Strategic Quality Management Definition

Introduction

Strategic Quality Management (SQM) is a process identified in management literature as a blend of total quality management (TQM) and corporate strategy (Juran & green, 1993, Cited by Pheng & Hong, 2005). The SQM concept suggests that considering the provision of quality products and services can have a positive impact on the performance of an organization and the system therein. This concept further seeks to use incremental quality strategies in product or service development in order to enhance the value that the customer attains from the same on purchase (Maylor, 2000).

Proponents of SQM argue that the concept is closely linked to success since the provision of quality products or services ensure that the consumer is satisfied and hence is more likely to conduct repeat purchases. Defining SQM, Pheng & Hong (2005) on their part state that it is the process through which long-term quality goals are established and approaches to meeting the set goals are defined.

Maylow (2000) defines quality in a customer’s perception as the “opinion of the totality of goods and service provision as determined by the consumer” (p.240). This means that the consumer’s perception of quality is affected by whether they associate value to a specific product or service. The organization’s quality can be defined as the ability to conform to set organizational procedures; avoidance of mistakes and the ability to maximize internal efficiency; and the ability of the product or service to serve the intended purpose. To external observers, quality is determined according to perceptions and expectations, which the organization has a role to manage (Maylow, 2000).

Understandably, Maylow (2000) concedes that the intangible nature of quality makes it hard to define especially in the management field. According to him, “quality” exists in one’s mind and is therefore not constant among people.

Strategic quality management is a concept that seeks to improve products or services in order to improve its competitive advantage. According to Moutinho (2000), SQM evolved from total quality management, which in turn evolved from quality assurance. The former was a product of quality control. Quality control is a product of inspection, which is, in turn, evolved from craft. SQM has its central focus as quality value, which is intended for the customer.

SQM is thus a product or placement tool that seeks to give as much value to the final consumer. To this end, SQM is perceived as part of the larger competitive strategy in the organization. However, for any SQM strategy to succeed, the focus must be on customer value, which means that adequate service levels must be attained by the consumers; he or she must get the desired service and he/she must be able to predict the level of value that a product or service has (Moutinho, 2000).

Literature review

Morgan & Smit (1996) approached the subject of quality based on five philosophical approaches. In the transcendent approach, they argue that quality cannot be defined because people do not really know what quality is, though they can recognize the same when an encounter occurs. The second approach is product-based, where the authors define quality as “the presence of desired ingredients in a product” (p. 25).

In a different approach, the authors argue that the opinions and preferences of the user determine whether the product or service produced by an organization was able to meet the consumer’s needs. Quality can also be defined from a manufacturing approach, whereby the ability of the producer to conform to set manufacturing standards is considered. The value-based approach as offered by Morgan & Smit (1996) is the most relevant to this essay. According to this approach, quality is “degree of excellence that can be provided at an acceptable price and to the extent to which variability can be controlled at an acceptable cost” (p. 25). This means that as organizations try to strategically manage quality, several other things, which include pricing, placement and packaging are affected.

Peng & Hong (2005) identifies seven principles, which according to them are critical to the success of SQM. They are:

