Iso 13485 2003 Pdf Free Download

Purpose – The purpose of this paper is to provide an understanding on implementation and operation of ISO 13485:2003 – "Medical Devices – Quality Management System – Requirements for Regulatory Purposes" – in the perspective of medical device industries in Malaysia. The study is focused on the Malaysian Small and Medium Enterprises (SMEs) which currently have accredited to ISO 9001:2000 quality management systems. Design/methodology/approach – Literature research and comparative analysis between ISO 13485:2003 and ISO 9001:2000 standard and requirements. A reference model is developed to assist the Malaysian SMEs towards ISO 13485:2003 accreditation. Findings – Unlike ISO 9001:2000, ISO 13485:2003 stresses the safety and efficacy of medical devices that are being produced. For this reason risk management is an essential process that needs to be adopted into the ISO 13485:2003 quality management system. Moreover, to demonstrate the effectiveness of the ISO 13485:2003 implementation, this standard has placed great emphasis on documentation requirements which are more prescriptive in insisting on the use of formal procedures. Originality/value – The paper provides guidelines to ISO 13485:2003 implementations as well as risk management approaches for small and medium‐sized businesses of Malaysian medical device manufacturers, which at the same time maintains its ISO 9001:2000 certification.

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The TQM Journal

Volume 21, Issue 1, 2009, pp.6-100

Articles

ISO 13485:2003: Implementation reference model from the Malaysian SMEs medical device industry

Izatul Hamimi Abdul Razak, Shahrul Kamaruddin, Ishak Abdul Azid, Indra Putra Almanar (pp. 6-19)

Keywords: Malaysia

, Medical equipment, Quality management, Quality standards, Risk management,

Small to medium-sized enterprises

ArticleType: Research paper

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Roma Mitra Debnath, Ravi Shankar (pp. 20-33)

Keywords: Business schools

, Data analysis , India, Management training, Performance measures, Resource

efficiency

ArticleType: Research paper

Applying QFD to develop a training course for clothing merchandisers

Catherine Y.P. Chan, G. Tayl or, W.C. Ip (pp. 34-45)

Keywords: Clothing

, Quality function deployment, Training

ArticleType: Case study

Self-assessment of TQM practices: a case analysis

V. Arumugam, Hiaw Wei Chang, Keng-Boon Ooi, Pei-Lee Teh (pp. 46-58)

Keywords: Business performance

, Self assessment, Total quality management

ArticleType: Case study

An initial survey on the use of costs of quality programmes in telecommunications

Maria Arvaiova, Elaine M. Aspinwall, David S. Walker (pp. 59-71)

Keywords: Costs

, Quality programmes , Quality programmes, Surveys, Telecommunications , United

Kingdom

ArticleType: Research paper

Quality performance measurement practices in manufacturing companies

Ali Uyar (pp. 72-86)

Keywords: Financial management

, Manufacturing industries, Quality management, Turkey

ArticleType: Research paper

Problems, success factors and benefits of QCs implementation: a case of QASCO

Salaheldin Ismail Salaheldin (pp. 87-100)

Keywords: Critical success factors

, Qatar, Quality circles

ArticleType: Research paper

Editorial

The TQM philosophy and the economic downturn

Vol : 21 Issue: 1

Author(s): Alex Douglas

ISO 13485:2003

Implementation reference model from the

Malaysian SMEs medical device industry

Izatul Hamimi Abdul Razak, Shahrul Kamaruddin,

Ishak Abdul Azid and Indra Putra Almanar

School of Mechanical Engineering, Universiti Sains Malaysia, Penang, Malaysia

Abstract

Purpose – The purpose of this paper is to provide an understanding on implementation and

operation of ISO 13485:2003 – "Medical Devices – Quality Management System – Requirements for

Regulatory Purposes" – in the perspective of medical device industries in Malaysia. The study is

focused on the Malaysian Small and Medium Enterprises (SMEs) which currently have accredited to

ISO 9001:2000 quality management systems.

Design/methodology/approach – Literature research and comparative analysis between ISO

13485:2003 and ISO 9001:2000 standard and requirements. A reference model is developed to assist the

Malaysian SMEs towards ISO 13485:2003 accreditation.

Findings – Unlike ISO 9001:2000, ISO 13485:2003 stresses the safety and efﬁcacy of medical devices

that are being produced. For this reason risk management is an essential process that needs to be

adopted into the ISO 13485:2003 quality management system. Moreover, to demonstrate the

effectiveness of the ISO 13485:2003 implementation, this standard has placed great emphasis on

documentation requirements which are more prescriptive in insisting on the use of formal procedures.

Originality/value – The paper provides guidelines to ISO 13485:2003 implementations as well as

risk management approaches for small and medium-sized businesses of Malaysian medical device

manufacturers, which at the same time maintains its ISO 9001:2000 certiﬁcation.

Keywords Medical equipment, Quality standards, Quality management,

Small to medium-sized enterprises, Risk management, Malaysia

Paper type Research paper

Malaysian small and medium enterprises (SMEs) medical device industry

Malaysia's life sciences industry encompasses of three major sectors, namely,

biotechnology, pharmaceuticals and medical devices. For medical device sector,

Malaysia was initially concentrating on the rubber-based products. However, this

industry currently has moved into the manufacturing of non-rubber based products

made from plastics, silicone and metal alloys, including implantable products. This is

in support with the Third Industrial Master Plan 2006-2020, where Malaysian

government places greater emphasis on the development of the medical industry to

enable it to advance and sustain its global competitiveness.

According to Malaysia Trade and Industrial Portal (2007), the medical device

industry in Malaysia encompasses of a broad range of products and equipments. Some

of the products are medical gloves, implantable devices, orthopaedic devices, and other

instruments which are used for medical, surgical, dental, optical and general health

appliances. In addition, as reported by Malaysian Industrial Development Authority

(MIDA) (2007), Malaysia continues to maintain its position as the world's leading

producer and exporter of medical gloves and catheters, by supplying 80 per cent of the

world market for catheters, and 70 per cent for rubber gloves.

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

www.emeraldinsight.com/1754-2731.htm

TQM

21,1

The TQM Journal

Vol. 21 No. 1, 2009

pp. 6-19

q Emerald Group Publishing Limited

1754-2731

DOI 10.1108/17542730910924718

In parallel with this achievement, in February 2005, the Malaysian government

decided to begin regulating medical devices to harmonize its regulations and standards

with those of other Asian and developed countries (Gross, 2007). Thus, in 2008, Medical

Device Bureau (MDB); a division of the Ministry of Health was developed to conduct

the medical device regulatory program. With primary aims to protect the public health

and safety, the MDB strives to ensure that only high quality, safe, and effective medical

devices are placed in the Malaysia market (Mahmud, 2008). The core competent of

MDB as stated includes registering medical devices; issuing licences to manufacturer,

distributor, importer, exporter, and inspecting facilities; monitoring medical devices

that are already on the market; monitoring operation and the usage of medical devices,

including disposal; laboratory testing; and drafting laws and standards.

Yet in order to place the medical devices in international market especially in

America, Europe, Australia, Canada and Japan, speciﬁc regulations still need to be

complied. This may create a constraint to the local medical device manufacturers

because they have to be competitive in the global market. This is due to the size and

culture of the manufacturers in Malaysia which are mostly categorized as small and

medium enterprises (SMEs). A study carried out by Deros et al. (2006) had proved this

statement when the authors found that more than 90 per cent of the manufacturing

companies in Malaysia are classiﬁed as small and medium enterprises (SMEs). The

Malaysian SME is deﬁned as company that employs less than 150 people or sales value

of less than RM25 million.

However, there is evidence in many publications that a lot of SME companies have

successfully accredited to international standard, ISO 9001:2000. It means that even

though SMEs are small size and have limited resources, it does not mean that SMEs are

incapable to gain success in their businesses. With regards to medical device industry,

complying with ISO 13485:2003; an international standard for quality management

system speciﬁed for medical device, seems to be the best approach for these SMEs

which plan to place their medical device products in the global market. It is because

this standard has been widely accepted in the medical device world, and all the notiﬁed

bodies; which are known as an entity approved by the competent authority to assess

manufacturers' compliance with the directives, also familiar with this harmonized

standard (Halper, 2006). As an evidence, 27 members of the European Union, Canada,

and Turkey only open their market to the medical device manufacturers that have

complied with ISO 13485 (Borsai et al., 2007).

For that reason, most Malaysian medical device manufacturers especially in SMEs

are moving forward to be accredited to ISO 13485:2003 even though they have

currently complied with ISO 9001:2000. Aside from providing proof of compliance that

the company has been producing medical devices and the related services that

consistently met the customer and regulatory requirements, registration to ISO

13485:2003 by an accredited registrar will show the company's commitment to quality

and customers, and willingness to work towards improving efﬁciency. This also

facilitates the medical device manufacturers in demonstrating that they have

sophisticated knowledge of reimbursement policies, know how to implement and

maintain effective compliance guidelines, and maintain ongoing enforcement activity

in the industry.

However, publications on the use and implementation of ISO 13485:2003 within the

organizations are very limit, and those available are mainly focused on the introduction

ISO 13485:2003:

implementation

of this standard (Kimmelman, 2003; Basler and Pizinger, 2004a). Continuing this,

Basler and Pizinger (2004b) describe the ISO 13485:2003's history and development in

details, and have briefed the steps for implementation. Other publications concerning

to medical devices and the related services are mostly focused on the national and

regional regulations as well as risk management for medical devices (Fries, 1997, 1998;

Bartoo, 2003; Schmuland, 2005).

Since very small numbers of publications and researches for ISO 13485:2003

implementation guidelines are undertaken, this paper is written with the aims to assist

the Malaysian medical device manufacturers in SMEs to successfully implement and

then certify to the ISO 13485:2003. Therefore, a clear idea on ISO 13485:2003 will be

provided by comparing this standard with the international standard which is

applicable to any industry; ISO 9001:2000. In order to meet the intention of this paper, a

reference model is proposed to the Malaysian SMEs which currently have accredited to

ISO 9001:2000 and working towards the ISO 13485:2003 accreditation.

Overview of the ISO 13485:2003

ISO 9001 Quality Management System (QMS) is accepted as the 'gold standard' for

quality system all over the world and applicable for any industry. Based on this

standard, International Organization for Standardization (ISO) has developed some

industry speciﬁc standards including for medical device industries. Basler and

Pizinger (2004a) in their article claimed that the establishment of the new version of

this international standard late in the year 2000, forces the ISO to revise the old

standard for medical device industry, ISO 13485:1996. It is because the new ISO

9001:2000 which emphasizes on continual improvement and customer satisfaction is

no longer appropriate to the heavily regulated medical device industries.

Therefore, the second version for international medical device standard, ISO

13485:2003 – "Medical Devices – Quality Management System – Requirements for

Regulatory Purposes" – was established in July 2003. Be a stand alone and is expected

to have an independent content, this new standard mainly revises and addresses

quality assurance of the product, customer requirements and other elements of quality

management system. Nevertheless, ISO 13485:2003 is still based on the ISO 9001:2000

in which at least 70 per cent of the ISO 13485:2003 content is quoted directly from ISO

9001:2000 texts without modiﬁcation (Kimmelman, 2003). In addition, this standard

also includes some particular requirements for medical devices and excludes

requirements that are not appropriate as regulatory requirements. Further

comparisons between ISO 13485:2003 and ISO 9001:2000 are summarized in Table I.

