Total Quality Management

- an issue of macroergonomics

LeszekPacholski^'^^ Institute of Management Engineering, Poznan University of Technol-ogy 11 Strzelecka Str., 60-965 Poznan, PolandEM ail: leszek.pacholski @ put.poznan.pl^ Stocznia Szczecinska S. A., ul. Hutnicza 1; 71-642 Szczecin, Poland

Abstract

The author focuses on two macroergonomic issues: the influence Total QualityManagement exerts on the Company Management System and the Human Factorrequired for the TQM implementation to be successful. The basis for the consid-eration is the implementation of the Total Quality Management effected by theleading Polish shipyard - Stocznia Szczecinska S.A.

1 Introduction

The contemporary enterprise has been forced to change the former strategy ofoperations, market share increase, and expansion of the output and sales of newproducts, to the strategy of forecasting the client's demand in advance, and ad-justing the products and manufacturing systems accordingly. This change hasbeen marked by a diversified demand which is difficult to forecast, short productlife cycles and the diminished competitive importance of price (following fromglobalization). This has forced the producers to look for other than price sourcesof competitive advantage, which caused their focus on the issue of quality ofproducts sold and services rendered and shortening of the delivery cycles.What has become the most important prerequisite for the success of a manufac-turing organization is the client's interests located outside of the company itself.The efficiency of processes to service clients and the promptness of the com-pany's reaction to the market is measured by the Total Cycle Time, which refersto the period between the client's expression of a particular desire and his or herpayment and full satisfaction for the product or service obtained. The internal

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company factors, such as orderly internal operations or processing of the paper-work, have become less important.The product quality has become the main element of competitiveness and thefundamental criterion for maintaining the company position on the market. Thesevery changes have increased the importance of quality from being an operationalparameter of production to becoming the most important strategic factor of com-pany management.Another prerequisite of the strategy of company management refers to the mar-ket globalization, which - apart from the products - concerns also capital re-sources and human labor. High profits from increased interest rate of treasurybonds in one part of the world may practically within seconds (thanks to com-puter technology) drain the capital from another part of the globe. The crisis inthe companies of the latter may be generated from practically nothing and with-out any opportunity to prevent it.The issue of globally taken human labor allows to observe that future contactsbetween countries or regions will not concern natural resources or strategic loca-tions, but rather access to work, which may be scarce due to technological prog-ress.The solution of this situation consists in the economic expansion and continuousgrowth, relying on the discovery of reserves, provided by utilizing the entireintelligence of all company employees in order to overcome the threats.

2. Ergonomic aspect of Total Quality Management

The ongoing utilization of the entire intelligence of all company's employees inorder to achieve the continuous growth and economic development of a companyis a macroergonomic type of an activity. Its core lies in the organizational inter-face, which has evolved from the first-generation (human-machine interfacetechnology) and second-generation (user system interface technology) ergonom-ics. It seems that the notion of microergonomics can be justified particularly withreference to the human-machine interface technology, but also with respect tothe second-generation ergonomics.The above notion and that of macroergonomics, which is sometimes called thethird generation ergonomics, might contribute to the entity named ergonomics.Looking for the reserves of economic development in the macroeconomic factoris the most interesting innovation in the contemporary company management. Atthe turn of the eighties in the 20^ century, the concepts of Total Quality Man-agement (TQM), Just in Time (JIT) and Business Process Reengineering (BPR)were developed on this basis.This situation frequently results in vast areas of knowledge generated about aparticular economic innovation, yet this knowledge is deprived of scientificgrounds, such as laws to rule this innovation. The above observation to a largedegree applies to TQM, JIT and BPR.This obliges the scientists involved in companies reality to look for the scientificaspects conforming to the principles of contemporary ergonomics in the area ofthe above mentioned innovations.

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1991 1087

Figure 1: Szczecin Shipyard ships sales (1991-1997)

TQM is based on the following four basic principles:• quality is the main objective of the company operations;• quality is the task of each company's employee;• the notion of quality is multi-dimensional and comprises people, proc-

esses and company systems;• quality consists in preventing faults rather than in detecting them.

