Total Quality Management in Micro, Small and Medium Enterprise

Technical Guideline

Total Quality Management in Micro, Small and Medium

Enterprise

Sujan Karki

Pushpalata Poudel

November, 2010

List of Abbreviation TQM Total Quality Management

QMS Quality Management System

GDP Gross Domestic Product

BDS Business Development Services

TA Technical Assistance

PF PlaNet Finance

PDSA Plan-Do-Check-Act

Ms. Pushpalata Poudel, SME & MF Expert, joined PlaNet Finance Nepal in December 2007 and Mr.

Sujan Karki, SME & MF Expert joined PlaNet Finance Nepal in January 2009. Both authors are working

to provide training and technical assistance in business development services to micro, small and

medium enterprises under the framework of SMElink project, funded by European Commission. They

also deliver trainings and technical assistance to Micro Finance Institutions.

For any feedback, authors can be reached at:

Sujan Karki – [email protected]/[email protected]

Pushpalata Poudel – [email protected]/[email protected]

Table of Contents List of Abbreviation ....................................................................................................................................... 2

Executive Summary ....................................................................................................................................... 4

Background ................................................................................................................................................... 7

Part A: Understanding Micro, Small and Medium Enterprise ...................................................................... 9

Introduction to MSMEs ................................................................................................................................. 9

General Orientation (Macro) - .................................................................................................................. 9

Managerial Orientation (Micro) - .............................................................................................................. 9

Strategic Management in MSME ................................................................................................................ 11

Three Hats in MSME ................................................................................................................................... 12

Importance of QMS in MSME ..................................................................................................................... 13

Cost of Quality - ...................................................................................................................................... 13

Overall Benefits from Quality Program - ................................................................................................ 15

Part B: Designing QMS for MSME ............................................................................................................... 16

Total Quality Management: Conceptual Framework ................................................................................. 16

Designing Quality Management System: Prototype of QMS Manual ........................................................ 18

Components of QMS Manual - ............................................................................................................... 19

Components of Process Manual - ........................................................................................................... 21

Implementation of QMS in MSME: Technical Guideline ............................................................................ 23

Strategic Quality Management Orientation – ........................................................................................ 23

Forming a Quality Council – .................................................................................................................... 23

Activating the Quality Council – .............................................................................................................. 24

Conducting Internal Audit – .................................................................................................................... 24

Special Implementation Consideration for Small Enterprises .................................................................... 25

Conclusion ................................................................................................................................................... 27

Annexure - 1 ................................................................................................................................................ 28

Annexure - 2 ................................................................................................................................................ 34

Annexure - 4 ................................................................................................................................................ 39

Executive Summary

Irrespective of the size of the enterprise, the essence of its success lies in its ability to satisfy its

customer, staffs and stakeholders which can be achieved through quality program. In case of

MSMEs, developing and adopting certain form of quality program is difficult because of their

lack of abilities and product centric focus. PlaNet Finance provided business development

service for implementing quality program in MSMEs as technical assistance program to address

the quality issues in MSMEs. This paper documents experiences of SMElink project as a

technical guideline to technical service provider, MSME consultant and MSME manager/owner

in their effort to design and help adopt initial form of quality program in an enterprise. However,

the paper doesn‟t address all implementation issues that can come across in the process of

implementation.

MSMEs are important to economies worldwide considering their contribution in GDP,

employment, and local resource utilization. Although the definition of MSMEs varies across

countries, what remains constant is the fact that no economy can envision prosperity without

contribution of MSMEs. In Nepal, MSMEs are defined based on size of fixed assets. Industrial

Enterprise Act categorizes industries with up to 50 million rupees as small industries, and

industries with fixed asset from 50 million to 150 million rupees as medium industries. Micro

Enterprise is defined as one having investment in fixed asset excluding land and building of up

to 2,00,000 NRS, annual turnover of less than 2 million rupees, entrepreneur should be involved

in the business, total number of staffs including entrepreneur not exceeding nine and if the

industry is using engine, energy capacity of less than 10 KW.

Despite being important economic entity, MSMEs face challenge of meeting quality

requirements and create environment of trust for customers which usually stems from their size.

MSMEs tend to have informal rules and procedures, a fluid culture, a simple planning and

control system, modest human and financial resources, and a limited customer base. As a

result, compared to large enterprises, they tend to have greater quality issues.

QMS is one system which can provide effective solution to quality issues faces by MSMEs. Its

aim is to continually improve effectiveness and efficiency of company‟s performance through

process approach. The main thrust of QMS lies in producing quality products and services in the

first place rather than correcting defective products/ services.

Given the benefits of QMS, it can only be fully realized if decision to adopt QMS is strategic

decision of an enterprise. A study had concluded that success of QMS depends on

management commitment which can be derived only if QMS is considered strategically in

enterprise. Similar experience was drawn during implementation of QMS Technical Assistance

program under SMElink project. Approximately only 50% of fifty two enterprises which enrolled

for TA program survived till final certification audit, of which only 50% were QMS certified.

Among many other reasons for such scenario, one of the most influential reasons was that QMS

implementation was not the strategic decision of the entrepreneur/business owner rather

encouraged by the project.

In MSME, design and implementation of quality program is highly dependent on three roles an

individual or few individuals play in an enterprise: entrepreneur, manager, and leader.

Entrepreneurial role visualizes opportunistic value from quality program, managerial role is

needed to execute the program, and leadership role itself is one of the core principles of TQM.

Though it‟s hard to find all three qualities in MSMEs or any enterprise in general case, BDS

should be planned after accessing them and nurturing if possible.

The importance of QMS program for any enterprise can be justified through the cost of quality

approach and of course the overall benefits such program can bring for the enterprise. The cost

of quality is cost of not delivering the quality product or service. Implementation of QMS helps to

reduce certain components of cost of quality immediately while other components are gradually

reduced over time in the long run. Other benefits of QMS include streamlining of business,

identification and rectification of issues/problems facing company, and creating environment of

trust for customers.

This paper adopts QMS as a tool in the pursuit of achieving Total Quality Management. TQM is

the operating philosophy with its focus on leadership, customer satisfaction, employee

involvement, continuous improvement, supplier partnership and performance measures.

Implementation of QMS is a step wise procedure which begins with strategic quality

management orientation of MSME owner/manager to ensure management commitment for

quality program. Forming a quality council headed by businessperson/entrepreneur is the next

step. Quality council sets the direction of QMS and ensures that QMS is in place as intended.

Activating quality council is the next step. Internal audit completes the process whereby the

actual performances are measured, non-conformance is followed up, and corrective actions are

proposed.

