Short Case Studies

Principles of Total Quality

By Joel E. Ross
 1. ILLUSTRATIVE CASE
For years, Simplon Devices, a hi-tech manufacturer in the
telecommunications industry, had chosen its suppliers based on a
combination of price and quality as criteria, with an emphasis on price. A
major supplier was Abbot Machine Tool Company. A sudden increase in
demand for Simplon’s products began growing faster than the company’s
ability to keep up.
This, in turn, caused the company to put more pressure on its suppliers,
particularly Abbot. Both companies were in a state of turmoil and both lost a
number of sales to competitors. Both CEOs decided to work together on a
longer-term basis in a partnering relationship to improve quality and avoid
the ups and downs of changing demands. Both realized that changing to a
TQM philosophy was necessary and that they themselves should be change
agents, instead of reacting to customer pressure or the embarrassment
caused by a competitor. Questions
1. What is a partnering arrangement? Discuss the pros and cons of entering
into such an arrangement?
2. How would you go about changing your company’s philosophy and
culture to one of TQM?
 2. ILLUSTRATIVE CASE
Las Vegas is a city with almost 100 casino/hotels offering various forms of
entertainment and services. Mirage Resorts is aware that in order to compete
in this highly competitive environment, it must attract and maintain a highly
competent work force, the primary factor for success in such a service
industry. The company spends a considerable amount of time and money in
hiring and training the most qualified and the friendliest employees it can
find. Employees are selected based on an estimate of whether they are likely
to enjoy their jobs and contribute to Mirage’s efforts to create and nurture
customer goodwill. Following selection, employees are trained and
motivated to provide quality customer service by offering them attractive
benefits, including free meals, health insurance, education assistance, paid
time off, bonuses for perfect attendance, and retirement plans.
Question
Do you think the “material” benefits listed will result in motivation
to provide quality customer service?
 3. ILLUSTRATIVE CASE
Wawa Food Markets took pride in its old-fashioned values but realized that
change was needed to meet the increasing competition in the convenience
store market and the customer challenges in that industry segment. To stand
out from the competition and develop a competitive advantage, Wawa
Stores adopted the following goals: improve customer service and
satisfaction, develop an organization culture that supports continuous
improvement, reduce costs and bolster return on equity, prioritize strategic
plans, and enable employees to contribute to the company’s bottom line.
The company adopted a customer-focused quality strategy that focuses on
five vital issues, namely, strategic planning, team projects, education,
supplier alliances, and customer information.
Questions
1. Are the goals and issues too general in nature? Should they be
quantified? Are they sufficiently specific to provide differentiation or a
competitive advantage?
2. How would you go about developing an organization culture that
supports continuous improvement?
 4. ILLUSTRATIVE CASE
Following the deregulation of the trucking industry in the 1980s, the
competition became more intense, and trucking firms adopted a number of
strategies to survive. Southeast Freight Systems identified employee
performance as a major area that needed improvement. The company
wanted to transform its sales force into one that could attract business that
was both of high quality and a good geographical fit and could provide
exceptional service to all of Southeast’s existing accounts. The company
was convinced that achieving these goals for its sales professionals would
help generate a competitive advantage. To operationalize this advantage,
the company created career planning and professional incentive programs.
Questions
How do you think a trucking company can differentiate its service in order
to provide a sustained competitive advantage?
Would the actions taken by Southeast provide such advantage?
 5. ILLUSTRATIVE CASE
Gulf Coast Health Systems is the primary hospital for a community of 20,000 in the
Panhandle community of Florida. Stakeholders are defined as patients and their
families, the community, the healthcare staff, employers and payors, and students
(nursing and medical students from the university) and their sponsoring institutions.
Healthcare staff includes physicians, midwife and practitioner nurses, physician
assistants, and nurse anesthetists. The payor mix includes Medicare (35%), managed
care/HMO (34%), indemnity (18%), Medicaid (6%), and self-pay (4%). Although the
satisfaction of all stakeholders is important, particular attention is paid to patients and
their families. Satisfaction is determined by an analysis of complaints as well as
surveys of:
1. Overall satisfaction
2. Competitive comparison
3. Likelihood to return to Gulf Coast Health Systems
4. Reason for selection of Gulf Coast Health Systems
5. Evaluation of specific service attributes
6. Evaluation of billing practices
Questions:
1. Evaluate the process of stakeholder satisfaction determination.
2. How would you manage the complaint process for feedback and improvement?
3. Name four or five indicators of quality healthcare in this hospital.
 6. ILLUSTRATIVE CASE

Milliken & Company of Spartanburg, South Carolina, was an early

(1989) winner of the Baldrige Award and later the European
Quality Award. One of the several measures of customer
satisfaction is on-time delivery measured by comparing the
promised and the actual shipment dates. Employee satisfaction is
measured by using annual surveys, a morale index, turnover and
absenteeism, and the degree of employee involvement in company
activities. The company believes that high ratings on employee
satisfaction will result in high ratings on customer satisfaction.

Question:
Do you think that employee satisfaction affects customer
satisfaction? In what way?
 7. ILLUSTRATIVE CASE
Existing management literature acknowledges that there are
fundamental operational differences between small and large firms,
but the question remains: Do these differences hinder the
implementation of total quality management? One study43 found that
there are no operational differences in TQM implementation
attributable to firm size and that small and large firms that produce
high-quality products implement TQM equally effectively. A second
study44 found that two of the most serious problems small companies
may face when implementing TQM are the owner-manager’s lack of
business experience and knowledge and the shortage of financial and
human resources required.
Question
What is your opinion regarding the differences between large and small
businesses and their ability to implement a program of quality
improvement?
 8. ILLUSTRATIVE CASE
HR Focus reported the case of an industrial equipment manufacturer seeking the
help of a consulting firm because the team it formed to improve the process of
engineering, manufacturing, and assembling one of its product lines was not
performing as expected. Production problems were mounting and customers were
becoming unhappy. The consulting firm conducted surveys and interviews and
through observation found out that team members felt frustrated, angry, and
burned out. Several factors undermined team performance, including a lack of
management support, a weak measurement system, and a lack of incentives. The
consultant recommended that the team be disbanded and that its scope and
membership be revamped. It was also recommended that the company be
restructured around product lines.

Questions

1. Do you agree with the consultant? Why or why not?

2. Describe the scope and membership of the revamped team.
3. Why do you think the consultant recommended restructuring around product
lines?