Julphar Company Applying European Excellence Model

Introduction

Total Quality Management principles have proved to be effective over the years, and most newer management approaches have implemented elements of TQM principles as core values of their models. The TQM principles have been used as a tool to increase profits, provide better customer stratification, and provide a competitive edge for the organization. They are especially effective in industrial settings. This paper will provide a review of quality management frameworks and an example of how they can be used to improve the excellence of one UAE organization.

Review of Quality Management Frameworks

Before discussing the quality management frameworks, it is important to establish the principles that they use. Eight primary principles of total quality management are used by the majority of the frameworks. The first is that the organization should be customer-focused. This means that all quality improvements that the organization implements should be focused on providing better service to the customer. The customer becomes the deciding factor in whether the changes are effective or not. The second principle is total employee involvement. All company employees should be working toward the same goal, or toward goals that benefit an overarching goal. They should feel empowered at work, and fear should not be a factor. The role of management in this situation is to create an environment where this is possible. The third principle is that the organization has to be process-centered. Thinking within the company should be based on processes. This occurs when the employees define the steps needed to achieve a goal.

The measures by which the goal is accomplished are constantly monitored in case an unforeseen variation occurs. The fourth principle is based on the idea of the integrated system. In an organization, the interconnections between various departments are often the most important for total quality management. The company’s vision becomes the defining goal of all the processes within the organization. Performance is then monitored and analyzed continuously. The fifth principle states that the organization should utilize a strategic and systematic approach to fulfilling its goals. Every element of the company is connected, and the actions of one department have direct consequences for another. This is why the quality management plan should be prepared strategically. The sixth principle is the need for continual improvement.

This principle, which is often neglected, describes the need for improvement not only during critical times for the company but at all times. Many companies over the years have declined because this principle was not upheld during the times of their success. When improvement ceases, organizations become stagnant and can eventually lose the loyalty of their customers. The seventh principle is focused on fact-based decision making. The performance of the organization needs to be monitored through gathering data. This data needs to be analyzed and used to make further decisions. The eighth principle is communication. The importance of communication is emphasized in many aspects of the business. For total quality management, communication represents a way to maintain morale and motivation among the staff during the daily workflow and in times of crisis (Sinha, Garg & Dhall 2016). These eight principles are often considered the basis of all total management models. However, variations exist between them, which leads to the different effects that they can have on a business.

Effect on Excellence Performance

Studies conducted over the years have shown that quality management frameworks can have a significant effect on the excellent performance of the company. Perhaps the most popular total quality management framework is called the EFQM excellence model. EFQM stands for the European Foundation for Quality Management, which shows the European origin of the model. Although the EFQM excellence model started in Europe, it has spread throughout the world due to its results. The main goal of the EFQM framework is to determine a level of excellence for the company to focus its efforts on the required improvements. It allows the company to look at its operations from a more systematic point of view. By understanding the way that the various departments of a company interact with each other, its management can focus on the issues between them that affect its excellent performance. EFQM is based on principles similar to those of total quality management, but it also employs additional criteria (fig. 1) that are divided into enablers and results, as well as a continuous improvement cycle referred to as RADAR logic (Moghaddam et al. 2017).

The Eight Criteria of the EFQM excellence model.
Fig. 1 The Eight Criteria of the EFQM excellence model (EFQM model in action 2017).

The effect on the business excellence of the company is dependent on its type and size (Escrig & Menezes 2016). EFQM is especially effective in the industrial sector where its predictive power is used to avoid large interdepartmental issues. Research shows that EFQM is capable of having a very positive effect on the excellent performance of various organizations. Companies achieve excellence by focusing on process management and social factors that can affect the excellence of the company. The use of the model is almost essential to achieve and maintain a certain level of excellence for any company. The positive effect that EFQM has on companies is showcased through an annual EFQM Excellence award that is given to the organizations that utilized the model with the best results.

