study of tqm on internal and external involvement – an example...

Study of TQM on Internal and External Involvement – an example ofSumiko Electronics Suzhou Company in China

Chich-Jen Shieh

I-Ming Wang ∗

Department of International Business

Chang Jung Christian University

396 Chang lung Rd., Sec. 1

Kway-Jen, Tainan

Taiwan 71150

R.O.C.

Abstract

Total Quality Management (TQM) in the briefest possible summary is: total people-empowerment; focus on the customer is a commitment to quality; and an investmentin knowledge. TQM actually has a wide variety of elements, themes, and principles.

This study seeks in a controlled setting to examine the efficacy of TQM programimplemented on internal and external employees, using the method of Case Studyat Sumiko Electronics Suzhou (SES) Inc. located in Su Zhou District of China, anda Longitudinal Comparative Research Design. The standard deviation was used todetermine how the scores of internal and external involvement spread out is betweenthe two periods (before and after the implementation of TQM program). This studyshows particularly true in the involvement indicators, such as Supplier Certification,Just-In-Time Purchasing, Benchmarking, and Supplier’s involved in Design and Training.

The significant difference indicates that After TQM Implementation has considered theconditions necessary for Internal and External Involvement.

Keywords : Just in time (JIT), TQM, purchasing, benchmarking, supplier’s involvement, supplier

certification.

∗E-mail: [email protected]

——————————–Journal of Statistics & Management SystemsVol. 9 (2006), No. 2, pp. 359–380c© Taru Publications

360 C. J. SHIEH AND I. M. WANG

Introduction

Total Quality Management (TQM) has met with very mixed reviewsfrom organizations that have attempted to understand and to implementthis strategy for organizational improvement. Successful implementationof TQM requires that all critical factors for success be addressedeffectively. [9]

Purchasing is a key ingredient in the implementation of TQM. Seniorexecutive consider the role of purchasing critical to improving quality. In asurvey conducted in 1989 by the American Society for Quality Control, 601senior executives indicated that more control over suppliers was one of thetop ten areas in which quality could be improved throughout Americanbusiness.

While most companies understand that 60 to 70 percent of the cost ofmost manufactured products is materials, we have only recently realizedthat the cost of buying materials and services is more than just the unitprice. The other components can amount to as much as, if not more than,the unit price. Moreover, the concept that the market dictates the price forthe unit price, but buyers can influence the other parts of the total cost.This is the reason why there is a focus on purchasing in TQM.

Suppliers and customers alike have never been as motivated as theyare today to improve. The quality of products and services to a levelpreviously was believed impossible. In many companies the burden ofachieving this new level of supplier quality has been placed directly onthe shoulders of the purchasing department.

The experts tell us that the solution is for purchasing to becomemore efficient and to have greater supplier involvement. Thus, thisarticle describes the impact of TQM programs on internal and externalinvolvement. A management perspective that seeks to evaluate theimpact on purchasing of the TQM programs using a comparative surveyapproach and documentary review to gauge the effect on internal andexternal involvement is offered. A prior and past TQM implementationassessment among same group of respondents studied affirms thepreceding perspective. TQM in the briefest possible summary is: afoundation for continuous improvement, a philosophy for running abusiness; the right way to manage: total people-empowerment; focus onthe customer is a commitment to quality; and an investment in knowledge.TQM actually has a wide variety of elements, themes, and principles.

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Different levels of an organization often have different understand-ings of TQM. Effective implementation of TQM, however, requiresthat there be a consensus on its understanding at every level of theorganization. Although a majority of organizations had adopted someform of TQM, they have experienced widely varying levels of commitmentto TQM, TQM success and optimism about its future. In an effort to helporganizations achieve desired results, recent empirical work has focusedon defining the components of TQM. [2], [13]

However, broad and all-encompassing it may be as a concept. TQMhas very specific applications in the world of business and industry.Its focus on the customer and on constantly refining the process andreshaping the working relationship of those responsible for the productsmakes it an ideal tool for achieving industry-wide improvements. Its effecton purchasing is very significant since its impact on the field as a focus onquality is for survival.

Given the importance of TQM in purchasing for tile long-termsuccess of the firm, this article examines an organizational andmanagement process that focus on tire internal and external involvementespecially on matters of buyer supplier partnership and benchmarking,in effect, an organizational and management approach to promote andoptimize the most suitable standard of quality. Specifically a comparativeassessment framework is used to describe the impact of TQM on internaland external involvement. Descriptive data that demonstrate the efficacyof this tool as well as management practices applicable to the differentlevels of the organization is offered.

