Topic 4 MEM678

TOPIC 4: TQM (MEM678)
TQM – The Organizational,

Communication, Management
Role Responsibilities and
Teamwork Requirement
Prepared By: Prof Ts Dr Nor Hayati Saad

Revised by: Ir Dr Noriah Yusoff
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TOPIC 4: CONTENT
The content of this topic includes:
1. The organizational structure
2. Management Roles and Responsibilities towards
TQM Culture
3. Teamwork Requirements for TQM
4. Communications for Quality; Amongst the
organizational structure and between customer-
supplier
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(4.1)
THE ORGANIZATIONAL
STRUCTURE
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The Organizational Structure
Basic types of Organizational Structure
 The Functional Structure

 The Divisional Structure
 The Matrix Structure
 The Line and Staff Structure
 The Project Structure
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The Functional Type Organizational Structure
The functional structure groups people together into functional

departments such as purchasing, accounts, production, sales, marketing.
These departments would normally have functional heads who may be
called managers or directors depending on whether the function is
represented at board level.
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The Divisional Type Organizational Structure
A divisional organizational structure usually consists of several parallel teams

focusing on a single product or service line. Examples of a product line are the
various car brands under General Motors or Microsoft's software platforms.
Each division operates separately, self-sufficient unit without having to rely
heavily on the parent company or top management of the organization,
equipped with their own machineries, supplies and resources, which allow for
a more autonomous method of operation.
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The Matrix Type Organizational Structure
In the typical matrix structure, a project manager is assigned from within one of
the functional departments in either a part time or full time capacity. They are
assigned project team members from various departments, who are released
from their departmental duties (at least partially). Thus, a high priority can be
placed on the project while maintaining the functional division services
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The Line and Staff Type Organizational Structure
Most large organisations belong to this type of organisational structure.

These organisations have direct, vertical relationships between different
levels and also specialists responsible for advising and assisting line
managers. Such organisations have both line and staff departments. Staff
departments provide line people with advice and assistance in specialized
areas (for example, quality control advising production department).
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The Project Type Organizational Structure
In the project-oriented organization, the project managers usually have

a great deal of independence and authority. They are able to draw on
resources with little required approval. Their work mostly on a project
basis and are therefore structured around projects. This includes
construction contractors, architectural firms, and consultants.
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THE FUNCTIONAL STRUCTURE
● In the functional structure, the organisation is

divided into functions such as operations and
maintenance.
● Communication occurs vertically up or down the
chain of command, rather than horizontally accross
functions.
● People are specialized in aspect.
● Employees are evaluated on a clear, narrow set of
responsibilities.
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DISADVANTAGES OF THE FUNCTIONAL
STRUCTURE
1) The functional structure is designed primarily for
the administrative convenience of the organisation,
rather than for providing high quality service for the
customers.
2) The functional structure separates employees from

customers: one‟s boss is the customer whom the
employee must satisfy.
3) Managers are rewarded for satisfying functional

goals.
Continues
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DISADVANTAGES OF THE FUNCTIONAL
STRUCTURE
4) The functional structure inhibits process

improvement: no organisational unit has control over
a whole process
5) Functional organisations often have a separate

function for quality, called Quality Control or Quality
Assurance: this provides people with the excuse not
to worry about quality.
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REDESIGNING ORGANISATIONS FOR
QUALITY
1) Poor organisation design can be devastating to a

company.
2) One of Deming 14 points is to – break down

barriers between departments because people in
various depts. must work as a team.
3) People cannot contribute to customer satisfaction

and continuous improvement if they are confined to
functional prisons where they cannot see
customers or hear their voices.
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Approaches to break down these barriers are:
 To focus on processes,
 Recognise internal customers,
 Create a team-based organisation,
 Reduced hierarchy, and
 Use steering committee
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Breakdown Barriers: Focus on Processes
Process is how work creates value for customers.
Common business processes include;
 - acquiring customer and market knowledge,
 - fulfilling customer orders,
 - purchasing ,
 - developing new product or service,
 - strategic planning,
 - production or service delivery,
 - distribution,
 - R&D,
 - information management,
 - performance measurement and
 - training.
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Breakdown Barriers: Focus on Processes
Individuals or groups, known as process owners, are

accountable for process performance and have the
authority to manage and improve their process.
Process owners may range from high level