With primary objective is to facilitate harmonized medical device regulatory

requirements for quality management system (QMS), compliance with the ISO

13485:2003 QMS may provide high degree of assurance that a manufacturer will

consistently produce medical devices that are safe, perform as intended, comply with

customer and regulatory requirements and have the appropriate degree of quality. In

addition, integration of risk management throughout the quality system process will

also work best rather than separating them. The integration may also enhance the

effectiveness of the quality management system (Basler and Pizinger, 2004a;

Schmuland, 2005). The risk management process provides a risk-based approach for

determining a level of rigor when implementing the standard.

TQM

21,1

In creating a new standard for the medical device industry, it is likely to split the

connection with ISO 9000, which might has a signiﬁcant impact for many

manufacturers. However, the decision to maintain quality systems that meet the

requirements for both standards will give great beneﬁts to an organization. The key

elements that must be included in this integrated system are customer satisfaction and

continual improvement as emphasized in ISO 9001:2000, and maintaining regulatory

requirements as emphasized in ISO 13485:2003.

ISO 13485:2003: the implementation process

The development and implementation of an integrated management system, no matter

on what approach it might be based; it always causes a decisive change in the company

(Mackau, 2003). Even though ISO 13485:2003 is a quality management system and

only has minimum changes in its requirements compared to ISO 9001:2000, lack of

employees and resources resulted from the characteristics of SMEs can create some

difﬁculties in carrying out the project. As claimed by Mulhaney et al. (2004), SMEs do

not have the resources to allocate one person to work full time in order to deliver this

type of change. As a result, several managers or executives have to share the

responsibilities for the quality system since usually SMEs do not have a quality

manager (Poksinska et al., 2006). This might be a burden when SMEs want to maintain

two standards; ISO 9001 and ISO 13485 at the same time.

Therefore, in initial action, Mackau (2003) has listed the essential points to be

observed during the deﬁned stages of introduction and qualiﬁcations. The author

recommended that during this stage, employees have to be prepared with certain

knowledge about the internal company procedures. The company needs to train few of

their employees for understanding the new adopted standard and the standard

regulations. All additional changes to the management system must also have

practical relevance, or in other words, purpose of the standards must not be changed.

In addition, top management which also act as a leader in this project must allocate all

the required resources and assign a clear task of responsibility. In return the employees

have to learn to use those resources to perform the tasks.

In this paper, a reference model to implement ISO 13485:2003 QMS for small and

medium businesses is proposed. The main reference in developing this reference model

is the road maps of ISO 9001 implementation developed by Yaacov (1995) and Motwani

ISO 13485:2003 ISO 9001:2000

The requirements are speciﬁc to organizations

providing medical devices regardless of type or

size of the organization

The requirements are generic and applicable to all

organizations, regardless of type, size and product

provided

Emphasis on maintaining regulatory compliance Emphasis on continual improvement and

customer satisfaction

Wants organization to document procedures,

requirements, activities and special arrangements,

and should implement and maintain them

Wants organization to document procedure,

implement, and maintain it

Must retain documents for at least the lifetime of

the medical device

Table I.

Synopsis of main

differences between ISO

13485:2003 and ISO

9001:2000

ISO 13485:2003:

implementation

et al. (1994), also ISO 13485 implementation guidelines as referred from Basler and

Pizinger (2004b) and BSI Management System Homepage (2004).

ISO 13485:2003: the reference model

Organization's situation and objectives can bring an impact to the selection and

implementation of a particular quality strategy, including the implementation of ISO

13485:2003. In order to ﬁnd the best regulatory path, an organization must know what

they need to achieve (Basler and Pizinger, 2004b). A very detailed analysis and

assessment are required to ﬁnd the most efﬁcient strategic and the implementation

plan. For that reason, a good methodology must be followed by medical device

manufacturers in order to implement an effective ISO 13485:2003 QMS, and at the same

time maintaining the current ISO 9001:2000.

The proposed reference model as shown in Figure 1 can be a good guidance for the

SMEs' medical device manufacturers in their journey to ISO 13485:2003 accreditation.

It is divided into three phases as detailed out in the following paragraphs. The phases

comprise of the preparation and development phase, the implementation phase, and

ﬁnally the registration phase. Detail discussions of these phases are given in the

following paragraphs.

Phase 1: Preparation and development phase

As shown in Figure 1, the ﬁrst phase in this implementation task is the preparation and

development phase. This phase consists of four initial steps that should be carried out

before the organization can start to implement the ISO 13485:2003 QMS. The steps

includes decision and commitment from top management, team up and planning

development, gap analysis, and revision of quality manual and documentations.

Figure 1.

The proposed reference

model for ISO 13485:2003

implementation

TQM

21,1

Normally, top managers of SMEs have greater interest and control of the organization

through an ownership position. They are usually more involved in daily operations in all

areas, know all the employees and their capabilities, have great understanding of the

whole company operations and can often involve in the processes or activities, and also

have good contact and familiarity of customer requirements (Aldowaisan and Youssef,

2006; Berg and Harral, 1998). These characteristics will be an advantage to the SMEs'

top management who are also the leaders in the implementation project. Already

well-known about the medical devices that they produce, top managements should then

get fully understanding on the ISO 13485:2003 that is being implemented. For reference,

a technical report, ISO 14969 – "Medical devices – Quality Management Systems –

Guidance on the application of ISO 13485:2003" – might be very helpful for better

understanding of this standard's requirements.

Flow of activities involve in the phase 1 which are applicable for medical device

manufacturers in SMEs can be summarized as in Figure 2.

Referring to Figure 2, once the top managements have decided to pursue the ISO

13485 registration to integrate it into the organization's current management system, it

is necessary to contact a registration body to assign target date for registration audit.

The best is to contact a body that has wide scope of accreditation to better fulﬁl all

regulatory needs (Borsai et al. , 2007). Then, communication and discussion with

representatives from cross functional departments could be made for planning

development. For the organization which initially has the proper management system

complied with ISO 9001:2000, it is best recommended to conduct Gap Analysis. The

purpose of this analysis is to examine the organization's current standing and

determine existing gaps that need to be ﬁlled when comparing with the ISO 13485:2003

requirements.

Owing to lack of employees and knowledge faced by the SMEs, hiring a

knowledgeable and experience consultant can be considered to assist the organization.

Figure 2.

Preparation and

development process

activity

ISO 13485:2003:

implementation

Result from the Gap Analysis will be a road map to reorganize the organization's

current quality system (Basler and Pizinger, 2004b). Organization team afterwards will

be able to develop an effective strategic and implementation plan for the necessary

changes to the quality system. For instance, one of the most crucial sections that needs

to be emphasized in this phase is "Product Realization" as declared in Clause 7 of the

ISO 13485:2003 standard. This section is considered as the real heart of ISO

13485:2003, outlining all the elements, controls, and approaches required to ensure

product or service is manufactured and delivered safely and effectively. Risk

management is regarded as the vital element in this section.

According to Kimmelman as quoted by Miller (2005), in fact, risk management

process can affect the performance of quality management system activities even

outside the area of product realization. The activities include corrective and preventive

actions, control of infrastructure, handling of conformances, as well as customer

complaints. One of the essential applications is sterile packaging of medical device

which risk management and risk analysis are expected for design validation, process

validation, and distribution validation.

Back to Figure 2, outputs from the planning development would be the best route to

implement an effective ISO 13485:2003 QMS. One of the signiﬁcant outputs is a revised

and edited organization's Quality Policy and Quality Objectives as it is compatible

with both ISO 9001:2000 and ISO 13485:2003 requirements. The new Quality Policy

should be publicized to create awareness among all employees. It is advisable to add

some brief and simple information about the ISO 13485 to give the understanding on

the safety regulations emphasized by this standard. For Quality Objectives, to produce

safe and effective devices should be the main objective of this new intervention.

For management training, it is appropriate to be conducted by the company's

consultant rather than sending the trainees to the available training program because

this can reduce costs. The training should give better understanding on the ISO

13485:2003 requirements, including the documentation system and procedures

required, and how to manage risk throughout product realization. In addition,

organization can also consider of having seminars concerning medical device safety as

well as guidance for a conducive working environment condition. Visits to other

medical device producers' premises which already have certiﬁed ISO 13485 are also

very helpful.

Other than that, documentation is also a critical element in ISO 13485:2003 QMS.

Integrating this standard into the current management system requires organization to

precisely revise an existing documentation. Because of ISO 13485:2003 is more

prescriptive in order to ensure medical device manufacturers meet regulatory

requirements, it requires that certain procedures still need to be documented.

Therefore, Gap Analysis that has been undertaken previously can be referred to

determine the additional procedures. This will cover all the relevant areas of the

organization's QMS with an appropriate documentation control as well as the safety

control of the medical devices.

Moreover, for special care of the medical devices, certain documents and records

must be retained for at least during the lifetime of the medical device as deﬁned by the

organization or as speciﬁed by regulatory requirements, but it should not be less than

two years from the date of product release. This will allow the organization to refer and

analyze these documents and records if there is a problem with recent device that needs

TQM

21,1

to be corrected. Other guidelines that should be followed by medical device

manufacturers in SMEs when revising the company's quality system documentation

are shown in Table II. It covers the main additional elements into the existing Quality

Manual as well as elements in documentation control.

Since ISO 13485 emphasizes more on product safety and efﬁcacy, it requires medical

device manufacturers to document certain activities such as product cleanliness and

risk management process, and also control of the working environment conditions,

product contaminations, and physical contacts to the devices. This can be referred in

Clause 6 (Resource Management) and Clause 7 (Product Realization) of ISO 13485:2003

requirements. In order to demonstrate that the medical device is totally safe and not

causing any harm, records for risk management activity throughout the product

realization must be established in accordance with guidance standard for risk

management, ISO 14971:2000 – "Medical Devices – Application of Risk Management

to Medical Devices". The record requirements include risk analysis (identiﬁcation), risk

evaluation (basis for decision making), risk control (decision implementation), and any

postproduction information gathering and review (monitoring).

Phase 2: Implementation phase

The second phase in the proposed reference model presented in Figure 1 is in

implementation. This phase is performed when organization has completely

undertaken the preparation and development phase. The key in implementation is

training, recording and monitoring. During this phase, company puts into practice the

new quality system that has been planned before and everyone begins to work by

following the new management system procedures. This implementation phase

encompasses all company's functions including the design and development of

products, the purchase of materials and services, production, and delivery of the

products and services, with all aspects of medical device, regulatory and industry

requirements being addressed.

As the effective quality system's implementation, SMEs strongly require

involvement and commitment from the entire organization, especially the lower level

employees from the very beginning of the implementation project (Yaacov, 1995;

Quality manual Demonstrate the revised management policy, as well as support and

commitment to the organization's QMS

Scope of the company's QMS, including deﬁnition of operations and

products to which the quality system applies

Statement of any exclusion of ISO 13485:2003 requirements

List of other standards with which the quality system complies, such

as ISO 9001 and ISO 14971 risk management

Additional procedures into the company's centralized procedure lists

Control of documents Product-speciﬁc technical documentation such as engineering

drawings, component purchase speciﬁcations, procedures for

manufacturing processes and testing

Procedures for labelling, packaging, etc.

