A TQM Implementation Model for Enhancing Competitiveness of Indian Manufacturing Firms

International Journal of Performability Engineering, Vol. 9, No. 4, July 2013, pp. 387-396. RAMS Consultants Printed in India A TQM Implementation Model for Enhancing Competitiveness of Indian Manufacturing Firms NITIN SINGLA 1*, DINESH KHANDUJA 2, and T. P. SINGH 3 1 Assistant Professor, Department of Mechanical Engineering, Baba Banda Singh Bahadur Engineering College, Fatehgarh Sahib, Punjab, INDIA. 2 Professor, Mechanical Engineering Department, NIT Kurukshetra, Haryana, INDIA. 3 Director, Symbiosis Institute of Technology, Symbiosis International University, Pune, INDIA. (Received on April 27, 2012, revised on May 28, 2012 and January 03, 2013) Abstract: Many firms have arrived at the conclusion that effective TQM implementation can improve their competitive abilities and provide strategic advantages in the marketplace. There are many approaches used for the implementation of TQM in the industry. These approaches are either based on number of National Quality Awards (NQA s) as developed by the governments of various countries or on the basis of frameworks as provided by various researchers. This paper tries to develop a comprehensive list of Critical Success Factors for TQM implementation in Indian industries by doing a comparative study of 21 major National Quality Awards and 14 frameworks as developed by various researchers. Then, using Principal Component Analysis, the paper proposes a new model for TQM implementation, which can be significantly useful for achieving manufacturing excellence and thus adding to the competitive abilities of the organizations. Keywords: Total quality management (TQM), critical success factors (CSFs), national quality award (NQA), Indian manufacturing industry, principal component analysis (PCA) 1. Introduction For more than six decades after independence, the companies in India have been enjoying a protected market with virtually no competition. But in this era of globalization and competition, manufacturing industries in India need to develop competitive strategies and focus on customer satisfaction. TQM is one such strategy which has received great attention in last two decades. There are number of frameworks /TQM Models that have been proposed by various researchers for TQM implementation and these are either totally conceptual in nature i.e., not empirically tested or contains an incomplete set of TQM CSF s/elements. In this paper, a TQM framework has been proposed after a comprehensive review of literature, which covers all the important TQM implementation CSF s derived from various National Quality Awards and the frameworks as proposed by various researchers. The proposed framework was then tested for its reliability and validity. Further the validated framework, after pretesting, was put to Principal Component Analysis to propose a TQM model, implementing which the Indian organizations can move towards achieving manufacturing excellence. 2. Review Of TQM Frameworks An extensive literature review shows the presence of award based frameworks as well as researcher based frameworks. Former are meant mainly for the organizations seeking * Corresponding author s email: nitin.singla@bbsbec.ac.in 387

388 Nitin Singla, Dinesh Khanduja, and T. P. Singh recognition and there are hundreds of National Quality Awards existing in different categories, including renowned ones like Malcolm Baldrige National Quality Award (MBNQA) of USA, Deming Prize (DP) of Japan, European Quality Award (EQA). Researcher based frameworks have been developed by the renowned researchers due to their vast experience in the field of TQM. The first survey which attempted to identify the critical success factors of TQM was done by Saraph et al. [1]. Some other important frameworks given by researchers include the framework by Flynn et al. [2] and by Ahire et al. [3]. Thus, a large number of frameworks, award based as well as researcher based, are available in literature for the manufacturing units to assess their own level of TQM implementation and therefore making it difficult for the organizations to decide upon which set of CSF s to choose. Table 1 enlists the various frameworks based on National Quality Awards which are compared in this study. Table 1: Award Based National Quality Awards National Quality Award Malcolm Baldrige National Quality Award [4] Deming Prize [5] European Foundation for Quality Management [6] Rajiv Gandhi National Quality Award [7] IMC Ramakrishna Bajaj National Quality Award [8] Japan Quality Award [9] Costa Rica Excellence Award [10] South African Excellence Award [10] Golden Peacock National Quality Award [11] CII Exim Business Excellence Award [10] Jordon: King Abdullah II Award for Excellence [10] Australian Business Excellence Award [10] Singapore Quality Award [10] Canadian Award for Excellence [10] The National Quality Award of Brazil [12] The Taiwan National Quality Award [13] The German Quality Award [14] Fiji National Quality Award [15] The Swedish Quality Award [16] Thailand Quality Award [17] Dutch Quality award [18] Nomenclature MBNQA DP EFQM RGNQA IMCRBNQA JQA CREA SAEA GPNQA CII Exim BEA JAFE ABEA SQA CQA NQAB TNQA GQA FNQA SQA TQA DQA 3. TQM Frameworks: A Comparison Table 2 shows a comparison of various National Quality Awards (NQA) with respect to 26 different CSFs of TQM implementation. Symbol X in front of particular CSFs signifies its inclusion in a particular National Award Category. The last column of the table signifies the frequency of occurrence of a particular CSF in all the National Quality Award categories taken together. The Table 2 depicts that the CSFs, which get maximum frequency of occurrence of 21 are Process Flow Management and Strategic Quality Planning. The CSF s of Top Management Support, Education and Training, Customer Orientation, Employee Empowerment & Involvement, Internal Quality Results and External Quality Results have also got a good score of 20 out of 21.