Literature review

An important concern in the implementation of TQM is the extent towhich TQM should be developed together with managerial performanceevaluation systems employing measures of the manufacturing processes[5]. Cali [3] identified four indicators of Internal and ExternalInvolvement. These indicators are crucial in making buyer-supplierrelationship meaningful. The performance evaluations are the indicatorsas followings:

1. Buyer-supplier partnership

Supplier partnership is defined as a mutual, ongoing relationshipbetween a buying firm and a supplying firm, involving a commitment


over an extended time period, and entailing a sharing of information aswell as a sharing of the risks and rewards of the relationship [3]. Taylor[14] examined senior executives’ associated attitudes to and perceptions ofTQM. The results from 113 TQM organizations suggest that organizationsdisplay significantly poorer levels of understanding the purpose of TQMand its true nature as a strategic approach to customers and the marketenvironment. They also appear less knowledgeable about their customers’satisfaction levels and are more likely to believe that TQM has had amarginal impact on their business.

Partnering encourages companies to share marketing, research, andproduction objectives, to build on compatible strengths and values, andto share the risks and profits. There are a lot of long-term supplierpartnerships such as: promoting a sound relationship that encouragesboth parties to make decisions in favor of the relationship; enhancing aninvestment of resources aimed at improving quality and reducing totalcost; and developing a common language and understanding betweenboth parties. They also encourage both parties to work together in severalareas like in operational decisions, causes of variations, improvementsin the consumer’s products, new-product introduction, handling withinventory and eliminating ”conference room decisions”. The potentialresults of this type of relationship are significant because they allowthe supplier to take risks, such as investing in technology (processautomation), equipment (process monitoring) and training facilities; andthey also provide for automatic price reductions based on continuousprocess improvement, and eliminate buffer stock and allow for a moveto Just-in-Time inventory systems.

2. Supplier base reduction

The reduction of the supplier base is advocated as a prerequisitefor supplier partnerships. The smaller base reduces variability in theparts purchased, allows for the focus on a few key suppliers for lastingpartnerships, and reduces the administrative process of dealing withmultiple suppliers.

Dr. W. Edwards Deming (1986) indicated that there are significantadvantages to single resources. They reduce the variation coming intothe customer’s process, give the supplier greater volume and thereforegreater opportunity to refine and improve the process, encourage andrequire more prompt and collaborative problem solving, and allow

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frequent interactions with suppliers that are directed towards continuousimprovements.

3. Just-In-Time purchasing

Just-In-Time (JIT) is the reduction of cost through the elimination ofwaste. JIT includes supplier selection and evaluation, bidding practices,incoming inspection procedures, inbound freight responsibilities, paper-work reduction, value analysis practices, and packaging aspects. [14]

4. Reducing variability

As a result of reducing supplier base, it focuses on reducing thevariability of die parts received while ensuring consistency with theprocess of the purchasing company. It is the way parts that are specified byspecifying target value (i.e., a specific parameter) and requiring maximumuniformity around the target value.

One of the tools used to control variability is the application ofStatistical Process Control (SPC). SPC is a method for determiningthe cause of variation, based on a statistical analysis of the problem.Identifying problems quickly and accurately, SPC provides quantifiabledata for analysis and promotes participation and decision making bypeople doing the job. [1]

5. Benchmarking

Cardy et al [4] addressed that from a TQM perspective, workers’performance is viewed as largely a function of the system rather thanof the workers. A benchmark is a standard of excellence or achievementagainst which offer similar things that must be measured or judged.Benchmarking compares a company’s performance against the best inthe industry (its direct competitors), against companies recognized forsuperiority in performing certain functions (the “best in class” or worldclass), or against companies that are just better. Benchmarking establisheshow much a company needs to improve to be at world-class levels offunctionality. Benchmarking also provides identification of best practice(s)in any(all) processes, provides a quantitative basis for setting processimprovement targets, and encourages participating managers 10 set loftygoals.


6. Involving suppliers in design (concurrent engineering)

It is defined as systematic approach to the integrated and overlappingdesign of products and their related processes, including design,manufacturing, and support. Concurrent engineering requires that, fromthe beginning, all elements of product life-cycle be evaluated across alldesign factors to include user requirements, quality, cost, and schedule.