System documentation levels structure, such as procedures and

instructions applicable for all products

Monitoring of activities and product performance and conformance

with speciﬁcations

Table II.

Quality manual

additional elements and

documents to be

controlled

ISO 13485:2003:

implementation

Mackau, 2003). Thus, in order to gain this commitment, the employees must be

informed on how the new QMS would beneﬁt them and the company

(Angelogiannopoulos et al., 2006). The employees must also be trained so that they

can completely understand the new procedures and records keeping. Also, they need to

be aware of how their job may affect the quality and safety of the devices, and the

consequences arise if they disobey the instructions.

Moreover, in this phase, management must also ensure that all documents and

records are accordingly controlled and maintained. To make it more structured and

well organized, it is advisable to assign a dedicated person to manage the distribution

of documents, keep the manual up to date, and retain the possible documents and

records. This person is also responsible to ensure that only approved documents are

distributed to the correct people for the correct process. A dedicated person is needed in

managing the documentation control because to control a bulk of documents and

records as required in ISO 13485 is not an easy task. It is also useful to have a

standardized format for the documentations. With these efforts, any risk such as

missing or misallocation of documents can be avoided.

As the effort moves forward, it is important to measure progress (Yaacov, 1995).

The monitoring and measuring process is important for three reasons; to ensure

product conformance, to ensure conformance of the QMS, and to maintain effectiveness

of the QMS. Therefore, a comprehensive internal audit is required to determine the

successful implementation of ISO with a mission to ensure that the QMS meets the

requirements of the standard and it is working effectively. Internal audit is also the

management's window into the quality system to view its current status. It is

conducted to ensure that in each department or personnel there isn't any variation

between what has been written and what has been carried out.

Also need to be considered is the organization's standard operating procedures and

the actual performance of those procedures. Both of the procedures and the actual

performance must be tailored and must completely follow the ISO 13485 standard

requirements. This in fact, is the critical point that needs to be emphasized in

monitoring the system's performance. This is because any dissimilarities or miss

comply with standard requirements might cause nonconformity which may affect the

registration audit. Besides that, monitoring the effectiveness of risk management is

very essential in order to demonstrate product's safety, stability and functionality.

Records of any ﬁndings or nonconformities from the internal audit must then be

reported to the top management for further corrective actions (Motwani et al., 1994).

The purpose of the corrective actions as well as preventive actions is to maintain or

improve quality and effectiveness of the management system implementation. An

appropriate corrective or remedial action must be taken to eliminate the root causes,

and to prevent recurrence of the nonconformities.

However, nonconformities or problems can be avoided by performing preventive

action before the nonconformity actually occurs. One good place to determine

preventive action as well as to manage risk is in management review activity, when

data are reviewed from quality management system. According to the recorded data,

potential of nonconformities or problems which might occur in the future can be

expected and appropriate actions can be taken. Sources to consider for estimation of

nonconformities including information and data which are from receiving and

incoming inspection, product requiring rework, reject or yield data, customer feedback

TQM

21,1

and warranty claims, process measurements, identiﬁcation of result that is out-of-trend

but not out-of-speciﬁcation, suppliers performance, service reports, and also from

concessions or deviations data.

Again, risk management process for medical device is the core element in the

corrective and preventive action. This is in order to meet an acceptable level of risk for

the devices as deﬁned by the organization and to ensure that the products do not cause

harm to the user or patients. An overall risk management process should include

processes as presented in Figure 3.

As shown in Figure 3, the risk management process begins with reviewing the

intended use of the medical devices. Then, the hazards are identiﬁed and the

probability that any harms might occur for the entire life cycle of the devices including

in design, production, post market and eventual disposal, is estimated. For each

hazard, the severity is estimated and the associated risks are evaluated. Finally, those

risks are controlled and the effectiveness of the controls are put in place to ensure that

the product does not harm the user or patients is monitored.

A detailed process of risk management is indicated in Figure 4. The process

encompasses of four phases of risk management; which are risk analysis, risk

evaluation, risk control, and postproduction information. Each of the steps represents

four clauses in medical device risk management standard requirements, ISO

14971:2000. This standard is an integral part of a quality management system and

serves guidelines for risk management process.

Phase 3: Registration phas e

After undergoing the previous two phases, the company is considered to have

developed and implemented a proper integrated quality management system with the

required evaluations and remedial actions that will ensure the system is perfectly

operated. All the nonconformities found must be eliminated or corrected. Then, the

ﬁnal phase can be carried out. Before the scheduled audit date arrives, all the

preparations that need to be audited should be completed. For the time being, it is

recommended that organization must have at least three months of records and have

completed at least one cycle of internal audit and management review.

Management must also be ensured that everything in organization, especially for

documents and records, employees, and the facilities are well prepared before the audit

day. All documents and records must have been revised and ensured that they are

available, complete and being kept at the appropriate location. The employees must be

informed earlier about the audit and the purpose of the audit, which is to acquire

evidence that the organization complies with both standard and regulatory

requirements. Furthermore, in undergoing the audit, it is vital to ensure that

organization's processes and the implemented quality management system are

completely incorporated in meeting the ISO 13485 requirements (Borsai et al., 2007).

With the aid of the consultant, a SME can undergo the registration audit much

easier and may not be wasting time and money for the accreditation. Repetition and

Figure 3.

An overall risk

management process

ISO 13485:2003:

implementation

Figure 4.

Risk-management

activities as applied to a

medical device, based on

ISO 14971:2000 and citing

sections of that standard

TQM

21,1

redundancy of work can also be avoided. Success in the audit and certiﬁed to ISO

13495:2003 veriﬁes that organization has a management system in place to support the

regulatory management policy with safety consideration has been implemented.

Meeting with this international regulation also conﬁrms the high level of the

organization's quality management system performance.

In general, because of a lot of things need to be considered with the ISO 13485:2003

implementation process, it might be time consuming and also requires higher costs and

effort compared to ISO 9001:2000 implementations. Therefore, one thing that must be

stressed out from the very beginning of the implementation process is cooperation and

full support from each and every single person in the organization. Besides that, full

attention and concentration are also vital in ensuring any gaps especially that are

related to critical elements in ISO 13485:2003 requirements are totally avoided. With

systematic and comprehensive plan, implementation activity will be much smoother

towards the ISO 13485:2003 accreditation. This will make a company to become more

competitive in global market, less ge neration of waste or scrap, improves

communication, generates higher proﬁts, and at the same time assures risk and

hazards reduction for the medical devices that being produced.

In addition, ISO 13485:2003 provides a structure to enable SMEs to meet their

customer and regulatory requirements. With primary objective is to provide a

harmonized model for Quality Management System (QMS) requirements that satisﬁes

international medical device regulations, the Malaysian medical device manufacturers

whose comply with ISO 13485:2003 QMS prove that the manufactured or supplied

medical device products have a great quality, free from any hazards, and effective in

use. This is in parallel with the mission endeavoured by Malaysian Ministry of Health

in the new developed Medical Device Bureau which is to protect public health and

safety.

Conclusion

In this paper, a proposed reference model for ISO 13485:2003 QMS implementation that

is suitable for medical device manufacturers in SMEs is developed. The reference

model consists of three phases; preparation and development phase, implementation

phase, and registration phase. Owing to limitation faced by SMEs, guidelines described

in every phase will be particularly appropriate for SMEs in order to successfully

implement the ISO 13485:2003 standard and at the same time maintaining the certiﬁed

ISO 9001:2000. One major inclusion that stressed out in this standard is engaging risk

management throughout the quality management system, providing risk-based

approach to control the safety and efﬁcacy of the produced medical devices. With

trained and knowledgeable employees and aids by consultant, the implementation

process will be much smoother and effective. Thus, the proposed reference model can

assist the Malaysian SMEs in their journey to be successfully accredited to ISO

13485:2003.

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Corresponding author

Shahrul Kamaruddin can be contacted at: meshah@eng.usm.my

ISO 13485:2003:

implementation

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Assessing performance of

management institutions

An application of data envelopment analysis

Roma Mitra Debnath

IGSM, Greater Noida, Uttar Pradesh, India, and

Ravi Shankar

School of Management, Asian Institute of Technology,

Pathumthani, Thailand

Abstract

Purpose – Utilizing data envelopment analysis (DEA), this paper seeks to examine the performance

of 20 Indian B-Schools, separating their proﬁtability and marketability. The technique allows one to

identify those management institutions which are able to utilize their resources in a most efﬁcient way

such that the overall goals of the organization are satisﬁed and total outcome maximized. If a

management institution means to be effective in developing professionals who are going to be

competent leaders and managers, then it would be useful to know the performance of the management

institutes. However, measuring the performance of management institutes has received very little

attention compared with other industries because it is difﬁcult to measure its output.

Design/methodology/approach – A DEA model is used to evaluate the relative efﬁciency of a

group of decision-making units (DMUs) in their use of multiple inputs to produce multiple outputs

where the form of production is neither known nor speciﬁed as in the case of parametric approach.

Findings – The paper ranks management institutes from various points of stakeholders. The main

ﬁndings are how much of the beneﬁt from ranking of the B-Schools is credited because of its efﬁciency

in converting the inputs to outputs. Does the ranking of any institution depend on scale of operations

(scale efﬁciency) or is it only based on technical efﬁciency? Technical efﬁciencies are identiﬁed with

failures to achieve best possible output levels and/or usage of excessive amounts of inputs.

Practical implications – As Indian management schools widely publicize job offers with six ﬁgure

salaries, managerial value addition, national ranking etc. provide an important impression about the

management institutions. However, the reported results of experiments on input and output measures

do not seem to differ between the ten best run institutes and the next ten institutes in terms of scale

efﬁciency.

Originality/value – The paper is one of the few written from the Indian perspective.

Keywords Management training, Performance measures, Resource efﬁciency, Data analysis,

Business schools, India

Paper type Research paper

Introduction

Management studies originally established in the USA were adopted in Europe in the

1960s. Since then it has gathered a global acceptability. Large numbers of management

schools are operating around the globe and they encounter a strong competition for

students.

Management is an area where the individuals are developed within the area of

management. The aim of MBA programme is to prepare their graduates for

managerial roles, help them to acquire a better understanding of the industrial and

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

www.emeraldinsight.com/1754-2731.htm

TQM

21,1

The TQM Journal

Vol. 21 No. 1, 2009

pp. 20-33

q Emerald Group Publishing Limited

1754-2731

DOI 10.1108/17542730910924727

business world and enriching them with relevant skills and competencies for their

careers. In other words it is generally agreed that management education adds value to

a student. However, in management education what kinds of values are added has not

been resolved in a widely accepted manner. Boyatzis and Renio (1989) indicate some

positive attributes gained from MBA studies. Espey and Batchelor (1987) report how

the company gained from the students carrying out projects and writing reports

relating to the needs of the company, thus making the graduates better managers. Yet

despite all the rhetoric, few signs of substantive change are evident in most of the

B-schools. Fiekers et al. (2000) discussed how to benchmark the postgraduate

admission process in their paper. Wan Endut et al. (2000) discussed the benchmarking

process of higher educational institute. Shaw and Green (2002) and Laugharne (2002)

discussed the benchmarking process of academic process and the PhD programme

respectively.