A TQM Implementation Model for Enhancing Competitiveness of Indian Manufacturing Firms 389 Similar research by Singla et al. [19] gives a comparison of various researcher based frameworks Table 2: Comparison of Various National Quality Awards MBNQA DP EFQM RGNQA IMCRBNQA JQA CREA SAEA GPNQA CII Exim JAFE ABEA SQA CQA NQAB TNQA GQA FNQA S QA TQA DQA Frequency of Occurrence Top Management Support X X X X X X X X X X X X X X X X X X X X 20 Education & Training X X X X X X X X X X X X X X X X X X X X 20 Vision & Plan Statement X 01 Customer Orientation X X X X X X X X X X X X X X X X X X X X 20 Supplier Quality Mgmt X X X X 04 Employee Empower & Involvement X X X X X X X X X X X X X X X X X X X X 20 Process Flow X X X X X X X X X X X X X X X X X X X X X 21 Management Reward & Recognition X X X X X X X X X X X X X X X 15 Benchmarking X 01 Strategic Quality X X X X X X X X X X X X X X X X X X X X X 21 Planning Information, Evaluation X X X X X X X X X X X X X 13 & Analysis Product Design X X 02 Product Quality X X X 03 Unity of Purpose X X 01 Internal Quality Results X X X X X X X X X X X X X X X X X X X X 20 External Quality Results X X X X X X X X X X X X X X X X X X X X 20 Quality System Improvement X X X 03 Organization X X 02 Standardization X 01 Maintenance X 01 Future plans X 01 Impact on Environment X X X X X X X X 08 Resources X X X X X X X 07 Market Focus X X X X X 05 Innovation & X X 02 Technology Knowledge Management X 01 Fourteen different frameworks have been compared in the study and the CSF of Top Management Support has got the maximum Score out of all the compared 26 CSFs. The CSFs of Education & Training, Customer Orientation, and Information, Evaluation & Analysis, have also got a good score, which shows that importance of these CSFs is also emphasized by maximum researchers. Thus after a detailed study of award based frameworks and research based frameworks (as done by Singla et al. [19]), the following CSF s /Elements of TQM (along with the coding used) were derived and thus used for proposing a TQM implementation model in this study: Leadership (LEADER), Education & Training (EDU_TR), Customer Orientation (CUST_OR), Supplier Quality Management (SUPP_QM), Employees Empowerment and Involvement (EMP_EPW), Process Flow Management (PRO_FLO),