The foundation of concurrent engineering is that some 80 to 85percent of a product’s cost is determined at concept development [3]. Theintegration of support processes early on cuts manufacturing costs whileraising quality and reducing development time.

The significant benefits from concurrent engineering include:improved quality of design; leading to reduction in change orders;reduction in product cycle time as a result of using concurrent, rather thansequential, design; reduction in manufacturing cost as a result of usingmulti function teams to integrate product and process: and reduction inscrap and rework as a result of product and process design optimization.Supplier involvement in this process is a necessary’ element for success.Since a company can not be all things, the technologies and expertise ofsuppliers must be part of the entire processes.

7. Education and training

TQM is more than simply another operations-improvement program.Instead it must be ingrained in a company’s culture at all levels[11]. Thus, one of the constants in TQM is the need for education andtraining. Education and training are required for both the purchasingorganization and the supplier community. With TQM, workers are giventhe proper education and training, and information needed to performthe job. Thus, it is stated that under international strict competition,companies are motivated to embrace the TQM concept so as to maintain apositive effect on their business performance. [8], [10]

There are two focuses for the education and training effort, as shownbelow:

(a) Education and training in TQM philosophies and principles.Subjects include quality awareness and the TQM process; quan-titative measures to analyze processes, group development skillssuch as team building; and understanding the change process.

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(b) Education and training in the implementation of purchasingstrategies. Subjects include the developing partnership and certi-fication process.

8. Evaluating Internal and External Involvement

TQM is cooperative form of doing business that relies on the talentsand capabilities of both labor and management to continually improvequality and productivity [8].

When TQM is implemented, several organizational practicesare expected to change. The organizational structure changes fromhierarchical structure. In terms of attitude towards change, the practicechanges from maintaining the status quo to focusing on continuousprocess improvement. The way the workers perceive their supervisorsalso changes. Traditionally, workers perceive their supervisors asbosses or cops. With TQM, supervisors are viewed as coaches andfacilitators. Relationships between the supervisor and subordinates alsochange when TQM is implemented. The traditional relationship ischaracterized by dependency, fear, and control. Managers are the brainsand workers are the hands. With TQM, the relationship is characterizedby the interdependency since supervisors expect valuable input fromsubordinates. In TQM, internal and external employee effort is focused onthe team, rather than on the individual. Efficiency ratings for employeesare a result of comparing work values. They are not rated against eachother but against past performance [3].

The organizational perception of labor and training also changeswith TQM. Traditionally, labor is regarded as one of the highest costand training an optional expense. Labor is viewed as the most importantasset in TQM. This is the reason why training is vital. With TQM, it isthe customers who define quality. The basis of decisions is changed withTQM. From out feel or instinct, the basis of decisions shifts to facts andsystems (Schmidth and Finnigan [12]). The system is based on assignmentof work values. The work value system measures involvement.

Involving internal and external employees is a crucial factor inmaking a TQM program successful. This study theorizes that TQMleads to internal and external involvement for it established participativeactivities that are a way of involving internal and external customers.

This is supported by the Human Relations, which states that humanbeings must be an active element in the production process. It is basedon the categorization of human needs that must be taken into account in


improving conditions and working relations. This theory suggests thatworkers be included in the decision making process [7].

To compare with the involvement of internal and external employeesbetween an organization with TQM and that without TQM, theareas of Buyer-Supplier Partnership, Supplier Base Reduction, SupplierCertification, JIT Purchasing, Reducing Variability, Benchmarking,Involving Suppliers in Design, and Education and Training shall be thebases [3].

9. Supplier certification

Certification is used to structure negotiations within a developmentplan to leverage joint resources in reaching mutual improvement goals.The objective of supplier certification is to gain confidence, both in theinformation supplied by a company to its suppliers and in the suppliers’process. This confidence has the ultimate goal of reducing dependency onincoming inspection by relying on Suppliers’ statistical Process Control(SPC).

There are obvious benefits of certification to purchasing such asfinancial benefit in not having to inspect parts, reduction in cost due toelimination of rework, the knowledge the supplier gains from learningconcepts that SPC can be applied to other processes, and the supplierdevelops a level of understanding that allows him to pass along variouscertification requirements to his own supplier.

