IMPACT OF TQM IMPLEMENTATION ON PRODUCTIVITY AND QUALITY - A STUDY AT GENARAL MOTORS

IMPACT OF TQM IMPLEMENTATION ON PRODUCTIVITY AND QUALITY - A STUDY AT GENARAL MOTORS Dr. S.J.MANJUNATH*; G. ARUN KUMAR** *ASSOCIATE PROFESSOR, MBA DEPARTMENT, B.N.BAHADUR INSTITUTE OF MANAGEMENT SCIENCES, MYSORE, KARNATAKA, INDIA. **ASSISTANT PROFESSOR, MBA DEPARTMENT, VIJANAGARA SRI KRISHNADEVARAYA UNIVERSITY, BELLARY, KARNATAKA, INDIA. ABSTRACT TQM focuses on teamwork, increasing customer satisfaction, and lowering costs. Organizations implement TQM by encouraging managers and employees to collaborate across functions and departments, as well as with customers and suppliers, to identify areas for improvement. The objective of the study is to determine whether the implementation of TQM leads to higher productivity and quality. The study was carried out at General Motors by collecting the primary data from the managers through structured questionnaire. The data was analyzed by descriptive analysis and Anova technique the result revealed that there is a significant relationship between TQM implementation and high productivity and quality. KEYWORDS: General Motors, Productivity, Quality,. Total Quality Management INTRODUCTION Total Quality Management is a method by which management and employees can become involved in the continuous improvement of the production of goods and services. It is a combination of quality and management tools aimed at increasing business and reducing losses due to wasteful practices. TQM views an organization as a collection of processes. It maintains that organizations must strive to continuously improve these processes by incorporating the knowledge and experiences of workers. The simple objective of TQM is Do the right things, right the first time, every time. TQM is infinitely variable and adaptable. Although originally applied to manufacturing operations, and for a number of years only used in that area, TQM is now becoming recognized as a generic management tool, just as applicable in service and public sector organizations. 1

LITERATURE REVIEW In urbanized countries such as UK, USA and JAPAN, total quality management has been a current issue for many years in all business sectors, mainly the manufacturing industry. However, in a developing country like India, even though it has successfully developed substantial manufacturing industry in the last two decades, TQM has made little impact. In manufacturing systems, quality management focuses primarily on technical issues such as equipment reliability, measurement of defects and statistical quality control techniques (process control). But quality management has penetrated into other areas such as product design, research and development, human resources practices (employee empowerment) team work,customer relations and organizational culture. Quality management pervades through the entire organization. Idris et al.(1996) conducted a survey of Malaysian manufacturing companies already registered to ISO 9000, with a view to examining their status as regards TQM implementation. Less than a third of the responding companies claimed to have RQM, but there was a strong minority claiming to have made substantial progress towards total quality practices. Theses authors also describes the Malaysian SIRIM model of total quality training for a company, which is multi-step process involving the adoption of such practices as a quality improvement process, Quality Control Circles(QCC) and TPM. Samson and Terziovski (1999) used a larger database of 1,024 usable responses from Australian and New Zealand manufacturing organizations to examine the relationships between TQM practices, individually and collectively, and firm performance, the study showed that the relationship between TQM practice and organizational performance is significantly in a crosssectional sense. Based on 698 usable responses from Australian and New Zealand manufacturing organizations, Dow et al. (1999) employed confirmatory factor analysis (CFA) to identifying nine quality practices. Nine quality practices include workforce commitment, shared vision, customer focus, and use of teams, personnel training, co-operative supplier relations, use of benchmarking, advances manufacturing systems, and use of just-in-time principles. Salaheldin Ismail Salaheldin (2003) conducted a study on implementation of TQM strategy in Egyptian manufacturing firms. The study aims to explore the critical resisting and driving forces that inhibit or promote the implementation of total quality management (TQM) strategy in Egypt, in an attempt to determine whether TQM can be implemented effectively in this developing country, a force-field analysis was used for identifying the salient factors affectingtqm implementation in Egypt. The findings indicated that forces that promote or prohibit TQM implementation obtained in one developing country might be generalizable to another less developed country. The investigation identified some driving forces that promote the implementation of TQM strategy by the Egyptian manufacturing firms. G.Karuppusami and R. Gandhinathan, (2006) identified critical success factors of total quality management by using pareto analysis. The authors discussed even through there has been a large number of articles published related to TQM in the last few decades, only a very few articles focused on documenting the critical success factors (CSF s) of TQM using statistical methods. An examination of 37 such TQM empirical studies resulted in compilation of 56 CSFs. 2