executives who manage cross-functional processes to
workers who run machinery on the floor.
By aligning the structure of an organisation with the

actual processes that the organisation performs,
customers may be served more effectively.
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Breakdown Barriers: Internal Customers
1) An internal customer is another person or group
within the organisation who depends on one‟s
work to get their work done.
2) Chains of customers.
3) Employees begin to think about satisfying the

next person in the process (horizontal) rather
than their supervisor (vertical).
4) Satisfying the internal customers first is the best

way to satisfy the external customers.
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Internal customer is a technical term used in

management science popularized by Joseph M.
Juran
He defined an internal and external customers as

anyone affected by the product or by the process used
to produce the product, in the context of quality
management. Internal customers may play the role as
supplier, processor, and customer in the sequence of
product development.
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Cont‟d
An internal customer is “anyone you count on

or rely upon to complete a task or a function or to
provide you with information so that you can get
your job done…and anyone who counts on you to
complete a task or function or to provide them with
information so that they can get their job done.”
(Rosenberger, 1998)
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Example
1) A dispatch department may be the internal customer of a
packing department, which in turn may be the internal
customer of the manufacturing process.
2) Another example, machine operators in a manufacturing
plant are customers of maintenance.
R&D
Product design manufacturing sales
marketing purchasing
Internal customers in a manufacturing company

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Breakdown Barriers: Team Based
Organisation - TBO
Definition : Non-traditional, innovative work
environment relying on teams to achieve
its objectives.
TBO's major characteristics include:

1) Mutual trust,
2) Employee empowerment in planning, organisation,
and goal-setting,
3) shared responsibility for self-management,
4) shared accountability for performance, and
5) shared leadership.
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Breakdown Barriers: Team Based
Organisation - TBO
1) Organisationnal redesign into teams.
2) By bringing together everyone associated with a

process, practices that are wasteful or compromise
quality much easier to identify and eliminate.
3) People see and change procedures they could see

or change in a functional structure.
4) If a team is responsible for an entire process, they

don‟t have to worry that their improvement efforts
will be undermined.
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EXAMPLE: TBO ORGANISATIONAL STRUCTURE
OF THE CLEAR LAKE PLANT
TEAM
SAFETY REPS
TEAM COUNCIL
CORE
PROCESS
TEAM
INNOVATION SAFETY
TEAM REPS
QUALITY
REPS
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(4.2)
MANAGEMENT ROLES AND
RESPONSIBILITIES TOWARDS
TQM CULTURE
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The Importance Of an Organizational
Change Towards TQM
■ Organisational change is needed in

implementing TQM and constantly
thereafter.
■ In the initial stage, change the culture of
the organisation.
■ One important aspect of continuous
improvement is reengineering.
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Types of Organizational Changes
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Management Roles in an
Organizational Change
3 groups of people in an organisation:
 senior management
 middle management, and
 the workforce.
Each has a critical role to play in changing

culture.
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Management Roles in an
Organizational Change
 Senior managers must ensure that their

vision of TQ is successfully executed
within the organisation.
 Middle managers provide leadership to

design the systems and processes.
 The workforce is to deliver the quality.
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Changing an Organizational Culture
For TQM
Companies adopt TQM for 2 basic reasons:
1. Competition that poses a threat to its profitable
survival.
2. TQM represents an opportunity to improve.
Most firms moved towards TQ because of the first reason. Example Xerox its
market share fall from 90% to 13%, and Milliken faced increase competition
from Asian Textile Manufacturers.
When faced with a threat to survival, a company effects cultural change more
easily. Under this condition, organizations generally implement TQ effectively.
Cultural change is not easy, it takes several years to complete and often fail due
to resistance by middle management. Why?
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How Organizational Culture Is
Changed
1) Leaders must articulate the employees the direction
in which they want the company to go.
2) Leaders must expend cultural change through
communication.
3) Early success must be publicized.
4) Leaders must personally practice the desired
behavior.
5) Leaders serve as the role models for the new
culture.
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Some Common TQM Implementation
Mistakes
1) TQM is regarded as program

