pareto chart tqm factors 15pp

Pareto analysis of critical successfactors of total quality

managementA literature review and analysis

G. KaruppusamiKumaraguru College of Technology, Coimbatore, India, and

R. GandhinathanPSG College of Technology, Coimbatore, India

Abstract

Purpose – The purpose of this literature review is to identify and propose a list of few vital criticalsuccess factors (CSFs) of total quality management (TQM) for the benefit of researchers and industries.

Design/methodology/approach – Even though there has been a large number of articles publishedrelated to TQM in the last few decades, only a very few articles focused on documenting the CSFs ofTQM using statistical methods. The main objective of this literature review is to investigate and listthe CSFs of TQM according to the descending order of frequencies of occurrences. The domain ofreview is the scale development studies and the TQM effect versus performance measurement studies.The review period is between 1989 and 2003. Rigorous statistical reliability tests and validity testswere conducted during these studies to factorize the CSFs and hence these studies were chosen for theliterature review. Finally, the quality tool “Pareto analysis” was used to sort and arrange the CSFsaccording to the order of criticality.

Findings – An examination of 37 such TQM empirical studies resulted in compilation of 56 CSFs.Implementation difficulties exist to operationalize such a large number of CSFs in organizations. Thisstudy analyzed and sorted the CSFs in descending order according to the frequency of occurrencesusing Pareto analysis. A few vital CSFs were identified and reported. The results of this study willhelp in a smoother penetration of TQM programs in organizations.

Practical implications – In future, the researchers in quality management may develop models tomeasure and sustain the level of implementation of TQM in industries. CSFs are the essentialconstructs based on which further statistical analysis can be carried out. The present study will guidethe researchers in selecting the reliable set of CSFs for empirical studies. Industries can benefit byadopting the results of this study for effective implementation of TQM.

Originality/value – This paper presents a solution to the difficulties hitherto faced by theorganizations in operationalizing the very large number of CSFs proposed by the various empiricalstudies published in TQM during the last two decades.

Keywords Pareto analysis, Critical success factors, Total quality management

Paper type Literature review

IntroductionTotal quality management (TQM) is an integrative management philosophy aimed atcontinuously improving the quality and process to achieve customer satisfaction.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0954-478X.htm

The authors gratefully acknowledge the anonymous referees’ comments and advice thatcontributed to the improvements of this paper.

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The TQM MagazineVol. 18 No. 4, 2006pp. 372-385q Emerald Group Publishing Limited0954-478XDOI 10.1108/09544780610671048

www.emeraldinsight.com/0954-478X.htm

Simply stated, it is the building of quality into products and process and makingquality a concern and responsibility for everyone in the organization (Juran, 1989).Empirical TQM studies, started to increase after 1989 when the critical success factors(CSFs) of TQM were first operationalized by Saraph et al. (1989). A survey approach tothe operationalization of TQM CSFs by this research work set a new direction for TQMresearchers interested in the set of CSFs that constitutes TQM. The similar surveystudies include those conducted by Ahire et al. (1996), Anderson et al. (1995), Black andPorter (1996), Flynn et al. (1994), Wali et al. (2003), Wilson and Collier (2000) and severalother studies that are detailed in this paper. These studies identified TQM frameworkswith CSFs ranging between four and twelve.

Over the past few decades, the quality gurus Crosby (1979), Deming (1986),Feigenbaum (1983), Juran (1986) and others have developed and advocated certainprescriptions in the area of quality management. Their insights into qualitymanagement provide a good understanding of quality management principles.Worldwide, there are several Quality Awards, such as the Deming Prize in Japan, theEuropean Quality Award (EQA) in Europe and the Malcolm Baldrige National QualityAward (MBNQA) in the USA. The European Foundation for Quality Management(EFQM) Excellence Model introduced in 1991 has its origins in TQM (Sandbrook,2001). Excellence is defined as “the outstanding practice in managing the organizationand achieving results”. Truly Excellent organizations are those that strive to satisfytheir stakeholders by what they achieve, how they achieve it, what they are likely toachieve and the confidence they have that the results will be sustained in the future(EFQM, 2005). Each award is based on a perceived model of TQM. They do not focussolely on the product, service perfection or traditional quality management methods,but consider a wide range of management activities, behaviour and processes whichinfluence the quality of the final offerings. These award models provide a useful auditor assessment framework against which the authors have formulated CSFs of qualitymanagement.

