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  • 1. A Study on the Impact of TQM Implementation on Malaysia Engineering Plant’sProductivity.IntroductionStarting from 1980s, when quality management was introduced among the practitioners,scholars and consulters like Deming, Joran and Crospy, a new management philosophyevolved under the name Total Quality Management (TQM) which is a cost added value. Thisconcept was then defined as an approach for continuously improvement on quality of productsor services delivered through the involvement of individuals at all levels of an organisation(Pfau, 1989).Furthermore, TQM has been expanded on more than a program in an organisation but as theway of business management. It is a holistic corporate philosophy which includes 3fundamental principles of “Total-as the participation of every people and every department”;“Quality-as meeting or exceeds customers‟ need and expectation”; while “Management-as toenable conditions for total quality” (Whyte &Witcher, 1992).According to Zandin (2001), TQM concept was highly influenced by the Japanesemanufacturers on the experiences of Japanese approaches to quality management. Later on,TQM practices have been extensively published in the measurement studies, also the studiesof the relationship of it practices with different dependent variables which have beeninvestigated. In the results, TQM emphasises that customer desires and management goals areinseparable which this affirms an integrated management approach based on a set oftechniques to achieve these objectives (Yusuf et al., 2007).For the past 20 years, a number of authors have concentrated their studies on the TQM factorsand dimensions. According to Ross (1993), TQM is set of practices, continuous improvement,meeting customer needs or expectations, reducing job errors, employee empowerment or
  • 2. teamwork on problem solving, process redesign, benchmarking with the best in the industry,constant result measurement, close relationship with external customer like suppliers.Followed by Powell (1995), suggesting the 12 factors in TQM programs and later onproposed by Rahman and Bullock (2005) to a more logical approach on the TQM factorsstudy, and the relationship with organisation performance. In the year 2007, Al-Marri et al.found that overall there are 16 critical success factors on TQM implementation in a serviceindustry which includes top management support, strategy, continuous improvement,benchmarking, customer focus, quality department, quality system, human resourcemanagement, recognition and reward, problem analysis, quality service technologies, servicedesign, employees, service capes, service culture and social responsibility, whereby inPowell‟s framework, it is more descriptive on the flexible manufacturing and measurementwhich are related in the aspects and factors in TQM.Since then, many researchers like FardosHussain (2001), Rachin Jain (2001), Shegan Fan(1997) had argued and defended on the positive effects of TQM practices on performance andproductivity in their studies. Productivity is refer to how effective or efficient a firm or anyother organisation can turn inputs like capital and resources into outputs in the form ofproduct or service compared with the same inputs or producing the same quantity of productor service with less input (John Janseen& Simon McLaughlin, 2008). In order words,according to Jamshed H. Khan (2000), productivity can be defined as the ratio of total annualoutput out of the total annual cost. Therefore, any factor that may positively affects therevenue or negatively affects the total annual costs will positively enhance the productivity.Of course, the quality improvement which brings benefits not only reflected on reducingunwanted costs but also on maximising the business profits. In this terms, what reallyaccountable to a firm is not only cost minimisation but it is also about the effect of superiorquality which impact the profits maximisation (Freiesleben J., 2005).Therefore, the aim of this study is to explore the interrelationships between the degrees ofimplementation of TQM based on implemented TQM models in quality practises and thecorresponding productivity index. In this case, correlation analysis will be used to find the