The gap found in the existing literature is the ranking of the management institutes

on the basis of efﬁciency. The aim of this paper is to present the result of an empirical

study which explored the efﬁciency of MBA institutes. The research question for this

paper is: How much of the beneﬁt from ranking of the B-Schools is credited due to its

efﬁciency in converting the inputs to outputs. Does the ranking of any institution

depend on scale of operations (scale efﬁciency) or is it only based on technical

efﬁciency.

After achieving a gigantic growth of 10.9 percent in service sector, a wide

opportunity has been created by the service sector in India. Though business education

started in nineteenth century in India, but presently there are about 1000 B-schools

operating within the country. Leaving few top end institutions like IIMs, IITs, XLRI

etc. most of the institutions are B and C category catering to the needs of the society.

Many magazines and professional journals publish ratings of these management

institutions. Business World (2005) ranked 100 B-Schools in India, which attracted a

huge amount of interest among academicians, employers and students. The

parameters considered for the ranking of these institutions are faculty proﬁle,

placement, and research done by faculty, teaching aids and admission applications. A

predeﬁned weight is given to these parameters and overall performance is measured

out of 1000 points. Although Business World's survey did not rank the MBA

programmes in terms of efﬁciency, one may wonder if there is any difference between

groups of institutes (e.g. top 10 versus next 10). Does one institution add more value

than another? This paper tries to examine the relevance of lesser-known institutions

against the backdrop of ever increasing demand of society and the value addition to the

students.

Being a primary customer, the students may be eager to know as to how much value

is added against the fees paid by them. They may have the opportunity to get through

more than one institution but to decide the best institution on basis of value addition

still remains ambiguous. Another stakeholder, the society might be interested to know

how the resources are being used to produce the output so that it can subsidize the

management education. Some institutions do receive funds from corporate,

government and other various sources. Some of the business schools might be

offering a very good placement but corporate are not concerned how efﬁciently these

B-schools are using their resources to produce the managers. It would be valuable

information for the prospective MBA student and for the society at large whose

Assessing

performance

resources are used in the complete process. In general, this information would be useful

in making decision regarding the optimum allocation of funds to make the institution

more competitive.

The aim of the paper is to estimate and compare efﬁciency of 20 Indian management

institutions and the analysis is supposed to verify or reject the hypothesis that the

ranking of an education institute is not solely decided by tangible parameters like

placement, salary, number of faculty etc. but intangible factors like customer's

satisfaction, vision of the management also plays a signiﬁcant role in the ranking of the

institute. An educational institute must not emphasize only on converting a set of

inputs to outputs but it should also focus to increase the customer's satisfaction while

operating under many disadvantageous positions. This paper also tries to establish a

theory that efﬁciency and customer satisfaction are positively correlated. It also

attempts to ﬁnd whether different methods used for performance measure signiﬁcantly

different from each other or not.

Data envelopment analysis (DEA)

In management contexts, mathematical programming is usually used to evaluate a

collection of possible alternative courses of action en route to selecting one, which is

best. In this capacity, mathematical programming serves this role and employs

mathematical programming. Data envelopment analysis reverses this role and

employs mathematical programming to obtain ex post facto evaluation of the relative

efﬁciency of management accomplishments, however they may have been planned and

evaluated (Banker et al., 1984). The aim of a central unit is to allocate resources in such

a way that the overall goals of the organization are satisﬁed as well as possible, or

speciﬁcally, the amount of the total outputs of the units will be maximized (Korhonen

and Syrjanen, 2004). DEA model is used to evaluate the relative efﬁciency of a group or

units of decision-making units (DMUs) in their use of multiple inputs to produce

multiple outputs where the form of production is neither known nor speciﬁed as in the

case of parametric approach (Shammari and Salimi, 1998). As a consequence, the DEA

efﬁciency score for a speciﬁc decision making unit (DMU) is not deﬁned by an absolute

standard, but it is deﬁned relative to the other DMUs in the speciﬁc data set under

consideration. Farrell (1957) is known as the pioneer to develop DEA to solve the

problem, which requires careful measurement but also has a limitation of combining

the measurements of multiple units to measure the overall performance. Later on

Charnes et al. (1978) generalized Farnell's framework and popularised the concept.

Berger et al. (1997) and Seiford (1996) conﬁrmed of DEA application in previous

research and other DEA works that contain more than 1,000 DEA contributors in the

past two decades (Sueyoshi, 1999).

The two most frequently applied models used in DEA are the CCR model – after

Charnes et al. (1978) and the BCC model – after Banker et al. (1984). The basic

difference between these two models is the returns to scale (RTS). While the latter takes

into account the effect of variable returns- to- scale (VRS), the former restricts DMUs to

operate with constant returns- to- scale (CRS). Charnes et al. (1978) developed DEA to

evaluate the efﬁciency of public sector non-proﬁt organizations. DEA aims to measure

how efﬁciently a DMU uses the resource available to generate a set of outputs and

DMUs can include manufacturing units, departments of big organizations such as

universities, schools, bank branches, hospitals, power plants, police stations, tax

TQM

21,1

ofﬁces, defence bases, a set of ﬁrms or even practising individuals like medical

practitioners etc.

A mathematical explanation on DEA is being provided in appendix. However, a

graphical explanation is being provided in this section for a better understanding of the

readers. Figure 1 portrays the situations under CCR and BCC to be considered in terms

of a single output, in amounts, y, and a single input, in amounts x.

As it is evident from Figure 1 that DMU A is assigned to 100 percent efﬁciency in

the case of CRS assumption, all the other DMUs are considered 100 percent efﬁcient

case of the VRS assumption. This is also an indication that the inefﬁciencies assigned

to DMU B, C and D are purely due to their scales of operation. Only DMU E is

inefﬁcient in case of both CRS and VRS assumptions. The best performing DMU is

assigned an efﬁciency score of unity or 100 percent and the performance of other

DMUs ranges between 0 and 100 percent relative to this best performance. For

inefﬁcient DMU (Efﬁciency , 100 percent), DEA measures the slacks in each of the

input and output variables and also derive a reference group of efﬁcient units with

which they can be directly compared (Cooper et al., 1999). DEA result also helps to

improve the productivity of these relatively inefﬁcient units without reducing quality

of service and while maintaining or even increasing the volume of services provided by

DMUs. Ruggiero (2001, 2004) discussed the application of DEA in education sector,

Vassiloglou and Giokas (1990), Zenios et al. (1999), Rouatt (2003) discussed various

application of DEA in banking sector to improve the performance, Sherman (1984)

used DEA in hospital sector, Lewin et al. (1982) used DEA in court system.

A unique feature of the DEA approach is to measure global Technical Efﬁciency

(TE) of a decision making units in relation to other units and decompose it into two

multiplicative parts: pure technical Efﬁciency (PTE) and scale efﬁciency (SE). While

technical efﬁciency (TE) measures the ﬁrm's success in producing maximum output

Figure 1.

CRS and VRS efﬁcient

frontiers for the DMUs A,

B, C, D and E

Assessing

performance

from a given set of inputs, the scale efﬁciency (SE) measures the ﬁrm's success in

choosing an optimal set of inputs with a given set of input-output prices or costs. The

CCR model estimates the global technical efﬁciency of a DMU while the BCC model

takes into account the variation of efﬁciency with respect to the scale of operation and

hence measures Pure Technical Efﬁciency. For any ﬁrm j one has the product PTE

¼ TE

. Thus, the overall inefﬁciency (TE) of any ﬁrm is caused by the inefﬁciency

operation of the ﬁrm (PTE) and at the same time by the disadvantageous condition of

the organization (SE). This becomes clear when one sets up a scale efﬁciency model by

which inputs are optimally determined by minimizing the total output costs measured

in terms of market prices of inputs.

DEA modelling allows researcher to select the inputs and outputs in accordance

with a managerial focus. This is one of the advantages of DEA sine it also focuses on

sensitivity analysis. Furthermore, this approach does not require any standardization

of the different units. However DEA also has some limitations. The DMUs, which are

identiﬁed as inefﬁcient, are in relation to others in the sample. It may be possible for a

DMU not included in the sample has a better efﬁciency than the efﬁcient DMU in the

sample.

Problem deﬁnition

In India, the existing monitoring organization All India Council for Technical

Education (AICTE) is responsible for evaluating the performance of the institutions

through the process of accreditation. The evaluation process is based on a set of

broad-based criteria and these criteria serves to assess the principal feature on the

institutional activities and programme effectiveness. Emphasis is given on entry

qualiﬁcation, intake of the students, duration of the course, structure of the

programme, examination rules and regulations, infrastructure norms like computer

facilities, library, teaching aids, etc. However, these norms and rules do not help to

measure the performance of any institutions. Harris (1994) presented a generic

approach to higher education. Primarily, a customer oriented approach where the

service to students is promoted through training and development. Secondly, a staff

focus approach which tries to enhance the contribution of all the member of staff to the

effectiveness of the institute and ﬁnally focus on service agreement. This deﬁnition

reﬂects the unique characteristic of the education. An education process involves input,

output and several others factors. Education process is a multi dimensional activity

and only one indicator cannot assess it.

Leaving the few top institutions in India, rest of them can be categorised into private

and government owned B-schools. Since intake of these colleges is not of high quality

and the objective of the management is to make quick money by spending least.

Therefore, the focus on quality value addition becomes a necessary step.

A performance measure helps in monitoring strategic achievements and controlling

the strategic movements of the institutions as it is strongly related to objectives of the

institutions. There are very few papers available in the literature for measuring the

performance of the management institutions. Haksever and Muragishi (1998), Dreher

et al. (1985), Hamlen and Southwick (1989) studied the quality and value of

management education.

For this research, 20 B-schools are considered for the performance evaluation. All

these intuitions are afﬁliated to AICTE and participated in the ranking organized by

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21,1

world. Out of these B-schools, 10 are located in Northern India, three are in Eastern and

Western part of India and four are in Western part of India. These institutions have

been evaluated by DEA on the basis of three inputs and three outputs.

The broad objectives of management institutes are to prepare professionally

qualiﬁed personnel in the area of management, and to prepare the graduates for

lifelong learning experience to meet society needs. To achieve these objectives, the

management institutes need various parameters like highly qualiﬁed, motivated and

committed faculty members, talented students with adequate background and a vision

for growth. The various outcomes of management institutes are qualiﬁed graduates

who have acquired skills/competencies and a good placement. Another important

parameter, which is also needed for the growth of the institution, is satisfaction of the

students. Today, education sector is considered as a service sector as explained by

Sallis (1993), and student is seen as an active participant in this process rather than as a

product or outcome. The customers deﬁne quality and therefore it is necessary to

understand their needs and expectations/requirements.

