Role of Quality Management System in Enhancing the Performance in Manufacturing Industries
Presented by S.Giridhara, Registered Senior Consultant-QMS (Reg. No : SC 24 046, National Board for Quality Promotion-Quality Council of India), Chief Consultant-Aakarshna Quality Management Services-Coimbatore, under guidance by Dr.G.Sivaramakrishnan, Professor and Head, Department of Management Studies, Karpagam College of Engineering, Coimbatore-India.
Abstract
After globalization in 1990s, the standardization process in manufacturing industries has geared momentum. A Model Quality Management System - ISO 9001(current version is in use:ISO:2008) has been recommended by the International Organization for standardization (ISO), Jeneva, Switzerland. In this study, an attempt has been made to identify the role of Quality Management System in enhancing performance in an Indian manufacturing industry. As a case study, M/S Ramdevs Motors, a pumps manufacturing industry at Coimbatore, Southern part of India was chosen for this study.
The performance measures like, Increase in financial performance, productivity, quality, employee performance, organizational change, document/record control, top management performance have been studied in this study. An opinion survey type questionnaire was used to collect data from the organization. The performance of the company before and after QMS implementation was collected. The data obtained is further processed and analysed using statistical tools. The results of study reveal the fact, that the role of QMS has significance in enhancing the performance of the organization. From this study it is also found that the role of QMS has no significance in financial performance of the organization. It is concluded that to forward recommendations to ISO to refine the standard requirements.
1. INTRODUCTION
The management of the organization in this study, has decided to implement a Quality Management System as per ISO 9001 standard for the following reasons...
· Customers demand for ISO 9001 certificate.
· To supply consistent quality products to the market and to sustain the product quality.
· To have a control on the manufacturing processes.
· To have a control on the internal documents (Example: Design drawings).
· To do manufacturing process in a systematic way.
The organization appointed a consultant to implement QMS and the organization was certified to ISO 9001:2008 QMS certification during September 2010. The management and entire team were fully involved in the ISO 9001 implementation. Then the organization maintains the Quality Management System as per ISO 9001.
The management of the organization is interested to know the following...
· Customer demands Quality Management System certification, but the organization facing with recurring expenses to maintain QMS certification. The management wants a justice for this recurring expenditure.
· The organization’s management is interested to know, whether QMS is really beneficial to their organization in improving the performance towards achieving their organizational objectives.
In broad perspective, from a survey data (Source : www.iso.org) from International Organization for Standardization, the total number of ISO 9001 certified companies in the word as on December 2012 is 11,01,272. Number of ISO 9001 certified in India is 29, 402 which is 2.7% of the world certification. We need to understand the significance of QMS in improving the performance of manufacturing industries as these manufacturing industries are the key contributors for the Indian Economic growth. Manufacturing Industries contribute 15% (as on 2012) in GDP of India.
Scope of study does not cover other standards like Environmental management system (ISO 14001) and Safety management system (BS OHSAS 18001).
2. OBJECTIVE OF THE STUDY
Objective of this study is to find the role of Quality Management System in improving the following organizational objectives...
· Financial performance.
· Quality & productivity.
· Customer Relation Management.
· Employee performance.
· Document and record control.
· Overall performance and
· To provide recommendations/suggestions to enhance the Quality Management System.
3. LITERATURE REVIEW
3.1 Literature Review 1
“A research study was done by Esin Sadikoglu and Hilal Olcay at School of Business Administration, Gebze Institute of Technology, 41400 Kocaeli, Turkey, Published 16 March 2014.
The study has found that, TQM index is positively related to all performance measures. TQM practices, in general, improve performance of the firm. Moreover, the study has found that different TQM practices significantly affect different outcomes. Although leadership is not significantly related to any performance measures, knowledge and process management practices are positively, related to inventory management performance, innovation performance, social responsibility, and market and financial performance”6
3.2 Literature Review 2
“A Research study was taken by Stella E.Garcia of Southwest 'Texas State University” in the year 1999, at Page 3 of her research report, it is addressed as “eight of the ten dependent variables demonstrate a positive relationship between organizational performance and quality management”7.
3.3 Literature Review 3
Dale H.Besterfield, Carol Besterfield, Glen Besterfield, Mary Besterfield.