2) Short-term results are not obtained
3) Goals are set too low
4) Training is not properly addressed
5) The focus is mainly on products, not
processes
6) Senior management is not committed.
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Some Common TQM Implementation
Mistakes
7) The organization is too successful and

complacent
8) The use of teams to solve cross-functional
problems is over emphasized.
9) Management fails to recognize that quality
improvement is a personal responsibility at all
levels of the organization.
10) Little empowerment is given to workers. etc.
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Making The TQM Culture Permanent
1) Make involvement in TQM a required part

of people‟s responsibilities.
2) Use the existing organization to implement
TQM.
3) Make sure everyone spends at least one
hour a week working on quality issues.
4) Change the measurements and information
systems
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Elements Of TQM Culture
1) Culture that values: customers; improvement; teamwork;
changing jobs due to improvements dictated by customer
needs
2) In a TQM culture, everyone believes that customers are
the key to the organization's future and that their needs
must come first.
3) Employee in a quality-oriented culture act as a team.
4) If someone was not at her desk and when her phone
rings, another employee will answer it rather than leave a
customer hanging.
5) Organizations that focus on customers, continuous
improvement, and teamwork have a good chance of
succeeding at TQM.
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Baldrige National Quality Program Criteria
for Performance Excellence
Malcolm Baldrige award is a recognition for the quality

management system practitioner. The criteria are as
follows:
1) visionary leadership
2) customer-driven excellence
3) organizational and personal learning
4) valuing employees and partners
5) agility
6) focus on the future
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Baldrige National Quality Program Criteria
for Performance Excellence
7) managing for innovation

8) management by facts
9) social responsibility
10) focus on result and creating values, and
11) system perspective
These values provide a good summary of the cultural

elements necessary to sustain a TQ environment and are
embedded in the beliefs and behaviors of high performing
organizations.
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Cultural Change Successful Story-
Boeing
1) Identify norms that currently guide behavior and
attitudes.
2) Identify behaviors necessary to make organization
successful tomorrow.
3) Develop a list of new norms that will move the
organization forward.
4) Identify the culture gaps – the difference between
the desired norms and actual norms.
5) Develop and put in place an action plan to
implement the new cultural norms
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ADDITIONAL MATERIALS ON
CULTURAL CHANGE
 Culture is the set of beliefs and values shared by the people

in an organisation.
 Culture is a powerful influence on people‟s behaviour,
because it operates without being talked about.
 TQM should be consistant with the organisational structure.
 Culture is a term that has various meanings: In term of
organization it means - The set of shared attitudes, values,
goals, and practices that characterizes an institution,
organization or group.
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CULTURAL CHANGE
Culture is symbolic and is described by telling stories about how

we feel about the organization. A symbol stands for something more
than itself and can be many things, but the point is that a symbol is
invested with meaning by us and expresses forms of understanding
derived from our past collective experiences. The sociological view
is that organizations exist in the minds of the members. Stories
about culture show how it acts as a sense - making device.
Culture is unifying and refers to the processes that bind the
organization together. Culture is then consensual and not
conflictual. The idea of corporate culture reinforces the unifying
strengths of central goals and creates a sense of common
responsibility.
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CULTURAL CHANGE
Culture is holistic and refers to the essence – the reality of the
organization; what it is like to work there, how people deal with each
other and what behaviors are expected.
All of the above elements are interlocking; culture is rooted deep in

unconscious sources but is represented in superficial practices and
behavior codes. Because organizations are social organisms and not
mechanisms, the whole is present in the parts and symbolic events
become microcosms of the whole.
Cultural change has come to mean any innovation that is new and
found to be useful to a group of people and expressed in their behavior
but which does not exist as a physical object. Humanity is in a global
"accelerating culture change period", driven by the expansion of
international commerce, the mass media, and above all, the human
population explosion, among other factors.
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CULTURAL CHANGE
Culture change must mean changing the corporate ethos, the

images and values that inform action and this new way of
understanding organizational life must be brought into the
management process.
The medium of culture is social interaction, the web of

communications that constitute a community. Here a shared
language is particularly important in expressing and signifying a
distinctive organizational culture.
If real change is to occur in organizations rather than cosmetic or

short – lived change, it has to happen at the cultural level.
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CULTURAL CHANGE
Culture and Success