There are different views and opinions to deﬁne "good performance" of a

management institute. Ideally the performance evaluation system would give us a fair

idea of how various resources (inputs) are being used to attain the services (output). In

our case, a management institute is said to be efﬁcient if it is able to use its resources in

an optimum way to achieve its full efﬁciency. This paper considers some relevant

parameters, which would be useful in measuring the performance of the technical

institutus. The selection of input and output variables is crucial for DEA as ill-deﬁned

variables could lead to the erroneous conclusion. In line with the AICTE

recommendation and Business World's ranking, the various parameters are chosen

in such a way that they reﬂect the actual objectives as accurately as possible. The

various parameters considered are intake capacity, annual fee, number of faculty,

average salary offered at the time of placement, student's satisfaction and the

management's vision for the growth. The secondary data were used from the

respective institute's website for the quantitative information. Since some of the

parameters are qualitative in nature like student's satisfaction and the vision of the

management, the qualitative responses (feedback) were gathered and analysed along

with other quantitative parameters through DEA. To measure student's satisfaction

and the vision of the management, the opinions were taken on a scale of 1-7 likert scale.

Cronbach's coefﬁcient (a) is calculated to test the reliability and internal consistency of

the responses. The value of Cronbach's a found to be 0.80. This value is considered to

be consistent as reported in Cronin and Taylor (1992) and Parasuraman et al. (1988).

The descriptive statistics are calculated and depicted in Table I.

As per the conventional method, pre deﬁned weights are assigned to various

parameters This could be misleading in case of handling qualitative factors as the

personal judgement varies from expert to expert and it could have a negative affect on

the performance evaluation of the various institutes. Because of intangible parameters,

assessing of the performance becomes a difﬁcult job but this paper tries to integrate

both tangible and intangible attributes in the analysis. Important statistics relating to

the sample are summarised in Table I. The standard deviation reﬂects the average

deviation from the mean value of the parameters. The maximum deviation can be seen

in "average salary" of the students followed by fees. However the parameter "vision"

has the least variation. Other useful statistics are average explaining the mean of the

Assessing

performance

data set, total number of observations, minimum and maximum value and range which

is the difference between the maximum and minimum observations.

Empirical analysis

This section presents the principal outcome, which reﬂects the relative efﬁciency of the

management institutes after evaluating under DEA-CCR and DEA-BCC

(output-oriented model under the constant returns to scale (CRS) and variable

returns to scale (VRS) assumptions respectively). The efﬁciency of all the institutions

has been evaluated and DEA efﬁciency scores are also calculated by running the

appropriate model. The DEA-solver-LV software, version 1.0, by Kaoru Tone is used

for the calculation of DEA scores, slacks, and return-to-scale (Cooper et al., 2000).

It is clear from Table II that the DEA-BCC model yields higher average efﬁciency

estimates than the DEA-CCR model. The respective average values of 0.90 and 0.80

and where an index value of 1.00 equates to perfect or maximum efﬁciency. Also in

terms of consistency, BCC model proves a better model than CCR, as the standard

deviation is lower in case of BCC model.

Table III outlines the efﬁciency obtained on 20 management institutes under

constant return to scale (CRS) and variable return to scale (VRS). 8 and 5 out of 20

management institutions included in the analysis are identiﬁed as efﬁcient when the

DEA-BCC and DEA-CCR models are applied respectively. The result that the

DEA-BCC model yields more efﬁcient management institutes is not surprising since a

DEA model with an assumption of constant return to scale provides information only

on technical efﬁciency while a DEA-BCC model with an assumption of variable returns

of scale identiﬁes pure technical efﬁciency alone.

Intake Fee Faculty Average salary Vision Satisfaction

Total N 20 20 20 20 20 20

Mean 121.5000 152,025.0000 27.3500 279,000.000 4.9250 3.9805

Median 120.0000 157,000.0000 24.5000 272,500.000 5.0500 4.2500

Sum 2,430.00 3,040,500.00 547.00 5,580,000.00 98.50 79.61

Minimum 60.00 33,500.00 8.00 12,000.00 2.00 1.02

Maximum 180.00 247,000.00 45.00 460,000.00 7.10 6.10

Range 120.00 213,500.00 37.00 448,000.00 5.10 5.08

SD 28.33540 52,713.34471 10.32256 103,538.44951 1.37935 1.46617

Kurtosis 2.366 0.990 2 0.793 1.178 2 0.564 2 0.014

Table I.

Descriptive summary of

the variables

BCC CCR

No. of DMUs 20 20

Average 0.904519 0.807223

SD 0.118685 0.159051

Maximum 1 1

Minimum 0.599218 0.480119

Table II.

The comparisons of

efﬁciencies between BCC

and CCR models

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21,1

It is an interesting subject to investigate the sources of inefﬁciency that a DMU might

have. The CCR model postulates that the radial expansion and reduction of all

observed DMUs and their nonnegative combination are possible and hence the CCR

score is called global technical efﬁciency. On the other hand, the BCC model assumes

the convex combination of the observed DMUs as the production possibility set and the

BCC score is called local pure technical efﬁciency. If a DMU is fully efﬁcient (100

percent) in both the CCR and BCC scores, it is operating in the most productive scale

size because it enjoys the maximum possible economy of scale (Cooper et al., 2000).

Technical efﬁciency describes the efﬁciency in converting inputs to outputs while scale

efﬁciency recognizes that economy of scale cannot be attained at all scales of

production and that there is one most productive scale size (MPSS) where the scale

efﬁciency is maximum at 100 percent. (Ramanathan, 1966).

The decomposition of scale efﬁciency which is deﬁned as Technical

efﬁciency/Pure Technical efﬁciency depicts the source of inefﬁciency whether it is

caused by inefﬁcient operation (PTE) or disadvantageous conditions displayed by

scale efﬁciency (SE) or by both. The result exhibited in Table III depicts that DMUs

A, D, F, J and M have attained MPSS whereas rest of the institutes are inefﬁcient in

terms of inefﬁcient operations and disadvantageous condition both. Since the model

used in this paper is output oriented, decreasing return to scale implies that an

increase in a unit's inputs result in a less than proportionate increase in its outputs.

This result implies scale efﬁciency is a major problem across all the institutions

included in the sample.

A one way ANOVA of the efﬁciency for the DEA-CCR and DEA-BCC analyses

indicates that the efﬁciency measures calculated using these two different approaches

are not signiﬁcantly different at the 1 percent and 2 percent level of signiﬁcance as

Technical efﬁciency Pure technical efﬁciency Scale efﬁciency

DMU DEA CCR DEA BCC DEA CCR 4 DEA BCC Returns to scale

A 1 1 1 Constant

B 0.724882133 1 0.724882133 Decreasing

C 0.76664465 0.828794055 0.925012245 Decreasing

D 1 1 1 Constant

E 0.647177108 0.762848737 0.848368852 Decreasing

F 1 1 1 Constant

G 0.687208768 0.861780093 0.797429383 Decreasing

H 0.926362297 1 0.926362297 Decreasing

I 0.593103632 0.599217986 0.98979611 Constant

J 1 1 1 Constant

K 0.480119454 0.935196687 0.513388745 Decreasing

L 0.764502762 0.931294153 0.820903643 Decreasing

M 1 1 1 Constant

N 0.566285326 0.752450554 0.752588092 Decreasing

O 0.82992074 0.891122278 0.93132083 Decreasing

P 0.929180887 1 0.929180887 Decreasing

Q 0.829063475 0.950145459 0.872564792 Decreasing

R 0.905189267 0.917971259 0.986075825 Constant

S 0.825363276 0.987186846 0.836076048 Decreasing

Table III.

Efﬁciency under

DEA-CCR and DEA-BCC

models

Assessing

performance

p-value is greater than 0.01 and 0.02. Table IV reﬂects that calculated F value is less

than critical F value so we may accept the hypothesis that there is no signiﬁcant

difference between two methods of efﬁciency. A Spearman's rank order correlation

coefﬁcient between the efﬁciency rankings derived from DEA-BCC and DEA-CCR is

0.70. The positive and high Spearman's rank order correlation coefﬁcient indicates that

the rank of each ﬁrm derived from applying the two different models is similar. A

combination of ANOVA and Spearman's rank order correlation coefﬁcient leads to the

conclusion that the efﬁciency estimates yielded by the two approaches are similar and

follow the same pattern across management institutes.

As far as individual institutions are concerned, Table III also reports the return

to scale properties. Of the 20 management institutions, all 5 scale efﬁcient

institutions show constant return to scale. Rest of them show decreasing return to

scale except DMU R, which shows a constant return to scale, being an inefﬁcient

institution.

Empirical result also reveals that there exists substantial waste in the operation of

the institutions in the sample. For instance, the average efﬁciency of institutions

derived from applying the DEA-CCR model amounts to 0.80. This indicates that in

theory, the management institutions under study can, on average, dramatically

increase the level of their output to 1.25 (1/. 80) times as much as their current level

while using the same inputs.

Figure 2 plots the tendency for the relationship between efﬁciency scores and

student's satisfaction level. Since the Pearson's correlation coefﬁcients of the student's

satisfaction are 0.54 and 0.17 with DEA-BCC and DEA-CCR models. Both the

correlations are signiﬁcant at 5 percent level of signiﬁcance. It appears that its scale of

operations signiﬁcantly inﬂuences the efﬁciency of a management institute and that

there is an evidence to support the existence of economies of scale in the education

sector.

Figure 2.

Relationship between

student's satisfaction and

efﬁciency score

ANOVA SS df MS Fp -value F crit.

Source of variation

Between groups 0.094665 1 0.094665 4.56698 0.039091 5.897959

Within groups 0.78767 38 0.020728

Total 0.882335 39

Table IV.

ANOVA of the CCR and

BCC efﬁciency

TQM

21,1

Discussion

This section outlines the discussion on the result obtained on 20 management

institutes. As exhibited in Table III, management institutes A, D, F, H, J, M, and P are

100 percent efﬁcient. These institutes are efﬁcient in terms of operations as they are

able to produce maximum output from a given set of inputs (BCC ¼ 1) and they are

also able to choose an optimal set of inputs (Scale Efficiency ¼ 1). However, institute B

is able to produce output from given set of inputs as BCC ¼ 1 but it is operating under

disadvantageous condition as the scale efﬁciency is equal to 0.72. The institute C is also

an inefﬁcient institute as its operation is inefﬁcient because BCC is equal to 0.82 and it

is also operating under disadvantageous condition because the scale efﬁciency is 0.92.

As a result it is not globally efﬁcient institute as CCR ¼ 0:76. The similar reason can be

given for other management schools.

It can be summarized from the obtained result that in terms of scale efﬁciency, there

is no signiﬁcant difference between top 10 and next 10 management institutions.

Leaving only 7 institutions, that is to say A, D, F, I, J, M and R, rest of them are

operating under decreasing return to scale. This suggests that scale inefﬁcient

institutions either have to increase the output level or decrease the input. However,

decreasing inputs viz. number of seats, number of faculty may not be a feasible

solution, in that case an emphasis must be on increasing the student's satisfaction level

and improving the vision towards the management education.

It is quite evident from the result that over a long period of time, the business

schools must consider their stakeholders rather than focussing only on proﬁt. Also, a

large number of management schools show lack of using the resources in an optimum

way, resulting dissatisfaction among the students.

Conclusion

In the present day, the management schools have become an integral part of the

economy. Especially if we are mentioning globalization of economy then the education

sector should be monitored more critically.

