Total Quality Management And European Foundation For Quality Management
This paper reports on research which explores the links and differences between quality assurance, or certification of the quality system according to the ISO 9000 series, the broader approach of Total Quality Management and European Foundation for Quality Management. First section of this paper outlines a typology of approaches to introducing ISO, TQM and EFQM. The second section of the paper explains similarities and differences between three quality systems first two by two and then all systems together. Major objective of this paper is to address the competing views on ISO, TQM and EFQM concepts in an attempt to show that these approaches complement each other.
In recent years, many changes have been lived in every topic in the world and the most important change that affects the business is change about quality. Management system in a business refers to what the organization does to manage its processes, or activities, so that its products or services meet the objectives such as, satisfying the customer’s quality requirements, complying with regulations and meeting environmental objectives. Because of these reasons, business must attend the developing technology and change their quality angle. And with the help of constructed quality assurance system, business provides needs of customers, reduces cost of suppliers, increases the competitive power, and improves quality level and efficiency.
The International Organization for Standardization widely known as ISO is an international standard setting body composed of representatives from various national standards organizations. The quest for certification to the ISO 9000 quality standards is a relatively recent growth phenomenon throughout the world. A large number of organizations are also moving down the TQM path. TQM is a management philosophy that seeks to integrate all organizational functions to focus on meeting customer needs and organizational objectives. Limited research is available which examines a number of questions concerning ISO certification, such as the reasons for seeking certification, the types of benefits which might result and in particular, the links with TQM. On the other hand EFQM is a non prescriptive TQM framework based on nine criteria such as customer focus, supplier partnerships, people development and involvement, systematic process management, continuous improvement, leadership, public responsibility and results orientation. Read about lean production vs mass production
In this paper an information about ISO, TQM and EFQM quality systems are given. A comparison between these three systems are made. In section three of this project differences and similarities between ISO, TQM and EFQM will be covered extensively. Finally a total comparison is made between these three systems in order to explain these concepts complement each other.
2. BACKGRAUND INFORMATION
2.1 INTERNATIONAL STANDARDS FOR ORGANIZATIONS (ISO)
ISO is an organization, the International Organization for Standardization that sets standards in many businesses and technologies, including computing and communications. ISO-9000 series of standard was developed by the International Organization for Standardization and over the last few years, the ISO-9000 has become the most popular quality standard. The first ISO standards were published in 1987 and then they were revised in 1994 as the ISO-9000:1994. The next and latest revision of ISO standards was released in 2000 and is therefore referred to as ISO-9000:2000 Standards. The ISO-9000:2000 can be applied to virtually any industry worldwide and is widely embraced in the semiconductor industry.
ISO-9000 currently has three quality standards: the ISO-9000:2000, the ISO-9001:2000, and the ISO-9004:2000. The ISO-9001:2000 has specific requirements for compliance while the ISO-9000:2000 and the ISO-9004:2000 just present information or guidelines. ISO-9000:2000 Quality Management Systems-Fundamentals and Vocabulary aims at establishing a starting a point for understanding the standards and defining the fundamental terms and definitions used in the ISO-9000 family to avoid confusion in their use. ISO-9001:2000 Quality Management Systems-Requirements’ purposes are providing the requirements that must be met in order to achieve certification and defining the requirements for satisfying the need of customers. And finally, the aim of ISO-9004:2000 Quality Management Systems-Guidelines for performance improvements is benefiting all parties through sustained customer satisfaction.
2.2 TOTAL QUALITY MANAGEMENT
Total Quality Management is an approach to the art of management that originated in Japanese industry in the 1950’s and has become steadily more popular in the West since the early 1980’s.TQM is a set of management
practices throughout the organization, geared to ensure the organization consistently meets or exceeds customer requirements and it is wider than just assuring product or service quality. TQM places strong focus on process measurement and controls as means of continuous improvement. In other word, TQM is the process of instilling quality throughout an organization and its business processes.
Total Quality is a description of the culture, attitude and organization of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company’s operations, with things being done right first time, and defects and waste eradicated from operations. Total Quality Management can be considered as a philosophy than a model or method. The three accepted principles well describes Total Quality Management. i) Customer focus; every decision should be taken based on customer expectation in mind. ii) Continuous improvement; continuous effort to improve the organization at all level in products and in services. iii) Integral approach; TQM concerns every aspects of the organization.
