard it described as "if you want to be successful, it's just this simple; know what you are doing, love what you are doing and believe in what you are doing". Marketing All business operations are centred around meeting the needs of your "market". This assumes you have clearly defined "your" market. Your marketing strategy starts, ends, lives and dies with your customer. In the development of your marketing strategy it is absolutely imperative that you forget about your dreams, forget about your visions, forget about your interests, forget about what you want, forget about everything, but your customer. The challenge is learn your customer's language and then to speak the language clearly and well, so that your voice can be heard above the din, because if your customer doesn't hear you, he will pass you by. "Marketing" often brings about frustration, you must ask yourself how do I do it, how do I determine my customers demographics, his psychographics. If you are asking these questions, then you are well on your way. You are demonstrating the need to understand your customer to determine his needs and then set about trying to meet them. Give your customers not only what they want, but more than they are used to getting - this beats price wars - be innovative and different when compared with your competitors. Be humble, listen and strive for excellence, listen to your market. Customer service is not about satisfaction, it's about dazzlement. The simple way to success is simply to be unusually good.

3 Workplace Reform Marina 83 Business today is bombarded with information about the numerous ways and techniques that are available to improve the quality of management, the majority of which require some form of workplace reform. The initial reaction to workplace reform often provides an enthusiastic approach about the concepts potential to deliver competitive advantage, and many have rushed to implement a range of quality management initiatives. Such an approach to workplace reform often fails to deliver the anticipated results. Consequently, the concept can become discredited with management and workers alike, barriers to future change become higher and entrenched positions become deeper. Workplace reform is not a quick fix solution but requires commitment and effort by managers and workers at all levels, but the rewards are worth it. Properly implemented workplace reform improves company performance and profitability, and is the root to the reliability/flexibility and innovation demanded in an increasingly sophisticated marketplace. To travel this route the managers must unlock the work forces motivation, skills and intelligence by creating an environment of true participation and continuous learning. They must also candidly address the wider issues of cultural and structural impediments within the company which act as barriers to change. The message is difficult for many managers to swallow as it demands greater flexibility of thought and action. Workplace reform demands those qualities in all workers and at all levels. Managers cannot impose the concept on their staff - they must "walk the talk" if effective change is to be achieved. So this then begs the question. "What are the attributes of a good manager"? Much has been written about this topic. Australian behavioural scientist Wilfred Jarvis has researched many leaders in New Zealand and Australia. He believes the following attributes characterise successful leaders. They have the ability to: transform visions into accomplishments; establish challenging, achievable goals; specify precise performance standards; demand and display excellence; enthuse colleagues to feel and express strong, constructive energies; define and practise unambiguous values; identify and emphasise dependable meanings; earn and give trust and respect; permit and sustain two-way empathy; lead by "wholeness", not by "whatness"; enable individuals to develop and express their highest capacities; maintain sensitive, accurate communications; build and use strong teams; demonstrate versatility in leadership methods.

4 84 Marina Types of "Quality Management" In the scope of this paper, I am unable to cover the full range of management techniques that have been offered in the last 8-10 years. Accordingly, I have centred my comments to a few of the major concepts that have acknowledged worldwide acceptance. Kaizen One of thefirstof the more recent new management techniques and the key to Japans competitive success. The word means gradual and unending improvement, doing the "little things better", setting and achieving ever higher standards. Kaizen is credited with being the simple truth behind Japans economical "miracle" and the real reason that the Japanese have become the masters of "flexible manufacturing" technology - the ability to adapt processes to changing customer and market requirements and to do it fast. The Kaizen approach to management is world recognised, and is seen as being the first approach to providing an effective relationship between management and worker. No longer was the employer seen as different from the employee, they were seen as a team working together to a common end of improving performance in all aspects of business operation, and therefore improving the quality of life of all those associated with that business. Kaizen plays a role in - profit planning, customer satisfaction, total quality control programmes, suggestion systems, small group activities, just-in-time production, just-in-time information processing, systems improvement, cross-functional management, policy implementation or deployment, quality deployment, total productive maintenance, supplier relations, top management commitment, corporate culture, problem solving in such areas as labour management relations. Introducing Kaizen practices into the workplace materially increases productivity without major capital investment, can lower the break-even point and enables a company to sieze competitive opportunities quickly, in either a slow growth or fast growth economy and can work in any culture. Kaizen is the opposite of complacency. TQM and ISO 9000 TQM or Total Quality Management was probably the next major influence on management reform of recent date. This process like the others won't happen without workplace reform and that means a close partnership between management and the workers. Those who have worked through the TQM process, acknowledge that they have gone from strength to strength and that the changes have made a significant contribution to achievements, but often the timeframe to achieve this is too long. The answer to the question of an