Methodology

1 Background of the company – Sumiko Electronics Suzhou (SES), Inc.

In 1984, Sumiko Electronics Taiwan (SET) Inc. started as a smallLead Frame manufacturing company. After one decade of continuousgrowth and expansion, it has emerged. as the leading Lead Framemanufacturing company in Taiwan. It also started Sumiko ElectronicsSuzhou (SES), Inc. at SuZhou, China, in 2000. The Corporate objective ofSumiko Electronics Suzhou (SES), Inc. includes

(1) to meet our existing customer for their China factory requirement;(2) to capture the growth of China semiconductor market;(3) to be a long-term strategic partner to its customers and suppliers;(4) zero accident and incident through built-up safe work practices and

occupational health program; and

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(5) out-bonding this pursuit by communication the quality to relevantcontractors, customers and suppliers.

SES, Inc. used several methods and tools in implementing theTQM program. These include Buyer-Supplier Partnership, Supplier BaseReduction, Supplier Certification, Just-In-Time Purchasing, Reducing,Variability, and Benchmarking, Involving Suppliers in Design, andEducation and Trailing. It cited several positive effects of this system. Itpromotes cleanliness and provides for a better working environ-ment. Customer relationship is maximized, and necessary or time-consuming activities such as material shortage and material qualityproblem are lessened. It also prevents accidents and injuries. Most of all, itincreases work efficiency.

2 Research questions

The research undertaken for this study is organized to providean empirical critique on the impact of TQM on internal and externalinvolvement.

Research Question: How does the degree of internal and external involve-ment differ in an organization before and after a TQM Program wasimplemented in terms of: Buyer-Supplier Partnership, Suppliers BaseReduction, Supplier Certification, Just-In-Time Purchasing, Reducing,Variability, and Benchmarking, Involving Suppliers in Design, andEducation and Training?

Although business scholars have long asserted that the effect of TQMto an organization is positive (e.g., [4], [13]), it has to demonstrate timeand again as an effective tool in management. An empirical examinationof this question is called for and the description of such a study is notedin the section that follows. To facilitate answering the research question,the researcher advances a Null Hypothesis which was tested in this study:There is no significant difference in the degree of internal and externalinvolvement in an organization before and after a TQM was implemented.

3 A comparative survey

The author conducted a survey study to gauge the impact of TQM oninternal and external involvement and job performance, as illustrated inFigure 1.

This study seeks in a controlled setting to examine the efficacy ofTQM program implemented on internal and external employees using


a Longitudinal Comparative Research Design. The sample composition,instrumentation, procedure, data analysis and findings are describedbriefly in the sections that follow.

Before TQM program After TQM program↓

Internal Involvement External Involvement• Buyer-Supplier Partnership • Buyer-Supplier Partnership• Supplier Base Reduction • Supplier Base Reduction• Supplier Certification • Supplier Certification• JIT Purchasing • JIT Purchasing• Benchmarking • Benchmarking• Involving Supplier in Design • Involving Supplier in Design• Education and Training • Education and Training

Figure 1Research evaluation framework for impact of TQM program

3.1 Sample

The subject pool was composed of a quota sample of 50 internaland external employees of Sumiko Electronics Suzhou, INS located in SuZhou district, China. Thirty is the minimum number of respondents inmeasuring a longitudinal comparative research [6]. The researcher madeuse of 50 respondents per survey period to be able to get the best results indetermining the effect of TQM on Internal and External Involvement, asshown in Table 1.

Table 1Sample demographic profile age (in years)

Proportion of subjects

Age (in year) 21-24 25-28 29-32 33-36 37-40 41-4428% 10% 18% 14% 10% 20%

Gender Women Men48% 53%

Length of experience 1-3 4-6 7-9 10-12 13-15within the company(in years) 14% 40% 18% 8% 20%

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More than 50 percent of the respondents are male. Twenty eightpercent belong to the age bracket of 21-24 years. Forty percent of therespondents have worked in the company for 4-6 years.

3.2 Producre

The researcher requested permission from the Department Head ofTotal quality Control to administer the questionnaires to the internal andexternal employees of the Sumiko Electrosmosis Suzhou Inc. who wereinvolved in this study.