2.3 EUROPEAN FOUNDATION FOR QUALITY MANAGEMENT (EFQM)
The European Foundation for Quality Management (EFQM) is a membership based not for profit organization, created in 1988 by fourteen leading European businesses, with a Mission to be the driving force for sustainable excellence in Europe and a Vision of a world in which European organizations excel. EFQM has promoted the concept of partnership with similar National organizations in Europe to help promote sustainable excellence in European organizations. All of these National Organizations have worked with EFQM to develop the Fundamental Concepts of Excellence and promote the EFQM Excellence Model.
EFQM is a way of managing activities based on the Total Quality Management concepts that can lead an organization to sustainable business excellence. The main Total Quality Management concepts engaged include customer focus, supplier partnerships, people development and involvement, systematic
process management, continuous improvement, leadership, public responsibility and results orientation.
3. A COMPARISON
3.1 ISO AND TQM
There are some linkages between these two quality concepts, ISO-9000 and TQM. There are complementary between them. ISO-9000 represents a trend in quality management and it cannot be ignored in today’s business environment. Companies that want to remain competitive and improve their quality systems use the ISO-9000 as a foundation for TQM system. Namely, based on this ISO-9000 is an important part of TQM and implementation of both approaches provide organizational success and competitive advantage. So, both approaches complement each other. ISO-9000 can be implemented first to create stability and consistency in the organization’s work, then the implementation of TQM can enhanced employee motivation and operational efficiency, success and performance. There are essential differences between ISO-9000 standards and TQM. ISO-9000 series registration is done by the quality manager. Quality manager writes manuals and procedures for other managers who afterwards just confirm and approve them without necessarily understanding them. And ?f an organization wants to get ISO-9000 series certification, there is a tendency to think they learnt that how to do quality. TQM, on the other hand, is opposed to this approach. It cannot be done by the quality manager. It has to be led by management and involve all members of organization. Therefore, when it is seen this point of view, getting ISO-9000 series certification in a way is disadvantage. An organization has to unlearn the way of getting quality before they start towards TQM. TQM focuses internally on management commitment and employee training and education and externally on meeting customer requirements exactly. The objective of TQM is to improve continuously every part of organization culture. And TQM considers customer needs and satisfaction as a part of their strategy to gain competitive advantage. On the other hand, ISO-9000 standards focus on consistency in the production of a product or service. The objective of ISO-9000 is to provide a common basis for assuring buyers that specific practices are in conformance with the provider’s stated
quality systems. ISO-9000 is considered as a quality assurance program and TQM is a quality management program. When they are compared, It is seen that quality management approaches are more comprehensive than quality assurance approaches. And these approaches are absolutely different from each other. ISO-9000 is focusing on quality goals based on internal capabilities. Its implementation is associated with line workers and application areas are line functions that are related products. Quality department, line management and staff are the participants of ISO-9000. The basic focus of ISO-9000 is to prove compliance, gain certification and customer assurance. ISO-9000 is used for external assessment needs in order to achieving customer satisfaction and organizations that use ISO-9000 depend on their customers and the aim at meeting customers’ requirements and exceeding their expectations. ISO-9000 process conform step by step procedures in ensuring the quality of finished goods or services and uses different techniques such as process capability and control charts that are used for conforming the specifications and reducing variations in order to achieve a stable and predictable system over time. ISO-9000 does not focus on human interactions. It emphasizes comprehensive guidelines on a quality system. Desired end goal of ISO-9000 is providing advantage in marketing. TQM is more related with top management. TQM focuses on continuous improvements, achieving and maintaining customer satisfaction. In addition of the customer satisfaction, TQM purposes the satisfaction of owners, employees, suppliers and society. TQM is internally generated opposite of ISO-9000 that is externally imposed. Entire organization is seen as a application area and all management, staff and employees in the organization are the participants of TQM. And TQM integrates all organizational functions such as production, customer service, marketing, finance and engineering. It is focused that product and process improvement continuously because of quality is a moving target. There is statistical monitoring namely, data and statistics not just opinions are used to evaluate and improve the quality. In TQM customers determine the quality and people working within the system create quality. For producing in high quality, quality is designed into products and variability is reduced initially. There is zero defect policy means any problem in the production process are filtered out before they get anywhere near the customer. Besides the differences between these two approaches,
both systems interact with one another because of that they cannot be separated. Succeed, leadership and management commitment play an essential role for both system. The similarities and differences between TQM and ISO 9000 can also be explained by a Venn diagram. As seen TQM is like an extension of ISO 9000.