Effect on Sustainable Business Success

The effect of quality management frameworks on sustainable business success is also often significant. It is primarily driven by the principle of continuous improvement. Success is the goal of each organization, but when a corporation achieves it, it can be lost in a short amount of time if proper planning is not implemented. Moreover, companies can put themselves into a “melting iceberg” situation where the initial success leads their management to a false sense of security. This overconfidence informs the decisions of the executives, which results in unsustainable and slowly dissolving companies. However, this degradation of performance can be prevented through the use of quality management frameworks such as EFQM. The continuous improvement that the model provides focuses the company on achieving better results than it already does by improving its work processes, streamlining its operations, reducing its overhead, and other strategies. By continuing to work on improvements after its initial success has been achieved, the company avoids stagnation. The improvements do not have to be dramatic and costly, but they should always contribute to the sustainability of the company’s success.

Besides continuous improvement, the frameworks contribute to the sustainability of business success through the elimination of issues between departments and focusing on providing value for both customers and shareholders. Such frameworks emphasize the creation of a relationship between the company and its customers. Subsequently, loyal customers can be a significant factor in the sustainability of business success.

Effect on Global Competitiveness

Currently, quality management frameworks are considered almost essential for a company to compete on a global scale. With more than 300,000 companies utilizing the EFQM model alone, and thousands of others relying on its various counterparts, a company is almost required to implement some type of quality management framework to survive (fig. 2). The widespread use of the EFQM system has motivated many firms to seek alternative methods of quality management. EFQM is a thoroughly tested model, and it has proved to be effective, but since it is used by such a large number of companies, its competitive edge in the global market is slightly limited. To overcome this limitation, organizations around the world attempt to customize existing models and create their own. Regional models such as the Singapore Business Excellence Framework, Australian Business Excellence Framework (Brown 2014), and company-created frameworks such as the 14 management principles of Toyota (Gao & Low 2014) and Xerox benchmarking model have shown varying levels of effectiveness. However, alternative quality management frameworks such as Six Sigma and 5S principles appear to be even more effective than the popular EFQM model when they are successfully applied (Jacobs, Swink & Linderman 2015). Nevertheless, the management of every company desires to gain a competitive advantage when operating on a global scale, and the use of various quality management models is an effective way to achieve that.

Popularity of business models around the world
Fig. 2 Popularity of business models around the world (Ahmed 2015).

Application of a Framework

The objective of this paper is to show how a UAE organization can use a quality management framework to improve their excellent performance and to become more profitable, have higher customer satisfaction, and achieve a competitive advantage in the global market. For this study, the pharmaceutical company Julphar, also known as Gulf Pharmaceutical Industries, was chosen. The company was established in 1980 by Sheikh Saqr bin Mohammad al-Qassimi. Currently, it operates on a global scale and produces products on five continents. Their products are in the fields of antibiotics, women’s health, endocrinology, gastroenterology, cardiovascular medicine, and consumer-grade medicine. Their most popular product is called Moist Exposure Burn Ointment, also known as MEBO, which is used to treat burns and scars. Julphar is one of the few companies that are involved in the production of the recombinant DNA that is used to create insulin. It is also the only company producing it in the Middle East and North Africa. This region has some of the highest diabetes rates on the planet, and the company plans to serve more than 30 million customers in the upcoming years. The company operates eleven manufacturing facilities and plans to open more in the Kingdom of Saudi Arabia, Algeria, and Ethiopia. Julphar employs more than 2900 employees and sells 213 distinct products (Julphar Gulf Pharmaceutical Industries 2017). The problem statement of the paper is that a company of such size requires a quality management model and therefore the most commonly used EFQM model will be applied.

Senior Management and Leadership

Currently, the board of directors of the company includes a chairman, vice-chairman, seven members of the board, and a chief executive officer. This is a relatively normal senior board size, and the board of directors will have one of the most important roles in the application of the EFQM excellence model. This model does not rely on the classic model of leadership where one person controls all business aspects of the company. That type of leadership would not be appropriate, given the unstable nature of current markets and business in general. A new company can become a sudden competitor due to a revolutionary breakthrough in technology or strategy. To avoid losing the company’s position in the market, its leadership has to be flexible and focused on all the people who are dedicated to achieving objectives as leaders or team members (EFQM model in action 2017).