TOTAL QUALITY MANAGEMENT-Third Edition, seventh reprint 2005, 254-255 narrates...
“Benefits of ISO registration-
A study of 100 Italian Manufacturing firms was undertaken to determine if there was any improvement in performance after registration. Significant improvement was noted in...
· Internal quality as measured by percent of scrap, rework and non conformance.
· External quality as measured by product accepted by customer without inspection, claims of non-conforming/returned product.
· Time performance as measured by time to market, on-time delivery, and through-put-time.
· Cost of poor quality as measured by external non conformities, scrap and rework
On the negative side, prevention and appraisal cost increased.
Additional examples of benefits after registration are...
North-town ford automobile dealer in Toronto, Ontario raised customer satisfaction and loyalty by 20%, and it had a 55% increase in customers who would recommend dealership.
United Airlines reduced the average engine overhaul cycle time from 120 days to 60 days”1
4. RESEARCH GAP
While similar type of studies were conducted in many places of the world, especially in a Small scale Manufacturing sector in India (M/S RAMDEVS MOTORS) is yet to be explored and hence there is a research gap and need for this study.
5. METHODOLOGY
The time taken for this study is one year. Opinions of employee and Management Team have been collected in a questionnaire (these questionnaires have been given as tables from the section 7.1 to 7.9 below). Data related to performance of the organization before implementing QMS and one year after implementing QMS have been collected in the questionnaire.
The employees, staff and Chief Executive officer (CEO) are the target the respondents, a questionnaire is submitted and their opinion is collected back.
The In-charge/Head of the department of the following functions were interviewed...
· Design
· Production & Machine Maintenance
· Quality
· Purchase
· Finance
Two senior operators from production were interviewed. CEO of the organization was interviewed. Number of respondents used in the study was 8 (eight). Opinions given by these respondents are summarised in the questionnaire (these questionnaires have been given as tables from the section 7.1 to 7.9 below).
Respondents for the survey are chosen based on their presence before and after implementing QMS. Staff and employee involved in the development of QMS and able to recognize the changes before and after implementing QMS are chosen for this study.
Research design method followed in this study is “Exploratory Study” due to limited number of data.
Sample design method followed in this study is “Non-Probability design” and Census sampling method is followed. The management and employees of the company is the sampling unit.
Type of collected data through the Questionnaire is a qualitative (also called Discrete or attribute data) one. The following are the discrete data in this study...
E-Efficient
G-Good
M-Moderate
LM-Less than Moderate
P-Poor
Data collected from the questionnaire is processed and further analysed by the following two methods...
(i) % Analysis: In this method, % data is evaluated before and after implementation of QMS. Difference between % before implementation and after implementation QMS shows the improvement.
(ii) Chi-Square (χ2) test: This test is carried out using Statistical packs.
6. TOOLS USED FOR ANALYSIS
Since type of data used is qualitative/attribute (discrete) data, Chi-Square (χ2) test is used as statistical tool to analyse the data.
Chi-Square (χ2) test: A chi square test, also called "test of association," is a statistical test of association between discrete variables or data. It is based on a mathematical comparison of the number of observed counts with the number of expected counts to determine if there is a difference in output counts based on the input category. This test is used for Qualitative/Attribute/discrete data in which are numbers (counts), for example number of errors in a manufactured product or opinions like good or bad. Critical Chi-squared value is p=0.05. If P value is less than or equal to 0.05 then test of association between two group of data is significant.
Before and after implementation of QMS is evaluated through % improvement analysis also. Difference between % before implementation and after implementation QMS shows the improvement.
However significance level of improvement is finally taken from the Chi-Square (χ2) test result.