BDS/TA provider need to take into consideration few issues unique to MSMEs while

implementing QMS in small enterprises, which are as follows:

As MSMEs are resource and capacity constrained, a non-accredited quality program is

a suitable platform to begin with, which can be stepping stone for enterprise to ultimately

embrace accredited quality program.

Scope of quality program should be limited to critical processes to begin with. Critical

processes are few crucial specialized processes which determine success of enterprise.

Business development service designer or quality consultant should cultivate or nurture

the vision of quality of the enterprise or entrepreneur.

Consideration of value system is must while implementing quality program in MSMEs.

MSMEs are usually family based businesses which is hybrid of socio-anthropological-

economic value system while the value system of quality program is managerial. As a

result, implementer should ensure that these two value system don‟t oppose each other

during implementation of quality program.

The level of formalization and documentation should be dealt with special consideration

especially because many of the advantages being MSME are derived from low level of

formalization and documentation.

Background Irrespective of the size of the enterprise, the essence of its success lies in its ability to satisfy its

customer, staffs and stakeholders. In case of MSMEs, developing and adopting certain form of

quality program is very difficult for number of reasons such as limited managerial abilities,

funding ability and overcoming its product centric focus rather than process.

PlaNet Finance provided business development services on both non-accredited and accredited

quality certification to its beneficiary enterprises as an access to performance enhancement

services under the framework of SMElink project funded by European Commission. This paper

documents experiences of SMElink project as a technical guideline to technical service provider,

MSME consultant and MSME manager/owner in their effort to design and help adopt initial form

of quality program in an enterprise.

This technical guideline is a non accredited quality program which inherits basic quality

principles in pursuit of total quality management. From our experience, this form of quality

program can be beneficial in an enterprise with up to 50 staffs.

This technical guideline is divided into two parts: Part A explains micro, small and medium

enterprise in terms of its managerial features, strategic management characteristics, three most

important roles in enterprise and importance of quality program in terms of cost of quality.

Contents of Part A are selected for those are the ones which have most impact in the design

and implementation of quality program. Part A acts as a premise for the reader to develop the

acceptance to quality program design and implementation logic.

Part B of the technical guideline offers the simple form of quality program in detail. It includes

review of quality principles, design of a simple quality program, implementation guideline and

special considerations to be made in MSMEs. Contents in Part B is supplemented working

documents which are presented in corresponding annexure.

Objective of the paper: The objectives of the paper are as follows:

Provide technical guideline to the implementers of quality program in MSMEs, who might

be the Technical Assistance providers, BDS consultants, or the entrepreneur/ manager/

leader of an enterprise.

Document the experience of PF team of implementing Quality program in micro and

small enterprises as a reference for implementation of similar program in future.

Scope of the paper: This paper draws upon the experience of PF team while implementing

quality program for its beneficiary enterprises which belong to Jewelry/Metal Craft, Pashmina,

and Sustainable tourism sector. Thus, the technical guideline provided in this paper can be

used, with adaptation, in the enterprises working in both product and service sectors. Similarly,

the guideline will be useful in an array of enterprises which fall under the spectrum of micro and

small enterprises with up to 50 employees. This paper provides technical guidance in the

following areas:

Pre-implementation preparation to be carried out in enterprise and considerations to take

into account prior to implementation of quality program in enterprise.

Documentation related with QMS implementation, including QMS Manual and Process

Manuals.

Audit Checklist to support the internal audit process after implementation of quality

program.

Limitations: In spite of the effort to encompass all aspects of implementing Total Quality

Management Program in an enterprise, the paper still has some limitations which are as follows:

The main focus of paper is on QMS as an approach towards achieving Total Quality

Management in an enterprise. As a result, the broader framework required for achieving

TQM is lacking. As a result, this technical guidance can be of lesser value to enterprises

which already have some sort of quality programs (QMS or other programs) and aim to

move towards achieving Total Quality Management.

The paper intends to provide technical guideline to implement quality program in

enterprise, and thus might not address all implementation details which one can come

across while actually implementing QMS in enterprise. TA/BDS provider will need to

develop implementation strategy based on given guideline.

The paper doesn‟t address certification issue which is usually carried out at the end of

implementation of quality program to check conformity with given standard. The paper

suggests that a standard/ benchmark be prepared before implementing quality program

against which actual implementation be measured and enterprises be certified but

doesn‟t include the standard itself.

Part A: Understanding Micro, Small and Medium Enterprise

Introduction to MSMEs

General Orientation (Macro) - Much have been said and written on MSME, in the special focus on its contribution/share on

industrial Gross Domestic Product that generally surpasses eighty percent in all economies.

MSMEs also contribute to employment creation and local resource utilization. Considering the

entire positive benefits that MSMEs bring, they are the subject of interest to politicians, policy

makers, development agencies and management consultants.

MSMEs are defined in one or the combination of the three measuring parameters: number of

staff, size of fixed assets and annual turnover. In Nepal, MSMEs are identified based on the size

of the fixed assets. Industrial Enterprise Act categories industries with up to 50 million rupees as

small industries, while industries with fixed asset from 50 million to 150 million rupees are

categorized as medium industries. Further, the traditional industries utilizing specific skills or

local raw materials and resources, and labor intensive and related with national tradition, art and

culture are classified as cottage industries 1 . Micro Enterprise is defined as one having

investment in fixed asset excluding land and building of up to 2,00,000 NRS, annual turnover of

less than 2 million rupees, entrepreneur should be involved in the business, total number of

staffs including entrepreneur not exceeding nine and if the industry is using engine, energy

capacity of less than 10 KW.

Managerial Orientation (Micro) - To understand small and medium enterprise, realizing that the very idea is „enterprise‟, two

important definitions emerge from the sociological and managerial interpretations.

An enterprise is studied as a formal enterprise which differs from other groups in terms of their

scale, structure and goal orientation. A formal enterprise is a group designed and created to

pursue specific goals, and held together by explicit rules and regulations. A formal enterprise

takes birth when a goal requires coordination skills and efforts. Once firmly established,

enterprise assumes its own life (Micheal S. Bassis, 1998). Also, a formal enterprise has five

elements identified by Richard Scott (1987) as: social structure, participants, goals, technology

and environment.

Small and Medium Enterprises differs from large enterprises in many aspects, inferring that size

does matter. In a study of Ghobadian and Gallear, common characteristics of MSMEs were

compared with large enterprises in aspects such as enterprise structure, procedures, behavior,

processes, people and contact. The study found out that MSMEs, in relative to large

enterprises, tend to have fewer layers of management, informal rules and procedures, a fluid

culture, a simple planning and control system, modest human and financial resources, and a

limited customer base.