The administration of questionnaire was done personally bythe researcher, thus retrieval was facilitated. The directions of thequestionnaire were thoroughly explained by the researcher and wereassured with positive gesture by the respondents when asked if theyfully understand how to accomplish the task given to them. Subjects’participation in the study was voluntary and without compensation, priorto participation in the study, subjects were assured that the informationthey provided would be held confidential and their personal identitieswould not be identified. The administration of the questionnaire andsubjects completion of the data collection instrument was not timelimited. Instead, respondents were encouraged to proceed at their ownpace. Average time spent by subject in accomplishing the research matterwas approximately 20 minutes.

Data on internal and external involvement before TQM Implementa-tion was based on past performance record.

3.3 Data analysis

Response for each item and area in the two instruments weretallied and expressed in terms of mean, standard deviation and t -test.The mean analysis was used to determine the level of internal andexternal involvement of Sumiko Electronics Suzhou, Inc. The standarddeviation was used to determine how spread out the scores of internaland external involvement is between the two periods (before and after theimplementation of TQM program). To determine whether or not there isa significant difference between the mean of the two periods, t -test wasused. This test determines the impact of Total Quality-Management onInternal and External Involvement. Each area of employee involvementand job performance was scored by obtaining


Table 2Interpretation of the responses per area for the internal andexternal involvement questionnaire

Store Description

4.5-5 Strong agree3.5-4.49 Agree2.5-3.49 Neutral1.5-2.49 Disagree1.0-1.49 Strongly disagree

Results

The researcher used a 0.05 level of confidence. If the equivalentprobability of the t -value is less, than 0.05, then the null hypothesis isrejected.

The range in which the responses of the internal and externalemployees after the TQM were implemented in terms of EmployeeInvolvement is displayed on Table 3. Results showed that 24% of therespondents were in the range of very high degree of involvement, while64% belongs to the high degree of involvement. Twelve percent belongs tothe moderate degree of involvement.

The range in which the response of internal and external employeesbefore the TQM implementation in terms of Involvement is displayed inTable 4. Results indicate that 12% of the respondents are in die very highdegree bracket, 66% are in the high degree bracket while 22% belongs tothe moderate degree bracket.

Table 3Distribution of responses for Internal and External Involve-ment – After TQM implementation

Range Frequency % Description

4.5-5 12 64 Very high degree3.5-4.49 24 6 High degree2.5-3.49 32 12 Moderate high1.5-2.49 Low degree1-1.49 None at all

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Table 4Distributions of responses for Internal and External Involve-ment – Before TQM implementation



In comparing the involvement practices and performance of internaland external employees of the company before and after the TQMprogram was implemented, the researchers obtained the responses of 50internal and external employees and available data on file for their pastrecords. Table 1 shows 26 respondents or fifty two percent are male and24 respondents or forty eight percent are female participants in April 2000survey. After TQM program was implemented, fourteen respondents ortwenty eight percent are from the age range of 21 -24, illustrated in Table 5.

Table 5Distribution of respondents According to Age – After TQMimplementation

Age Frequency %

21-24 14 2825-28 5 1029-32 9 1833-36 7 1437-40 5 1041-44 10 20Total 50 100

After TQM program was implementation, twenty respondents orforty percent have worked in the company for 1-3 years, as shown inTable 6.

Before TQM program was implemented, the distribution withrespondents is as follows: Fifteen respondents or thirty percent are in theage range of 21-24, as shown in Table 7.

Before TQM program was implemented, twenty four respondents orforty eight percent have worked in the company for 1-3 years, as shown inTable 8.


Table 6Distribution of respondents according to work experiencewith the company – After TQM implementation

Number of years Frequency %working in the company

1-3 20 404-6 7 147-9 9 18

10-12 4 813-15 10 20Total 50 100

Table 7Distribution of respondents according to age – Before TQMimplementation

Age Frequency %

21-24 15 3025-28 9 1829-32 12 2433-36 6 1237-40 2 441-44 6 12Total 50 100

Table 8Distribution of respondents according to work experience –Before TQM implementation

Number of years Frequency %working in the company

1-3 24 484-6 9 187-9 9 18

10-12 1 213-15 7 14Total 50 100

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The information needed to compare the involvement practices andperformance was taken from the internal and external employees ofboth companies through the accomplishment of a questionnaire and adocumentary review of the past records. The Linker-type questionnairewas developed by the researcher to measure the extent of involvementand level of performance of the said employees a year after TQM wasimplemented. Each area of internal and external involvement and jobperformance was scored by obtaining their means.