7. DATA ANALYSIS AND INTERPRETATION
7.1 QMS Vs Financial Performance
QMS Vs Financial performance data: % Improvement Analysis-Table 1
Sl.No | Performance aspects | Status Before QMS Implementation | Status : Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
Investment for QMS Vs Organization growth | ● | ● | |||||||||
Return on investment-General | ● | ● | |||||||||
Return on investment-QMS | ● | ● | |||||||||
Market share-Domestic | ● | ● | |||||||||
Market share-International | ● | ● | |||||||||
Increase in turnover | ● | ● | |||||||||
Increase in profits | ● | ● | |||||||||
Total Items A | 0 | 0 | 1 | 1 | 5 | 0 | 2 | 3 | 1 | 1 | |
Maximum score (C) | 7 X 100=700 | 7 X 100=700 | |||||||||
Obtained score D=Σ(AXB) | 80 | 360 | |||||||||
% Obtained score (DX100)/C | 11.4% | 51.4% | |||||||||
Graph 1 : Chi-Square Test result : QMS Vs Financial Performance
Findings/Inferences: QMS Vs Financial Performance
% Analysis shows, 40% improvement in the financial performance is found after QMS implementation. However chi-square test shows P value =0.129 which is not a significant change. Hence, it is interpreted that, the role of QMS has no significance in improving the financial performance of the organization.
7.2 QMS Vs Productivity
QMS Vs Productivity data : % Improvement Analysis –Table 2
Sl. No. | Performance aspects | Status Before QMS Implementation | Status : Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
Number of products delivered per month | ● | ● | |||||||||
Storage/Inventory level-Incoming parts | ● | ● | |||||||||
Storage/Inventory level-In-process | ● | ● | |||||||||
Storage/Inventory level-finished goods | ● | ● | |||||||||
Control of tools/jig/fixtures/patterns | ● | ● | |||||||||
Improvement in manufacturing process | ● | ● | |||||||||
Total Items A | 0 | 0 | 2 | 0 | 4 | 2 | 4 | 0 | 0 | 0 | |
Maximum score (C) | 6 X 100=600 | 6 X 100=600 | |||||||||
Obtained score D=Σ(AXB) | 120 | 520 | |||||||||
% Obtained score (DX100)/C | 20.0% | 86.7% | |||||||||
Graph 2 : Chi-Square Test result : QMS Vs Productivity
Findings/Inferences: QMS Vs Productivity
% Analysis shows, 66.7% improvement in the productivity is found after QMS implementation. Chi-square test shows P value =0.007, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the productivity of the organization.
7.3 QMS Vs Quality Improvement
QMS Vs Quality Improvement : % Improvement Analysis- Table 3
Sl. No. | Performance aspects | Before QMS Implementation | Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
1. | Product Design improvements | ● | ● | ||||||||
2. | Control of drawings/quality plans | ● | ● | ||||||||
3. | Improvement in incoming materials inspection/product testing process | ● | ● | ||||||||
4. | Internal Non conformance | ● | ● | ||||||||
5. | Process control | ● | ● | ||||||||
6. | Customer complaints | ● | ● | ||||||||
7. | field failures and returns | ● | ● | ||||||||
8. | Cost of poor quality | ● | ● | ||||||||
9. | Corrective action for internal NCs | ● | ● | ||||||||
10. | 5s-house keeping/cleanliness | ● | ● | ||||||||
11. | Identification, method of storage and Traceability of parts | ● | ● | ||||||||
12. | Supplier quality (incoming NC parts) | ● | ● | ||||||||
13. | Supplier’s delivery performance | ● | ● | ||||||||
14. | Supplier PO tracking system | ● | ● | ||||||||
15. | Defect prevention/implementation of preventive/proactive active controls | ● | ● | ||||||||
Total Items A | 0 | 0 | 0 | 6 | 9 | 2 | 5 | 7 | 1 | ||
Maximum score (C) | 15 X 100=1500 | 15 X 100=1500 | |||||||||
Obtained score D=Σ(AXB) | 120 | 1040 | |||||||||
% Obtained score (DX100)/C | 8.0% | 69.3% | |||||||||
Graph 3 : Chi-Square Test result : QMS Vs Quality Improvement
Findings/Inferences: QMS Vs Quality Improvement
% Analysis shows, 61.3% improvement in the quality is found after QMS implementation. Chi-square test shows P value =0.000, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in quality improvement of the organization.