1 Industrial Enterprise Act of 1992, annexure 1 further limits the nature and requirement for cottage industries.

Confusion always remains on the meaning of the terms “small business” and

“entrepreneurship”. Though the concept between the terms overlaps, they are, in fact, different.

A Small business firm is owned and operated independently. It does not engage in innovative

practices. In contrast, entrepreneurial venture is any business which pursues goal of profitability

and growth, and most importantly, engages in innovative strategic practices. Thus, the

difference lies on their fundamental orientation on growth and innovation (Thomas L Wheelen,

2004).

MSMEs and Quality Program

Despite being economically important entity, SMEs face a number of challenges, major one

being the inability to address the demand of quality by the customers. In the globalized

environment while SMEs have the opportunity to explore global market, at the same time they

face the challenge of addressing the quality requirements that are usually higher in export

market.

For this reason, MSMEs require a system which effectively handles the issues of quality and

creates an environment of trust for their customers, especially in the export market. Quality

Management System can be one system that can provide such solution.

A QMS can be defined as a set of coordinated activities to direct and control an organization in order to continually improve the effectiveness and efficiency of its performance. The main thrust of a QMS is in defining the processes, which will result in the production of quality products and services, rather than in detecting defective products or services after they have been produced. A fully documented QMS will ensure that two important requirements are met:

The customers‟ requirements – confidence in the ability of the organization to deliver the desired product and service consistently meeting their needs and expectations.

The organization‟s requirements – both internally and externally, and at an optimum cost with efficient use of the available resources – materials, human, technology and information.

QMS enables an organization to achieve the goals and objectives set out in its policy and strategy. It provides consistency and satisfaction in terms of methods, materials, equipment, etc, and interacts with all activities of the organization, beginning with the identification of customer requirements and ending with their satisfaction, at every transaction interface.

Strategic Management in MSME Strategic panning process and the plan itself is quite informal in MSMEs. Studies show that

formality of strategic planning increases with the enterprise growth and when the manager and

owner do not coincide (Juhan Teder). Taking into consideration that MSMEs derive benefits

from its informality in many aspects of enterprise management, too much effort in formalizing

the planning process is not practical and it might actually be detrimental. The strategic planning

process is what benefits the enterprise rather than the plan itself.

Quality Management System, in pursuit of total quality management (TQM), is an operating

philosophy with its utmost focus on customer satisfaction and continuous improvement,

everything through process approach. For the TQM to be value adding to an enterprise, the

decision to adopt TQM should be strategic decision. Once the decision to adopt QMS is made

strategically, management will commit resources in its attainment, hence fulfilling one of the

prerequisites of successful QMS development and implementation. A report by McKinsey &

Company reported that two third of the TQM programs it examined had failed to produce

expected improvement. Conclusion presented out said the failure or the success of the TQM

program depends on the management commitment.

Similar experience was drawn during the implementation of Quality Management System

Technical Assistance Program under MSMElink project. Total of fifty two MSMEs participated at

the start of the non-accredited QMS for MSME standard certification program. However, there

were significant drop outs from the program with only twenty four remaining for the final

certification audit. Among many other reasons for such scenario, one of the most influential

reasons was that QMS implementation was not the strategic decision of the

entrepreneur/business owner rather encouraged by the project.

TQM philosophy asserts that the quality failure is the result of the poor processes design and

implementation. Processes are the strategic asset of an enterprise. Processes of an enterprise,

like the enterprise itself, mature over time. Starting from the chaotic stage, it reaches to

optimized stage developing serially through repeated, defined and managed stages. Unless

entrepreneur/manager/owner manages processes strategically, total quality management -

through developing, implementing and improvising quality management system as the subject

of this paper – is hard to achieve.

MSME has its own life cycle (existence, survival, success, take-off and resource maturity).

Strategic Management is not relevant in the first two stages rather on the last three stages. It is

therefore the issue of great attention as to when a MSME should decide to integrate QMS from

the strategic-state point of view.

Developing appropriate quality programs, implementing them and improvising them over the

course of time is absolutely necessary. Generally, one way or the other, consciously or not,

completely or partially, enterprise has certain quality program. MSMEs tend to have partially and

unconsciously developed and implemented quality programs. First, MSMEs need to recognize

the strategic importance of quality program. Second, partial quality program should be

developed into complete quality program, implemented and monitored for progress.

Three Hats in MSME Three most important roles which affect enterprise are the roles of a manager, a leader and an

entrepreneur. In the context of MSME, limited by its size and range of functions all three roles

should be ideally played by one person, however, it is not simple as it might sound.

Manager: The focus of manager is on the complexity of the situation, while the challenge is to

optimize the resource in the process of achieving organization goal. Optimizing the complexity is

hard therefore, managerial functions evolves to reduce this complexity though planning,

organizing, controlling and coordinating.

Source: http://www.mel-institute.com/manager-leader-entrepreneur/

Entrepreneur: While the focus of the entrepreneur is always on opportunity, one being highly

achievement oriented individual, his/her playing ground is market, where opportunity prevails.

Functions of entrepreneur is therefore to identify the opportunity, for the attainment of which

s/he gathers resources, innovates the way of doing things, all functions leading to the creation

of value.

Leader: Leader is a person with vision and one who can influence others to walk towards the

vision. Leader always focuses on change and works with people. The need of strong leadership

is essential for the success of quality program in the organization.

In MSME, design and implement initial quality program is highly dependent on these three roles

in an enterprise. First, being an entrepreneur, he/she should get opportunistic value from the

quality program such as increased customer or better competitive edge. Second, quality

program needs great deal of planning, organizing, directing, delegating and controlling which

are functions of a manager. Third, value of leadership is itself one of the core principles of total

quality management.

In this paper, leadership, more precisely team leadership with quality of both transformational

and transactional leadership quality, is embedded in the quality program, which will be

discussed in detail in the following sections.

In MSME, a person with qualities of a manager, a leader and an entrepreneur would be highly

desirable; however, it is not very common, rather very rare. Research conducted found that two

of the qualities is common. Manager and leader, commonly referred to as managerial leader,

and leader and entrepreneur were found in most enterprise. However, the evidence of a person

being a manager and an entrepreneur was very low.

On TQM/QMS program, all three roles are equally important. Though it‟s hard to find all three

qualities in MSMEs or any enterprise in general case, BDS should be planned after accessing

them and nurturing if possible.

Importance of QMS in MSME Enterprise, regardless of its size, needs to establish certain approach to total quality

management. In more simple terms, a kind of quality program is indispensible to an enterprise

to achieve its goal. We will try to draw the relevance of quality program through the cost of

quality perspective and later, through overall benefits offered by such program.