The conventional method of evaluating any educational institute is to ask the

knowledgeable respondents to express their perception. This paper attempts to

measure the efﬁciency of the institutes quantitatively and rank them. It has been

argued in this paper that efﬁciency can be measured by using the inputs and outputs

which are intangible in nature. Although some of the management schools are

analysed in this paper, however this paper focuses on the measurement of the value in

management education. Many institutes are being able to charge a high fee for their

management programme. However they are not able to maintain their status and rank

in the various rankings. This paper tries to answer the question. The result draws to a

clear and speciﬁc conclusion that an efﬁcient institute is able to use all its resources in

an optimum way to produce the maximum output.

Our purpose is not to contradict or conﬁrm the ranking they have received in

Business World (2005). The approach is to illustrate the application of DEA for the

evaluation of MBA institutes on the basis of efﬁciency. It should be remembered that

the efﬁciencies have been computed for illustration purpose. This paper tries to

establish whether differences in efﬁciency exist among some the best run institutes

(e.g. if the top 10 differ from the next 10) and it does not provide any insight on efﬁcient

programmes. To add further that information on various inputs and outputs were

Assessing

performance

collected from the websites of the respective B-schools and no such validation was

done on data collection.

This kind of analysis may give different efﬁciencies even though some slight

changes have been applied. As we have dealt with qualitative parameter, sometimes it

is difﬁcult to achieve a consensus. However, the expert's opinion may be considered for

the analysis.

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similar answers to those received.

Comparing the responses received from certiﬁed and non-certiﬁed companies, the

frequency and the corresponding sequence of importance of cited reasons for not

implementing CoQ programmes were very similar. The most frequently cited reasons

indicated by both ISO 9001 certiﬁed and non-certiﬁed companies were: (i) already

capable costing system and (ii) have not yet been introduced to the concept of quality

costs. One possible reason why 39 per cent of all respondents answered that their

costing system is already capable of monitoring quality costs is the increasing use of

Enterprise Resource Planning (ERP) systems within small and medium size companies

(Sun et al. 2005) even though it has been the domain of large organisations (Huin, 2004).

Such systems were designed to provide "real-time resource accountability" integrating

a company's business units (Jacobs and Bendoly, 2003) using a shared foundation of

information (Davenport and Brooks, 2004).

"Have not yet been introduced to the concept of tracking quality costs" as the

second most frequently cited reason is surprising knowing the fact that quality

management related training and education tend to represent an inherent part of the

popular TQM perspectives (Powell, 1995; Douglas and Judge, 2001; El Shenawy et al.,

2007). Dale and Plunkett (1999) deﬁne quality costing as "one of a number of tools and

CoQ in tele-

communications

techniques which an organisation can use in the introduction and development of

TQM" and so appropriate training/education in the ﬁeld of quality costs might have

been expected considering the pervasiveness of TQM as a dominant management

strategy of last decades (Wayhan and Balderson, 2007). Furthermore, as concluded by

Reed et al. (2000), training and education should not be taken only as a means of

teaching skills but also as a tool that is "generating barriers to imitation", therefore,

enhancing a company's capacity to sustain their competitiveness.

Conclusions

The results of the survey presented in this paper are limited by two key factors, the low

response rate and the range of data collected. The 8.25 per cent response rate was

below that generally for postal surveys (22 per cent Yusof and Aspinwall, 2000; 24 per

cent Delgado-Hernandez and Aspinwall, 2005; 12 per cent Sousa et al., 2006), which did

not allow the results to be generalised. Only one respondent company did implement a

quality costs programme, whilst the other 32 did not. The two main reasons for not

implementing a quality costs programme, according to the respondents, were the

already capable costing system and the lack of knowledge about this ﬁeld of quality

management.

The discussion part of the paper provides a comparison of the survey results with

similar projects studied in a thorough literature review on quality cost models

implementation and investigates the respondents' views. The two key perceived

reasons for not implementing quality costs are discussed in the context of:

(1) the use of TQM principles; and

(2) the sustainability of organisational competitiveness.

Those ighlight the role of training and education in introducing cost reduction and

quality improvement methodologies.

Future research will address more telecommunications manufacturers in order to

investigate whether the implementation of quality costs is more frequent within such a

sector. This might be helpful in eliciting sufﬁcient data for performing statistical

analysis which in turn would give the necessary rigour in drawing conclusions. In

addition, emphasis will be put into the examination of the information systems being

employed in CoQ tracking. This would not only allow a better understanding of the

barriers encountered in data collection and analysis but also would help to identify the

possibilities of integrating CoQ tracking into (or developing from) existing reporting

systems.

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Yusof, S.M. and Aspinwall, E.M. (2000), "Critical success factors in small and medium

enterprises: survey results", Total Quality Management, Vol. 11 Nos 4/5/6, pp. S448-62.

CoQ in tele-

communications

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Quality performance

measurement practices in

manufacturing companies

Ali Uyar

Faculty of Economics and Administrative Sciences, Fatih University,

Istanbul, Turkey

Abstract

Purpose – The purpose of this paper is to present the results of a survey study on quality

performance measurement practices in the Turkish top 500 manufacturing companies. The study

evaluates both ﬁnancial and non-ﬁnancial aspects of quality performance measures in Turkish

manufacturing companies.

Design/methodology/approach – The methodology of the study was a postal questionnaire

survey. The survey was conducted with the top 500 industrial enterprises in Turkey speciﬁed by the

Istanbul Chamber of Industry (ICI) for the year 2005. These ﬁrms are selected and ranked by ICI

according to production-based sales.

Findings – Two major ﬁndings of the study are: Turkish manufacturing companies utilize

non-ﬁnancial measures more frequently than ﬁnancial measures; and Turkish managers perceive

non-ﬁnancial measures to be more effective than ﬁnancial measures.

Research limitations/implications – The sample is restricted to the top 500 industrial enterprises

in Turkey. As the data in this study were collected from the manufacturing companies, the ﬁndings

should not be generalized to other sectors.

Originality/value – The study is unique in reﬂecting the general practices and perceptions of

manufacturing companies on quality performance measures across Turkey.

Keywords Quality management, Financial management, Manufacturing industries, Turkey

Paper type Research paper

Introduction

In running an organization, performance measurement plays important roles, such as

translating strategy into desired behaviors and results, communicating these

expectations, monitoring progress, providing feedback, and motivating employees

through performance-based rewards and sanctions (Chow and Van der Stede, 2006).

For a long time, managers had primarily used accounting-based measures, which are

named as ﬁnancial measures, to evaluate performance of organizations (Yeniyurt,

2003; Chow and Van der Stede, 2006; Paulson Gjerde and Hughes, 2007). Since using

ﬁnancial measures has some limitations that will be explained in the coming section,

both scholars and practitioners were urged to develop non-ﬁnancial measures.

However, instead of choosing either one, ﬁnancial and non-ﬁnancial measures should

be viewed as complementary to each other (Chow and Van der Stede, 2006).

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

www.emeraldinsight.com/1754-2731.htm

The author thanks Necdet Sensoy, N. Gokhan Torlak, and John Taskinsoy for their valuable

help. The author would also like to thank the anonymous referees and the Editor of this journal

for their valuable comments.

TQM

21,1

The TQM Journal

Vol. 21 No. 1, 2009

pp. 72-86

q Emerald Group Publishing Limited

1754-2731

DOI 10.1108/17542730910924763

Measuring and accounting for the costs of quality are essential steps in total quality

management programs (Kettering, 2001, p. 16). This paper emphasizes the importance

of utilizing both ﬁnancial and non-ﬁnancial measures together in measuring quality

performance of organizations. The study provides an empirical evaluation of Turkish

manufacturing companies on utilization and perceived effectiveness of quality

performance measures. The results of this paper are especially beneﬁcial for

practitioners, because the study presents a set of quality performance measures. In

addition, the paper contributes to the literature related to quality performance

measurement from an emerging market perspective. Hence, the study exempliﬁes the

applicability of the subject in developing countries as well as in developed countries.

The organization of the remainder of this paper is as follows. Section two provides

literature review about ﬁnancial and non-ﬁnancial measures of quality performance.

Section three presents scope and methodology of the study, and cites eight research

questions of the study. Section four assesses the results, and the ﬁnal section provides

the concluding remarks of this paper.

Review of literature

Performance measurement is deﬁned as the process of quantifying action, where

measurement is the process of quantiﬁcation and action leads to performance

(Neely et al., 1995). The performance of organizations is traditionally measured by

methods based on accounting reports. However, in a changing business

environment these measures are considered inadequate. Therefore, organizations

have begun to use new performance measures (non-ﬁnancial measures) other than

traditional measures.

The limitations of traditional performance measures are:

being too retrospective;

lacking predictive ability to explain future performance;

rewarding short-term or incorrect behavior;

providing little information on root causes or solutions to the problems;

not capturing key business changes until it is too late;

being too aggregated and summarized to guide managerial action;

reﬂecting functions, not cross-functional processes, within a company; and

giving inadequate consideration to difﬁcult to quantify "intangible" assets such

as intellectual capital (Ittner and Larcker, 1998).

Although traditional measurement systems, which focus on ﬁnancial outcomes,

translate and report all activities into dollars and cents, however, in recent years it has

become evident that looking at just ﬁnancial measures masks many of the important

performance activities that are taking place behind the scenes (Shepherd, 2002). Those

organizations that are aware of this fact are beginning to utilize non-ﬁnancial measures

along with ﬁnancial measures from both manufacturing and service industries, such as

hotels, banks, and healthcare (Ballou et al., 2003; Phillips, 1999; Ittner and Larcker,

2003; Hussain et al., 2002).

Quality-based measures of performance focus succinctly on issues, such as the

number of defects produced and the cost of quality (Neely et al., 1995). In this context,

Quality

performance

measurement

some cost accounting textbooks (Horngren et al., 2006) and related articles (Albright

and Roth, 1992; Kettering, 2001; Lin and Johnson, 2004; Carr et al. , 1997; Sjoblom, 1998)

cover the subject from the perspectives of ﬁnancial and non-ﬁnancial measures, which

are suggested to be utilized together in order to evaluate quality performance of a

business. The name of this approach is the balanced scorecard approach. The reason

for that is the balanced scorecard approach considers both ﬁnancial and non-ﬁnancial

aspects of the quality performance evaluation. Non-ﬁnancial measures represent

information and analyses that are not expressed in monetary equivalents (Kettering,

2001, p. 16). For example, the number of reworked units, the number of material

inspections, and the number of customer complaints represent non-ﬁnancial measures.

Carr et al. (1997), and Kapuge and Smith (2007) use "physical measures" and

"non-ﬁnancial measures" interchangeably. On the contrary, ﬁnancial measures

represent information and analyses in terms of monetary equivalents. While

measuring quality performance by utilizing ﬁnancial measures, quality costs are

classiﬁable using a prevention-appraisal-failure (PAF) approach. Under the PAF

approach, conformance (prevention plus appraisal) and nonconformance (internal plus

external) costs are two major quality cost categories. This classiﬁcation allows

practitioners; to compute the monetary equivalent of each quality cost item and total

quality cost, to make investigations about tradeoffs among quality cost items, and to

prepare trend analysis.