  1. Total commitment: Here, the authors argue that the management in any organization must be totally committed to the SQM program. Accordingly, the commitment in the top management would spill over to other staff members thus making and streamlining the procedures or processes required to enhance quality easier. Citing Riggs (1994), Pheng & Hong (2005) state that the initiative to make SQM a reality lies squarely on the management of the company. This thought is shared by Tummala & Tang (1994-95), who argue that it is paramount for people in an organization to know the right actions or processes to adopt in order to enhance quality. Notably, however, staff members can only adopt such practices if the top management leads by focusing on the continuous enhancement of products or services. Total commitment thus means that the top management must be willing to constantly embrace innovation, and commit resources and funds to innovative practices.
  2. Customer-driven services: this refers to the ability of an organization to provide services that satisfy the clients by adopting the right processes for service delivery. To this end, Pheng & Hong (2005) argue that the focus of the employees of a service company should target the customer as the main focus of their operations regardless of the departments they work in. This enables them to add value to the products or services at every stage. Getting feedback from the customers is also a vital part of this process.
  3. Eliminating re-work: strategic quality management enables organizations to simplify and standardize work procedures, thus ensuring that work is successful the first time, therefore eliminating the need to fix mistakes on products. This saves time and also ensures that the consumer gets the same quality from a product (Pheng & Hong, 2005).
  4. Teamwork: the performance of SQM requires different people working on a product or service to collectively focus on implementing the SQM principles. This translates to shared goals, objectives as well as responsibilities (Pheng & Hong, 2005).
  5. Training: this entails full and proper training of staff members in an organization for purposes of developing skills and capabilities of staff members, therefore, enabling them to improve the quality of services or products delivered to the customer. Citing Riggs (1994), Pheng & Hong (2005) state that training allows the managers to formulate frameworks through which they can then guide their respective organizations towards improving the quality of products or services.
  6. Respecting and giving decision-making power to staff members: In SQM, decisions are delegated to staff at all organization levels. However, SQM also supports the need for top managers in an organization to retain control of key decisions in the organization (Pheng & Hong, 2005). This then means that though decisions made by employees are advantageous since they boost their morale and increase their responsibility towards implementing decisions that they make.
  7. A continuous process: SQM should be a management process adopted for use in the long-term (Pheng & Hong, 2005). This then means that it cannot be a short-term process adopted to correct specific problems; rather, it should be an ongoing process that is part of the larger management of the organization.

Tummala & Tang (1994-95) identifies issues surrounding SQM as “customer focus, leadership, continuous improvement, speed and prevention, people participation/partnership, and fact-based management” (p.41). In regard to customer focus, the authors argue that SQM realizes that the quality process has the customer as the key consideration. As such, the decision-making process is like a continuous loop that revolves around the customer. In this regard, the authors contend that all value addition attributes associated with the product or services, no doubt lead to more satisfaction to the customer and therefore needs addressing during the decision-making process.

Leadership’s relation to SQM comes in because senior managers need to create quality values that are not only visible but clear to the staff working in an organization. More to this, Tummala & Tang (1994-95) states that the people in senior leadership levels must create high expectations for quality since this will inspire staff members to meet the expectations set by the leaders. Citing Juran (1991), Tummala & Tang (1994-95) observe that active and often personal leadership from the senior managers is capable of creating positive results since the values, expectations and quality culture are communicated efficiently to the staff members.

Continuous improvement, on the other hand, is perceived as the cornerstone of strategic quality management. According to Tummala & Tang (1994-95), organizations should strive to provide the best quality today and even better quality tomorrow. More to this, quality should be enhanced with every production, but the products or services should be consistent in order to avoid confusing the consumer through constant variations. Through continuous improvement, the production process of products or services should have little or no waste, and should also be able to reduce defects in the products or services. Further, improved and effective products should be among the key objectives of an organization which has taken up SQM.

Strategic plans aimed at improving quality hold the key to success [or lack of] of SQM efforts (Tummala & Tang, 1994-95). The plans are long-term and usually involve making commitments to stockholders, customers, suppliers as well as the employees. Accordingly, they are meant to take into account the organization’s short and long-term needs. The plans should involve plans for employee training and development, supplier relations, technology development and other factors that affect quality.

The design of a product or service should also be of high quality in order to conform to SQM principles (Tummala & Tang, 1994-95). This, in turn, means that errors or defects in the design are unacceptable. For this to happen, processes of production should specifically be geared towards quality enhancement. Innovation and speed are also crucial for SQM, especially in the fast-changing contemporary consumer market. This is because the organization would need to adjust the design of its products or service to meet the evolving consumer needs.

The participation of people and their ability to partner with the organization is also crucial to the success of SQM (Tummala & Tang, 1994). The word people in this case mainly refer to employees of the organization and the vendors. With the employees, the organization will need dedicated participation in order to produce quality product or services. With the vendors however, the organization will need some kind of partnership to enable it meet its production objectives. Of notable interest also, is the fact that production organizations can also succeed in upholding quality if the materials provided by the vendors or suppliers are equally good. This therefore raises the need for corporations to develop lasting relationships between them and the suppliers.