Cost of Quality - Confusing it may sound but the cost of quality is not the price of delivering quality product or

service rather the cost of not delivering the quality product or service. According American

Society for Quality, cost of quality represents the difference between the actual cost of a product or

service and what the reduced cost would be if there were no possibility of substandard service, failure of

products or defects in their manufacture.

Categorization of Cost of Quality:

The cost of quality is generally classified into four categories:

1. External Failure Cost

2. Internal Failure Cost

3. Inspection (Appraisal) Cost

4. Prevention Cost

1. External Failure Cost: Cost associated with defects found after the customer receives the product or service. Example: Processing customer complaints, customer returns, warranty claims, product recalls.

2. Internal Failure Cost: Cost associated with defects found before the customer receives the product or service. Example: Scrap, rework, re-inspection, re-testing, material review, material downgrades

3. Inspection (appraisal) Cost: Cost incurred to determine the degree of conformance to quality requirements (measuring, evaluating or auditing). Example: Inspection, testing, process or service audits, calibration of measuring and test equipment.

4. Prevention Cost: Cost incurred to prevent (keep failure and appraisal cost to a minimum) poor quality. Example: New product review, quality planning, supplier surveys, process reviews, quality improvement teams, education and training.

Implementation of QMS help to reduce the cost of quality, some cost components immediately

after its implementation and others gradually over a period of time. Failure cost, especially

external failure cost, is reduced significantly once QMS is established because one of the focus

of QMS is to deliver consistent quality to its customers and ensure customer satisfaction. To

achieve this, QMS takes organization-wide preventive measure.

There is also a school of thought which believes that QMS implementation, though reduces

external failure cost, moves the cost to other cost areas like internal failure cost, inspection cost,

and prevention cost. This might actually be true during the beginning phase of QMS

implementation when the total cost of quality might even increase, especially for MSMEs where

the quality control mechanism is usually not in place at all. But in the long run, the focus will be

towards strengthening the processes, including product realization processes, through continual

improvement which are geared towards producing the products/delivering services right the first

time.

Similarly, there is a TQM rule called 1-10-100 rule which also strengthens the counter argument

to this school of thought. This rule depicts relationship between three cost components:

prevention cost, correction cost, and failure cost as illustrated below:

Source: Total Quality Management, Joel E. Ross

The illustration above shows that one dollar spent on prevention will save ten dollar on

correction, and hundred dollars on failure cost. As one moves along the streams of events from

design to delivery or “dock-to-stock,” the cost of errors escalates as failure costs becomes

greater. Thus, although the implementation of QMS will move the some external cost to other

cost components, its not as high as the external failure cost and there is some cost cutting in the

process.

On the other hand, prevention cost, inspection cost, and failure cost can be reduced in the long

run through the establishment of optimized processes through continual improvement.

MSMEs have high cost of quality. It is very likely for MSMEs to have a very high external failure

cost because of weak preventive and inspection functions which are amongst the low cost areas

compared to failure cost. When the cost of quality is high, enterprise will face serious problems

reasonably allocating resources across business functions. This problem will lead to difficulties

in retaining customer and maintaining competitive edge in the market. Thus, developing

appropriate quality program, implementing it and improvising over the course of time is

absolutely necessary.

The intervention of QMS can help to reduce the external failure cost but the prevention and

inspection cost will increase though not proportionately. However, when the processes become

optimized through continual improvement, even these costs get reduced in the long run. While

implementing QMS in MSMEs, it thus becomes absolutely important to determine the immediate

cost saving and cost saving in the long run. This will also help to quantify the benefits of QMS to

MSMEs.

Overall Benefits from Quality Program - QMS implementation brings a number of benefits to any enterprise, including MSMEs, which

are discussed below:

1. A planned approach to running an organization: Implementation of QMS requires

thorough documentation of the way an organization operates. As a result, a QMS

ensures that a business runs in a streamlined and coherent way.

2. Ensures issues are identified and addressed: The mandatory internal control

mechanisms like team meetings and internal audit help to identify the issues/problems

facing a company and gives opportunity to rectify them

3. More Customers: Customers have more trust in suppliers which operate QMS, while

some might even mandate that their suppliers have such system in place before even

establishing business relations with them.

Part B: Designing QMS for MSME

Total Quality Management: Conceptual Framework Defining quality is as difficult as managing it. However, three perspectives on quality are

noteworthy. User based definition view quality as judged by user themselves. Manufacturing

based definition view quality as ability to conform to the established standard. Product based

definition view quality as a precise and measurable variable.

International Standardization Organization defines quality as a question of degree in which

inherent characteristics of something meets a set of requirement, meaning to say that the

quality of something can be determined by comparing a set of inherent characteristics with a set

of requirement. If those inherent characteristics meet all requirements, high or excellent quality

is achieved. If those characteristics do not meet all requirements, a low or poor level of quality is

achieved. The central idea of quality lies on the question of how well does a set of inherent

characteristics comply with this set of requirement. Thus, quality is a relative concept (PRGL,

2010)

Total Quality Management is not a new concept. TQM is the collective philosophy and tools &

Techniques developed over the period of more than 50 years by notable quality gurus such as

Walter A. Shewhart, W. Edwards Deming, Joseph M. Juran, Armand V. Feigenbaum, Kaoru

Ishikawa, Phillip B. Crosby and Genichi Taguchi.

Total Quality Management is the operating philosophy with its focus on leadership, customer

satisfaction, employee involvement, continuous improvement, supplier partnership and

performance measures. All tools and techniques for total quality management focus on

maintaining abovementioned elements.

There are number of tools and techniques in pursuit of total quality management such as

benchmarking, information technology, quality management system, environment management

system, quality function deployment, quality by design, failure mode and effect analysis, product

liability, total productive maintenance, management tools, statistical process control,

experimental design and Taguchi‟s Quality Engineering.

Figure below explicitly depict that both the philosophy and tools & techniques are concentrated

to strengthen the product or service realization aspect of the enterprise which is to ultimately

ensure the satisfaction of the customer.

TQM has continuous process improvement approach implemented with strongly established

performance measures.

This paper is focused on Quality Management System as a tool in pursuit of Total Quality

Management. While accredited QMS is referenced from ISO 9001:2008 standard, non-

accredited QMS is suggested as a business development service module for small and medium

enterprise.

Source: Besterfields, Total Quality Management, 3/e, p.6.

Shewhart Benchmarking Deming Information Technology Juran Quality Management System Figenbaum Environment Management System Ishikawa Quality Function Deployment Crosby Quality by Design Taguchi Failure Mode and Effect Analysis Products and Service Liability Total Productive Maintenance Management Tools Statistical Process Control Experimental Design Taguchi‟s Quality Engineering

People and relationship Approach: Leadership Continuous Process Improvement Customer Satisfaction Employee Involvement Measure: Supplier Partnership Performance Measurement

Gurus

Principles

and

Practices

Tools and

Techniques

Products or Service

Realization Customer

Designing Quality Management System: Prototype of QMS Manual This first step in building a Quality Management System is the creation of a "Quality Manual".