For a company the size of Julphar, the number of leaders would typically be high, with every department and facility having its managers who would share the responsibilities of the senior managers. The senior managers would need to establish a clear vision for the company that other managers would be able to follow and apply to their departments. They would have to become the so-called “agents of change” within the company. There are likely issues in its organizational structure, and these agents will work on bringing changes to the company’s operations. The leaders will need to welcome change themselves to inspire others to do so as well. Their actions would need to be symbolic and associated with the upcoming change. The second step could involve changing the structure of the company. Perhaps it could be a small change but still applicable to the vision presented earlier. For this, everyone will need to be involved. By asking the opinions of the staff, the leaders would be able to improve their plans by incorporating the ideas of their employees, which should also create a sense of involvement in the change among the team members. Finally, the agents of change can change a fundamental part of the company, such as an extraneous process or a dysfunctional department.

Teamwork and Mania

One of the main principles of the EFQM excellence model lies in cooperation among the people of an organization. Teamwork is highly emphasized within the organization, and the team members themselves are empowered in the process of applying the excellence model. The teams are encouraged because they have a chance to focus on function instead of the required result. It allows their members to have a narrow focus because the work of the other departments does not come into their consideration. EFQM defines the team as “a group of people acting with a common purpose and shared responsibility for the success or failure of their efforts,” and it reflects the needs of the organization to develop teams instead of individual workers. Such teams are more flexible and improve the flexibility of the organization itself (EFQM model in action 2017).

The empowerment of people is required to avoid the development of resentment or other undesirable consequences during the implementation of the quality management framework. Empowerment can unleash the energies of the people who were previously unmotivated to work to the best of their abilities. Motivation expands the ambitions of team members and also works to make the company more flexible. People become more resilient to previously unforeseen issues and can deal with them after the required training is complete. Power becomes collective, which allows team members to approach these issues from a variety of perspectives (EFQM model in action 2017).

Communication also becomes a central focus of the company’s operation because people work best when they receive clear instructions and detailed information. Every team should know its objective, and if any questions arise, they should be answered quickly and clearly. This could be accomplished through various communication techniques depending on the size of the organization. For Julphar, one possible tactic might be the implementation of transparent communication between the team members, team managers, and senior management. It has proved to be highly effective when implemented in other companies due to the streamlining of the communication process and the way feedback can be passed directly from the team members to the leaders of the organization, without the need to wait for an official response from a third party (Vogelgesang, Leroy & Avolio 2013). Any member of the team can contact any manager whose responsibility touches upon the encountered issue.

Deployment Process

The EFQM model will be deployed within the Julphar organization by focusing on the nine criteria of the EFQM excellence model. These include the previously discussed leadership and personal criteria in addition to strategy, partnerships, and resources, processes and products, people results, customer results, society results, and business results. At first, the company will be assessed as to whether its current operation is based on EFQM concepts. Then each of these aspects will be examined individually to identify the changes that need to be implemented for the successful implementation of the EFQM excellence model. The previously discussed agents of change will be responsible for the changes that the organization will experience during this process. Then their efforts will be once again evaluated and new changes will be implemented if they are required. Eventually, the company should be basing its operations on the model’s nine criteria, and it should receive the benefits that the model provides.

Taking a Narrow, Focused Approach

A narrow and focused approach to the company’s operations should accompany a thorough commitment to the company’s vision and mission. Even without the EFQM model, Julphar Gulf Pharmaceutical Industries is likely already following the vision of its senior management. Although this is a standard practice in such organizations, the focus on the message is often ignored during some companies’ day-to-day operations. However, the EFQM excellence model is focused on making the company mission essential to its operation. The mission should represent the main goal and purpose of the organization as well as its ambitions for the future. It needs to be communicated clearly to avoid any misrepresentation or misunderstandings. The creators of the mission should consider the needs of the customers, the organization’s partners, and the environment in which it operates. The leaders should be involved in the evolution of the mission not only to keep it current but also to generate a feeling of involvement among them (EFQM model in action 2017).