Basing the SQM on facts is also crucial to its success (Tummala & Tang, 1994-95). This calls for reliable data, information and data analysis. When such are provided to the managers, they are able to base their decisions on factual projections or indicators. Analyzing trends in the consumer market is also more accurate when the proper information is used.

According to Tummala & Tang (1994-95), SQM implementation largely depends on the above discussed subjects. They are “strategic quality planning; design quality, speed and prevention; people participation and partnership; and fact-based management” (p.44). According to the author, these are the quality initiatives that form the basis of a successful SQM. They must however be used together with proper plans and designs in order to ensure continuous production of quality products or services.

Case study

XYZ Company makes juices from fresh fruits for the consumer market. The company specifically produces juices from oranges, pineapples, and passion fruits. Since the company has a large farm, part of it is used for pineapple cultivation. This means that the main fruits that the company buys from vendors are passion fruits and oranges. For this, the Company has approximately 100 dedicated suppliers.

Overall, XYZ has a group of managers who are extremely loyal to the company. A majority of the employees are from the neighboring region and have witnessed first hand how the XYZ has boosted development in the area through sponsoring community based initiatives. The entrance of other juice manufacturers in the region in the recent past has raised the need for the Company to put more emphasis on quality production in order to beat the competition. The management decided that adopting SQM was the best way to achieve competitiveness.

The process

The CEO decided that the first step would be to conduct a SQM readiness test. As such, senior managers in different departments in the organization were interviewed in order to reveal the main areas that needed improvement. A sample of the employees was also interviewed for the same purpose. Based on the answers obtained from the interviews, the SQM training course was developed.

In the next step, the CEO arranged for the managers to communicate the vision of XYZ Company to all employees. All employees including the farm workers, truck drivers, and those working in the juice production plant were all informed of the new vision. At the end of each session, employees were allowed to ask any question they had about the SQM process.

The next step involved organizing a steering committee that would oversee the training process. The steering committee told the trainers to incorporate the organizational culture into the SQM process in order to improve the credibility of the process among employees. Through the training, employees were able to see sense in the SQM ideas and promised to back the management in their implementation.

While the training was ongoing, a team that would oversee the implementation of the SQM changes started work, encouraging those who had been trained to start implementing the objectives learnt in their work processes. The main focus areas identified by the SQM requiring special attention during the process included: customer focus; teamwork; problem solving; continuous improvement; and waste elimination.

In customer focus, the managers encouraged employees to make satisfaction the focus of their operations. This meant that right from picking the right fruits either from the farm or from the suppliers, processing the fruits, packaging and delivery, the employees would only do what would deliver quality value to the consumer. In teamwork, the management made the employees to understand that quality could not be delivered if each and everyone did not do his/her part to ensure that their jobs were done efficiently and in good time.

Problem solving was also essential in realizing SQM objectives in the XYZ Company. Employees were encouraged to report any problems they may experience during work promptly to the management in order to necessitate fast solutions. Waste elimination had several objectives. For starters, those responsible for handling fresh fruits were encouraged to accept only the mature fruits from the vendors.

Farm workers were also encouraged to pick fruits that were ready for processing only. The processing plant was also replaced in order to ensure that the production process was faultless and that the juice production capacity was enhanced without compromising quality. Continuous improvement sought to embrace new technology in the production process in order to keep improving the quality of the juices, their packaging and placement.

Analysis

As Tummala & Tang (1994-95), argues, the SQM implementation should follow “strategic quality planning; design quality, speed and prevention; people participation and partnership; and fact-based management” (p.44). In the XYZ Company’s case the strategic quality plans are not clearly defined. However, one gets the impression that streamlining production in order to ensure the company’s products retained quality in order to retain competitiveness in the market was behind the SQM process.