The purpose is to describe in a concise and brief format, the scope and extent of the company

quality system. Quality Manual is precisely the reflection of the quality program being

implemented in an enterprise. Therefore, it should be developed very carefully and with

involvement.

QMS inherits the quality principles: quality leadership, customer satisfaction, employee

involvement, supplier partnership, continuous process improvement and performance

measurement, which are reflected in one or more areas addressed in QMS manual. Also, QMS

manual should embed PLAN-DO-STUDY-ACT cycle.

A prototype of the Quality Management System manual is presented as here:

Fig: Prototype of Quality Management System manual

Quality manual determines the scope of the quality management system, identify and detail the

procedures and describe the interaction of the processes.

Pareto Principle

1: Quality Leadership

2: Customer Satisfaction

3: Employee Involvement

4: Supplier Partnership

5: Continuous Process Improvement

6: Performance Measurement

STRATEGIC LINKAGE

Critical Processes Identification

- Critical Process 1




CUSTOM

ER

SATISFAC

TION

QUALITY COUNCIL

Critical

Success

Factors

P

D S

A

C Y

C L

E

C E R T I F I C A T I O N A U D I T

QMS Manual:

1. Introduction

2. Strategic Posture

3. Enterprise Structure

4. Description of Processes

5. Internal Control

6. Internal Audit

QMS MANUAL

1. Presentation

2. Process Map

3. Explanation of the steps

4. Annexure (if necessary)

PROCESS MANUAL

QUALITY PRINCIPLES

Components of QMS Manual - Component Introduction

Rationale QMS manual is guiding document for all the staffs on their work which is developed with the strategic emphasis. Introduction component orients the reader on the context in which QMS is developed.

Sub-Component 1. Introduction of the enterprise 2. Context in which QMS is developed 3. Brief Description of the product and/or services

Description A simple introduction of the enterprise with brief description of its products and services is the start of the QMS manual.

Component Strategic Posture

Rationale Clear strategic posture sets the direction of the enterprise towards total quality management. Established strategic posture in the enterprise is one of the major signs of management commitment. In addition, Quality Council with the help of established strategic posture will be in a position to lead the enterprise.

Sub-Component 1. Vision Statement 2. Mission Statement 3. Quality Objectives 4. Quality Policy Statement

Description In small enterprise, strategic posture is most likely to be unwritten, unclear and informally acted upon. Considering the fact that the entrepreneur is the ultimate strategist in small enterprise, strategic quality management orientation (discussed later) should emphasis discussion with him/her. Later in the stage, strategic posture might need to be redrafted with the support of quality council, while consulting entrepreneur with special emphasis.

Component Enterprise Structure

Rationale Clearly established enterprise structure is necessary to execute quality management system in a manner to satisfy both the internal and external customers.

Sub-Component 1. Organization Structure 2. Job Description 3. Communication Matrix

Description Staffs in small enterprise are compelled to undertake several responsibilities and are identified performing in confusing chain of command. Organization structure can be designed with the recognition of either the staffs in the enterprise or the functions. Quality Council should be integrated into the organization structure. Once the organization structure is established, quality council can initiate drafting job descriptions. Job description should put sufficient emphasis on the need of staffs to contribute to quality.

Component Description of process

Rationale Quality Management System is principally built on the process approach. All the functions carried out in the enterprise are identified as processes. Philosophy of Total Quality Management asserts that the poor quality is result of the faulty processes.

Sub-Component 1. Critical Processes 2. Support Processes

Description Critical Processes are those processes which contribute to maintain critical success factors in the enterprise. Critical success factors are contributing factors to customer satisfaction. In that logic, successful critical process design and its implementation will help enterprise achieve/ maintain customer satisfaction. Three to five critical processes are identified. The answer why three to five critical processes lie on the pareto principle that explains few processes contribute most of the value. Once the critical processes are identified by the quality council, a manual is prepared with rigorous discussion with each staffs involved in the particular process. Support processes are not the major processes in the enterprise, but are supporting them.

Component Internal Control

Rationale Successful execution of Quality Management System requires clear, workable and established internal control measure in place. Internal control system within QMS will eliminate malfunction and under-operation during its implementation.

Sub-Component 1. Documentation Policy 2. Team Meeting Requirement 3. Customer Feedback Review 4. Control of Non Conformity in the Process 5. Quality Council

Description Although small business derives most of its advantages through informal operation, establishing formalized internal control measures to little extend since the beginning is fruitful. To systematically establish successful internal control system, PDSA cycle should be embedded in most possible ways.

Component Internal Audit

Rationale Internal audit fulfills following three objectives: 1. Identify the actual performance against those recorded in the

QMS manual. 2. Follow up on the non conformance from the previous audit. 3. Propose corrective actions activities to businessperson/

entrepreneur.

Sub-Component

Description Internal audit is divided into three sections: preparation/ plan, carrying out the audit and reporting the result. Internal auditor should prepare the audit reviewing the QMS manual, taking checklist of the questions to be asked, preparing the schedule

and list of the persons/ process owners to be interviewed. Conducting the audit is to follow the audit plan. Generally, audit is conducted into three phases: pre audit meeting, audit and closing the audit. Refer the annexure 3 for more detail. After conducting the audit, auditor submits the report to the management in the proper format. Audit report should be standardized and written with the use of parameters. For example, the parameters can be classified as: Conformance, Non Conformance – Major and Non Conformance – Minor.

Components of Process Manual - Component Presentation

Rationale Pre determination of the input and output of the process with clear objectives together with the mention of the context in which it was developed is a first of building process manual.

Sub-Component 1. Name of the Process 2. Context/ Description 3. Objective of the Process 4. Input in the Process 5. Output of the Process

Description This section introduces the process manual.

Component Process Map

Rationale A graphical representation of the series of steps to be carried out to deliver value is methodologically comprehensible.

Sub-Component

Description With the involvement of process owner and quality council, all the steps are identified with its input and output. Steps identified are later analyzed and evaluated on the basis of their contribution in value chain. Best approach would be to assess the process in five dimensions commonly called SIPOC: Supplier, Input, Process, Output and Customer. All identified steps are sequenced to form a process. Process mapping is built in such a way to satisfy both the internal and external customer. Note: Internal customers are the staffs who work on the process. Staffs who works on the following step is the customer of the staff who is working on the preceding step. This step demand higher degree of involvement and critical analysis and evaluation. A simple technique of process mapping is recommended.