Implementation difficulties exist to operationalize such a large number of CSF s in organizations. The study analyzed and sorted the CSF s descending order according to the frequency of occurrences using the quality tool Pareto analysis. A few vital CSF s were identified and reporte. In manufacturing industries, automobile companies are more interested in implementing TQM. There are two main reasons: first, automobile manufacturing is the largest manufacturing activity in the world.secondly, increasing global competition over the past decade has forced automobile companies to improve quality and efficiency. Therefore, they are more willing to implement TQM in order to improve quality, and in turn to survive in the market. Therefore, TQM is found to be well established in the automobile industry as compared to other industries. Baba Md Deros, et al, (2006) conducted a study on benchmarking implementation framework for automotive manufacturing SMEs. The researchers described the need for a framework and its relationship with benchmarking and TQM then proposing benchmarking implementation frameworks. The frameworks were categorized into two broad types based on the different writer s background and the approach on how they view the benchmarking implementation process. The researchers suggested a conceptual framework for benchmarking implementation guides them through from the start to end of the benchmarking process. The framework was validated at six pilot case study companies, which gave useful comments and suggestions regarding the usefulness and applicability within the SMEs context. OBJECTIVE OF THE STUDY- The objective of the study is determine the impact of TQM implementation on high productivity and quality RESEARCH METHODOLOGY The relevant data for the study has been collected from both primary and secondary sources. Simple random sampling used to collect the required information through structured questionnaire by using five point likert scale. Descriptive analysis and anova was used in this research to analyze the data. Samples of 20 employers were selected for the study. HYPOTHESIS 1) Ho There is no significant influence of TQM implementation on high productivity and quality at General Motors H1 - There is a significant influence of TQM implementation on high productivity and quality General Motors 3

DATA ANALYSIS AND INTERPRETATION Descriptive Statistics N Minimum Maximum Mean Std. Deviation Top management actively participates in 20 3.0 quality management activities. 5.0 4.2500.63870 Top management learns quality-related concepts and skills. 5.00 4.1000.64072 Top management strongly encourages employee involvement in quality 5.00 4.2500.71635 management activities Top management empowers employees to solve quality problems 5.00 4.3000.65695 Top management arranges adequate resources for employee education and 5.00 4.1000.71818 training. Top management discusses many qualityrelated issues in top management meeting 5.00 4.2000.61559 Top management focuses on product quality rather than yields 5.00 4.1000.64072 Top management pursues long-term business success. 5.00 4.2500.63867 Our firm has established long-term cooperative relations with suppliers. 5.00 4.3000.65695 Our firm regards product quality as the most important factor in selecting suppliers 5.00 4.1000.64072 Our firm always participates in supplier activities related to quality. 5.00 4.1000.71818 Our firm always gives feedback on the performance of suppliers products 5.00 4.2500.71635 Our firm has detailed information about supplier performance 5.00 3.8000.83351 Our firm regularly conducts supplier quality audit. 5.00 4.2500.71635 Our firm has a clear long-term vision statement. 5.00 3.8000.76777 The vision effectively encourages employees commitment to quality 5.00 3.7500.71635 management. 4