3.2 ISO AND EFQM
The EFQM Model and the Quality Systems Standard
The IS0 9000 version of ISO series of Quality Systems Standards specify the requirements aimed at achieving primarily customer satisfaction by preventing nonconformity at all process stages from design though to servicing. They are what can be called compliance standards aiming at demonstrating confidence in product or service conformance. Issues such as leadership people management, resources, people satisfaction, customer satisfaction, impact or society and business results are not seriously considered. More specifically, the current IS0 9000 standards is linked with the EFQM model criteria as follows:
Management must demonstrate commitment towards the implementation of a quality management system. Also management is responsible for setting the organization’s Quality Policy and Quality Objectives. In the case of the EFQM Model, leaders must inspire support and promote a culture of Total Quality Management, which has a wider scope than Quality Assurance.
(b) Policy and Strategy:
Although in IS0 9000 Quality Systems the policies are more focused on quality rather than more open as in the EFQM Model, the method of developing, communicating and updating is similar to the EFQM stated criteria, provided the leadership is fully committed to this process.
(c) People management:
The IS0 9000 standard, specifies the need for competent people whose training needs are defined, reviewed and satisfied, whereas the EFQM model goes much
deeper assessing the involvement, empowerment and recognition, their agreement on targets and performance, the caring for people and the need for an effective dialogue.
The IS0 9000 Standard calls for resources to be identified and be provided for in a generalized statement whereas the EFQM Model is specific on which resources have to be effectively managed and the method by which they are managed. Such resources are financial, information, supplier relationships, assets, technology and intellectual property.
An effective IS0 9000 Quality System could be able to meet the EFQM requirements, always depending on the commitment of management. The EFQM Model requires more insight into the target setting and also the need for using innovation and creativity.
(f) Customer satisfaction:
The IS0 9000 standard calls for the proper handling of customer complaints on one hand and on the other hand, the effective use for the information collected in corrective/preventive action activities. The EFQM Model calls for the provision of results relating to the customers’ perception on one hand and on the customers perception on the organisation.
(g) People satisfaction:
The EFQM Model asks for the provision of information regarding the expectation of its employees and their satisfaction.
(h) Impact on society:
The EFQM Model calls for the existence of evidence regarding the satisfaction of the needs and expectation of society relating to the perception of the organization and the measurement of the organization’s impact on society.
(i) Business results:
While in the IS0 9000 Quality Systems the monitoring and control focuses on the process management side, in the EFQM Model the performance of the whole organization has to be demonstrated and compared against competitors or best in class organizations.
The IS0 9000 / EFQM connection is shown below.
The new edition IS0 9001: 2000
The new version is addressing the company’s quality system in completely new setting, both with respect to concept and structure. It follows in the footsteps of the EFQM Model. Its conceptual model is structured on the process approach “Plan, Do, Check, Act” and based on the Total Quality Management principles. The focus is shifted towards customer satisfaction, people’s satisfaction, measurement, analysis and improvement. The major difference is that IS0 9001:2000 is more focused on the product or service while the EFQM Model has a wider scope encompassing wider activities of the organization.
Similarities and Differences
EFQM and ISO 9001 are both overall quality management systems and they can be compared as follows,
EFQM constantly improves the organization’s own performance. ISO delivers total client satisfaction through an effective and constantly improving system.
In EFQM, efficiency and better performance results in relation to clients, people, society, and key performance. In ISO, there are more satisfied
clients, and fewer quality related problems and related costs. Improved efficiency is achievable, but there is no explicit objective.
EFQM is non-normative, i.e. it does not prescribe the minimum to be done. It offers a framework for good management. Comparison with others can be done through a system of benchmarking. ISO is normative and prescriptive. A minimum number of well-defined processes must be in place so as to comply with the norm.