Component Explanation

Rationale In the process manual, identified steps are explained instructively.

Sub-Component

Description Each step in the process is numbered to be explained with the answer to questions such as: what, by whom, when, how and where?

Component Annexure

Rationale All the inputs in each of the process should be pre-determined and standardized.

Sub-Component

Description Inputs in the form of tools, templates and documents are structured to standardize in the annexure. In some cases, clear sub steps to be followed or the considerations to be made are included in the annexure.

Implementation of QMS in MSME: Technical Guideline Implementation of QMS – There are number steps in the implementation of Quality

Management System in an enterprise, presented as follows.

Strategic Quality Management Orientation – First step in implementing quality program is to begin with orienting MSME owners/manager on

the strategic nature of quality management and to integrate quality management in the overall

strategic management of the enterprise. Such strategic quality management is conducted by

consultant/ technical assistance provider.

Implementation of QMS demands strong commitment from management. In ISO 9001 standard,

management commitment is specifically detailed into actions such as communicating the need

to meet customer, legal and regulatory requirement, establishing a quality policy, ensuring

quality objectives are established, conducting management review, and ensuring the availability

of resources. For the purpose of this paper, management commitment is embedded with larger

framework of the enterprise – strategic focus. Strategic element of the enterprise is already

explained in detail in above section. Here we focus how we can establish the basis for strategic

quality management orientation.

Quality Management System in pursuit of total quality management is a program that intensely

demands strategic focus of the enterprise. Consultant/ technical assistance provider should

develop the content that best orients MSME owner/ manager towards the need of strategic

awareness and commitment on quality program.

Forming a Quality Council – Quality council is a team consisting of businessperson/entrepreneur, business function head,

supervisors and consultant. Quality council, the driver for the TQM engine, sets the direction of

QMS. Quality council should be the part of the organization structure. Quality Council, which is

naturally smaller in small enterprises, has to conduct regular meetings to discuss the progress

status and act up it upon necessity. Working of the quality council should be formalized.

In small business, quality council can be headed by the businessperson/entrepreneur himself or

the head of the function.

Quality Council should fulfill following responsibilities which is embedded within the PDSA cycle:

PLAN

1. Facilitate and participate the strategic and quality baseline audit.

2. Develop the planning and road map (with time schedule) of the QMS

implementation/ integration in the enterprise.

DO

1. Develop the strategic posture of the enterprise: core values, vision statement,

mission statement, quality objectives and quality policy statements.

3. Develop and implement the QMS awareness and training plan in the enterprise.

4. Establish the measurement indicators (quantitative and qualitative), embed them

in the QMS manual and enforce it.

5. Activate new organization structure and new processes.

6. Establish recognition and reward system to reinforce the implementation of the

QMS.

7. Develop functional and realistic QMS manual.

STUDY

1. Monitor the implementation of the QMS in the enterprise.

2. Analyze pre-established indicators against the result.

ACT

1. Eliminate the non-conformance results and standardize the solution.

2. Reinforce the standardized solutions for continual improvement.

Activating the Quality Council – Since the size of the quality council in small enterprises is smaller, activating the quality council

is easier. All that has to be done is to activate new organization structure. Note that quality

council is a part of organization structure.

Conducting Internal Audit – Internal audit is done by the consultant/ technical assistance provider. The objectives of the

internal audit are presented below:

1. Identify the actual performance against those recorded in the QMS manual.

2. Follow up on the non conformance from the previous audit.

3. Propose corrective actions activities to businessperson/ entrepreneur.

Internal audit is divided into three sections: preparation/ plan, carrying out the audit and

reporting the result.

Internal auditor should prepare the audit reviewing the QMS manual, taking checklist of the

questions to be asked, preparing the schedule and list of the persons/ process owners to be

interviewed.

Conducting the audit is to follow the audit plan. Generally, audit is conducted into three phases:

pre audit meeting, audit and closing the audit. Refer the annexure 3 for more detail.

After conducting the audit, auditor submits the report to the management in the pre-determined

format. Audit report should be standardized and written with the use of parameters. For

example, the parameters can be classified as: Conformance, Non Conformance – Major and

Non Conformance – Minor.

Special Implementation Consideration for Small Enterprises 1. Non-accredited quality program (or certification) -

Often very expensive for MSMEs to afford accredited quality program in an enterprise, such

program is beyond the strategic sight of small business owner. Enterprise which derives its

operational philosophy far substandard from what is standardized in accredited quality program

is ambitious goal. Non-accredited quality program such as the one presented in this paper,

presented in the simplest structure, is affordable. Also, program like this one also provides

stepping stone for the enterprise to, someday, ultimately embrace accredited quality program. It

is suggested that non accredited quality program can be synergized if it is developed as a

business development service module with intense focus on building entrepreneurs capacity on

quality management.

2. Scope of the quality program –

Enterprise derives its successes from few yet powerful forces which are called critical success

factors. These critical success factors are realized through crucial specialized processes –

critical processes. Quality program which is dictated with the process approach philosophy limits

scope within these critical processes. As a first step to a never ending quest to total quality

management journey, focus on these critical process is a right start.

Besides, unshakable commitment to quality leadership, customer focus, continuous

improvement, employee involvement and customer satisfaction only in the most manageable

application terms should be limited to the scope of the quality program.

3. Leadership element –

Design of a successful quality program in MSME calls and providing consulting services needs

special consideration on the leadership element.

Transformation of leadership philosophy in enterprise is seldom successful unless it is begun

with the correct approach special to MSMEs. Business development service designer or quality

consultant should cultivate or nurture the vision of quality of the enterprise or entrepreneur. This

is the first step.

Administration of leadership - to develop formal influence throughout the enterprise to direct the

efforts of the team towards attainment of quality goal - is the second step. Individual –

management representative - or a team - as quality circle - fulfills the need of transactional

leadership in the enterprise through out the journey.

Top management or board necessary for the transformational leadership which also sets the

strategic direction for the quality program falls within the scope.

4. Value system –

Consideration for the value system is especially important in course of implementation of quality

program. It is very important to understand the fact that value system (old) in place in MSME is

very different and most often is in contrast to the value system (new) of quality program –

whether accredited or non-accredited. For example, family business derives its value system

from two entities: family – which is purely social anthropological entity and business – which is

purely economic entity. Family business has, thus, hybrid of socio-anthropological-economic

value system. Value system of quality program, however, is derived from quality principle which

is purely managerial. These two value system is most likely to contradict each other.

Consultant or quality circle has to recognize the forces that resist quality program and help in

the adoption new value system or the assimilation of both the value systems. It is especially

important to recognize the cause of the resistance to quality program, which will assist the

identification of right solution.