The range in which the responses of the employees after the TQMwere implemented in terms of internal and external involvement isdisplayed on Table 9. Results showed that 24 of the respondents werein the range of very high degree of involvement, while 64 belonged tothe high degree of involvement. Twelve percent belongs to the moderatedegree of involvement.

The range in which the response of internal and externalemployees before TQM implementation in terms of Internal and ExternalInvolvement is displayed in Table 10. Results indicate that 12% of therespondents are in the very high degree bracket, 66% are in the high degreebracket while 22% belongs to the moderate degree bracket.

Table 9Distribution of responses for Internal and External Involve-ment – After TQM implementation



Table 10Distribution of responses for Internal and External Involve-ment – Before TQM implementation




Table 11Comparative mean of Internal and External Involvement

Area After X Before X t-value p(α = 0.05)

Buyer-Supplier Partnership 4.08 3.83 1.824 0.067Supplier Base Reduction 4.15 4.02 –0.335 0.735Supplier Certification 4.42 4.16 2.01 0.044Just-in-Time Purchasing 4.25 3.91 2.33 0.0203Reducing Variability 4.05 3.76 1.922 0.054Benchmarking 4.23 3.94 2.446 0.015Supplier’s Involvement 4.1 3.79 2.31 0.0125in DesignEducation and Training 4.15 3.88 2.712 0.008Overall 4.18 3.91 2.14 0.031

The weighted mean for each area of Internal and ExternalInvolvement is presented in Table 11. The table shows the weighted meanfor each involvement area for both periods of the company as well as therespective t -values and probability values.

In the area of Buyer-Supplier Partnership, After TQM Implementa-tion obtained a mean of 4.08 compared to the 3.83 mean of Before TQMImplementation. After and Before TQM Implementation the t -value is1.824 and the probability of 0.067, at the 0.05 level of significance, theresearcher accepted the null hypothesis. In the area of Supplier BaseReduction, After and Before TQM Implementation, the probability is0.735, and the researcher also accepted the null hypothesis at the 0.05 levelof significance.

For Supplier Certification, After TQM Implementation obtained amean of 4.42 compared to Before TQM Implementation 4.16. The l -valueis at 2.01 and the probability at 0.044. The null hypothesis is again rejectedat the 0.05 level of significance.

For Just-In-Time Purchasing, After TQM Implementation obtaineda mean of 4.25 compared to the 3.91 of Before TQM Implementation.The t -values and probability values are at 2.33and 0.0203 respectively.The researchers also rejected the null hypothesis at the 0.051evel ofsignificance.

In the area of Reducing Variability mean 4.05 was obtained byAfter TQM Implementation while Before TQM Implementation obtained

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a mean of 3.76. The t -value is 1.922 and the probability is 0.054. Theresearcher accepted the null hypothesis at the 0.05 level of significance.

In the area of Benchmarking After and Before TQM Implementationobtained means of 4.23 and 3.94, respectively. The t -value is 2.446 whileprobability is at 0.015 the researcher rejected the null hypothesis at lie 0.05level of significance.

For Supplier’s Involvement in Design, After TQM Implementationobtained a mean of 4.1 compared to Before TQM Implementation 3.79.The t -value and probability value are at 2.31 and 0.0215 respectively. Thenull hypothesis is also rejected at the 0.05 level of significance.

For the Education and Training of the Internal and Externalemployees, After TQM Implementation scored a mean of4.15 comparedto Before TQM Implementation 3.88. The t -value is at2.712 and theprobability is at 0.008.Again, the researcher rejected the null hypothesisat the 0.05 level of significance.

Overall, After TQM Implementation obtained a mean of 4.18compared to the 3.91 of Before TQM Implementation. When subjected tothe t -test, the t -value is 2.14 with a probability of 0.031. The researcherrejected the null hypothesis at the 0.05 level of significance.

Discussion and conclusion

In interpreting the significance or non-significance of the differencesin the internal and external involvement between after and before TQMImplementation, the researcher based their interpretations on the t -valuesobtained and their equivalent probability at the 0.05 level of confidence.

The eight factors of Involvement yielded various results when thesignificance of its difference was tested. In the area of Buyer-SupplierPartnership, it showed that there is no significant difference between Afterand Before TQM Implementation.

