Institution Quality Management

With the development of market relations, ensuring the required quality level of products and services should be the strategic focus of any organization. At the same time, a key concept related to the object of the market (products and services) is its competitiveness.

Quality is a synthetic indicator of the total manifestation of many factors – from the dynamics and the level of development of the national economy to the ability to organize and manage the creation of quality within any company. However, international experience shows that it is in an open market economy, which is inconceivable without the intense competition, manifest factors that make the quality of the survival of producers in determining the result of their economic activities.

There are different approaches to quality management. Each of them is effective if applied in the right situation. The most frequently used approaches to quality management are as following:

1. Total quality management (TQM). TQM is a management system based on the production of quality products and services in terms of customer. TQM is defined as customer-focused, evidence-based and managed by a team process approach. TQM is aimed at achieving planned strategic objectives of the organization through continuous improvement of its work. The principles of TQM are also known as “a general improvement of quality,” “world class quality,” “continuous quality improvement” and “universal quality of service” (Amitava, 2012). TQM is not a program; it is a systematic, integrated and organized work style aimed at continuous improvement. Nevertheless, this system requires a complete coherence between all levels of the organization, making it somewhat difficult to implement.

2. Plan-Do-Check-Act (PDCA) is a cyclically repeating decision process used in the quality management. It is a common method of continuous quality improvement. By means of continuous checks, before, during, and after the manufacturing process, training liability and primarily using the production process of permanent audit can be detected weaknesses in different processes at the enterprise. In practice, the PDCA cycle is used multiple times with different periodicity, which gives a possibility to use the information acquired during previous cycles to eliminate some quality issues completely. 

3. Six Sigma is a production management concept developed at Motorola Corporation in the 1980s and popularized in the mid-1990s after Jack Welch used it as a key strategy in General Electric (Hoyle, 2007). The essence of the concept is the need to improve the quality of the outputs of each of the processes to minimize defects and statistical variations in operating activities. This concept utilizes quality management methods, including statistical methods, requires the use of measurable goals and results. In addition, it involves the creation of special working groups within the company, with projects to address the problems and improve processes. That means utilizing this concept may require additional costs and human resources, which can be inappropriate or unreasonable in some situations.

4. Just-in-time approach (JIT) is a certain philosophy that covers every aspect of the production process, from product development to sales and after-sales service. This approach seeks to create a system that functions well with minimal inventory, minimal space and minimal record keeping. In JIT systems, quality is “embedded” in the product and in the manufacturing process (Hoyle, 2007). Companies that use JIT systems reach a level of quality that allows them to work with small production lots and busy schedule. These systems are highly reliable since they exclude the main sources of inefficiency and disruption, and the workers are trained not only to work in the system, but also to continuously improve it. However, implementing such a system usually requires total remodeling of the production process and intense training for employees.

Summarizing all aforesaid, it is possible to say that PDCA will be the best option to implement because of its affordability and relative simplicity compared with the other approaches. Moreover, this approach usually does not require drastic changes in the structure of the organization or its production process, which makes it even more attractive. Companies utilizing such an approach are often successful in the competitive environment. It is appropriate enough to provide an example of practical implementation of the PDCA, which illustrates the “work” of one of the stages of the model. Nissan began buying second-hand cars subcompacts, including broken ones, and sent them to Japan, which was surprising for market participants. The number of cars purchased by Nissan measured in thousands of units. Four years later, the new car model Nissan Micra was produced, and it was recognized as one of the best in its class. Shipping the broken cars to Japan was a part of a planning step for Nissan Micra (Mohanty, 2008).

Methods of statistical quality control are very popular nowadays. The most famous among them are so-called “seven tools of quality control,” which were widely used in Japan and later in other countries, due to their effectiveness and accessibility for ordinary employees (Basu, 2004):

1. Stratification is used to determine the reasons for the scatter characteristics of products. Essence of the method is to divide the obtained characteristics depending on various factors: the training of employees, the quality of raw materials, work methods, equipment performance, etc. This determines the influence of a factor on the characteristics of a product that allows taking the necessary measures to eliminate their unacceptable scatter.

2. Charts are used for clarity and ease of understanding the interdependence of quantities or their changes over time. The most commonly used are linear, circular and bar charts.

3. Pareto diagram allows visualizing the magnitude of the losses, depending on the various defects. This makes it possible at first focus on eliminating those defects that lead to the greatest losses. To determine the causes of these defects is advisable to additionally use a causal diagram. After clarifying the causes and eliminating defects newly constructed Pareto chart to test the effectiveness of the measures taken.

4. Cause-and-effect diagram is usually applied in the analysis of defects leading to the largest losses. It allows identifying the causes of defects and focusing on eliminating these causes.

5. A histogram is a bar graph, which is used for visualizing the distribution of specific parameter values by repetition rate for a certain period of time (week, month, and year). When applied to the schedule of allowable parameter values, a researcher can determine how often this option falls into the allowable range shifts within tolerance or goes beyond it.

6. Scatter diagram is constructed as a graph showing relationships between the two parameters. This allows determining if the relationship between these parameters exists, giving a possibility to eliminate the deviation of one parameter affecting the other.

7. Control chart – a kind of graphics, which is distinguished by the control limits, indicating the allowable tolerance range characteristics under normal conditions during the process. Output characteristics beyond the control of borders means a violation of process stability and requires an analysis of the causes and taking an appropriate action.

These “seven tools” help solve the most common issues of quality. 

As a conclusion, it is possible to say that in a market economy, the problem of quality is the most important factor in improving the standard of living, economic, social and environmental security. Quality is a complex concept, which characterizes the efficiency of all aspects of the activity: development strategy, production, marketing, etc. Nowadays, key objectives of any company are creation, practical implementation and the subsequent certification of the quality management system. This goal can be achieved by utilizing one of approaches mentioned before, with the choice depending on the type of the organization, its size, place in the market, etc.

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