5. Formalization and Documentation –

The level of formalization and documentation should be dealt with special consideration

especially because many of the advantages being MSME are derived from low level of

formalization and documentation. Pushing formal procedure and overloading the processes with

documentation might be detrimental and this might ultimately vaporize the essence of quality

program.

Conclusion The first objective of this technical guideline is to provide technical guideline to the implementers

of quality program in MSMEs, who might be the Technical Assistance providers, BDS

consultants, or the entrepreneur/ manager/ leader of an enterprise. Secondly, this paper aims to

document experiences of PF team of implementing Quality program in micro and small

enterprises as a reference for implementation of similar program in future.

In this technical guideline, we have explained micro, small and medium enterprise in terms of its

managerial features, strategic management characteristics, three most important roles in

enterprise and importance of quality program in terms of cost of quality. These contents have

high impact in the design and implementation of quality program.

This technical guideline also offers a simple form of quality program in detail. It includes review

of quality principles, design of a simple quality program, implementation guideline and special

considerations to be made in MSMEs. This technical guideline supplemented working

documents which are presented in corresponding annexure.

As for further research, it is recommended to develop non accredited standard or benchmark

development methodology to implement non accredited quality program.

Annexure - 1 QUALITY MANAGEMENT SYSTEM MANUAL

[Name the standard if available]

[Document Code Number]

[Address]

[Telephone Number]

[Email Address]

[Website]

[Date of Issue]

[Revision Number]

THE CONTENTS OF THIS QUALITY MANUAL IS THE SOLE PROPERTY OF [NAME OF THE ENTERPRISE] NO PART OF

THIS MANUAL CAN BE REPRODUCED IN FULL OR IN PART WITHOUT THE WRITTEN AUTHORISED PERMISSION.

A. Introduction

1. Introduction of the Enterprise.

Basic introduction of the enterprise.

Who established the enterprise? What does it do? Where is it located? When was it

formed?

2. Context of QMS.

Context when the decision to adopt QMS was taken.

Scope of the QMS.

Mention its strategic focus of the enterprise.

3. Description of Product and/or Services.

List the products and/ or services. [Document Code Number]

Provide brief description of each of the product and/ or service. (For example,

composition and features). [Document Code Number]

B. Strategic Posture

1. Vision Statement. [Document Code Number]

What does the enterprise/ entrepreneur aspires to be in the future?

Vision of the enterprise is timeless, inspirational and deeply shared.

2. Mission Statement. [Document Code Number]

Who we are? Who are the customers? What do we do? And how do we do it?

Mission statement should clearly put the purpose for the employee, customers and

suppliers.

3. Quality Objectives. [Document Code Number]

4. Quality Policy Statement. [Document Code Number]

Quality policy statement guides everyone in the organization on how they should

provide products and service to its customers.

It‟s a statement shared and understood by all staff members.

It underlines the deep commitment towards Quality Management System.

It draws up the main objectives of Quality Management System.

It reminds the mission of the organization.

It reminds the objectives of the organization.

It emphasizes the main values shared in the organization.

C. Enterprise Structure

1. Organization Structure. [Document Code Number]

What are the functions in the enterprise? (E.g. production, sales and marketing,

accounting, outsourcing etc.)

Who are the responsible staffs for each of the functions?

How the chain of command and span of control established in the enterprise?

Establish the enterprise structure.

Integrate quality council in the enterprise structure.

2. Job Description. [Document Code Number/s]

Template:

D. Description of Process

1. Critical Processes. [Document Code Number]

Name each critical processes and link to the annexure for the corresponding process

manual.

2. Support Processes. [Document Code Number]

Name each support process/s and link to the annexure for the corresponding

process manual.

Refer to Annexure 2: Process Manual Template.

3. Communication Matrix. [Document Code Number]

Communication Matrix eases the monitoring of the processes.

One communication matrix for each process.

Template:

Name of the Process: [Critical/ Support Process]

Staffs involved in the

Process (Column)/ Steps in

the Process (Row)

Executive Director Staff Member Staff Member Staff Member

Step 1 [Name]

Step 2 [Name]

Step 3 [Name]

Step 4 [Name]

E. Internal Control

QMS helps enterprise to “monitor, analyse, and improve processes”. It will allow management to check conformity of the products and services, to ensure conformity of the quality management system and to continually improve its effectiveness.

1. Team Meeting.

Different team meetings are planned in order to allow members of a same team to sit

together, exchange, coordinate, and take the right decisions for an optimal realization of

the concerned product. On the other hand, the complete staff needs also to have a

common meeting. That is the purpose of the staff meeting (on a monthly basis).

Participation to meetings is compulsory (except exceptional cases). Meeting reports

[Document Code Number], which summarize all the issues discussed during the

different meetings, are sent to all concerned staff members.

2. Customer Feedback Review.

Customer feedback mechanism aims at maintaining a strong communication on the

basis of mutual exchange with its customers. Therefore, it allows team to integrate

feedbacks and to improve continuously on product and/ or services. Moreover, each

complaint is registered in the Problem Log Complaint Feedback Excel Document

[Document Code Number], and is then analysed and corrected during the meeting of the

concerned team.

3. Control of Non – Conformity in the Process.

Firstly, staffs need to identify and register problems in the processes. Problem log document [Document Code Number] can be used to register complaints or feedback from customers, regulators, inspection personnel, process owners, and findings of internal auditors and management.

Secondly, common causes are classified. A repeat problem or problem of serious consequences can be identified.

Thirdly, quality council can recommend priority to be taken, for analysis and corrective action to the management.

4. Documentation and Record Control.

Documentation/Record Identification.

Documentation/Record Storage, Retrieval and Disposal.

Documentation/Record Backup.

Documentation access policies.

5. Quality Council.

Quality council is a team consisting of business person/entrepreneur, business function

head, supervisors and consultant. Quality council, the driver for the TQM engine, sets

the direction of QMS.

What is the norms and value of the quality council?

When the regular meeting of the quality council does take place?

What are the deliverables of quality council?

F. Internal Audit

Internal audit is done by the consultant/ technical assistance provider. The objective of the

internal audit is presented below:

1. Identify the actual performance against those recorded in the QMS manual.

2. Follow up on the non conformance from the previous audit.

3. Propose corrective actions activities to businessperson/ entrepreneur.

Determine who undertakes the responsibility to conduct internal audit and who

authorizes him/ her.

Determine at what interval the internal audit will be undertaken.

Establish the process manual of the internal audit (annexure Internal Audit Process

Manual [Document Code Number]).

Establish the report format and reporting system.