Horngren et al. (2006) use ﬁnancial measures and cost of quality (COQ)

interchangeably. Furthermore, they argue that COQ and non-ﬁnancial measures

supplement each other. Therefore, the integrated utilization of ﬁnancial and

non-ﬁnancial measures is advisable. The advantages of ﬁnancial and non-ﬁnancial

measures are explained in the following paragraphs.

Advantages of ﬁnancial measures (COQ) of quality (Horngren et al., 2006:

COQ measures are consistent with the attention-directing role of management

accounting, and they focus managers' attention on the costs of poor quality;

total COQ provides a measure of quality performance for evaluating trade-offs

among prevention cost, appraisal costs, internal failure costs, and external

failure costs; and

COQ measures assist in problem solving by comparing costs and beneﬁts of

different quality-improvement programs and setting priorities for cost reduction.

Advantages of non-ﬁnancial measures of quality (Horngren et al., 2006, p. 669):

non-ﬁnancial measures of quality are often easy to quantify and understand;

non-ﬁnancial measures direct attention to the physical processes, and hence help

managers identify the precise problem areas that need improvement;

non-ﬁnancial measures, such as the number of defects, provide immediate

short-run feedback on whether quality-improvement efforts are succeeding; and

non-ﬁnancial measures, such as measures of customer satisfaction and employee

satisfaction are useful indicators of long-run future performance.

Kapuge and Smith (2007) state that although non-ﬁnancial measures are increasingly

important in decision making and performance evaluation, copying non-ﬁnancial

measures that others use may not work. Instead, the companies should link the

TQM

21,1

measures to the factors, such as corporate strategy, value drivers, organizational

objectives and the competitive environment (Kapuge and Smith, 2007). Albright and

Roth (1992, p. 16) emphasize the importance of ﬁnancial data although non-ﬁnancial

measures of quality such as the number of customer complaints and the number of

defects are important quality measures. They say that quality costs are one type of

ﬁnancial data that cost management systems need to provide.

Kettering (2001) emphasizes that small ﬁrms can achieve beneﬁts, similar to those

beneﬁts which large ﬁrms achieve with their costly quality programs, by using

non-ﬁnancial measures to identify and monitor quality. He says that the principle of

this simple approach is not to waste time and effort to report the data in monetary

equivalents, but to simply report the non-ﬁnancial data and look for trends in the

measures.

The ﬁndings of three previous studies about ﬁnancial and non-ﬁnancial measures of

quality indicate that:

ﬁrms report ﬁnancial measures of quality less frequently than physical measures

of quality (Carr et al., 1997);

most business managers prefer the use of non-ﬁnancial quality performance

measures, while they comprehend and support for the COQ and other ﬁnancial

measures with relative limitation (Lin and Johnson, 2004); and

companies implementing total quality management (TQM) provide more

frequent physical and ﬁnancial quality measures than non-TQM companies

(Kapuge and Smith (2007).

Methodology

A postal questionnaire survey was conducted with the top 500 Turkish manufacturing

ﬁrms. The list of these top 500 companies was obtained from the Istanbul Chamber of

Industry (ICI) Report for the year 2005. The ICI selects and ranks these 500

manufacturing companies according to their production-based sales revenue (Istanbul

Sanayi Odası, 2006). The questionnaire was adopted from the studies conducted by

Tansey et al. (2001), and Lin and Johnson (2004). The original copy of the questionnaire

was ﬁrst prepared in English and then translated into Turkish to be sent out to the

ﬁrms. The responses were statistically analyzed using Statistical Package for Social

Sciences (SPSS) software and the Microsoft Excel spreadsheet program. Out of those

top 500 companies, ﬁfteen ﬁrms had declined to give out their names in ICI report. As a

result, other ﬁfteen ﬁrms were added from the list of "Second Top 500 Companies".

Therefore, the total sample consists of top 500 manufacturing ﬁrms. The responding

ﬁrms are geographically dispersed throughout Turkey. Hence, the results of the study

are representative of the general practices and perceptions of quality performance

measures across the country.

The main purpose of this study is to explore the utilization frequency and perceived

effectiveness of quality performance measures (i.e. ﬁnancial and non-ﬁnancial)

amongst manufacturing companies. For further analysis, the following seven research

questions were prepared:

RQ1. Do Turkish companies utilize ﬁnancial and non-ﬁnancial quality

performance measures in the same frequency?

Quality

performance

measurement

RQ2. Do Turkish managers perceive ﬁnancial and non-ﬁnancial quality

performance measures as effective in the same degree?

RQ3. Do listed and non-listed Turkish companies utilize ﬁnancial quality

performance measures in the same frequency?

RQ4. Do listed and non-listed Turkish companies utilize non-ﬁnancial quality

performance measures as effective in the same degree?

RQ5. Do International Organization for Standardization (ISO-refers to 9000-01)

certiﬁed and non-ISO certiﬁed Turkish companies utilize ﬁnancial quality

performance measures in the same frequency?

RQ6. Do ISO certiﬁed and non-ISO certiﬁed Turkish companies utilize

non-ﬁnancial quality performance measures as effective in the same degree?

RQ7. Do COQ system adopting and non-COQ system adopting Turkish

companies utilize ﬁnancial quality performance measures in the same

frequency?

RQ8. Do COQ system adopting and non-COQ system adopting Turkish

companies utilize non-ﬁnancial quality performance measures as effective

in the same degree?

One hundred and two questionnaires out of the 500 questionnaires returned back to

me. Hence, the response rate of the research is 20.40 percent. When these 102 responses

are reviewed, most of the survey-takers are accounting/ﬁnance professionals (26

persons) and quality professionals (48 persons). Other respondents (22 persons) come

from various professional groups such as plant managers, chief executive ofﬁcers,

production managers, and engineers. The remaining six respondents are from

unknown job speciﬁcations.

The average number of employees and average production sales per responding

ﬁrm are 1,388 and 333,027,602 TRY (New Turkish lira) respectively.

The classiﬁcation of responding ﬁrms according to ISO certiﬁcation ownership is

as follows: 84 ﬁrms (82.35 percent) have ISO certiﬁcation, 15 ﬁrms (14.71 percent) do

not have ISO certiﬁcation, and three ﬁrms (2.94 percent) did not respond to the

question.

The classiﬁcation of responding ﬁrms according to COQ system implementation is

as follows: 48 (47.1 percent) ﬁrms implementing, 49 (48 percent) ﬁrms not

implementing, and 5 (4.9 percent) ﬁrms did not respond to the question.

The classiﬁcation of responding ﬁrms according to being listed or non-listed is as

follows: 29 ﬁrms (28.4 percent) are listed, and 73 ﬁrms (71.6 percent) are non-listed.

Results and analysis

Overall analysis

The respondents were asked about the utilization frequency and perceived

effectiveness of 11 ﬁnancial and non-ﬁnancial quality performance measures. Lin

and Johnson (2004) and Tansey et al. (2001) used these 11 measures in their studies in

the People's Republic of China previously. Five of these measures are ﬁnancial, six are

non-ﬁnancial. The listing of these 11 measures is below:

TQM

21,1

(1) Financial measures::

itemized quality cost reporting;

analysis of quality cost components;

quality cost budgeting and variance analysis;

comparison of quality costs to industrial standards; and

multi-period trend analysis of quality costs.

(2) Non-ﬁnancial measures:

percentage of product reworks;

rate of material spoilage;

rate of defects in production output;

percentage of returned goods to total sales;

on-time delivery of goods or services to customers; and

total number of customer complaints.

The quality performance measures listed above are investigated according to two

aspects in this study:

(1) utilization frequency; and

(2) perceived effectiveness.

To investigate the utilization frequency of eleven measures, the survey questions were

evaluated with the alternative answers expressed in a Likert scale of 1-5, in which "1"

denotes "never use", "2" represents "once a year", "3" indicates "every 6 months", "4"

means "every 3 months", and "5" denotes "at least once a month". Table I lists the mean

scores and ranking order of the eleven measures of quality performance that is based

on utilization frequency of the responding ﬁrms. As a measure of reliability, the high

Cronbach a (0.86) shows that eleven items are internally correlated. Based on the mean

scores of those eleven items, the top 500 manufacturing companies most frequently

utilize the total number of customer complaints (mean ¼ 4:3) measurement, next by

the rate of defects in production output (mean ¼ 4:2), on-time delivery of goods or

services to customers (mean ¼ 4:1), rate of material spoilage (mean ¼ 4:1), itemized

quality cost reporting (mean ¼ 4:0), percentage of returned goods to total sales

(mean ¼ 3:9), percentage of product rework (mean ¼ 3:8), analysis of quality cost

components (mean ¼ 3 :1), quality cost budgeting and variance analysis (mean ¼ 2:8),

multi-period trend analysis of quality costs (mean ¼ 2: 7), and comparison of quality

costs to industrial standards (mean ¼ 2:1).

To investigate the effectiveness of measures, the survey questions were evaluated

with alternative answers expressed in a Likert scale of 1-5, in which "1" denotes "not

effective", "2" represents "slightly effective", "3" indicates "effective", "4" means "quite

effective", and "5" denotes "extremely effective".

Table II lists the mean scores and ranking order of the 11 measures of quality

performance based on effectiveness perceived by the respondents. As a measure of

reliability, the high Cronbach a (0.9) shows that eleven items are internally correlated.

The mean scores in the study indicate that the top 500 manufacturing companies

perceive non-ﬁnancial measures more effective than ﬁnancial measures. What is most

Quality

performance

measurement

interesting is that the last four items in the utilization frequency ranking are also the

last four items in the effectiveness ranking.

In order to investigate whether or not ﬁnancial (average of ﬁve ﬁnancial measures)

and non-ﬁnancial (average of six non-ﬁnancial measures) quality performance

Quality performance measures based on

utilization frequency (Cronbach a ¼ 0:862) N Mean

SD Ranking

Financial measures

Fin1: Itemized quality cost reporting 84 4.0 1.53 5

Fin2. Analysis of quality cost components 79 3.1 1.66 8

Fin3. Quality cost budgeting and variance analysis 78 2.8 1.58 9

Fin4. Comparison of quality costs to industrial

standards 79 2.1 1.53 11

Fin5. Multi-period trend analysis of quality costs 77 2.7 1.70 10

Non-ﬁnancial measures

Nonﬁn1: Percentage of product rework 85 3.8 1.65 7

Nonﬁn2: Rate of material spoilage 88 4.1 1.52 4

Nonﬁn3: Rate of defects in production output 85 4.2 1.40 2

Nonﬁn4: Percentage of returned goods to total sales 86 3.9 1.55 6

Nonﬁn5: On-time delivery of goods or services to

customers 84 4.1 1.46 3

Nonﬁn6: Total number of customer complaints 86 4.3 1.19 1

Notes: Fin ¼ financial disclosure items; Nonfin ¼ non  financial disclosure items;

the mean score

is based on a Likert scale of: 1 ¼ never use; 2 ¼ once a year; 3 ¼ every six months; 4 ¼ every three

months; and 5 ¼ at least once a month

Table I.