Deal and Kennedy (1982) argue that culture is the
single most important factor accounting for success or
failure in organizations. They identified four key
dimensions of culture:
1) Values – the beliefs that lie at the heart of the corporate

culture.
2) Heroes – the people who embody values.
3) Rites and rituals – routines of interaction that have strong
symbolic qualities.
4) The culture network – the informal communication system or
hidden hierarchy of power in the organization.
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(4.3)
TEAMWORK REQUIREMENTS
FOR TQM
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What Is A Team?
Definition:
A team is a small number of people with
complementary skills who are committed to a
common purpose, a set of personal goals, and an
approach for which they hold themselves mutually
accountable, or for short,
Team is defined as a group of people working

together to achieve common objectives or goals.
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Cont‟d
Team work
1) Teams are very effective in solving all quality and
productivity problems.
2) Teamwork is the cumulative actions of the team
during which each member of the team
subordinates his interests and opinions to fulfill the
objectives or goals of the group.
3) Many heads are better than one, especially in
meeting ever-changing customer needs.
4) Each member of the team have special ability that
can be used for the problem.
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Cont‟d
Team work
6) Many processes are so complex that one person
cannot able to solve completely.
7) Based on the synergic effect, whole is greater
than sum of its parts.
8) Team work is better than sum of its member
contribution.
9) Team builds a rapport with each other that allows
everyone to do a better job.
10)Teams provide the vehicle for improved
communication.
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The Importance Of Teams
No matter what you are trying

to do, teams are the most
effective way to get the job
done
‘Donald Peterson, Former CEO Ford Motor Company’.
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The Importance Of Team In TQM
1) Teamwork enables various parts of the organisation

to work together in meeting customer needs that
can seldom be fulfilled by employees limited in one
specialty.
2) TQM recognises interdependence of various parts
of the organisation and uses teams as a way to
coordinate works.
3) Teams provide the capacity for rapid response to
changes in customer demands.
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Types of TQM Teams
Many different types of teams that sometimes it is
difficult to tell one from another. Some common types
of teams are:
1) Steering Committees
2) Problem-Solving Teams
3) Departmental Problem-Solving Team
4) Cross-Functional Teams
5) Natural Work Teams
6) Self-Managed Teams
7) Virtual Teams
8) Project Teams
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TQM Teams: Steering Committee
1) Responsible for establishing policy for TQM.
2) Guiding implementation and evolution of TQM.
3) Reviews and adjust when necessary.
4) Top manager overall responsibility.
5) Creation of high level planning group with the
responsibility for guiding the organisation‟s quality
effort.
6) Role of steering committee is to launch, coordinate
and institutionalise annual quality improvement
activities.
7) Steering Committees are the focal point for quality
in the organisation
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TQM Teams: Problem Solving Team
Problem Solving Team: is the most common setup.

This team basically identify and solve specific
quality-related problems
There are two types of problem-solving teams:
 Departmental problem-solving teams, and

 Cross-functional teams.
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Problem Solving Team:
Departmental Problem-solving Teams
■ Limited in memberships to employees of a

specific department.
■ Standardised problem-solving methodology.
■ group implements own solution.
■ Teams stay intact.
■ Problems are diverse
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Problem Solving Team:
Cross-functional Teams
● Members come from several departments
and/or functions.
● Problems include a wide variety of functions.
● Teams dismantle after the completion of

problems.
● Teams receive training in problem-solving,

identify and solve problems and implement
solutions.
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TQM Teams: Natural Work Team
1) People who work together everyday to perform a

complete unit of work such as assembling a
motorcycle, creating a circuit plan for a TV set, etc.
2) Replace rather than complement the traditional
organization of work
3) Team members share responsibility for completing
the job
4) Usually cross-trained to perform all work tasks and
often rotate among them
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TQM Teams: Self-Managed Team
1) Self-Managed Teams replace rather than

complement the traditional organization of work.
2) Manage themselves: budgeting, scheduling, goal-

setting, ordering supplies, performance evaluation
and hiring.
3) Members must possess interpersonal skill as well

as technical skill.
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TQM Teams: Virtual Team
What is a virtual team?
Definition:
There are several different definitions of virtual teams,

but what these definitions have in common is that,
in addition to being a team, virtual team members are
physically separated (by time and / or space) and that
virtual team members primarily interact electronically.
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Cont‟d
TQM Teams: Virtual Team
■ Virtual teams as teams of people who