Our firm has a clear short-term business performance plan 5.00 4.2000.61559 Our firm has a clear quality policy 5.00 4.0500.60481 Our firm has a detailed quality goal. 5.00 4.2000.69585 Our firm has effective quality improvement plans 5.00 3.7500.78640 Various policies and plans are well communicated to the employees 5.00 3.6000.75394 Employees from different levels are involved in making policies and plans. 5.00 3.8000.83351 Our firm regularly audits various business strategies 5.00 4.1500.58714 Benchmarking is used extensively in our firm. 5.00 4.0000.72548 Valid N (listwise) 20 The descriptive analysis reveals that the top management actively participates in quality management activities and has a mean value of 4.2500 which gives a clear indication that most of the managers take active participation in quality management activities. In terms of quality related concepts and skill the above table reveals that the mean value is 4.1000 which implies that the managers consider it as one of the vital aspect of TQM and give considerable attention to this factor. The above table reveals that the top management strongly encourages employee s involvement in quality management activities as the mean value is 4.2500. Thus it can be considered as one of the important factor in implementation of TQM. The above results revealed that top management empowers employees to solve quality problems with the mean value of 4.300. Hence most of the managers consider this factor as the significant attribute for the implementation of the TQM. Top management arranges adequate resources for employee education and training which is a important attribute as the mean value of this attribute is 4.100 and it is deemed to be an essential attribute for implementation of TQM. The managers have divulged that the top management discusses many quality related issue in top management meetings and the mean value of this trait is 4.200. it gives the clear sign that it is considered as imperative aspect in implementation of TQM. The results revealed that the top management focuses on product quality rather than yields as the mean value of this attribute is 4.100.Hence this attribute is measured as critical in TQM implementation. The above results reveal that top management pursues long terms business success, a mean value of 4.250. Hence most of the managers believe that this factor is the major attribute for the implementation of the TQM. GM has established long term cooperative relationship with suppliers and is an imperative attribute as the mean value of this attribute is 4.300 and it is believed to be the essential attribute for implementation of TQM. 5

The descriptive analysis reveals that GM company regards product quality as the most important factor in selecting suppliers with a mean value of 4.1000 it gives a clear indication that most of the managers select the suppliers who supply them with quality products. In terms of firms participation in supplier activities related to quality the analysis reveals that the mean value is 4.1000 which imply that the managers consider it as one of the vital aspect of TQM and give considerable attention to this factor. The above analysis reveals that GM managers always give feedback on the performance of the products supplied by suppliers and the mean value is 4.2500. Thus it can be considered as one of the important factor in implementation of TQM. In terms of the firm detailing information about supplier s performance the study revealed that the mean value is 3.800 which implies that this factor is consider as a vital aspect in TQM implementation. GM Company regularly conducts supplies quality audit to ensure that the suppliers supply quality products and the mean value is 4.2500. GM Company has the clear long term vision statement which is seen in the analysis with the mean value of 3.800, hence GM managers clearly know what they have to achieve in the future. The descriptive analysis reveals that the vision effectively encourages employee s commitment to quality management with a mean value of 3.750 which gives a clear indication that most of the managers have to take active participation in quality management activities. In terms of short term business performance plan the above table reveals that the mean value is 4.200 which implies that the managers consider not only the long term plans but also short term plan as the vital aspect of TQM. The above table reveals that GM firm has a clear quality policy with a mean value of 4.0500. Thus it is considered as one of the important factor in implementation of TQM. The above results reveal that top GM Company has a detailed quality goal with a mean value of 4.200. Hence most of the managers consider this factor as a significant attribute for the implementation of the TQM. GM Company has effective quality improvement plans with a mean value 3.750 this attribute is deemed to be an essential attribute for implementation of TQM. The managers have divulged that the various policies and plans are well communicated to the employees with a mean value of 3.600 it gives a clear sign that the top management informs the employees about the different policies and plans they need to implement. The results revealed that the employee from different levels are involved in framing policies as the mean value of this attribute is 3.800.Hence this attribute is measured as critical in TQM implementation. The above results reveal that GM Company regularly audits various business strategies with a mean value of 4.150. Hence most of the managers believe that this factor is a major attribute for the implementation of the TQM. GM firm has established benchmarking in order to improve the quality aspects of the product with a mean value of 4.000 and this attribute is believed to be an essential attribute for implementation of TQM. 6

ANOVA (High Productivity and Quality) Sum Squares of df Mean Square F Sig. 1.163 1 1.163 4.153.043 actively participates in Groups quality management Within Groups 6.637 18.369 activities. Total 7.800 19 3.009 1 3.009 7.975.011 learns quality-related Groups concepts and skills. Within Groups 6.791 18.377 Total 9.800 19 2.112 1 2.112 6.245.022 strongly encourages Groups employee involvement Within Groups 6.088 18.338 in quality management activities Total 8.000 19 2.112 1 2.112 6.245.022 empowers employees Groups to solve quality Within Groups 6.088 18.338 problems Total 8.200 19 3.009 1 3.009 7.975.011 arranges adequate Groups resources for Within Groups 6.791 18.377 employee education and training. Total 9.800 19 1.001 1.001 5.001.041 discusses many Groups quality-related issues Within Groups 10.549 18.586 in top management meeting Total 11.550 19 1.163 1 1.163 4.153.043 focuses on product Groups quality rather than Within Groups 6.637 18.369 yields Total 7.800 19 3.009 1 3.009 7.975.011 pursues long-term Groups business success. Within Groups 6.791 18.377 Total 9.800 19 7