The mission of the company subsequently needs to be instilled into its environment and culture. The mission of Julphar could be to provide the most effective and affordable pharmaceuticals to customers in the regions where it operates. This mission should be used to shape the values of the company. For example, quality assurance and the search for affordable manufacturing should be emphasized in the work of various departments. Efforts to align current work processes with the company’s mission should be rewarded, and going against its mission should be discouraged.

Communication plays a large role in the development of a focused approach because it is necessary for a variety of things that ensure the organization’s unity. Communication of strategy allows the company management to ensure that every department and team is focused on attaining the company’s common goal. Communication allows the company to understand the needs of its customers and adjust its operation accordingly. It is also essential for understanding and interacting with the company’s suppliers. Also, it is required to maintain the trust of the company’s stakeholders. Each stakeholder group has its own needs and requires a different approach. When a corporation is communicating its message clearly and listens carefully to its stakeholders, it achieves a higher level of success. The responses given to the company are often even more important than the initial message that it delivers because they allow the company to adjust its operations.

Training, Education, Inspiration, and Skill Building

Training, educating, inspiring, and building the skills of employees are some of the commonly used methods of achieving excellence in almost any model. The same is the case with the EFQM excellence model. The value of human resources should never be underestimated because they can be the deciding factor in the success of the organization. Before training and other processes can begin, the EFQM model emphasizes the selection of people for specific positions within a company. Their qualifications, experience, and technical skills should be examined and applied to the most appropriate position. They may be incompatible with the culture of the organization, or their attitude could hurt the work of their team. Therefore each member needs to be examined to prevent negative factors from affecting the goal of the firm. Julphar is a large company and conducting a personal examination of each of its employees may be a problematic process. However, there are ways of making it easier. The company should collect information about the results and incidents that the employee has had during their time with the company and every six months; these results should be analyzed to decide on a further course of action (EFQM model in action 2017).

If an employee is having issues with the new system or shows signs of incompetence, they would need to go through training to address their areas of deficiency. If this is not done, their work will eventually lead to further issues for customers and company operations. Such workers often become uninspired and incapable of achieving the required results. These issues can be avoided, however. Training allows the employee to become familiar with their position and inspires them to work harder. When employees are educated about their role within the company, it partially prevents them from feeling unmotivated and uninvolved in the workings of the company. It raises job satisfaction and could lead to new solutions to issues from the newly educated employees.

Training should also be a way to build the existing skills of the employees. New and innovative approaches to various aspects of the company appear almost constantly, and the organization should not be afraid to implement them through training. When a new approach or technique has been found effective by experts, it should be implemented in the appropriate departments of the company. For example, when a new database system for the company’s products is found to be much more efficient than the one in current use, it should be implemented as soon as possible. However, the staff is likely to be unfamiliar with its operation. All the staff members that operate the database would need to go through a short but essential course of training to improve their technical abilities. Then they will be able to operate the database, and the workflow of the organization will improve. Training could be an element in a much more individual situation as well, especially with leadership positions. Management strategies often change, and when a more appropriate one becomes known, managers would need to be informed about it. Such a session could last from one week to a month, depending on the task. They may involve lectures, readings, and practical exercises such as role-playing (EFQM model in action 2017).

Increasing Global Competition

Julphar is a global company with connections in many countries of the world. Their focus on international business is clear, and the successful implementation of the EFQM model will require additional attention to the global competitive edge of the company. It may be one of the easier elements to address because the company has already worked on gaining a competitive edge on the market. As was previously mentioned, it is currently the only company that develops the material required for the production of insulin in the Middle East and North Africa. It has also made its name through the development of the Moist Exposure Burn Ointment that is considered highly effective by many medical professionals. The company’s competitive advantage comes from its products, and this is why the application of the EFQM excellence model should facilitate continued improvements to the company’s products. All of its processes should be driven to produce new and desired products for its customers. The company’s mission statement would need to include a focus on research and development as well as the needs of the customers that can only be satisfied by the work of the company. Also, the company could streamline its operations to make the product more affordable for customers. The present competitive advantage of the company should be maintained and possibly improved after new products and avenues of growth are discovered.