Key performance indicators
In EFQM, reporting and indicators are in three domains, namely people, customer, and society. The orientation is rapid towards indicators. In ISO, reporting and indicators focus on the client.
In EFQM there is self-assessment framework. Application can be submitted for external quality award. You perform at your own pace. In ISO, there is recognized validation and accreditation for meeting the standard. Everything must be in place and up to date for the auditor.
3.3 TQM AND EFQM
In order to give any substances to the concept of TQM, many tools, many methods and many models have been developed world wide so far. But In Europe the model for business excellence was issued by the European foundation for quality management (EFQM) which is defined as EFQM is a non for profit membership foundation, is the primary source for organizations in Europe looking to excel in their market and in their business. The model for business excellence by EFQM has gained broad acceptance among both profit and non profit making organizations. The EFQM Model for Business Excellence has 9 distinctive areas, each representing different aspect of the organizations. These nines are subdivided areas which are concerned with what result has been achieved and how these results have been achieved.
Figure shows us nine areas and how they are related to each other.
As mentioned above there are several principles in the TQM. In order to translate these principles into everyday practice we now use the Business model for excellence developed by EFQM. This EFQM may be considered complementary to the existing ISO 9000. Before TQM for examples in ISO 9000 there is a systematic approach. This implies that working processes and resources identified by using performance indicators (PIs).ISO 9000 quality system is quite suitable for seeking for continuous improvement by helping of performance indicators. Actually it is not enough by own self. So that a new quality management tools is required because of the fact that ISO 9000 quality system is stable in dynamic organization. It has ensured no more satisfaction for continuous improvement or goals that are specified from the company after 3 years using ISO 9000. So that they have found their demands met in the model of TQM which is defined by EFQM. The EFQM’s most important requirement is its ability to focus on both organizational and result aspects and their relationship with each other. We use self-assessment in EFQM to see what results are achieved at a given moment. Based on these findings organization can decide what improvement action must be taken to strengthen one or more several enablers in order to achieve better results. EFQM is not only useful for future improvement initiatives. Current projects can also be reprioritized and evaluated on the self-assessment. EFQM intends to disseminate and stimulate the TQM philosophy throughout Europe. At different levels in the organization and in the content of either internal or external quality management, this method can be used to make a self-diagnosis and to formulate points for improvement.
Explanation of the basic method of the EFQM
The basic model illustrates that leadership gives content and guidance to policy and strategy, people management and resources. These are the organizational manner by means of which the process management can be implemented. This determines the degree of satisfaction among the various interested parties customer satisfaction, people satisfaction which is according to internal people (employees), impact on society and in the way
in which they influence with each other lead to desired business result. EFQM looks like Plan Do Check cycle of Deming’s. Formulates its plan and objectives which stands for PLAN, carries out actions which stands for DO, measures the results which stands for CHECK.
The differences between EFQM and TQM
TQM has been conceptualized around basic principles such as consumer focus, continuous improvement and human resource management.
EFQM excellence model was introduced at 90s as the framework for assessing organizations for the European Quality Awards( EQA)
TQM is an excellent model to use after successful implementing of an ISO 9000 Quality System
EFQM model makes TQM easy to enlarge the quality management viewpoint and to take an objective look at your organization and it’s result to achieve
TQM can be considered a philosophy rather than a method or model.
EFQM is a model for business excellence issued by the European Quality and guide to self-evolution, self-assessment .Guide to positioning and improvement.
TQM ensures to guarantee it’s comprehensiveness, dynamism, tracking of the latest developments
EFQM helps to relate the different aspects of the organization to one balanced viewpoint.
It’s ability to focus on both organizational and result aspect and their relationships to each other. These are the elements that classical ISO does
not focus on but takes for guaranteed
Organizational self-assessment to identify and improve their competitive position in order to cope with an ever changing environment. It helps to set priorities in the improvement projects.
 Alan Brown, Ton van der Wiele, “A Typology of Approaches to ISO Certification and TQM” Australian Journal of Management, Vol. 21, No. 1, June 1996,The University of New South Wales.
 Mehdi Jamshidian, Arash Shahin, “ISO 9000 or Total Quality Management: Which One First?” University of Isfahan, Iran