primarily interact electronically and
who may meet face-to-face occasionally.
■ Examples of virtual teams include a team

of people working at different geographic
sites and a project team whose members
telecommute.
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TQM Teams: Project Team
 A project team is a team whose members usually
belong to different groups, functions and are
assigned to activities for the same project.
 Usually project teams are only used for a defined
period of time.
 They are disbanded after the project is deemed
complete. Due to the nature of the specific
formation and disbandment, project teams are
usually in organization.
 Project teams need to have the right combination
of skills, abilities and personality types to achieve
collaborative tension
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Criteria For Effective Teamwork
■ Teams must achieve their goal for quality
improvement
■ Teams that improve quality performance quickly

are more effective than those that take a long
time.
■ Team must maintain or increase its strength as

a unit.
■ Team must preserve or strengthen its

relationship with the rest of the organisation.
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10 elements For Successful Team
1) Clarity in team goal. 6) Well-defined
2) An improvement decision procedures
plan 7) Balanced
3) Clearly defined role participation
4) Clear 8) Established ground
communication rules
5) Beneficial team 9) Awareness of group
behavior process
10) Use of the scientific
approach
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Advantages of TEAMWORKING
1) Want to be progressive in making decisions that

affect their work
2) Believe that being involve in teams will enhance
their potential for promotion or other job
opportunities
3) Believe that teams will be privy to information
that typically is not available to individuals
4) Enjoy the feeling of accomplishment and
believe that teams provide greater possibilities
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Advantages of TEAMWORKING
5) Want to use team meeting to address personal

agendas
6) Concerned about the future of the organisation
and feel a sense of obligation to help improve it
7) Enjoy the recognition and rewards associated
with team activity
8) Find teams to be a comfortable social
environment
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Drawbacks of Not Joining TEAMWORKING
1) Have more outside commitment

2) Fear or embarrassment with other members
3) Having overwhelming workloads
4) did not trust the management
5) Fear of failure or losing jobs
6) Simply having “ I don‟t care “ attitude
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Good Teamwork Member’s Attributes
■ Members most important in teams
■ Members must be representive of the

department.
■ Members must possess the technical

knowledge.
■ Members must have problem-solving skill.
■ Members must have strong interpersonal skill.
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Common Teamwork Tasks
1. Problem Selection/Identification:
 New teams not skilled enough to solve massive problems.
 New teams often select problems not associated with quality.
2. Problem Diagnosis:
 Understand the symptoms.
 Theorizing as to causes.
 Testing the theories.
3. Work Allocation:
 Team needs to assign people tasks that will utilize their skills to the
greatest extend possible.
 Team needs to be aware of status differences.
4. Communication:
 Carefully assign people to key communication tasks and training
people in communication.
 Use a variety of media.
 Communication is a series of steps that can be improved.
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Cont‟d
Common Teamwork Tasks
5. Organizational Support:
 Management needs to support team efforts.

 Management issues a clear charge to the group.
 Team members need adequate training.
 Performance appraisals need to be changed.
 Management must provide team with necessary
resources.
 Selection processes for team members might be
changed.
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Successful Teamwork Practitioner
Sentara Norfolk General Hospital in Norfolk,
Virginia:
■ Reporting result on X-Ray and CAT Scan

improved by 81%.
Globe Metallurgical:
■ Self-managed teams.
■ Winner of Malcolm Baldrige Award.
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Breakdown Barriers: Reduced Hierarchy.
■ Reduction of the hierarchical layers in the

organisation.
■ Reduction in middle management facilitated by
advances in information systems.
■ Elimination for non value-added activities.
■ Empowerment of front-line workers.
■ Less supervision and coordination for
managers.
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Breakdown Barriers: Reduced Hierarchy-Example
A simple organizational hierarchy depicted in the form of a tree