Our firm has Between 2.112 1 2.112 6.245.022 established long-term Groups cooperative relations Within Groups 6.088 18.338 with suppliers. Total 8.000 19 Our firm regards Between 1.163 1 1.163 4.513.048 product quality as the Groups most important factor Within Groups 4.637 18.258 in selecting suppliers Total 5.800 19 Our firm always Between 1.163 1 1.163 4.153.043 participates in supplier Groups activities related to Within Groups 6.637 18.369 quality. Total 7.800 19 Our firm always gives Between 1.001 1.001 5.001.041 feedback on the Groups performance of Within Groups 10.549 18.586 suppliers products Total 11.550 19 Our firm has detailed Between 4.255 1 4.255 8.562.009 information about Groups supplier performance Within Groups 8.945 18.497 Total 13.200 19 Our firm regularly Between 1.001 1.001 5.001.041 conducts supplier Groups quality audit. Within Groups 10.549 18.586 Total 11.550 19 Our firm has a clear Between 4.255 1 4.255 11.028.004 long-term vision Groups statement. Within Groups 6.945 18.386 Total 11.200 19 The vision effectively Between 3.091 1 3.091 8.354.010 encourages Groups employees Within Groups 6.659 18.370 commitment to quality management. Total 9.750 19 Our firm has a clear Between 1.001 1.001 5.001.041 short-term business Groups performance plan Within Groups 10.549 18.586 Total 11.550 19 8

Our firm has a clear quality policy Our firm has a detailed quality goal. Between Groups 4.255 1 4.255 8.562.009 Within Groups 8.945 18.497 Total 13.200 19 Between Groups 3.174 1 3.174 7.490.014 Within Groups 7.626 18.424 Total 10.800 19 Our firm has effective Between 1.662 1 1.662 2.966.102 quality improvement Groups plans Within Groups 10.088 18.560 Total 11.750 19 Various policies and Between 3.174 1 3.174 7.490.014 plans are well Groups communicated to the Within Groups 7.626 18.424 employees Total 10.800 19 Employees from Between 4.255 1 4.255 8.562.009 different levels are Groups involved in making Within Groups 8.945 18.497 policies and plans. Total 13.200 19 Our firm regularly Between 1.163 1 1.163 4.153.043 audits various business Groups strategies Within Groups 6.637 18.369 Total 7.800 19 Benchmarking is used Between 2.112 1 2.112 6.245.022 extensively in our Groups firm. Within Groups 6.088 18.338 Total 8.000 19 Top management actively participate in quality management activities analysis of variance revealed significant influence towards the high productivity and quality over top management actively participate in quality management activities ( F=4.153; P=.043), as the P value is less than.05 there is significant association. Top management learns quality related concepts and skills: Significant difference was found for this component with respect to high productivity and quality, where F value was found to be 7.975 and P value of.011. Hence it clearly indicates the significant relation between Top management learning quality related concepts and skills and high productivity and quality. Top management strongly encourages employee involvement in quality management activities: ANOVA for Top management strongly encourages employee involvement in quality management activities with high productivity and quality which revealed a significant difference 9