7.4 QMS Vs Employee Performance
QMS Vs Employee Performance : % Improvement Analysis- Table 4
Sl. No. | Performance aspects | Before QMS Implementation | Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
1. | Individual performance of employees | ● | ● | ||||||||
2. | Department wise performance | ● | ● | ||||||||
3. | Employee involvement | ● | ● | ||||||||
4. | Employee satisfaction | ● | ● | ||||||||
5. | Employee awareness on QMS | ● | ● | ||||||||
6. | Effectiveness of employee training on QMS | ● | ● | ||||||||
Total Items A | 0 | 0 | 0 | 4 | 2 | 0 | 1 | 5 | 0 | 0 | |
Maximum score (C) | 6 X 100=600 | 6 X 100=600 | |||||||||
Obtained score D=Σ(AXB) | 80 | 380 | |||||||||
% Obtained score (DX100)/C | 13.3% | 63.3% | |||||||||
Graph 4 : Chi-Square Test result : QMS Vs Employee Performance
Findings/Inferences: QMS Vs Employee Performance
% Analysis shows, 50% improvement in the employee performance is found after QMS implementation. Chi-square test shows P value =0.05, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the employee performance of the organization.
7.5 QMS Vs Customer Relation Management
QMS Vs Customer relation management: % Improvement Analysis – Table 5
Sl. No. | Performance aspects | Before QMS Implementation | Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
1. | Customer satisfaction level | ● | ● | ||||||||
2. | customer relation management | ● | ● | ||||||||
3. | Customer order tracking and delivery against customer order tracking system | ● | ● | ||||||||
Total Items A | 0 | 0 | 0 | 2 | 1 | 0 | 3 | 0 | 0 | 0 | |
Maximum score (C) | 3 X 100=300 | 3 X 100=300 | |||||||||
Obtained score D=Σ(AXB) | 40 | 240 | |||||||||
% Obtained score (DX100)/C | 6.7% | 80.0% | |||||||||
Graph 5 : Chi-Square Test result : QMS Vs CRM
Findings/Inferences: QMS Vs Customer Relation Management
% Analysis shows, 73.3% improvement in the customer relation management is found after QMS implementation. Chi-square test shows P value =0.05, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the customer relation management of the organization.
7.6 QMS Vs Organizational Cultural change
QMS Vs Organizational Cultural change : % Improvement Analysis Table 6
Sl. No | Performance aspects | Status Before QMS Implementation | Status : Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
QMS implementation Vs organizational cultural changes | ● | ● | |||||||||
QMS Vs changes in Employee morale/discipline | ● | ● | |||||||||
Total Items A | 2 | 2 | |||||||||
Maximum score (C) | 2 X 100=200 | 2 X 100=200 | |||||||||
Obtained score D=Σ(AXB) | 40 | 120 | |||||||||
% Obtained score (DX100)/C | 20.0% | 60.0% | |||||||||
Graph 6 : Chi-Square Test result : QMS Vs Organizational cultural change
Findings/Inferences: QMS Vs Organizational Cultural changes
% Analysis shows, 40% improvement in the organizational cultural changes is found after QMS implementation. Chi-square test shows P value =0.046, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the organizational cultural changes.
7.7 QMS Vs Document/Data/Record Controls
QMS Vs Document/Data/Record control : % Improvement Analysis –Table 7
Sl. No | Performance aspects | Status Before QMS Implementation | Status : Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
Document/data/ record control | l | l | |||||||||
Documentation/ procedures for every process | l | l | |||||||||
Data/record retrieval and traceability | l | l | |||||||||
Management information system/Analysis of data/Statistical data presentation | l | l | |||||||||
Internal communication system within department and inter departments | l | l | |||||||||
Total Items A | 0 | 0 | 0 | 3 | 2 | 1 | 4 | 0 | 0 | 0 | |
Maximum score (C) | 5 X 100=500 | 5 X 100=500 | |||||||||
Obtained score D=Σ(AXB) | 60 | 420 | |||||||||
% Obtained score (DX100)/C | 12.0% | 84.0% | |||||||||
Graph 7 : Chi-Square Test result : QMS Vs Document/Data/Record controls
Findings/Inferences: QMS Vs Document/Data/Record controls
% Analysis shows, 72% improvement in the document/data/record controls is found after QMS implementation. Chi-square test shows P value =0.019, which is a high significant change. Hence, it is interpreted that, the role of QMS has significance in improving the performance related to document, data and record controls of the organization.