Current managerial innovations based on the macroergonomic principles of thecompany identity are assigned a concrete efficiency advantage. There are esti-mations (concerning TQM) that this kind of innovation is capable of utilizing a20% reserve in the company economic development. Such a high reserve in thevalue of company's sales has probably been blocked by the hitherto classical,corporate model of the company management.

uss

5000

1990 1W1 199? 1983 1984 1995 1SGG 18&7 1098

Figure 2: Gross Domestic Product per person in Poland (1990-1998).

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3. Issue of TQM implementation

The considerations presented in this paper are based on the Total Quality Man-agement implementation effected by the leading Polish shipyard - StoczniaSzczecihska S.A. It has to be emphasized that the interest the Stocznia Szczeci-nska has demonstrated in the quality systems is by no means unique in Polisheconomy. Polish quality boom is a natural outcome of the dynamic process ofeconomic renewal and entrepreneurship, experienced by a vast majority of Polishmanufacturing companies.

29,5c _ , _ p

1990 1991 1992 1994 1996 1998

Figure 3: Inflation rate in Poland (1990-1998).

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The Polish processes of dynamic economic renewal and entrepreneurship be-tween 1991 and 1998 are commonly known and recognized with respect to theirmacroeconomic range. They are formally exemplified by the following: rapidgrowth in the Gross Domestic Product (GDP), drastic drops in inflation rates,soaring capital investments (largely from foreign sources), massive job creation,increases in real wages, decline in budget deficits and public debt as measuredagainst the GDP.

1993 1994 1995 1996 1997 1998

Figure 4: Unemployment rate in Poland (1991-1998).

It has to be explicitly emphasized that the achievements of the entire economycome from the successes of individual enterprises. The restructurization accom-plished by the enterprises is in turn grounded on their internal renewal of man-agement and entrepreneurship. The core of this renewal entails the companymanagement system, which comprises the following four elements: strategy,structure, decision making processes and the company identity. The environ-mental factors have made the fourth element - the identity, which refers to thehuman factor and its macroeconomic aspect - the fundamental restructurizationincentive.It is estimated that out of the vast number (75%) of American and British enter-prises that declare the TQM implementation, only 1/4 to 1/3 confirms the signifi-cant influence of the quality program on the competitiveness of their companies.The conclusion is that at least approximately 2/3 of the implemented TQM pro-grams has not met the expectations. The analysis of these discouraging factorsdemonstrates that the most significant flaw of the majority of implemented TQMprograms was underestimation of the human aspect of quality and negligence of

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the issue, which is obvious for contemporary ergonomics, that the change anddevelopment of an organization depends on the people in it.

management of technologyand organizational change

financial restructuring:debt reduction

— . total quality management

privatization

performance modelling

project management',",'••;*; v j &aaa

managing changes

Figure 5: Macroergonomic bases of the company renewal.

Current bibliographic data and the experience form the TQM implementation atthe Stocznia Szczecinska S.A. point out to the importance of the following im-plementation prerequisites:

• the primary role in the TQM implementation processes has to be assignedto the human factor;

• the tradition of excessively narrow perception of quality by the top levelmanagement and the consequent poor involvement of the company boardsin TQM processes has to be abandoned;

• concrete organizational methods to create positive quality attitudes, be-haviors and involvement of employees should be offered;

• unequivocal link of the individual employees' positions with the results ofcomplex management through quality in the company has to be demon-strated;

• quality management concept has to be implemented in a clear and under-standable way to win full employees' approval;

• process leaders at all three levels of the management hierarchy: strategic,tactic and operational one have to be particularly cared for;

• interpersonal communication and open information policy have to be im-proved according to the principle that the worker who is openly informedabout the institution's goal and strategy cannot avoid responsibility.