390 Nitin Singla, Dinesh Khanduja, and T. P. Singh Rewards & Recognition (REW_RECO), Benchmarking (BENCH), Strategic Quality Management( ST_QM), Evaluation and Analysis (EVAL_AN), Product Design (PROD_DES), Internal Quality Results ( INT_QLTY), External Quality Results (EXT_QLTY). All the above mentioned elements got a good score from the view point of various National Quality Awards and various researchers in the field of TQM. The CSF s of Vision and Plan statement (VIS_PLAN), Statistical Process Control (STAT_PC), Scientific approaches to Decision Making (SC_DEC), Product Quality (PROD_QLT), Perceived Quality Market Outcomes (PER_QLT), Unity of Purpose (UNI_PUR), Quality System Improvement (QLT_SYS), got a low score from NQA and researchers perspective, but they were also added due to their importance with respect to Indian manufacturing organizations as suggested by various academicians in the field of TQM and practitioners from the group of surveyed Industry. 4. Research Methodology A questionnaire survey was used to obtain data from 115 small, medium and large scale manufacturing firms in the northern region of India covering the states of Punjab, Haryana, Himachal Pradesh, Uttar Pradesh, Delhi and the Union Territory of Chandigarh. A total of 210 industrial enterprises were selected out of which only 115 responded to the questionnaire thus making a response rate of 54.7%. Part I of the questionnaire consisted of the basic and background information of the organization to determine the fundamental issues like type of industry, size of industry etc. The second part of the questionnaire consisted of the 177 statements about the various CSF s of TQM derived as mentioned previously. The respondents were asked to give score to a particular CSF on a five point Likert Scale, with ratings ranging from 1 (Strongly Disagree) to 5 (strongly agree). Data collected was then analyzed using a statistical software system called SPSS version 11. 5. Profile of the Respondents The 115 participating companies representing North India manufactured wide variety of goods like electric goods, electronic instruments, textiles, chemicals and pharmaceutical goods. Out of these 115 companies, 97 were privately owned, 12 were public and 6 were joint venture. Nearly 30% of the companies were small scale enterprises, 37% medium scale and 33% large scale. 53% of the respondents were graduate while 35% were prost graduate, 10% were having a diploma certificate and only 2 % were having some other degree. In total 105 of the total organizations replied yes to the question Do you believe in TQM philosophy and 97% of the total respondents were having ISO 9001:2000 certificate. 6. Pretesting of the Measurement Instrument The SPSS 11.0 software was used for testing the reliability, validity, sampling adequacy, initial screening and for performing the Principal Component Analysis. Tests for Reliability Internal consistency of reliability for an instrument is measured by calculating reliability coefficient also known as Cronbach s coefficient alpha (α). Generally, coefficient alpha of 0.70 or more are considered acceptable [20]. In the present case value of reliability coefficient ranged from 0.7213 to 0.9168 for all the 20 CSF s, which indicates the high level of reliability of scale and their items.

A TQM Implementation Model for Enhancing Competitiveness of Indian Manufacturing Firms 391 Sampling Adequacy The Sampling adequacy was measured using Kaiser-Meyer-Olkin (KMO) index [21]. The KMO value must be greater than 0.5 for any factor analysis to yield accurate results, which in the present case is 0.761 and thus factor analysis should yield reliable factors. Initial Screening Before going ahead with the Principal Component analysis, communalities present within the variables are required to be checked, which measure the proportion that each variable has in common with other variables. In this case, communalities vary from.872 to.616 and thus all the communalities are neither too low nor too high, which shows that the factor analysis will yield good and accurate results. The correlation matrix was also obtained and thus analyzed to find out which set of variables cluster together, if any. It was found that the correlation coefficient was <0.9 for all the variables and thus indicates the absence of multi-co linearity in the data. 7. Principal Component Analysis/Extraction of Principal Components Now to yield a TQM model for Indian manufacturing organizations, Principal Component Analysis (PCA) was used. PCA is basically used to reduce the dimensionality and the number of variables in a measurement instrument. Extraction of Principal Components is shown in Table 3. It explains the total variance and shows the Eigen values thus obtained, i.e., the variance on the new factors that was successively extracted by principal component analysis. The proportion of total variance and the cumulative % in all the variables accounted for by that factor is also given in the successive columns. The Table shows twenty factors, under the heading of Initial Eigen values. The other part of the table shows the extraction sums of square loadings. It can be seen from the table that successive Eigen values rapidly drop off in importance. For example, the first component accounts for 9.388 of the original 20 factors, i.e., 46.94 percent, and the subsequent components account for much less. The decision of how many factors to retain is often subjective, but two methods are generally used. In the first method as proposed by Kaiser [22], the factors having eigen values greater than 1 are considered significant and all the factors with eigen values less than 1 are considered insignificant and disregarded. In this study, using this criterion, we retain four factors (principal components), as can be seen from above table, and these cumulatively account for 73.45 percent of the total variance. In the second method known as Cattell Scree test, which is a graphical method, as proposed by Cattell [23], (Figure 1), the components are plotted on the x-axis and the corresponding eigen values on the y-axis. 10 Scree Plot 8 6 4 Eigenvalue 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Component Number Figure 1: Scree Plot As one moves to the right, toward later components, the eigen values drops. When the drop ceases, the curve makes an elbow and all the components after the one starting the elbow are dropped. But it is not easy to make the judgment based on the scree test and