diagram. Diagrams like this are called organizational chart
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Maslow's hierarchy of needs
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SUMMARY
■ Problems with the functional structure
such as overly complex processes and
a narrow focus for individuals, have led
to many quality oriented organisations
to abandon this structure.
■ New structures that feature internal
customers, process teams, less
hierarchy and quality steering
committees developed.
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(4.4)
COMMUNICATIONS FOR
QUALITY; ACROSS THE
ORGANIZATIONAL STRUCTURE
AND BETWEEN THE
CUSTOMERS-SUPPLIERS
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Communications for Quality
Definition: Communication is defined as the exchange of
information and understanding between two or more persons or
groups.
Methods of Communications:
1) Verbal communication either between individuals or groups,
using direct or indirect methods, such as public address and
other broadcasting systems and recordings.
2) Written communication in the form of notices, bulletins,
information sheets, reports, e-mail and recommendations.
3) Visual communication such as posters, films, video,
internet/intranet, exhibitions, demonstrations, displays and
other promotional features. Some of these also call for verbal
and written communication.
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Communication is linked in the quality management activities.
The ability to communicate effectively across the organizational
structure is the key to the successful and sustainable TQM
implementation.
Generally, the information being disseminated using the three
methods mentioned in the previous slide. However, effective
communication must complement between the method and
frequency of the dissemination.
 Monthly meeting between CEO and staff
 Monthly Departmental Meeting
 Email
 Memebrs of the inner circle
 Company Newsletter
 Customer (Internal/External) issues
 Verbal/Written from manager or supervisor
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It is the duty of the Quality Director or TQM Coordinator to
translate a clear directive to the senior management team and
assist them in preparing and delivering the clear directive to all
level of employees.
This must be signed by all business unit, division, or process

leaders, and distributed to everyone in the organization. The
directive should include the following:
1) Need for improvement.
2) Concept for total quality.
3) Importance of understanding business processes.
4) Approach that will be taken and people’s roles.
5) Individual and process group responsibilities.
6) Principles of process measurement.
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Communication linkages the three common level groups of people in

most TQM organizational structure, such as:
 Senior managers must ensure that their vision of TQM is

successfully executed within the organization.
 Middle managers provide leadership to design the systems and

processes.
 The workforce /other employees is to deliver the quality (who

may not care, so long as they still have jobs and get paid,
though these people must be the custodians of the delivery of
quality to the customer and own that responsibility).
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The core of TQM is

customer-supplier
interfaces; both
externally and internally.
At each interface
intervene a number of
processes that is
supported by the people
and systems in the
organization. The core
must be reinforced by
commitment to quality,
communication of
quality message with
good TQM working
culture
Customer-Supplier Interfaces Model
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Communications for Quality:
Customer – Supplier Relationships In
TQM
1) Every company is part of a long chain.
2) Each company is a customer to its suppliers and a
supplier to its customers.
3) Your customers‟ customers are your customers as
well.
4) Creating mutually beneficial relationships with
suppliers and customers (CSR, corporate social
responsibility)
5) Expanding the pie rather than arguing over its
division.
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Communications for Quality: in the
Customer-Supplier Perspective
Type of Customers:
 External - outside the organization (people who pay
the bills.) such as:
End-user customers
Manufacturer (OEM, original equipment
manufacturer) for suppliers.
 Internal - people within your organization who
receive your work
 In many situations, producers have multiple
customers and therefore find it useful to identify
“core customers”
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The Importance Of Customers

 Customers are at the center of TQM
activity, devoting to satisfy them is the
first principle of TQM.
 Customers are recognized as the
guarantee of the organization's
continued existence
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Importance of the Customer Satisfaction
and Loyalty
1) “Satisfaction is an attitude; loyalty is a
behavior”
2) Loyal customers spend more, are willing to
pay higher prices, refer new clients, and are
less costly to do business with.
3) It costs five times more to find a new
customer than to keep an existing one
happy.
14/04/2020 83
Identifying Customer Need Through:

1) focus-group discussions
2) individual and group interviews
3) surveys
4) comment cards
5) study repair and return data
6) customer complaints
7) warranty claims
8) analyze competitor products
14/04/2020 84
The Importance Of Suppliers