7.8 QMS Vs Top Management controls
QMS Vs Top Management controls : % Improvement Analysis – Table 8
Sl. No. | Performance aspects | Before QMS Implementation | Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
1. | Management commitment towards QMS | l | l | ||||||||
2. | Management policies, vision, missions | l | l | ||||||||
3. | Monitoring department level objective and improvement actions | l | l | ||||||||
4. | Effectiveness Internal auditing process, NC Identification and closing | l | l | ||||||||
5. | Effectiveness of Management review meeting | l | l | ||||||||
6. | Provision of resources needed for manufacturing & administration | l | l | ||||||||
Total Items A | 3 | 3 | 4 | 2 | |||||||
Maximum score (C) | 6 X 100=600 | 6 X 100=600 | |||||||||
Obtained score D=Σ(AXB) | 60 | 380 | |||||||||
% Obtained score (DX100)/C | 10.0% | 63.3.% | |||||||||
Graph 8 : Chi-Square Test result : QMS Vs Top Management Controls
Findings/Inferences: QMS Vs Top Management Controls
% Analysis shows, 53.3% improvement in the top management controls is found after QMS implementation. Chi-square test shows P value =0.007, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the top management controls of the organization.
7.9 QMS Vs Overall Performance
QMS Vs overall performance of the organization: % Improvement Analysis –Table 9
Sl. No | Performance aspects | Status Before QMS Implementation | Status : Within 3 years After QMS implementation | ||||||||
E | G | M | LM | P | E | G | M | LM | P | ||
Maximum Rating (B) | 100 | 80 | 60 | 20 | 0 | 100 | 80 | 60 | 20 | 0 | |
Total Items A (50 questions in the questionnaire) | 0 | 0 | 3 | 21 | 26 | 5 | 23 | 19 | 2 | 1 | |
Maximum score (C) | 100 X 50=5000 | 100 X 50=5000 | |||||||||
Obtained score D=Σ(AXB) | 600 | 3520 | |||||||||
% Obtained score (DX100)/C | 12% | 70.40% | |||||||||
Graph 9 : Chi-Square Test result : QMS Vs Overall Organizational performance
Findings/Inferences: QMS Vs Organizational overall performance
% Analysis shows, 58.4% improvement in the overall organizational performance is found after QMS implementation. Chi-square test shows P value =0.000, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the organizational overall performance of the organization.
8. SUMMARY OF FINDINGS/INFERENCES
8.1 Findings/Inferences: QMS Vs Financial Performance
% Analysis shows, 40% improvement in the financial performance is found after QMS implementation. However chi-square test shows P value =0.129 which is not a significant change. Hence, it is interpreted that, the role of QMS has no significance in improving the financial performance of the organization.
8.2 Findings/Inferences: QMS Vs Productivity
% Analysis shows, 66.7% improvement in the productivity is found after QMS implementation. Chi-square test shows P value =0.007, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the productivity of the organization.
8.3 Findings/Inferences: QMS Vs Quality Improvement
% Analysis shows, 61.3% improvement in the quality is found after QMS implementation. Chi square test shows P value =0.000, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in quality improvement of the organization.
8.4 Findings/Inferences: QMS Vs Employee Performance
% Analysis shows, 50% improvement in the employee performance is found after QMS implementation. Chi-square test shows P value =0.05, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the employee performance of the organization.
8.5 Findings/Inferences: QMS Vs Customer Relation Management
% Analysis shows, 73.3% improvement in the customer relation management is found after QMS implementation. Chi-square test shows P value =0.05, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the customer relation management of the organization.
8.6 Findings/Inferences: QMS Vs Organizational Cultural changes
% Analysis shows, 40% improvement in the organizational cultural changes is found after QMS implementation. Chi-square test shows P value =0.046, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the organizational cultural changes.
8.7 Findings/Inferences: QMS Vs Document/Data/Record controls
% Analysis shows, 72% improvement in the document/data/record controls is found after QMS implementation. Chi-square test shows P value =0.019, which is a high significant change. Hence, it is interpreted that, the role of QMS has significance in improving the performance related to document, data and record controls of the organization.
8.8 Findings/Inferences: QMS Vs Top Management Controls
% Analysis shows, 53.3% improvement in the top management controls is found after QMS implementation. Chi-square test shows P value =0.007, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the top management controls of the organization.