392 Nitin Singla, Dinesh Khanduja, and T. P. Singh moreover picking the elbow is very subjective in nature, particularly if a curve has multiple elbows. In our case thus we have taken the Kaiser criterion as our basis for the selection of number of factors, so we have retained four factors for further analysis in this study. Table 3: Eigen values Obtained using PCA Total Variance Explained Initial Eigen values Extraction Sums of Squared Loadings Component Total % of Variance Cumulative % Total % of Variance Cumulative % 1 9.388 46.941 46.941 9.388 46.941 46.941 2 3.071 15.356 62.297 3.071 15.356 62.297 3 1.134 5.672 67.969 1.134 5.672 67.969 4 1.005 4.981 73.450 1.005 4.981 73.450 5.745 3.724 76.174 6.590 2.952 79.127 7.549 2.744 81.870 8.490 2.451 84.321 9.478 2.388 86.709 10.461 2.304 89.013 11.413 2.067 91.080 12.342 1.712 92.792 13.278 1.389 94.181 14.233 1.163 95.344 15.224 1.120 96.464 16.203 1.013 97.477 17.144.719 98.196 18.136.682 98.878 19.120.600 99.478 20,104.522 100.000 7.1 The Component Matrix As shown in the Table 4, the component matrix gives the factor loadings, which is the main output of PCA. The factor loadings in PCA are basically the correlation coefficients between the variables and the extracted factors. Factor loadings which are above 0.6 are usually considered high and those below 0.4 are considered low. It can be seen from the table that first factor has got high loadings from the four variables namely Vision and Plan statement, Process Flow Management, Strategic Quality Management, and the Quality System Improvement. As all these variables load on the same factor, they have been clubbed together and are thus given the combined name of Process Management & Planning. Similarly, variables of Customer Orientation, Product Design, Product Quality and Perceived Quality Market Outcomes are strongly associated with the second factor and thus after being clubbed, they are given the name of Customer Focused Performance. The third factor of People Management including Partner Development includes the variables of Leadership, Education & Training, Supplier Quality Management, Employees Empowerment & Involvement, Rewards & Recognition and Unity of Purpose. Lastly, the fourth factor (named as Information & Analysis/Business Results) includes the CSF s of Statistical Process Control, Benchmarking, Evaluation and Analysis, Scientific approach to Decision Making, Internal Quality Results and External Quality Results.