1) Suppliers are also critical to satisfy the needs of
the customer
2) The final product cannot be better than the parts
that comprise it
3) Suppliers shape the quality of the processes used
to produce the product
4) Suppliers influence the cost as well as the quality
of the product
14/04/2020 85
Principles For Customer – Supplier
Relationships Under Total Quality:
1) Recognition of the strategic importance of
customers and suppliers
2) Development of win-win relationships between
customers and suppliers
3) Establishing relationships based on trust
4) Trust is develop over time through a pattern of
success by all parties to fully and faithfully deliver
that which was promised
14/04/2020 86
Practices For Dealing With Suppliers
1) Purchasing decisions based on quality as well as cost
2) Reduced number of suppliers:
 reduced administrative costs
 reduced variability in incoming products
 Small numbers of partnerships
3) Long term contracts
4) Developing cooperative relationships
5) Early involvement of suppliers in design of new products
6) Joint quality planning between customers and suppliers
14/04/2020 87
Quality Customer – Supplier Relationship
Practitioner/Example
1) GE Appliance and DJ Inc.
2) DJ went from being one of GE suppliers to its
sole source
3) GE „s supplier seminars in SPC
4) Early involvement in product design
5) Frequent flows of information
6) Benchmarking inside and outside the industry
14/04/2020 88
Communications for Quality: in the Customer-
Supplier Perspective
American Customer Satisfaction Index
 Measures customer satisfaction at national

level
 Introduced in 1994 by University of Michigan
and American Society for Quality
 Continual decline in index from 1994 through
1998 with a small improvement into 2000
suggests that quality improvements have not
kept pace with consumer expectations
14/04/2020 89
JD POWER MALAYSIA QUALITY STUDY
This is the third J.D. Power Asia Pacific 2005 Malaysia Initial
Quality Study (IQS) conducted so far. The study measures new-
vehicle quality in the first two to six months of ownership.
The study focuses on 135 problem symptoms affecting quality

across nine IQS problem categories: ride, handling and braking,
features and controls, seats, heating, ventilation and cooling,
sound system, vehicle exterior, vehicle interior, transmission, and
engine.
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ACSI (American Customer Satisfaction Index) Model of Customer Satisfaction
14/04/2020 96
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Leading Practices (1 of 2)
 Define and segment key customer groups

and markets
 Understand the voice of the customer
(VOC)
 Understand linkages between VOC and
design, production, and delivery
14/04/2020 98
Leading Practices (2 of 2)
 Build relationships through commitments,

provide accessibility to people and
information, set service standards, and follow-
up on transactions
 Effective complaint management processes
 Measure customer satisfaction for
improvement
14/04/2020 99
Key Customer Groups:
 Organization level
 consumers
 external customers
 employees
 society
 Process level
 internal customer units or groups
 Performer level
 individual internal customers
14/04/2020 100
Identifying Internal Customers
 What products or services are produced?
 Who uses these products and services?
 Who do employees call, write to, or answer questions
for?
 Who supplies inputs to the process?
14/04/2020 101
AT&T Customer-Supplier Model
Your Inputs Your Outputs Your

Suppliers Processes Customers
Requirements Requirements
and feedback and feedback
14/04/2020 102
Customer Listening Posts

 Comment cards and formal surveys
 Focus groups
 Direct customer contact
 Field intelligence
 Complaint analysis
 Internet monitoring
14/04/2020 103
Customer Relationship Management

 Accessibility and commitments
 Selecting and developing customer contact
employees
 Relevant customer contact requirements
 Effective complaint management
 Strategic partnerships and alliances
14/04/2020 104
Measuring Customer Satisfaction

 Discover customer perceptions of business
effectiveness
 Compare company’s performance relative
to competitors
 Identify areas for improvement
 Track trends to determine if changes result
in improvements
14/04/2020 105
Example Customer Satisfaction Survey: The Olive
Garden
1) The Lobby
 Was the lobby staff friendly and did they welcome you to the
restaurant?
 Were you seated in a timely, efficient manner?
2) The Table Area
 Was your table area clean when you were seated?
3) The Server
 Was your server attentive and there when you needed him/her?
 Was your server knowledgeable and able to answer your questions
about our food and beverages?
 How was the pace of your meal?
14/04/2020 Scale: 1 = poor ; 5 = excellent 106

4) The Food
 How would you rate the taste of your food?
 Please rate the temperature of your food, hot food being piping hot.
 Please rate your visit on the value for the money.
 Overall, how would you rate your visit
 Would you recommend this Olive Garden to a close friend or
relative?
5) Open-ended questions:
 What one thing did you like most about your visit?
 What one thing could we do to improve your experience at The Olive
Garden?
6) Survey form provides address, 800 number, FAX
14/04/2020 Scale: 1 = poor ; 5 = excellent 107