Internal and External employees of both periods indicate a verystrong relationship. It suggests that the workers of both periods oftenundertake information exchange that is mutually beneficial to both buyerand supplier. They have established a symbiotic relationship not only interms of information sharing but a working climate built on trust andcooperation as well.

Results in tile area of Supplier Base Reduction showed that there isno significant difference between After and Before TQM Implementation.This is evidenced by the fact that Sumiko Electronics Suzhou, Inc. has


relied on a single-source supplier for each line item ever since. Thisresult is also consistent with their founded principle on buyer-supplierpartnership based on trust and cooperation.

The third Involvement indicator, Supplier Certification, showed thatthere is a significant difference in this area between After and Before TQMImplementation. For After TQM Implementation is a must for renewal ofcontract. Results indicate that their suppliers applied for certification fromISO and have been certified. In other words the suppliers were upgraded.

As to Before TQM Implementation, supplier certification is notrequired although their performance is very satisfactory but falls short inlatest technology.

There is also a significant difference in the Just-In-Time Purchasing,the fourth Involvement indicator, between the two periods. In AfterTQM Implementation, Sumiko Electronics Suzhou, Ins. never pan out ofsupplier and no rejects. Counting and inspection of deliveries were alsoeliminated. An indication of reduction in operating cost.

As to Before TQM Implementation, Just-In-Time Purchasing is alsodescribed as very satisfactory but of greater operating cost because ofinspection activity and formal paper work requirements. In the area ofReducing Variability, results showed that there is no significant differencebetween the two periods of After and Before TQM Implementation.Reduction of variability is a consequence of Buyer-Supplier partnershipand reliance on a single-source supplier. Beside the fact that suppliers havedone their part in making sure that the parts delivered have been subjectedto quality control, the entire requisition process was also placed in controlthrough lie application of SPC, thus variability has been minimized if notcompletely eliminated.

In evaluating Benchmarking, the sixth Involvement indicator, resultsrevealed that there is a significant difference between the two periods. Asa consequence of the benchmarking process that has been undergoneby Sumiko Electronics Suzhou, Inc. and its Suppliers, After TQMImplementation a substantial level of improvements was observed in thearea of Inventory Control, Supply Management and Quality Processes incontrast to their Before TQM Implementation counterparts.

Comparing Sumiko Electronics Suzhou, Ins. to other leadingcompanies, Sumiko Electronics Suzhou, Inc., is a benchmark in tile area ofcustomer focus, distribution, empowerment and marketing. As a matterof fact Sumiko Electronics Suzhou, Inc., has been certified ISO 9002.

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There is also a significant difference in the Supplier’s Involvementin Design between the two periods. Results revealed that a supplier inAfter TQM Implementation has been very involved in the concurrentengineering process. This indicated that the supplier’s technologiesand expertise has been part of the entire process that ascertained theproductively of the final requirements in their output product.

Both Buyer and Supplier have mutually benefited from concurrentengineering and were thus motivated to strive for excellence because theimproved quality of design has led to substantial reduction in changeorders, product cycle life, manufacturing costs, and in scrap and rework.

In evaluating the Education and Training of Internal and ExternalEmployees, and the eighth Involvement indicator, results revealed thatthere is a significant difference between the two Period. Education andTraining of Internal and External employees of both companies aredescribed as very intensive. This indicates that the Internal and Externalemployees were being educated and framed well in order to equipthem with knowledge and skills that makes them globally competitive.Another objective of Sumiko Electronics Suzhou, Inc. is the continuingdevelopment of every member of the Sumiko Electronics Suzhou’s familyinto a quality person to realize its greater source that is why developmentis a must.

After TQM Implementation had Quality Improvement Teams whowere framed in the Quality Tools implement the fundamentals of totalquality on the process they are working on. This training has not onlyproven to be cost-effective but also to have the maximum possible impacton the employees’ retention of the learned skills for application back in thenormal workplace.

Overall, results showed that there is a significant difference in thedegree of Internal and External Involvement between the two periods. Itshows that the degree of Internal and External Involvement of after TQMImplementation employees is generally higher compared to Before TQMImplementation.

This is particularly true in the involvement indicators such as Sup-plier Certification, Just-In-Time Purchasing and Benchmarking. Supplier’sinvolved in Design, education and training. The significant differenceindicates that After TQM Implementation has considered the conditionsnecessary for Internal and External Involvement.