  • 3. relationships among the TQM factors, to prioritise the addressed factors and to investigate thefeasibility of implemented TQM on the engineering plant located in Malaysia.Problem StatementA new managerial philosophy approach- Total Quality Management (TQM) has becomes anurgent need factor for any organisation to remain their competitive edge on the rivalry ofengineering industry over their competitors. The aim of this research is to seek andaccomplish the objective of determining the correlation between the implemented TQMfactors and the impacts on an engineering plant‟s productivity index. First of all, thecharacteristics of the respondent profile are considered the important domain of this researchin regards to their demographics knowledge and background in engineering industry whichare the records in profiling the respondents‟ age, tenure in present occupation, education level,gender, field specialised, and manager status, in order to help us to identify and evaluate TQMfactors on its implementation and the effects on plant‟s productivity. The age (20-29, 30-39,40-49, 50-59, and above 60) is one of the important factors to determine its range matchingwith the tenure of years working in the plant (1-3 years, 4-6 years, 7-9 years, 10-12 years, 13-15 years, 16-18 years, and above 19 years) to seek for whether the experience in TQM factorsbrought positive effect on the productivity and which factor is prioritise?In engineering firm, education level (high school, diploma, associates, bachelor, master ordoctorate) and the specialisation field (electronicengineering, industrialengineering,civilengineering, mechanicalengineering, economics, accounting, material, and softwareengineering) which is also accountable to verify the importance of TQM factors. Wherebygender (female or male) and managerial status (supervisor or non-supervisor) also take countson the apparels of TQM aspects. Into this, which demographic factor of respondent profile isthe top to determine the existence of TQM factors? And which demographic factor canprioritise the positive effect of its existence?TQM factors1) Committed Leadership
  • 4. Management leadership is an important factor in TQM implementation because it improvesperformance through influencing other TQM practices (Wilson & Collier, 2000). The lack ofcommitment in the top management levels may lead to some problems in the process ofimplementing TQM. Top management is completely involved in implementing andstimulating the TQM approach. Leadership is also responsible for the product and servicewhich are offered (Gonzalez-Benito & Martinez-Lorente, 1999). Successful implementationof TQM requires effective changes in an organization‟s culture and it is somehow impossiblewithout management leadership (Ho et al., 1999). In a TQM process, effective leadershipshould develop a clear mission statement and then build up suitable strategies in order tosupport the mission. The top management needs to identify the critical success factors and toreview the management structure. Leadership must ensure that the principles of qualitymanagement are implemented continually (Yusuf et al., 2007). The four distinctive ways thattop management can support TQM implementation include allocating budgets and resources;control through visibility; monitoring progress; and planning for change (Motwani, 2001).2) Employee EmpowermentEmployee empowerment is an integral part of any successful quality improvement processwhich helps employees to make decisions about their own work and environment. This alsoencourages people to apply the most appropriate tools and techniques (McQuater et al., 1995).In general, empowerment is a core concept in a humanistic management movement that isdistinguishable from the more mechanistic scientific management traditions. According tothe conceptual logic, people are the principle resource of organizations. Empowerment is acentral concept in TQM that has been credited with making a major contribution to theJapanese revival and has been adopted with enthusiasm in other parts of the world (Lloyd etal., 1999). specific measures of employee empowerment include the degree to which cross-departmental and work teams are used; the extent of employee autonomy in decision making;the extent of employee interaction with customers; and the extent to which employeesuggestion systems are being used (Powell, 1995).3) Process ImprovementProcess improvement is a key aspect in TQM programs (Sinclair &Zairi, 1995). Processanalysis has its primary objective, i.e., the reduction or elimination of variance, whichDeming (1986) saw as the source of problems in providing quality products and services. Areduction in process variation leads to benefits such as increasing output uniformity, continual