Performance-Importance Analysis
Performance
Low High
Who cares? Overkill

Importance
Low
Vulnerable Strengths
High
14/04/2020 108
Difficulties with Customer Satisfaction
Measurement:
 Poor measurement schemes
 Failure to identify appropriate quality
dimensions
 Failure to weight dimensions appropriately
 Lack of comparison with leading competitors
 Failure to measure potential and former
customers
 Confusing loyalty with satisfaction
14/04/2020 109
Practices For Dealing With Customers:
1) Collect Customer Information Through:

 surveys
 service evaluation cards
 focus groups
 complaints
 video messages
 have top managers of the company act as
customers of their own organizations
14/04/2020 110
2) Disseminate customer information:

 Broadcast this information within the
organization
 Saturate your company with the voice of the
customer
 Customer information must be translated into
the features of the organization's product and
services
14/04/2020 111
3) Use customer information:
 Take advantage of customer feedback

 70% of customers leave a supplier because of
poor quality service, not problem with products
14/04/2020 112
SUMMARY
The principles for developing quality customer –
supplier relationships are :
 Recognizing the centrality of customers and the

importance of suppliers
 Developing win – win relationships
 Building up and acting on trust
14/04/2020 113
SUMMARY
The practices for implementing these principles in
dealing with customers are:
 Collecting information relentlessly about
what customer wants
 Distributing this information broadly within
the organisation, and
 Designing one‟s products and services in
accord with customer demands.
14/04/2020 114
Let’s Recap
1. Discuss the type of organizational structure and how
it is best fit to a particular operation.
2. Review the Management Roles and Responsibilities
towards the TQM Culture
3. Evaluate how teamwork assist in the TQM
implementation
4. Discuss the principle of communications for quality in
the customer-supplier perspective. Identify the key
customer groups at the organizational level; process
level and performer level.
14/04/2020
115

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Topic 4 MEM678

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TOPIC 4: TQM (MEM678)

TQM – The Organizational,

Prepared By: Prof Ts Dr Nor Hayati Saad

 The Functional Structure

The functional structure groups people together into functional

A divisional organizational structure usually consists of several parallel teams

Most large organisations belong to this type of organisational structure.

In the project-oriented organization, the project managers usually have

● In the functional structure, the organisation is

2) The functional structure separates employees from

3) Managers are rewarded for satisfying functional

4) The functional structure inhibits process

5) Functional organisations often have a separate

1) Poor organisation design can be devastating to a

2) One of Deming 14 points is to – break down

3) People cannot contribute to customer satisfaction

 Recognise internal customers,

 Create a team-based organisation,

 Reduced hierarchy, and

 Use steering committee

Individuals or groups, known as process owners, are

Process owners may range from high level

By aligning the structure of an organisation with the

3) Employees begin to think about satisfying the

4) Satisfying the internal customers first is the best

Internal customer is a technical term used in

He defined an internal and external customers as

Breakdown Barriers: Internal Customers

An internal customer is “anyone you count on

Product design manufacturing sales

Internal customers in a manufacturing company

TBO's major characteristics include:

2) By bringing together everyone associated with a

3) People see and change procedures they could see

4) If a team is responsible for an entire process, they

■ Organisational change is needed in

3 groups of people in an organisation:

Each has a critical role to play in changing

 Senior managers must ensure that their

 Middle managers provide leadership to

 The workforce is to deliver the quality.

1) TQM is regarded as program

7) The organization is too successful and

1) Make involvement in TQM a required part

Malcolm Baldrige award is a recognition for the quality

7) managing for innovation

These values provide a good summary of the cultural

 Culture is the set of beliefs and values shared by the people

Culture is symbolic and is described by telling stories about how

All of the above elements are interlocking; culture is rooted deep in

Culture change must mean changing the corporate ethos, the

The medium of culture is social interaction, the web of

If real change is to occur in organizations rather than cosmetic or

Culture and Success

1) Values – the beliefs that lie at the heart of the corporate

Team is defined as a group of people working

No matter what you are trying

1) Teamwork enables various parts of the organisation

Problem Solving Team: is the most common setup.

There are two types of problem-solving teams:

 Departmental problem-solving teams, and

■ Limited in memberships to employees of a

■ Standardised problem-solving methodology.

■ group implements own solution.