Subsequent empirical studies focused on the relationship between quality practices,quality performance and business performance. The works of Adam (1994), Flynn et al.(1995), Hendricks and Singhal (1997, 2001), Kaynak (2003), Powell (1995) and manyothers further activated theoretical advances in the area. In general, these studiesprovide support for the hypothesis linking quality practices to quality performance.But the support for quality practices-business performance hypothesis is more mixed.Hendricks and Singhal (2001) found evidence on the relation between the financialperformance from effective implementation of TQM to characteristics such as firm size,the degree of capital intensity, the degree of firm diversification, the maturity of theTQM implementation, and the timing of the TQM implementation.

CSFs of TQM are latent variables, which means they cannot be measured directly(Ahire et al., 1996). Hence, items are generated that represent manifestations ofthese CSFs. For example, top management commitment to quality is a CSF that cannotbe measured directly. However, when top management is committed to quality,adequate resources will be allocated to quality improvement efforts. Thus, allocation ofadequate resources to quality improvement efforts can be one of the manifestationsof top management commitment to quality. For a field study, each manifestation ismeasured with an item in a scale.

Pareto analysisof critical success

factors

373

The congruence of TQM and six-sigmaMikel Harry at Motorola developed six-sigma in the late 1980s, and it has roots back tothe teachings of Dr Joseph Juran and Dr W. Edwards Deming (Thawani, 2004).Six-sigma is a high performance, data driven method for improving quality byremoving defects and their causes in business process activities. Six-sigma’s target isto achieve less than 3.4 defects or errors per million opportunities hence the name.Higher the number of sigmas, the more consistent is the process output or smaller isthe variation. It is particularly powerful when measuring the performance of a processwith a high volume of outputs. Six-sigma links customer requirements and processimprovements with financial results while simultaneously providing the desired speed,accuracy and agility intoday’s e-age. Lucas (2002) asserts that six-sigma is essentially amethodology within – not alternative to – TQM. Because this quality improvement isa prime ingredient of TQM, many firms have found that adding a six-sigma programto their current business gives them all, or almost all, of the elements of a TQMprogram. Lucas has thus concluded that:

Current business system þ six-sigma ¼ total quality management

Six-sigma uses a project based structured problem-solving method linking customerrequirements with processes and tangible results. It selects the appropriate tools from awide variety of statistical tools. One of the most common methodologies used is define,measure, analyze, improve, and control (DMAIC). Yang (2004) developed an integratedmodel of TQM and GE-six-sigma based on 12 dimensions: development, principles,features, operation, focus, practices, techniques, leadership, rewards, training, changeand culture. The author concluded that although management principles of TQM andGE-six-sigma are somewhat different, there is congruence among their qualityprinciples, techniques, and culture. Hence, the integration of TQM and GE-six-sigma isnot difficult.

Objectives of the studyObjectives of this literature review were to investigate and report as follows.

. Compilation of the CSFs reported by the scale development studies and thestudies that correlated the quality, plant performance measures with businessperformance measures. These studies were chosen for review because thereliability and validity of the CSFs were statistically tested during these studies.

. Application of Pareto concept and sorting of the CSFs in the descending orderaccording to the frequencies of their occurrences.

. Compilation and final reporting of the few vital CSFs.

Scope of the studyThe online databases were searched extensively to identity research papers publishedin referred journals. The scope of the search is for TQM articles published in referredjournals because of the thorough professional review of these papers undergo beforeacceptance and publication. Since, the first research paper in the proposed researchreview was published by Saraph et al. (1989), the search was limited to the periodbetween 1989 and 2003. The procedure described below was adopted to identifythe relevant TQM research articles. A set of keywords was formulated and used for thearticles title search:

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374

. quality instrument;

. empirical quality;

. quality performance;

. quality improvement;

. quality critical factors;

. empirical TQM;

. TQM factors;

. TQM construct;

. TQM instrument;

. TQM performance;

. quality index; and

. TQM evaluation.