  • 5. reduction of waste of staffing, machine time, and materials (Anderson et al., 1994). Thisfactor emphasizes adding value to processes, increasing quality levels, and raisingproductivity per employee (Motwani, 2001) and contains improving work center methods andinstalling operator-controlled processes that lead to a lower unit cost, embracing kaizen(continuous improvement) philosophies, reducing the operator material handling duties,promoting a design for a manufacturing program, and achieving a compact process flow(Kasul&Motwani, 1995a; Kasul&Motwani, 1995b). Continuous improvement can beefficiently achieved in organizations only if a structured continuous improvement process isin place to guide managers (Sinclair &Zairi, 1995).4) BenchmarkingBenchmarking is a continuous process of comparing an organization‟s products, services andprocesses against those of its best competitors or those of organizations renowned as worldclass or industry leaders. In many companies, benchmarking is a key component of the TQMprocess, profitability and growth flow from a clear understanding of how the business isperforming, not just against its previous accomplishment, but against the best competitors orworld-class organizations (Ghobadian& Woo, 1996). Benchmarking involves theidentification of best practices among competitors in a given industry, among the recognizedleaders in any industry, for the purpose of improving organizational processes and enhancingcompetitive position (Hackman &Wageman, 1995; Jefferson, 2002). It also includesmeasuring performance in the company which seeks improvement of activities. In thebenchmarking process, managers should understand the reason of why their performancediffers. An understanding of differences allows managers to organize their improvementefforts to meet the goal. Benchmarking is about setting goals and objectives and meeting themby improving processes (Besterfield et al., 1995). Benchmarking may contribute to anorganization‟s ability to achieve competitive advantage by monitoring the best practices in theindustry and diagnosing measure of performance. The typical classification of benchmarkingwhich are pinpointed in the literature includes internal benchmarking; competitivebenchmarking; functional benchmarking; and generic benchmarking (Carpinetti&Melo, 2002).5) Increased TrainingTraining of employees is crucial for building the human capital of the organization. Trainingand education are essential to provide employees with new techniques and practices necessaryto implement TQM successfully. Training and education arealso necessary for teaching the
  • 6. TQM philosophy that requires permanent change in individual behaviors and attitudes andleads to strengthening the organization‟s culture (Shenawy et al., 2007). Training andeducation are primary levers for change, and they have significant influence on the changeprocess (Buch&Talentino, 2006). Training should focus on building quality skills with equalattention paid to behavioral skills and quality tools needed for change in performancemanagement and recognition (Palo &Padhi, 2005). Training includes explanation of overallcompany operations and product quality specifications. Specific measures for evaluatingtraining include the time and money spent by organizations in training employees andmanagement in quality principles, problem solving skills, and teamwork (Black & Porter,1996).Since total quality management is a cost factor in organisation levels, there should be aclarified explanation on its implementation which the value added comparatively with thequality cost (Jamshed H. Khan, 2000). Productivity as a business excellence determinant hasto be measured against the degree of TQM implementation to clarify the importance of TQMimplementation. Therefore, the main question of this study is: Does the implementation ofTQM have brought positive effects on an engineering plant‟s productivity? With the statedkey question to this research, there are some factors which positively, negatively or no effectson affecting the total revenue or the total cost of the plant which can be postulated in toanother hypothetical question: Among the factors on the TQM implementation, which one isthe most impactful to the productivity?Research ObjectiveGeneral ObjectiveTo explore and highlight the impact of implementation of total quality management (TQM)on a Malaysia engineering plant‟s productivity based on the specified TQM factors.Specific Objective • To examine the feasibility of implementing TQM in an engineering plant.