The biggest loophole in their SQM process however appears in “people participation in partnerships” as identified by Tummala & Tang (1994-95). Though they successfully engage the employees in the process and succeeded in making the employees accept it, no where in their SQM process do they reveal a need to engage or partner with the fruit suppliers. This is despite the company supplies relying on suppliers for the supply of oranges and passion fruits.

The greatest strength of the approach taken by XYZ Company was in the training. As Pheng & Hong (2005) indicates, the training enhances knowledge and also helps the employees to upgrade their skills thus strengthening the organization among its competitors. Through incorporation of the organization’s culture into the SQM, the organization indirectly acknowledges that it values and respects its employees. According to Pheng & Hong (2005), respecting and empowering employees motivates them to practice caution while attending to their tasks, thus meaning that they are more effective thus eliminating the need to rework on the products.

Further, good communication of SQM by the leadership to the employees is touted as one of the key to achieving success in strategy implementation. According to Pheng & Hong (2005), the top leadership should set good practice in order to provide employees with something to emulate. More to this, Juran & Gryna (1993) cited by Pheng & Hong (2005) states that the top management in the organization needs to be involved in the SQM, failure to which the process would fail. XYZ succeeded in engaging the managers in the SQM process and has therefore set a good precedent for other employees to follow.

In treating SQM as an ongoing process, we observe this concept in the replacement of the juice production equipment in the Company. This indicates that XYZ understands that SQM is not a one-time solution to the challenges posed by competition. Rather, it is a long-term process.

Overall, XYZ Company set its SQM goals, generated an action plan and finally implemented the plan. We however do not grasp how the plans were evaluated or how the company wished to control the strategy. We also lack a clear definition of how the company will analyze the performance of SQM.

Recommendations

According to Pheng & Hong (2005), setting goals in SQM should be followed by actions plans, evaluation of the same plans, implementing the plans, strategy control and company analysis. My recommendations to the XYZ Company would specifically encourage the company to establish evaluation plans, strategy control and a method to analyze the SQM results. This will enable the company to evaluate if the SQM is in deed working as expected or whether a few adjustments in the strategy would need to be done in order to achieve success.

Conclusion

Strategic quality management does not only relate to the quality of a product or service, but also the interaction that goes on between the company and the employees. This is mainly because warm relations will be reflected in enhanced quality while cold or indifferent relations will only lead to poor quality.

Morgan and Smit (1996) states that since SQM is a long-term process, there needs to be a continuous gathering of data and any relevant information that could help the company build a stronger strategic plan to enhance quality in its products or services. Through the gathered information, a company is able to understand and easily identify the problems that face it, and is easily able to develop and later implement the appropriate solutions.

Through empowering employees, managers in organizations that have adopted SQM are able to pass the responsibility and the authority of acting on specific information to the employees. This then means that employees do not have to wait for orders from managers in order to respond to urgent circumstances. Rather, they apply the skills, knowledge and tools available at work confidently without the fear of reprisal.

Overall, SQM is a process that requires quality to be built in all aspects of the product or service development. The responsibility of ensuring that the quality concept is understood by all employees lies squarely with the managers in the organization. This means that they need to communicate the quality philosophy to the employees who should then take up the responsibility of ensuring that they perform their work within the acceptable quality standards.

References

Maylor, H. (2000). Strategic Quality Management. In Moutinho, L. (ed.) Strategic management in tourism. Wallingford, OX: CABI. Web.

Morgan, N & Smit, E. (1996). Contemporary Issues in Strategic Management. Johannesburg: Pearson South Africa. Web.

Moutinho, L. (2000). Strategic management in tourism. Wallingford, OX: CABI. Web.

Pheng, L.S & Hong, S. H. (2005). Strategic quality management for the construction industry. The TQM Magazine 17(1), 35-53. Web.

Tummala, V.M.R & Tang, C.L. (1994-95). Strategic Quality Management, Malcolm Baldrige and European quality awards and ISO 9000 certification: core concepts and comparative analysis. Annual Issue of IIE (HK), 40-54. Web.