8.9 Findings/Inferences: QMS Vs Organizational overall performance
% Analysis shows, 58.4% improvement in the overall organizational performance is found after QMS implementation. Chi-square test shows P value =0.000, which is a significant change. Hence, it is interpreted that, the role of QMS has significance in improving the organizational overall performance of the organization.
8.10 Findings/Inferences
Eight out of nine performance factors studied shows significant improvement. Hence the finding of the study is “The Role of Quality Management System has enhanced the performance of a Manufacturing Industry significantly”.
Table 10 : Summary of findings/Inferences
The interpretation of results of the analysis of the study is given in the following table.
SL | Performance aspect | % Improvement analysis) | P value in the Chi Square test # | Interpretation and Inferences (To decide it as significant P value should be less than or equal to 0.05) | ||
Before QMS (A) | After QMS (B) | Improve- ment % (B-A) | ||||
1. | Financial performance | 11.4 | 51.4 | 40 | P=0.129 | No significant inference by the QMS. |
2. | Productivity | 20 | 86.7 | 66.7 | P=0.007 | Significant |
3. | Quality Improvement | 8 | 69.3 | 61.1 | 0.000 | Significant |
4. | Employee Performance | 13.3 | 63.3 | 50 | 0.05 | Significant |
5. | Customer relation management | 6.7 | 80 | 73.3 | 0.05 | Significant |
6. | Cultural changes | 20 | 60 | 40 | 0.046 | Significant |
7. | Document/data control | 12 | 84 | 72 | 0.019 | Significant |
8. | Top Management aspects | 10 | 63.3 | 53.3 | 0.007 | Significant |
9. | Overall performance of the organization | 12 | 70.4 | 58.4 | 0.000 | Significant |
9. DISCUSSIONS, CONCLUSION AND RECOMMENDATIONS
9.1 CONCLUSIONS
Eight out of nine performance factors studied shows significant improvement result. Hence, the finding of the study is “The Role of Quality Management System has enhanced the performance of a Manufacturing Industry significantly”.
As already discussed in the literature review-1, research study by Esin Sadikoglu and Hilal, reveals that financial performance also has improved after QMS implementation.
Whereas, our study results show, that, there is no significant improvement realized by the organization in the financial performance from QMS implementation.
9.2 Managerial Implications
Based on the discussions had with the management team, the following causes are enlisted for non- achievement of financial performance...
(a) There were no extra order generation, due to QMS implementation alone. So, no increase found in turnover and profits.
(b) The organization was supplying all products to only one principal corporate brand customer in India. So, no increase found in turnover and profits.
(c) Only domestic market was focused. No exports were done in the past 3 years.
(d) No measurable data had been taken by the organization with respect to in the return of investment (investment made for QMS implementation) in the overall profit.
(e) QMS Standard is silent in the finance and account aspects and its controls. In manufacturing sector, finance/accounts processes are not covered during QMS implementation and certification audits.
9.3 DISCUSSIONS AND RECOMMENDATIONS
Employee performance is still not fully focused by the standard. ISO 9001 requirements are limited to competency and skill development part of employee but concepts like employee safety, employee motivation, employee involvement, maintaining cordial relations with employees, fulfilling employee welfare needs etc., are not covered in the standard.
No requirements in the standard with regard to change management. Hence no initiatives from the organization towards change management.
Role of QMS has enhanced overall performance of an Indian Manufacturing Industry. No significant impact by QMS was found on the financial performance.
Following aspects can be covered in the ISO 9001 standard itself and these aspects are to be enforced by the consultants, organizations and certification body auditors to realize more benefits by the organizations ...
(1) At present, general recognition/value for ISO 9001 certificate in the market is going down, because all firms either highly-performing-firm or non-performing-firm is getting this certificate easily. There are no stringent requirements in the standard to ensure the performance. All certified companies are treated with equality. No grading/score system between QMS of two certified organizations. For instance, in Bureau of Energy Efficiency Model of Government Of India, for electrical products, Star Rating is given, based on the performance of the product. Due to these reasons, there is no pressure/vision to the organizations to perform towards achieving higher standards/goals during QMS implementation and certification process.