  • 7. • To determine the level of TQM factors (Committed Leadership, Employee Empowerment, Process Improvement, Benchmarking, Increased Training) on engineering plant‟s productivity. • To identify the positivity or negativity correlation of the TQM factorsin engineering plant‟s productivity with the respondent demographic factors. • To identify the Top implemented factors and the Least in engineering plant‟s productivity.Hypothesis of StudyH01. Committed Leadership has no positive correlation on firm‟s productivity.H02. Employee Empowerment has no positive correlation on firm‟s productivity.H03. Process Improvement has no positive correlation on firm‟s productivity.H04. Benchmarking has no positive correlation on firm‟s productivity.H05. Increased Training has no positive correlation on firm‟s productivity.Types of AnalysisThe construct of this study will be tested using Cronbach‟s Alpha Correlation analysis andSPSS.Significant of StudyIn Malaysia context, there are many studies conducted to determine the correlations of totalquality management and firm‟s productivity especially food and beverage industry due to themeeting of product quality. In this research, there will be some variance compared to previousstudies done by other researchers, as this research is not only to test the correlation but alsothe positive or negative effect towards the engineering plant‟s productivity index whether itbrings better profit or in return? Also, an additional to the research is identifying the top TQM
  • 8. factor which bring the positive effect and the least TQM factor whereby none of any authorhas ever specific this.Thus, this research could bring a clear and clarified picture for anyorganisation management team, since it identified the factors that arouse in theimplementation of TQM and applying the right concept to achieve management goals andover their competitors.The findings in the study would imply that committed leadership has the most correlation andhighest value in positivity among the TQM factors, while training is only the factor which isnot correlated to other factors.In conclude, the addressed TQM factors which have been designed and distributed in theplant‟s organisation would act as the enablers of improving not only the productivity, but alsohelp to reduce the unwanted cost (internal and external), reduce wastage in resources andmaterial handling, and also reduce the error in operation. All this would bring the firm to havea good quality management and continuously improvement to make products or services inmeeting or exceeding customers‟ need, requirement and even expectation.Limitation of StudyThe data reliability and validity of this research is depends on the memory and honesty of therespondent in the organisation in giving the information and answering the questionnaires.Since the present study is a correlation and causal study,the findings should not be generaliseddue to the small respondent (employees) numbers which only limited to one companyonly.Also, obtaining the data and the process of the research would be costly and timeconsuming due to the large number of questions hold.Terminology DefinitionThe conceptual and operational definitions of key terms in this study are as follows:Terms Conceptual OperationalProductivity Productivity is how efficiently a firm or any other organisation can turn inputs such as labour and capital, into outputs in the form
  • 9. of goods and services with the same inputs or producing the same quality of goods and services less input (John Janseen& Simon Laughlin, 2008).Committed Direct participation by the highest levelLeadership executives in a specific and critically important aspect or program of an organization (Ho et al., 1999). In quality management it includes setting up and serving on a quality committee, formulating and establishing quality policies and objectives, providing resources and training, overseeing implementation at all levels of the organization, and evaluating and revising the policy in light of results achieved (Wilson & Collier, 2000).Employee Employee empowerment is a term used toEmpowerment express the ways in which non-managerial staff can make autonomous decisions without consulting a manager. These self- willed decisions can be small or large depending upon the degree of power with which the company wishes to invest employees. Employee empowerment can begin with training and converting a whole company to an empowerment model. Conversely it may merely mean giving employees the ability to make some decisions on their own (McQuater et al., 1995).Process Process Improvement is the accepted
  • 10. Improvement methodology for improving businesses. The principal quality systems -- Total Quality Management (TQM), Six Sigma, ISO9000, QS9000 -- are all focused on process improvement. ISO9000 and QS9000 focus on the quality system. TQM and Six Sigma (in the broad sense) address the whole business. The greatest Value (return for invested effort) from any quality system is obtained when the processes being improved align with the strategic and financial plans for the business (Deming, 1986).Benchmarking Benchmarking can be simply defined as a continuous process to find and implement best practices that will lead to superior performance. As the definition implies, benchmarking is a process that will make a company s operations lean, and improve quality and productivity (Ghobadian& Woo, 1996).Increased Employee training generally refers toTraining programs that provide workers with information, new skills, or professional development opportunities. For example, people might be required to participate in a new employee orientation or on-the-job training when they are hired. Other types of employee training programs include those that encourage staff members to brush up on certain skills, or to stay current with
  • 11. developments in their field (Shenawy et al., 2007).Research FrameworkRespondent Profile 1. Age 2. Gender 3. Tenure in present occupation 4. Specialisation Field TQM Factors 5. Education level 1. Committed Company Productivity 6. Manager status Leadership 2. Employee Ratio of total annual Empowerment output out of total 3. Process annual cost. Company Profile Improvement 1. History & 4. Benchmarking Background 5. Increased Training 2. Involvement of Industry 3. Market Scope/Work scope Input Throughput OutputFigure 1.1: The impact of implementation of Total Quality Management on a Malaysiaengineering plant‟s productivity.Organisation of the Study
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