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4. Conclusions

The TQM philosophy entails the complete range of strategic, actual and opera-tional issues of the company with respect to the technical, human and methodo-logical aspect. The TQM implementation affects the organizational, personneland financial areas as well as the issues of the circulation of information andinterpersonal communication. In the company which implements the TQM phi-losophy, the information flow, which was traditionally limited to the contentdetermined by the supervisors to be necessary, was replaced by the informativeopenness, indispensable to attain the goals and implement the institutional strat-egy. This conforms to the principle that the one who is not provided with infor-mation cannot assume responsibility; an employee who obtains full informationcannot avoid responsibility.Therefore, the Total Quality Management is a special form of the company or-ganizational culture, aiming at making the employees the subjects of operationsand at emphasizing the integration principles of efficient cooperation.The company's strategy, structure, decision-making process and identity are nota set of unrelated elements in the process of the company management. Theyform a tightly knit interrelated unity, or a system.

Figure 6: Company Management System.

Consequently, the implementation of TQM has particular effects on the wholeprocess of the company management. The TQM or BPR must not be perceivedexclusively as "fiddling" with the company identity. The relation between theidentity and decision-making processes is characterized by a particularly stronglink. If the identity changes as a result of a strong charismatic leader, the exces-sively formalized or bureaucratic decision-making processes and their imper-sonal character are shattered. It is worth observing that the bureaucracy of deci-sion-making processes impedes the generation of managerial identity, which istypical of contemporary management innovations such as TQM or BPR.

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Yet stronger relations bind the elements of structure and identity within the com-pany management system. The structure affects the identity by means of struc-ture assisted division of power. The identity that exists in TQM promotes theintegration principles of efficient cooperation, thus making the existing organ-izational structure flexible, and creates links over the traditional hierarchicaldivisions. In practice this makes the organization thinner and more flat. Thisresult is achieved in TQM and BPR by means of replacing the traditional func-tion-oriented structures by the new process-oriented ones.Here the relations between the structure and decision-making processes result indelegating decisions to the level of the competent and responsible employeeswho are directly involved in production. It means that these elements of thestructure which serve as intermediaries, coordinate and supervise the on linelevel are practically eliminated. This task may also be assumed by modern com-puter technologies.Traditional bureaucratic structures are replaced in TQM by mundane teaching ofprocess thinking in terms of task teams, business units, company mission andstrategy, organizational culture and business leaders, all of which are furtherexamples of strong influences the company structure exerts on the companyidentity and strategy. The managerial identity, exemplified in TQM by the busi-ness leaders, may constitute a driving force for profound, expanding and long-term changes of values, principles, rules, and organizational behavior in a com-pany. A leader does not treat the company's employees as the labor force but asthe human capital, which is the resource of the company. An employee treated inthis way becomes an asset him/herself and enables the generation of further,new, valuable assets, getting the recognition of fellow workers and of the socialenvironment of the company.

References

1. Carr D. K. and Johanson H. J., Best practices in reengineering: whatworks and what doesn't in the reengineering process. McGraw-Hill, NewYork, 1995.

2. Oakland J. S., Total Quality Management. Butterworth-Heinemann Ltd.,Oxford, 1992.

3. Pacholski L., TQM - six dilemmas of contemporary management inmanufacturing business. Poznan University of Technology ScientificWorks - Organization & Management, 22, pp. 151-160. 1998. [In Polish].

4. Pacholski L. and Bancewicz J., Total Quality Management as the stage ofthe enterprise management improvement. Poznan University of Technol-ogy Scientific Works - Organization & Management, 25, pp. 163 - 174,1999, [In Polish].

5. Pacholski L. and Krukowski K., Preparation, application and maintainingthe quality management system of Stocznia Szczecihska S.A. accordingto the quality standard ISO 9001. Poznan University of Technology Sci-entific Works - Organization & Management, 18, pp. Ill - 127, 1995,[In Polish].

Transactions on the Built Environment vol 42, © 1999 WIT Press, www.witpress.com, ISSN 1743-3509