The significant difference in terms of Internal and ExternalInvolvement can be attributed to Total Quality Management. This isbecause TQM covers every aspect that may affect Internal and EternalInvolvement. In fact, TQM covers every aspect on the way of lifeand operation that is conducted in an organization. This is particularlytrue for Internal and External Involvement that is directly affectedby TQM. Internal and External Involvement because of establishedparticipative activities.

The “significant difference” on the other hand in some areaswas discussed per indicator of involvement. Overall, the insignificantdifference in some aspects can be attributed to the fact that these have beenproperly addressed by management Before TQM Implementation and alsoas a matter of priority.

Recommendations

The TQM Program of Sumiko Electronics Suzhou, Inc. has provenitself to be successful m terms of its effect on Internal and ExternalInvolvement. The TQM program provided venues and conditions whereinternal and external employees can influence the direction of thecompany. The researcher presents recommendations derived from thefindings of the study as follows:

1. That Sumiko Electronics Suzhou, Inc. continues implementing itsTQM program. Management must devote a sustainable effort tocontinually support and develop the program by deployment ofmore resources and time. Resources would be the materials andtools required by the Total Quality/Productivity Circles to improveall aspects of quality in management and product/service. Time isneeded in the identification and analysis of problems as well as theformulation of solutions.

2. Additional incentives should be given to internal and externalemployees who are active in the TQM Programm, aimed to increasethe participation of internal and external employees to TQM relatedactivities. Incentives can be in the form of material goods such as rice,grocery items, and/or Fu Shing, product.

3. Purchasing executives must not only obtain senior managementcommitment, but also provide the proper purchasing leadershipthemselves.

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4. Increase incentives to reduce the financial risk to industrial invest-ments in new manufacturing equipment and techniques. (Particularattention should be paid to modernization of the supplier orvendor base.) Such incentives could include: budget and contractingpolicies that encourage stability” for the contractor and thesuppliers: rewards to contractors that continually use state-of-the-artproduction systems; changes in accounting systems to capture thebenefits of production modernization.

References

[1] D. H. Basefield (1994), Quality Control, 4th edn., Prentice Hall, Inc.,U.S.A.

[2] G. Bounds (1994), Beyond Total Quality Management, McGraw Hill,International Editions, New York.

[3] J. F. Cali (1992), TQM for Purchasing Management, McGraw Hill,International Editions, USA.

[4] R. Cardy, G. H. Dobbins and K. Carson (1995), TQM andHRM: Improving performance appraisal research, theory, andpractice, Revue Canadienne des Sciences de l’Administration, Vol. 12 (2),pp. 106–115.

[5] R. H. Chenhall (1997), Reliance on manufacturing performance mea-sures, total quality management and organizational performance,Management Accounting Research, Vol. 8 (2) (June), pp. 187–206

[6] L. R. Gay and P. L. Diehl (1992), Research Methods for Business andManagement, MacMillan Publishing Co., New York.

[7] A. Ghobadian and D. Gallear (2001), TQM implementation: anempirical examination and proposed generic model, Omega, Vol. 29(4) (August), pp. 343–359.

[8] P. Hess and J. Siciliano (1996), Management: Responsibility forPerformance, The McGraw Hill Company, Inc., USA.

[9] K. A. S. Kassicieh, S. A. Yourstone and A. Steven (1998), Training,performance evaluation, rewards and TQM implementation success,Journal of Quality Management, Vol. 3 (1), pp. 25–38.

[10] V. Kohse (1994), Quality management and competitiveness inCanadian manufacturers, CMA Management; Hamilton, Vol. 68 (6),pp. 25–32.

[11] C. G. Partlow (1996), Human-Resources Practices of TQM Hotels,The Cornell Hotel and Restaurant Administration Quarterly, Vol. 37 (5)(October), pp. 67–77.


[12] W. H. Schirndt and J. P. Finnigan (1993), TQM Manager, Josey-BassPublisher, San Francisco, California.

[13] C. M. Shea and J. M. Howell, Organizational Antecedents to theSuccessful Implementation of Total Quality Management: A SocialCognitive Perspective, Journal of Quality Management, Vol. 3 (1)(1998), pp. 3–24.

[14] W. A. Taylor (1997), Leadership challenges for smaller organizations:self-perceptions of TQM implementation, Omega, Vol. 25 (5)(October), pp. 567–579.

Received November, 2005

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