The five online journal databases: www.Emeraldinsight.com, www.Ebsco.com, www.Infotrac.com, www.ProQuest.com and www.Sciencedirect.com were searched. In thisprocess, articles related to TQM survey by Ahire et al. (1995), Fynes (1999), Sila andEbrahimpour (2002), Thiagarajan and Zairi (1997a, b, c) and Yong and Wilkinson(1999) were identified. The bibliographies of these articles were screened in addition toonline searches to locate articles related to the objectives stated. During this entireprocess, 37 articles were found. The titles of the journals where these articles werepublished are listed in Table I.

Journal title Survey articles

1 Decision Sciences Saraph et al. (1989), Anderson et al. (1995),Flynn et al. (1995) Black and Porter (1996),Ahire et al. (1996), Curkovic et al. (2000)Wilson and Collier (2000)

2 Industrial Management & Data Systems Forza (1995), Huarng and Chen, 20023 International Journal of Operations &

Production ManagementForker et al. (1996), Adam et al. (1997)

4 International Journal of Production Research Tamimi (1995), Forker et al. (1997), Josephet al. (1999), Ho et al. (2001), Merino (2003)

5 International Journal of Quality & ReliabilityManagement

Motwani et al. (1994), Badri et al. (1995),Zhang et al. (2000)

6 International Journal of Quality Science Grandzol (1998), Tamimi (1998)7 Journal of Operations Management Adam (1994), Flynn et al. (1994), Choi and

Eboch (1998), Samson and Terziovski (1999),Kaynak (2003)

8 Management Science Benson et al. (1991)9 Production and Operations Management Dow et al. (1999), Fynes and Voss (2001)

10 Production Planning & Control Mohanty and Lakme (1998), Wali et al. (2003)11 Strategic Management Journal Powell (1995)12 The Quality Management Roethlein et al. (2002)13 Total Quality Management Quazi et al. (1998), Rao et al. (1999), Hua et al.

(2000), Claver et al. (2003)

Table I.Title of journals where

TQM survey articlespublished


factors

375

Pareto analysis of critical success factorsUnderstanding processes so that they can be improved by means of systematicapproach requires knowledge of the seven basic quality control (QC) tools, which areused in problem identification (Herbert et al., 2003). These tools are largely quantitativeand help answer the questions associated with them:

(1) Process flowcharting – what is done?

(2) Pareto analysis – which are the big problems?

(3) Cause and effect analysis – what causes the problem?

(4) Histograms – what does the variation look like?

(5) Check sheets/tally sheets – how often does it occur?

(6) Scatter diagrams – what are the relationships between factors?

(7) Control charts – which variations are to be controlled and how?

A Pareto analysis is a QC tool that ranks the data classifications in the descendingorder from the highest frequency of occurrences to the lowest frequency of occurrences.The total frequency is equated to 100 per cent. The “vital few” items occupy asubstantial amount (80 per cent) of cumulative percentage of occurrences and the“useful many” occupy only the remaining 20 per cent of occurrences.

The CSFs and the statistical tests reported by the selected articles were extractedand presented in a table (not shown). The locations were these studies were carried out;the initial and final number of items, the chosen sample size and the responses to thestudies were also compiled. Only those CSFs that were recommended by the authorsfor effective implementation of TQM were included in the Pareto analysis. The CSFsassociated with the output performance measures were excluded from the analysis.However, if such CSFs were recommended by the authors as a part of TQMimplementation, those CSFs were also included in the analysis. The Pareto analysis ofCSFs compiled from selected articles is presented in Tables II, III and Figure 1.

Through a judgmental process of grouping similar CSFs, the frequencies of CSFswith similar description were grouped and reported under single label. The frequenciesof CSFs shown in italic letters (Table II and III) accounted for the frequencies of theCSFs shown in parenthesis also.