5 Marina 85 appropriate timeframe often comes down to leadership and one must ask the question," have you got what it takes"? TQM provides the means to efficiently and effectively manage the business resources, in order to provide goods and services at the right price, at the right time and the right quantities and to specification. The ISO 9000 international standards provide a firm foundation for TQM and an assurance to the customer that the process that the firm uses to provide quality goods and services will meet the customers' needs. ISO 9000 and TQM require changes to business philosophy, culture and way the things are done. Planned correctly they compliment one another. "Quality" TQM and ISO 9000 are about quality. How do we define this word quality. Some definitions include fitness for purpose of use, the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Essentially, quality is about providing the customers stated and implied needs in their terms of price, delivery, specification and quality. Quality can be taken to mean expensive, luxurious or high specifications e.g. a Rolls Royce. However, this is wrong and in context of this paper a Ford Laser is just as capable if not more so, of exhibiting quality features. It depends on the customers perception of the needs and wants, the product or service is to satisfy. What is TQM It is set of principles, tools and procedures that provide guidance in the practical affairs of running an organisation. It can be defined as, "involving everyone in an organisation in controlling and continuously improving how work is done, in order to meet customer expectations of quality". It applies to every sector of industry including service, manufacturing, professional service, transport, public service, government, in fact all enterprises. In TQM, quality means everything to the organisation and its customers, the end users of its products and services. This includes the physical quality of the product and services, productivity, efficiency, ethics, environmental, moral issues, safety and the wise use of resources. The TQM organisation is dynamic, using strategic planning to align itself with the future, it is flexible in order to respond to changes in demand and environment. In short, it is ideally suited for success in a world where the only constant is change. TQM is fundamentally different from traditional management, some of these differences are shown in the following table :

6 86 Marina Traditional Management Needs of users of products and services defined by specialists Errors and waste tolerated if they do not exceed set standards Products and services inspected for problems, then 'fixed' Many decisions governed by assumptions and gut feelings Short-term planning based around budget cycle Control and improvement by individual managers and specialist Improvement focused on one-time breakthroughs such as computers and automations Short-term contracts awarded based on price Costing based on broad criteria Total Quality Management Customer focus, where users of products and services define what they want No tolerance for errors, waste, and work that does not add value to products and services Prevention of problems Fact-based decisions using hard data and scientific procedures Long-term planning based on improving mission performance Teamwork among managers, specialists, employees, vendors, customers, and partner firms Continuous improvement of every aspect of how work is done Vendor partnership of long-term buyer/seller obligations, based on quality and continuous improvement Activity based costing used to provide realistic cost indicators What is ISO 9000 ISO 9000 is a series of international standards which define the basic requirements of a Quality Management System for quality assurance of products and services. The standards have genetic application by focusing on how quality is provided and the process by which quality is ensured. There is a world-wide trend towards more stringent customer expectations with regard to quality. What therefore are the benefits of the ISO 9000 Quality Management System: Improvement in the Firm's Financial Performance the organisation to "get it right the first time". The standard encourages Marketing A certified quality firm, has an advantage over organisations without certification.

7 Marina 87 Customer/Firm Expectation Gap Enables a firm to close the expectation gap between what a customer wants and what the firm can provide. Suppliers/Firm Expectation Gap Enables a firm to close the gap with its own suppliers by requiring them to achieve ISO 9000 certification. Improved Communication Structure By clearly defining the roles and responsibilities of staff and providing an effective organisation structure, lines of communication within the firm will be more effective. Business Risk ISO 9000 certification is regularly audited. Measured Service The recording of non-conformancies affords the opportunity to analyse them and apply appropriate corrective actions to prevent re-occurences. Objective Evidence of Quality Quality Management Systems are audited both internally by the user and externally by the independent certification body. Responsiveness of the Organisation customers. Regular contact with and feedback from Demonstrated Commitment to Quality ISO 9000 requires the management representative for quality matters to report directly to the Chief Executive Officer. Quality of Employees Life In a quality organisation, the quality of a worker's life improves along with job satisfaction and motivation. Business Process Re-Engineering TQM and ISO 9000 certification can be seen as moves towards improving management and business opportunities, and normally requires some major changes within a business. Business Process Re-Engineering is used when firms wish to look at the way of doing their business. The approach to Business Process Re-Engineering is to concentrate on just some of the continuous core processes which go on in any business. These consist of those activities which are valued by the customer, the shareholder or the regulator and are therefore critical to get right. They are the processes which are required for success in the chosen sector of the business, they are those processes that the business strategy has defined as critical to beat the competition. Cost, quality, cycle time and service are the parameters which we seek to optimise and balance in our analysis of the core business process. It

8 88 Marina is a great temptation to look for quick fixes rather than long-term solutions. What is needed is to re-think the way that business is done in a holistic way to improve responsiveness to the customer. The tactics are to initially identify the few core business processes which exist in any organisation and which the marketplace will value and which offer competitive distinction, these then should be worked through the framework of Business Process Re-Engineering. Business Process Re-Engineering is an integrated approach to challenging the fundamental framework in which the organisation conducts its business. The Way Ahead Implementation of any of the strategies dealt with above will a place a short-term need for expertise and knowledge on the firm. This is where a consultant can be called in to help. Consultants can provide experience at different points in your programmes development from start-up through to implementation. In Choosing your Consultant look for the following qualities: Flexibility Make sure consultants adapt their programme to your organisation instead of the other way around. Experience Some consultants have only recently jumped on the quality bandwagon, but a proven record is the best credential. Do not expect an exact "fit". You need to ensure that your programme is specifically designed for you. It should not be a carbon copy. Compare Value Consider the value that different consultants will add to your organisation, not just the cost. Choosing the lowest bidder for the most important change your organisation will undertake, may not be the best solution. Watch for gimmicks Anyone promising a quick path or a magic bullet will not necessarily help you create lasting continuous improvement. What is the true value of consultant services? Consultant fees will be a minor part of the total cost of introducing your Quality Management System. You will spend much more on the time executives, managers and staff take to learn how to use and implement the Quality Management Systems. Although this is a "different colour of money" from consultant costs, it is just as real. The true value of consulting may be measured in how it will help you control this greater cost, and whether it will help you gain success.