(2) The standard may be refined to include key financial controls and related practices. The standard may be refined to include key employee performance improvement practices. The standard may be refined to include mechanisms and best models for customer enquiry and order generation processes. Standard may be refined to include all business management related processes so that overall performance of the organization is initiated through a systematic way.
(3) To improve further performance, it is recommended to fine-tune the standard requirements with regard to organizational improved performance. Refinements of ISO 9001 standard towards organizational performance improvement may be recommended by the organization to ISO through Bureau of Indian Standards-BIS (www.bis.org.in).
ISO 9001:2015 standard which is going to be released at the end of 2015 is expected to fulfil these needs.
10. LIMITATIONS
This study is limited to M/S RAMDEVS MOTORS only.
This study is limited to the role of Quality Management system as per ISO 9001 standard. (Note: Quality Management is a part of overall management) This study does not cover other management certification standards like Environmental Management System as per ISO 14001, Occupational Health and Safety standard as per BS OHSAS 18001 etc.
Since certain requirements are not covered in the ISO 9001:2008 standard, while implementing QMS and during the QMS certification process in a manufacturing sector, those requirements are not covered, for example....
· Finance requirements
· Accounting practices and processes
· Payment transactions
· Payrolls/ESI/PF requirements
· Formation of company, board of directors, memorandum of associations...etc.,
· Environmental requirements/conditions and norms
· Safety requirements/conditions
· Share holders requirements
· Employee’s expectations
· Social responsibility
· Suppliers expectations (example : complying to supplier payments)
11.0 DIRECTIONS FOR FUTURE RESEARCH
Similar to this study, the following research work may be executed...
· Effective ways to getting financial benefits from ISO 9001 (Organizations to implement additional standard already published : ISO 10014:2006)
· Role of QMS in achieving business goals
· Role of QMS in improving performance by Government organizations /Hospital/Education/Finance sector/Any other sectors
· Role of other similar standards and its performance in meeting the market requirements
· Study on number of certification obtained and withdrawals in various parts of India and world wide
12.0 REFERENCES
12.1 Textbooks, Journals & Research publications
1. Dale H.Besterfield, Carol Besterfield, Glen Besterfield, Mary Besterfield, Text book : Total Quality Management-Third Edition, 7th Reprint, 2005, ISBN 81-297-0260-6, Published by Pearson Education, 254-255
2. F.C Weston.Jr. “What do Managers Really Think of the ISO 9000 process?”-Quality Progress Journal (October 1995) 67-73
3. James P.O Neil, “Using 9000 to Go Beyond Industry Norms”-Quality Progress Journal (December 1998), 43-44
4. Norman HO, “ISO 9000, No longer a stranger to service”-Quality Digest (June 1999) : 33-96
5. Pietro Roman “ISO 900:What is impact on Performance?”-Quality Management Journal (Vol.7, No3, 2000) : 38-55
6. Esin Sadikoglu and Hilal Olcay at School of Business Administration, Gebze Institute of Technology, 41400 Kocaeli, Turkey, Research Publication, Published 16 March 2014.http://www.hindawi.com/journals/ads/2014/537605. Advances in Decision Sciences Volume 2014 (2014), Article ID 537605 page PP.9 to 11.
7. Stella e. garcia an applied research (year 1999) source : digital.library.txstate.edu Organizational Performance and Quality management: an analysis of workforce development organizations in Texas
8. Subburaj Ramasamy-Text Book : Total Quality Management- Tata McGraw-Hill, 2005, Edition 2004, ISBN 0-07-059090-7, Pages 20.34 to 20.35
12.2 Bibliography
1. ISO 9001:2008 Quality Management System-Requirements, 4th Edition by ISO, Source : www.iso.org
2. ISO 9000 :2005 Quality Management Systems: Fundamentals and Vocabulary, Source : www.iso.org
3. Quality Management Principles: Source
4. Quality Management-Guidelines for realizing financial and Economic Benefits: ISO 10014:2006 published by ISO. Source : www.iso.org
12.3 JEL Classification
JEL code for this study as per the American Economic Classification
1. L89 : Other : Quality Management System and standardization
2. L84 : Personal, Professional and Business services
3. L64 : Other Machinery ; Business Equipment; Armaments : Manufacturing of pumps
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