The total number of CSFs extracted and grouped from all the 37 studies taken forreview was 56 and the total frequency of occurrences was 306. In the “vital few”groups, 14 CSFs accounted for 80 per cent (Table II). The remaining 42 CSFs accountedfor only 20 per cent of occurrences frequency and were reported as “useful many”groups (Table III). The first five CSFs operationalized by the highest number ofauthors were “the role of management leadership and quality policy, supplier qualitymanagement, process management, Customer focus and training”. The CSF, “customerfocus” with 7.52 per cent frequency of occurrences was not factorized by Saraph et al.(1989) study.

The most vital CSF, “the role of management leadership and quality policy”was split and listed as two separate CSFs, “top management leadership” and“quality policy” by some authors. In this study, “quality policy” was grouped with“quality planning” and it occupied the second place in the “useful-many” group with anoccurrences frequency of 1.63 per cent. The frequency of 35 CSFs grouped under“useful many” (numbered 8 to 42, Table III) was one only.

TQM18,4

376

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Table II.

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378

Critical success factor OccurrencesPercentage ofoccurrences

Cumulativepercentage ofoccurrences

1 Statistical control and feedback(statistical method, SPC, SPC usage)

5 1.63 1.63

2 Quality planning (quality policy,strategic quality planning,strategic quality management)

5 1.63 3.27

3 Strategic planning (vision andplan statement, planning,shared vision)

5 1.63 4.90

4 Continuous improvement 4 1.31 6.215 Learning 3 0.98 7.196 Knowledge 2 0.65 7.847 Work attitudes 2 0.65 8.508 Adopting philosophy 1 0.33 8.829 Behavioural 1 0.33 9.15

10 Brand image 1 0.33 9.4811 Co – operation 1 0.33 9.8012 Company reputation 1 0.33 10.1313 Compensation 1 0.33 10.4614 Competitive assessment 1 0.33 10.7815 Corporate quality culture 1 0.33 11.1116 Evaluation 1 0.33 11.4417 External internal management 1 0.33 11.7618 External quality in-use 1 0.33 12.0919 Financial results 1 0.33 12.4220 Impact of increased quality 1 0.33 12.7521 Impact on society 1 0.33 13.0722 Internal and external co-operation 1 0.33 13.4023 Internal support 1 0.33 13.7324 Maintenance 1 0.33 14.0525 Measuring product and service 1 0.33 14.3826 Open organization 1 0.33 14.7127 Operation procedures 1 0.33 15.0328 Operational quality planning 1 0.33 15.3629 Organizational commitment 1 0.33 15.6930 Participatory orientation 1 0.33 16.0131 People and customer management 1 0.33 16.3432 Policy and Strategy 1 0.33 16.6733 Proactive business orientation 1 0.33 16.9934 Recognition and reward 1 0.33 17.3235 Results and recognition 1 0.33 17.6536 Rewards and SPC 1 0.33 17.9737 Rewards to employees for quality

department1 0.33 18.30

38 Traditional engineering 1 0.33 18.6339 Values and ethics 1 0.33 18.9540 Work culture 1 0.33 19.2841 Workforce commitment 1 0.33 19.6142 Zero defects mentality 1 0.33 19.93

Cumulative occurrences 61Table III.

CSFs – useful many


factors

379

Comparison with previous studiesThe first survey study on TQM literature was published by Ahire et al. (1995). In thisstudy, the authors analyzed a total of 226 articles from the TQM literature publishedbetween 1970 and 1993 using the seven MBNQA criteria as a framework. Youssef andZairi (1995) benchmarked CSFs of TQM generated based on MBNQA and the teachingof quality gurus and checked the applicability, order of criticality and relevance ofTQM in various countries. Thiagarajan and Zairi (1997a, b, c) also analyzed the TQMliterature using sets of criteria similar to those of the MBNQA and the EQA. In anotherliterature review paper, Fynes (1999) examined 20 empirical TQM studies that testedand validated the CSFs of TQM. The next review of TQM literature was by Yong andWilkinson (1999). This study had a limited focus in that it only examined those articlesthat argued that TQM was beneficial to companies and those that argued on thecontrary. The article also provided a comparative summary table of 15 survey studiesthat analyzed the link between TQM practices and performance. Sila and Ebrahimpour(2002) investigated how TQM survey research evolved over an 11 year period from1989 to 2000. A total of 76 of the 347 studies analyzed contained CSFs that were mostlyextracted by factor analysis. However, a few of these 76 survey articles that also usedan integrated approach to TQM but rated the CSFs using descriptive statistics werealso included. The other 271 articles were not used to come up with a framework toexamine the TQM literature simply because they did not use a holistic approach toTQM. Analyzing the CSFs extracted by the 76 studies, the authors found 25 CSFs.Rahman (2002) surveyed TQM literature for studies that described scale developmentefforts in the context of Australian business and identified four studies. These studieswere then reviewed and the statistical analyses used in the scale development processwere identified. In the present research, the studies which reported CSFs only after