A TQM Implementation Model for Enhancing Competitiveness of Indian Manufacturing Firms 393 Table 4: Component Matrix for the Four Extracted Factors Component 1 2 3 4 LEADER.306 9.919E-02.852.377 EDU_TR.191-5.150E-02.715.111 VIS_PLAN.708 -.131 2.973E-02.403 CUST_OR.113.781 -.256.102 SUPP_QM.516-2.279E-02.819.163 EMP_EPW.322 3.516E-03.787-4.206E-02 PRO_FLO.827 4.132E-02.138 -.176 STAT_PC.415-4.008E-03.278.766 REW_RECO -8.853E-02.261.908.104 BENCH -.114 -.118-3.433E-02.776 ST_QM.812 1.549E-02.148 -.253 EVAL_AN -.202 -.172 7.395E-02.909 SC_DEC.215.188.358.756 PROD_DES -7.308E-02.845 7.082E-02-2.901E-02 PROD_QLT.113.718 -.414-3.666E-02 PER_QLT.224.692 -.351 -.156 UNI_PUR -.175 3.138E-02.800-5.324E-02 INT_QLTY.405 7.298E-02 -.239.647 EXT_QLTY -.090.104 -.265.784 QLT_SYS.731 8.443E-02 -.231.394 8. Proposed Model of TQM Implementation Thus through Principal component Analysis, it was seen that the TQM implementation in the Indian manufacturing firms can be made successful by implementing these four components which can also be said as four pillars of TQM. The whole list of 20 CSF s of TQM initially derived from literature thus has been divided into theses four components, which is shown in the form of a TQM Implementation Model in Figure 2. Figure 2: The Proposed Model of TQM Implementation

394 Nitin Singla, Dinesh Khanduja, and T. P. Singh The first factor which is given top priority by Principal Component Analysis is Process Management and Planning. It is important from the view point that proper planning and management of processes add value to the processes, increase quality levels, and raise productivity [24]. In a firm, the management and planning of processes can t go without a formal vision and plan statement. A vision and plan statement is something which describes how a firm wants to be seen in its chosen business. Another important CSF which is included under the head of Process Management and Planning is strategic quality management which aims to set clear priorities establish clear targets for improvement of activities and allocate resources for the most important things to be done [25]. The factor of quality system improvement which is also included in this factor stresses upon the continuous improvement of various quality systems and procedures used in the organization. Second Component which has emerged as second crucial factor of TQM implementation is Customer Based Performance. Customer requirements need to be understood in the widest possible sense for a TQM programme to work and it is known worldwide that without good product quality and product design, one can t achieve 100% customer satisfaction. The next important component of TQM implementation is People Management including Partner Development which includes the implementation of important CSF s like Leadership, Education & Training, Supplier Quality Management, Employees Empowerment & Involvement, Rewards & Recognition, and Unity of Purpose. The firm operates in a dynamic and turbulent environment. Thus in order to maintain its competitive edge in the market the fourth factor of Information & Analysis/ Business Results plays a very important role. It includes the CSF s of Statistical Process Control, Benchmarking, Evaluation and Analysis, Scientific Approach to Decision Making, Internal Quality Results, and External Quality Results. All of these CSF s emphasize the need of formal evaluation of the quality activities in the firm for a sound TQM programme to work. It can be concluded that TQM implementation is not a step by step technique but it is a culture which is to be incorporated in company s day to day operations for successful and fruitful results to come. Everyone in the organization starting from the top management should make sustained and continuous efforts for the successful Implementation of a TQM programme. 9. Conclusion The paper presents the results of a study which was done with an aim to derive a TQM implementation model for the manufacturing organizations of Northern India. The results of the study clearly indicate that the most crucial component for effective TQM implementation is Process Management and Planning followed by Customer Focused Performance, People Management including Partner development and Information & Analysis. One of the major limitations of the study (due to resources and time constraint) was that the study only includes the organizations of Northern India. Another limitation was that the study has considered and treated all the manufacturing industries in different sector as alike. In future, extent of TQM practices in different Industry sectors can be compared and also the study can be extended to the service sector like banking, health care, education etc.

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396 Nitin Singla, Dinesh Khanduja, and T. P. Singh Dinesh Khanduja is Professor of Mechanical Engineering at National Institute of Technology, Kurukshetra, Haryana, India. His areas of research interests include, productivity engineering, entrepreneurship, operations management, energy management and Six Sigma applications. Email: dineshkhanduja@yahoo.com T. P. Singh is Director, Symbiosis Institute of Technology, Lavale, Pune, India. His research areas include Electric Discharge Machining, Quality Systems, Ergonomics, Waste Minimization and Lean Manufacturing. Email: tp_malik@yahoo.com