Annexure - 2 PROCESS MANUAL

[Document Code Number]

1. Presentation

a. Name of the process:

b. Context/Description:

c. Objective of the process:

d. Inputs for the process:

e. Outputs to be achieved:

2. Process Map

Process Mapping is done with a technique called flow chart. Please follow symbols

below to map your critical process.

a. Boundaries: Identifies the beginning or end of a process and is represented by the oval symbol.

b. Operation : Identifies an activity or task in the process.

c. Decision: Identifies a decision or branch point in the process. Write the decision inside. Label each path emerging from the Decision block with the options, such as yes, no

d. Movement or transportation: Indicates movement of the output between locations.

Rectangle

Diamond

?

Oval

When all symbols are put together, process will look like:

(Process Map)

1. Start

2. Activity

4. Decision

?

3. Activity

5. Activity

6. End

5. Activity

NO

YES

Every box in the process map is numbered and for each number narrates the details of

the process.

Steps Explanation (What, How, When and Where) By Whom?

1

2

3

4

4.1

5

6

3. Explanation

4. Annexure

Annexure is the thickest part in the process manual, it has all the formats which are

explained in the above section.

Use of graphs, templates, pictures, tables, instructions, checklist, list of tools, templates

and documents are recommended.

Code all the annexure.

Annexure - 4 A. INTERNAL AUDIT

Internal Audits should be about processes and systems and should answer the

following questions:

Are they effective

Are they meeting requirements

Could they be improved

Thus, internal audit should be about judging both conformance and effectiveness of

individual processes and overall system. In this regard, internal audit carries out the

following tasks:

Identifying the actual performance against those recorded in the QMS manual

Following up on the non-conformance from the previous audit

Proposing corrective actions against non-conforming processes/products to

improve effectiveness of processes

On the other hand, Internal Audit should be looked upon as a tool that will ensure the

ongoing relevance of the Quality Management System that has been installed in the

organization. With the change in external and internal environment, it becomes

important to ensure that the QMS hasn‟t become redundant. In this context, it should

also look for the elements which ensure the continual improvement of the processes

and overall system.

Internal Audit is usually carried out using an Audit checklist. The checklist should be

such that it captures the dynamism of Internal Audit. It should check conformity against

standard, the efficiency of processes and system and, and also the elements of

continuous improvement. A sample checklist is attached in Appendix …

The Internal Audit should be adapted when it‟s being done for the first time in

organization after the installation of QMS in the organization. The approach should be

like the certification audit where the auditor‟s job is to ensure that the correct system is

in place and that it‟s functioning properly. The internal audits after the first one should

focus more on ensuring that the Quality Management System is functioning efficiently

and if the system needs to be improved for better functioning. Thus, the major

component to look for after the first internal audit will be the elements of continuous

improvement of the system.

B. AUDIT METHODOLOGY EXPLANATION

1. Quality Management System

1. Strategic Posture

1. Does the organization have vision and mission statements?

2. Does the organization have quality objectives?

3. Does the organization have Quality Policy Statement?

4. Does vision statement clearly identify the direction of company and its core

values?

5. Does mission statement clearly spell out company‟s purpose?

6. Does Quality Policy Statement clearly outline the company‟s commitment toward

quality?

7. Is vision/mission/objectives and quality policy well communicated within the

organization and do all stakeholders identify with these?

8. Do vision and mission statements inspire the stakeholders of the company?

9. Do all organization members believe that Quality Objectives are achievable and

do they identify their contribution in achieving those objectives?

2. Enterprise Structure

1. Does organization have well defined organization structure?

2. Is organization structure communicated to all staffs?

3. Are all staffs aware about the chain of command in the organization? Has there

been an evidence of conflict due to unclear chain of command?

4. Has Quality Council been formally established in organization structure and has

its roles and authority been clearly established?

5. Do all staffs know about the roles and responsibilities of Quality Council?

6. Is Quality Council perceived as positive change maker by staffs?

7. Do all staffs have job description?

8. Are they aware of their job responsibilities?

9. Have there been instances of conflicts due to unclear job responsibilities?

3. Quality Management System: General Requirement

1. Is the process properly explained and documented?

Parameter What to look for How to Judge

Process Introduction

Completeness i.e. all components of process introduction are present

Process manual

Objective is SMART as far as its relevant

All inputs are properly identified

Process Mapping

Logical flow Process Manual

Understandable

Realistic i.e. whether its followed in the organization and captures all dimension of process

Process Explanation

Clarity of Explanation Process Manual

Templates and Tools

Whether all tools and templates are either attached or located in the manual

Process Manual

2. Is the process formalized?


Formalization of Process

Does the process follow standard business practice

Process Manual

Whether the process is carried out using different tools and templates

3. Is the process Implemented?


Implementation of Process

Are the concerned people aware of processes?

Interview with concerned staffs who carry out the process

Do concerned people have a copy of process manual?

Check with concerned staffs

Do concerned people have materials (tools and templates) needed to carry process?

Check with concerned staffs

Is there an evidence of process being carried out?

Record related to process

4. Is the process measured and monitored?


Measurement and Monitoring of Process

Whether the objectives are SMART Process Manual

Whether Problem Log Document is maintained

Record

5. Are the documented processes critical for the organization and are they sufficient

to manage all critical aspects of the company?


Criticalness of Processes

Whether processes directly contribute to profitability of the company

Process Manuals, Interview with Management Representative

Whether documented processes represent the areas which, if not managed properly, will lead to lost clients, wastage, etc.

Process Manuals, Interview with Management Representative

Sufficiency of Processes to manage Critical Aspects

Whether documented processes are sufficient to manage all critical aspects of the company

Observation, Interview with Management Representative

6. Are the documented processes continuous?


Continuity of Processes

Whether processes are carried out frequently in the organization

Interview with Management Representative Volume of record associated with processes, if present

4. Internal Control

1. Does team meeting take place regularly in pre-determined interval?

2. Has team meeting been an effective tool of communication between all

organization members?

a. Is staff meeting considered important by top management?

b. Do all staffs feel comfortable to communicate their issues in team

meeting?

c. Are the decisions made in team meeting actually implemented in the

organization?

3. Is customer feedback taken regularly and is the frequency reasonable?

4. Does the organization have mechanism to process customer

feedback/complain?

5. Is customer feedback taken as important element of quality?

a. Is company responsive towards customer feedback i.e. is it used as input

in decision making?

b. Is customer feedback taken for continuous improvement?

6. Is there a mechanism of recording non-conformity in the process?

7. Is this mechanism effectively being used in organization?

8. Has there been any non-conformity in process and has it been effectively dealt

with?

Total Quality Management in Micro, Small and Medium Enterprise

Documents

Transcript of Total Quality Management in Micro, Small and Medium Enterprise