Figure 1.Pareto analysis of CSFs ofTQM

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380

systematic reliability and validity tests were selected. Fifty-six CSFs reported in sucharticles were extracted and analyzed. Analysis was free from fixed framework likeMBNQA, EQA and quality gurus.

Discussion and conclusionsDeveloping reliable instruments or testing hypothesis based on CSFs is a tedious andtime-consuming process. However, it is important that researchers understand theimportance of CSFs and include vital few CSFs in their work. It seems from this reviewthat there is a lack of a well-established framework to identify CSFs and guideresearchers through the various stages of scale development/hypothesis testingprocess. Even though a researcher may possess a strong quantitative and statisticalfoundation, the process of identifying CSFs may not be well understood, thus theresearch may only be partially successful. Hence, in the present research work, TQMempirical studies conducted between 1989 and 2003 were taken for review and Paretoanalysis. An examination of 37 TQM empirical studies resulted in compilation of56 CSFs. Implementation difficulties exist to operationalize such a large number ofCSFs in organizations. This study analyzed and sorted the CSFs in descending orderaccording to the frequency of occurrences using Pareto analysis. Industries can selectthe most critical 8 to 12 CSFs reported in this study and implement over a plannedperiod of time.

Following are the concluding points:. This review provides a list of 56 CSFs arranged in the order of criticality. Vital

few CSFs were identified and reported.. From this study, the beneficiaries will be those who develop instruments, those

who study the effect of TQM on performance and those who review and evaluatework for possible publication.

. The results of this study will help in much smoother implementation of TQMprograms in industries.

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Further reading

Nunnally, J. (1967), Psychometric Theory, McGraw-Hill, New York, NY.

Zairi, M. and Youssef, M.A. (1995), “Benchmarking critical factors for TQM: Part I – empiricalresults from different regions in the world”, Benchmarking for Quality Management &Technology, Vol. 2 No. 1, pp. 5-20.

About the authorsG. Karuppusami received his BE and ME degrees from PSG College of Technology, Coimbatore,India. Presently he is working as Assistant Professor in the Department of Mechanical

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Engineering, Kumaraguru college of Technology, Coimbatore, India. He has 15 years ofindustrial experience as manufacturing engineer and six years of teaching experience. He has12 publications to his credit in national and international conferences. His fields of researchinterest include TQM, Benchmarking, Six Sigma and Computer aided Engineering. He is a lifemember of Indian Society for Technical Education and Indian Institution of IndustrialEngineering. He is currently working on his PhD thesis in Quality Engineering. G. Karuppusamiis the corresponding author and can be contacted at: [email protected]

R. Gandhinathan received his BE, ME and PhD degrees from PSG college of Technology,Coimbatore, India. At present, he is working as Assistant Professor in the Department ofMechanical Engineering, PSG College of Technology, Coimbatore, India. He has more than17 years of teaching experience and five years of industrial experience. He has 40 publications tohis credit in national/international journals and conferences. His fields of research interestinclude, Quality Engineering, Cost Management, Industrial Economics and ConcurrentEngineering. He is a life member of Institution of Engineers (India), Indian Society forTechnical Education and Indian Institution of Industrial Engineering. He has also investigatedGovernment of India research projects in the fields of near net shape manufacturing and highspeed machining. E-mail: [email protected]


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