with F value of 6.245 and P value of.022. Hence Top management strongly encourages employee involvement in quality management activities has significant impact on high productivity and quality. In the aspect of top management empowering employee to solve quality problem and the relationships between high productivity and quality. The anova method revealed a significant difference with f value of 6.245 and the p value of.022. In the aspect of top management arranges adequate resources for employee education and training, anova p values was.011 and the p value was lower than 0.05. The ANOVA summary table reveals that the association between- top management discusses many quality related issue in top management meeting and high productivity and quality. The F- ratio is 5.001, and the p-value was.041 which indicates that there is a significant difference. Top management focuses on product quality rather than yields: Significant difference was found for this component with respect to high productivity and quality, where F value was found to be 4.153 and P value of.043. This clearly indicates the significant relation between Top management focuses on product quality rather than yields and high productivity and quality. Top management pursues long term business success: ANOVA test revealed a significant difference with Top management pursuing long term business success and high growth and productivity with F value of 7.975 and P value of.011. Hence there is a positive relationship between Top management pursuing long term business success and high productivity and quality. Our firm has established long term cooperative relationship with suppliers also has a significant positive relationship with high productivity and quality. To determine whether any significant differences existed between GM with regards to product quality as the most important factor in selecting suppliers and high productivity and quality a one way anova test was carried out. In one way anova analysis we compared the two attributes and the results revealed statistically significant differences with p value.048 (p <.05). To decide whether any major differences existed between GM always participates in suppliers activity related to quality concerning the high productivity and quality a one way anova test was carried out. In one way anova analysis we compared GMs participation in supplier s activity related to quality with high productivity and quality. The results showed statistically significant differences with p value.43 (p <.05) GM always give feedback on the performance of supplier s product: Significant divergence was found for this component with respect to high productivity and quality, where F value was found to be 5.001 and P value of.041. GM has detailed information about supplier s performance: ANOVA test revealed an insignificant difference with GM having detailed information about supplier s performance and high productivity and quality with F value of 8.562 and P value of.009. GM regularly conducts supplier quality audit: Analysis of variance revealed significant influence towards the high productivity and quality with value of (F=5.001; P=.041), as the p value is less than.05 hence it is significant GM has a clear long-term vision statement: ANOVA for GM having a clear long-term vision statement as related to high productivity and quality revealed a significant difference with F value of 11.028 and P value of.004. The vision effectively encourages employees commitment to quality management. Significant difference was found for this component with respect to high productivity and quality, where F value was found to be 8.354 and P value of.010. 10

In the aspect of GM having a clear short-term business performance plan there is a positive relationships between high productivity and quality, the anova method revealed a significant difference with f value of 5.001 and the p value of.041. GM has a detailed quality goal - ANOVA test revealed a significant difference with GM having a detailed quality goal and high productivity and quality with P value of.014. GM has effective quality improvement plans: ANOVA for GM having effective quality improvement plans with high productivity and quality revealed a significant difference with P value of.042. The ANOVA summary table reveals that the association between various policies and plans are well communicated to the employees and high productivity and quality. The F-ratio is the p- value is.014, which indicates that there is a significant difference. Employees from different levels are involved in making policies and plans- Significant difference was found for this component with respect to high productivity and quality, where P value was found to be.009. Hence it clearly indicates the significant relation between high productivity and quality and high productivity and quality. ANOVA test revealed a significant difference with GM conduction regular audits of various business strategies and high productivity and quality with P value of.043. Hence there is a positive relationship between the firm regular audits of various business strategies and high productivity and quality. Significant difference was found for Benchmarking is used extensively by GM with respect to high productivity and quality, with a p value of.022. CONCLUSION Many organizations may not use the term TQM anymore but is still very much part of most business thinking. It is seen as being a way in which a business can add value to its product and to gain competitive advantage over its rivals. The study revealed that there is a positive correlation between the implementation of TQM and high productivity and quality. Thus all the TQM parameters considered in this study are positively related to high productivity and quality. REFERENCES 1. AALBREGTSE, R.J., HEJKA, J.A. & MCNELEY, P.K. (1991) TQM: How do you do it?, Automation, August, pp. 30 ± 32. 2. ADAMS, M.L. (1994) Quality rst: a model for TQM implementation & planning, IEEE AES Systems Magazine, 9, pp. 25± 27. 3. BERRY, T.H. (1991) Managing the Total Quality Transformation (New York, McGraw- Hill). BOLTON, J.E. (1971) Repor t of the Committee of Inquir y of Small Firms (London, HMSO). 4. CORMAN, J. & LUSSIER, R.N. (1996) Small Business ManagementÐ A Planning Approach (Chicago, Irwin). 5. CROSBY, P.B. (1980) Quality is FreeÐ The Ar t of Making Quality Cer tain (New York, McGraw-Hill). 6. DALE, B.G. (1995) A quality improvement framework: application and comparative analysis, Total Quality Management, 6, pp. 383± 397. 7. DALE, B.G. & PRAPOPOULOS, M. (1995) The introduction of a quality improvement process in small companies: an examination in Traþ ord Park, Quality World Technical Supplement, September, pp. 80± 88. 11

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