Increasing Customer Expectation

The EFQM excellence model considers customer results to be one of its primary evaluation criteria. Increasing customer expectation is only one of its aspects. Julphar will need to consistently measure customer satisfaction to become intimately familiar with the successes and failures of its products. Customer expectations can be measured through their perceptions of the organization itself. These results can be gained through customer surveys, vendor ratings, focus groups, complaints, and compliments. The information gained through these methods needs to be analyzed and later used to adjust the operations of the organization (EFQM model in action 2017).

However, there are three significant mistakes that the management of Julphar can make during this process. The first is to assume that the results presented in the surveys represent all of the company’s customers. While the majority of customers may share the views represented in the gathered data, it would not mean that an issue reported by a smaller group is insignificant. The reported issue may become much more serious if it is left unattended. For example, a small group of customers may complain about one medical product that the company provides. Their complaints are overshadowed by the majority of satisfied customers. However, the complaints may be associated with a rare condition that a drug affects, and many people can be hurt as a result. The negative outcomes would be the fault of the company, and it will be liable for the damage it caused. The second mistake would be to make decisions based only on its more popular product groups while ignoring others. While this is a mistake that should be avoided in all organizations, Julphar’s pharmaceutical work requires complete attention to all the products of the company. Issues with any product should be addressed, independent of its popularity. The final mistake would be to gather information only from a certain geographical region. Julphar is an international company that has representation on five continents. To limit its data gathering to a single place would potentially be disastrous because of regional differences and the differing needs of customers across regions (EFQM model in action 2017).

After gathering the data, the company should make an effort to not only satisfy the customers but also to make them loyal to the organization. Julphar will need to focus on creating a relationship with its customers because doing so facilitates their loyalty. This could be accomplished through competent and pleasant support channels, successful ad campaigns, and loyalty programs. Given the pharmaceutical focus of the company, these measures would need to be taken with additional consideration for ethics, as drugs are not always able to be advertised due to the policy of the countries where Julphar operates.

Opposing Economic Pressures

Despite the financial success of the company and the United Arab Emirates as a whole, Julphar is likely experiencing certain economic pressures due to its wide scope of operation. To counteract them, the agents of change at Julphar will need to closely examine all of its departments for signs of redundancy and inefficient operation. This data can be gathered through the company’s annual reports, surveys, and tests. Whenever an issue is found, it should be addressed either through streamlining the processor by its elimination. The company may contain several extraneous positions that could be either combined or eliminated to enable a leaner operation. The workflow of certain departments may also be costly, but its members may be unaware of more cost-efficient solutions. If this is the case, new solutions would need to be implemented. However, as was previously pointed out, people are an important asset to the company, and even if the position they fill is redundant, it does not mean that they have to be fired. They may be very useful in a different department or a different position. Such issues should be discussed, and solutions that do not involve the firing of qualified and skilled staff should be considered (EFQM model in action 2017). Currently, the company does not require downsizing. The situation is positive, and avenues of expansion are already set for years to come. Therefore, instead of reducing staff, the focus should be on creating efficient processes and workflows for the future facilities and branches of the organization.

New Approach to Management

As was mentioned in the leadership section of the paper, the EFQM excellence model emphasizes flexibility in the management structure. Managers gain a more important role when their suggestions can shape many aspects of the company. Management according to the EFQM model becomes more based on inspiration and setting an example for the team members. Managers often forget that their actions can affect the way that the team members perceive their orders. A manager who does not practice the principles that they preach is likely to be ineffective. The EFQM model is designed to address this issue, and the role of the manager is to become a motivational force for the team. They should be the first to implement change within the company, and their actions should be representative of the goals that they set. For example, a manager might want to emphasize a certain deadline that has to be met. This could be accomplished by the dedication that the manager shows for the project (EFQM model in action 2017). The manager can become involved with its various aspects and immediately address any issues that are brought up by the team members.

It is also important to reward the behavior that helps the company achieve its goals. If an employee is skilled at finding errors and solving them, they should receive additional benefits that can range from verbal support of their actions to monetary rewards. Managers should make sure that additional efforts are not overlooked because it could lead to the loss of morale and a decrease in job satisfaction among the employees. When a person’s achievements and dedication are ignored, they often lose interest in doing anything above the minimum work required, and an opportunity to improve the team’s operations through their additions is lost (EFQM model in action 2017). This is why rewards, motivation, and inspiration should be the main principles behind the work of managers.

Nevertheless, evaluation should also be a part of their duties. Evaluation in this case includes evaluation of the team members, of their feedback, and the managers themselves. It is important to understand that the opinions of the team can be extremely useful for the work of the manager. They reflect the way that the team experiences change and which issues require additional attention. Feedback loops between the team and managers should be established so that a manager’s decisions are not treated as gospel. Despite their position, managers are just as likely to make mistakes or overlook things, and if even one person on the team detects an issue with a plan, it could save a lot of work for the whole team in the future.

Strategic Planning Process

The strategy is also considered to be one of the primary criteria of the EFQM excellence model. The strategic planning process in the EFQM model starts with an analysis of the company’s stakeholders (EFQM model in action 2017). For Julphar, the list of stakeholders would include its customers, employees, partners, and suppliers, and the governments and societies of the countries where it operates, and also the public sector because it is a publicly-traded company. Then their needs are identified through special processes that are designed to gather data through surveys, focus groups, benchmarking, and other methods that may be appropriate for them. The most important pieces of information are then used to develop plans for the company. The plan often consists of goals that need to be met in certain timeframes, resources that are necessary to meet these goals, the timeframes themselves, key processes that need to be used, information about the ownership of components, and the analysis of the expected costs and benefits.

To deliver the results outlined in the plan, the organization subsequently employs a process management view of the situation. This involves the selection of key processes. These are typically represented by the value they deliver to the customer and other stakeholders. The elements required to ensure the operation of these processes are called critical success factors and have to be prioritized during the execution of the plan. Special frameworks for these key processes are then established to manage them. The validity of the framework needs to be constantly evaluated at a regular interval that is no longer than a year (EFQM model in action 2017).

The communication of the plan has to be clear and detailed to ensure its smooth implementation. The EFQM model suggests that communication should be done in a three-way process. The first is a traditional top-down approach where the senior managers explain how the plan is laid out and how the various departments of the organization need to implement it. Then the bottom-up approach allows managers to examine how the members of the team understand the plan. The sideways approach reduces the risk of teams assuming inaccurate responsibilities and committing inappropriate actions due to their misunderstanding of the plan. Plans are often created with the use of various tools such as the balanced scorecard, Hoshin Planning, and dashboards. Julphar focuses considerable attention on detailed plans for the future, and, likely, the company is already familiar with these tools. Therefore, the implementation of strategic planning should not be problematic.

Discussion

Total quality management has proved to be an effective and popular tool for the achievement of excellence among organizations. Its focus on specific principles and beliefs has made it easy to understand and modify for many firms around the world. Regional and company-centric frameworks of excellence have been developed over the years, and for the most part, they take direct inspiration from the eight principles of total quality management. The extremely popular EFQM excellence model has shown that excellence should not be underestimated. Its application to an existing UAE corporation such as Julphar Gulf Pharmaceutical Industries could bring new benefits, even for an already successful company. The nine criteria it uses almost perfectly into the quality management aspects that could bring better customer stratification, higher profits, and competitive advantages in the global market.

Conclusion

This study has shown that quality management is an essential technique for the sustained success of an organization. Julphar is a currently successful company, but with its constant expansion, likely, it will soon require the implementation of a quality management framework such as the EFQM excellence model. Some elements of the study have shown that the company should be ready for its implementation due to its previous history and plans. If the management of Julphar Gulf Pharmaceutical Industries decides to implement such a framework, they may improve the workflow of their business and receive various benefits from it.

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