Ranking of the quality

performance measures

based on utilization

frequency

Quality performance measures based on

perceived effectiveness (Cronbach a ¼ 0:90) N Mean

SD Ranking

Financial measures

Fin1: Itemized quality cost reporting 73 3.6 1.00 6

Fin2. Analysis of quality cost components 68 3.3 1.14 8

Fin3. Quality cost budgeting and variance analysis 66 3.1 1.14 9

Fin4. Comparison of quality costs to industrial

standards. 66 2.9 1.20 11

Fin5. Multi-period trend analysis of quality costs 65 3.0 1.17 10

Non-ﬁnancial measures

Nonﬁn1: Percentage of product rework 73 3.5 1.13 7

Nonﬁn2: Rate of material spoilage 74 3.7 0.99 3

Nonﬁn3: Rate of defects in production output 73 3.7 1.07 5

Nonﬁn4: Percentage of returned goods to total sales 73 3.7 1.20 4

Nonﬁn5: On-time delivery of goods or services to

customers 72 3.9 1.01 2

Nonﬁn6: Total number of customer complaints 75 4.0 0.91 1

Notes: Fin ¼ financial disclosure items; Nonfin ¼ non  financial disclosure items;

the mean score

is based on a Likert scale of: 1 ¼ not effective; 2 ¼ slightly effective; 3 ¼ effective; 4 ¼ quite effective;

and 5 ¼ extremely effective

Table II.

Ranking of the quality

performance measures

based on perceived

effectiveness

TQM

21,1

measures have signiﬁcant differences in terms of utilization frequency and perceived

effectiveness, paired-samples t-test was conducted. The results indicated that the top

500 manufacturing companies utilize ﬁnancial quality performance measures

signiﬁcantly (signiﬁcant at 0.01 level) less frequently than non-ﬁnancial quality

performance measures, and also the same companies perceive ﬁnancial quality

performance measures signiﬁcantly (signiﬁcant at 0.01 level) less effective than

non-ﬁnancial quality performance measures (see Table III). These ﬁndings are

consistent with the ﬁndings of another study conducted over New Zealand

manufacturing companies (Carr et al., 1997). In the above study, the researchers

conclude that New Zealand manufacturing companies report ﬁnancial measures of

quality less frequently than physical (non-ﬁnancial) measures of quality. The

researchers suggest that possible reasons for this as the difﬁculty in quantifying and

the perception of lack of usefulness of ﬁnancial measures in comparison to the physical

(non-ﬁnancial) measures.

Subgroup analysis

The ﬁrst subgroup analysis was conducted to determine preference over quality

performance measures dealing with perceived effectiveness.

Based on the study ﬁndings, business managers in Turkey perceive non-ﬁnancial

measures more effective than ﬁnancial measures. For further investigation of the

preference over quality performance measures by subgroups based on job

speciﬁcations, one-way ANOVA analysis was conducted (see Table IV). The

ﬁndings are that there are no signiﬁcant differences over seven items; however, there

are signiﬁcant differences among subgroups over the following four items. The

signiﬁcant differences among subgroups, which were analyzed with ANOVA Duncan

statistical testing, are as follows:

(1) quality professionals perceive "analysis of quality cost components (signiﬁcant

at 0.05 level)" more effective, compared to "others";

(2) quality professionals perceive "quality cost budgeting and variance analysis

(signiﬁcant at 0.05 level)" more effective, compared to "others";

(3) quality professionals perceive "rate of material spoilage (signiﬁcant at 0.05

level)" perceive more effective, compared to both accountants and "others"; and

(4) quality professionals & accountants perceive "total number of customer

complaints (signiﬁcant at 0.05 level)" more effective, compared to "others".

Mean N SD Standard error mean t

Based on utilization frequency

Financial measures 3.0 81 1.31 0.15 2 6.00

Non-ﬁnancial measures 4.0 81 1.19 0.13

Based on effectiveness

Financial measures 3.2 70 1.00 0.12 2 4.63

Non-ﬁnancial measures 3.7 70 0.82 0.10

Notes:

Signiﬁcant at 0.01 level

Table III.

Results of the

paired-samples t-test for

ﬁnancial and

non-ﬁnancial quality

performance measures

Quality

performance

measurement

Figure 1 depicts the comparison of perceived effectiveness of quality performance

measures by subgroups based on job speciﬁcations that range from 1 to 5, in which "1"

denotes "not effective", and "5" represents "extremely effective". When the perceptions

of quality professionals', accountants', and others' quality performance measures were

compared, quality professionals perceive these measures more effective than

accountants, and accountants perceive them more effective than "others".

In addition to subgroup analysis conducted based on job speciﬁcations of the

respondents, some subgroup analyses were conducted according to the following ﬁrm

characteristics:

Respondents' job type

Perceived effectiveness of quality Quality Accountant Others

performance measures by subgroups M R M R M R ANOVA

Financial measures

1. Itemized quality cost reporting 3.8 7 3.6 4 3.4 3 0.71

2. Analysis of quality cost components 3.6 8 3.3 7 2.7 8 3.15

3. Quality cost budgeting and variance

analysis 3.3 9 3.1 10 2.4 11 3.19

4. Comparison of quality costs to industrial

standards 3.0 11 3.2 9 2.7 9 0.57

5. Multi-period trend analysis of quality

costs 3.2 10 3.1 11 2.6 10 1.25

Non-ﬁnancial measures

6. Percentage of product rework 3.8 6 3.3 8 3.2 7 2.27

7. Rate of material spoilage 4.0 2 3.4 5 3.4 5 3.18

8. Rate of defects in production output 4.0 3 3.4 6 3.5 2 2.22

9. Percentage of returned goods to total sales 4.0 5 3.6 3 3.3 6 1.53

10. On-time delivery of goods or services to

customers 4.0 4 4.1 2 3.6 1 0.96

11. Total number of customer complaints 4.2 1 4.2 1 3.4 4 4.13

Notes:

Others group include the respondents other than accountants and quality professionals;

signiﬁcant at 0.05 level; M ¼ Mean; R ¼ Ranking

Table IV.

Results of one-way

ANOVA analysis for

quality performance

measures based on

perceived effectiveness

Figure 1.

The comparison of

perceived effectiveness of

quality performance

measures by subgroups

based on job speciﬁcations

TQM

21,1

being listed or not;

having ISO certiﬁcation or not; and

implementing COQ system or not.

According to the results of the independent-samples t-test, the listed companies

signiﬁcantly utilize non-ﬁnancial quality performance measures more frequently than

non-listed companies (see Table V).

The detailed item-by-item analysis indicates that the listed companies signiﬁcantly

utilize the following three non-ﬁnancial measures more frequently than non-listed

companies:

(1) percentage of returned goods to total sales (signiﬁcant at 0.05 level);

(2) on-time delivery of goods or services to customers (signiﬁcant at 0.05 level); and

(3) total number of customer complaints (signiﬁcant at 0.05 level).

Figure 2 depicts the comparison of listed and non-listed companies based on utilization

frequency of quality performance measures. Perceived effectiveness ranges from 1 to 5,

in which "1" denotes "not effective", and "5" represents "extremely effective".

According to the results of independent-samples t-test, ISO certiﬁed companies

signiﬁcantly utilize ﬁnancial quality performance measures more frequently than

non-ISO certiﬁed companies (see Table VI).

The item-by-item analysis indicates that, according to the ISO certiﬁcation

ownership, there are not much signiﬁcant differences among ﬁrms. There are

signiﬁcant differences only over two ﬁnancial measures:

Figure 2.

Comparison of listed and

non-listed companies

based on utilization

frequency of quality

performance measures

Listed Non-listed

Quality performance measures N Mean N Mean t-test

Financial measures

25 3.0 60 3.0 2 0.52

Non-ﬁnancial measures

26 3.9 63 4.5 2 2.59

Notes:

Signiﬁcant at 0.05 level;

average of ﬁve ﬁnancial disclosure items;

average of six

non-ﬁnancial disclosure items

Table V.

Results of the

independent-samples

t-test for listed and

non-listed companies

Quality

performance

measurement

(1) itemized quality cost reporting (signiﬁcant at 0.05 level); and

(2) quality cost budgeting and variance analysis (signiﬁcant at 0.10 level).

Figure 3 depicts the comparison of ISO certiﬁed companies and non-ISO certiﬁed

companies based on utilization frequency of quality performance measures. Perceived

effectiveness ranges from 1 to 5, in which "1" denotes "not effective", and "5" represents

"extremely effective".

The results of independent-samples t-test showed that COQ system adopters

signiﬁcantly utilize both ﬁnancial and non-ﬁnancial quality performance measures

more frequently than non-COQ system adopters (see Table VII).

The item-by-item analysis indicates that, according to the COQ system adoption,

there are signiﬁcant differences over the following nine items (see Table VIII):

COQ system

adopters

Non-COQ

system adopters

Quality performance measures N Mean N Mean t-test

Financial measures

47 3.6 37 2.1 2 6.23

Non-ﬁnancial measures

47 4.3 41 3.8 2 2.03

Notes:

Signiﬁcant at 0.05 level;

signiﬁcant at 0.01 level;

average of ﬁve ﬁnancial disclosure

items;

average of six non-ﬁnancial disclosure items

Table VII.

Results of the

independent-samples

t-test for COQ system

adopters and non- COQ

system adopters

Figure 3.

Comparison of ISO

certiﬁed companies by

non-ISO certiﬁed

companies based on

utilization frequency of

quality performance

measures

ISO certiﬁed Non-ISO certiﬁed

Quality performance measures N Mean N Mean t-test

Financial measures

72 3.2 13 2.1 2 2.67

Non-ﬁnancial measures

77 4.1 12 3.6 2 1.26

Notes:

Signiﬁcant at 0.05 level;

average of ﬁve ﬁnancial disclosure items;

average of six

non-ﬁnancial disclosure items

Table VI.

Results of the

independent-samples

t-test for ISO certiﬁed and

non-ISO certiﬁed

companies

TQM

21,1

Listed or non-listed ISO certiﬁcation COQ system

Quality performance measures Listed Non-listed Certiﬁed Not certiﬁed Exist Not exist

by subgroups M R M R t-test M R M R t-test M R M R t-test

Financial measures

1. Itemized quality cost reporting. 4.3 6 3.8 5 2 1.28 4.2 4 2.5 7 2 3.00

4.4 3 3.3 7 2 3.21

2. Analysis of quality cost

components. 3.3 8 3.1 8 2 0.50 3.2 8 2.4 8 2 1.59 4.0 8 2.0 9 2 6.60

3. Quality cost budgeting and

variance analysis. 2.7 9 2.8 9 0.15 2.9 9 2.0 9 2 1.90

3.4 10 2.0 8 2 4.34

4. Comparison of quality costs to

industrial standards. 2.0 11 2.2 11 0.68 2.2 11 2.0 11 2 0.36 2.6 11 1.6 11 2 3.24

5. Multi-period trend analysis of

quality costs. 2.7 10 2.7 10 0.02 2.8 10 2.0 10 2 1.61 3.6 9 1.7 10 2 5.94

Non-ﬁnancial measures

6. Percentage of product rework. 4.2 7 3.7 6 2 1.22 3.9 7 3.7 4 2 0.35 4.1 6 3.4 6 2 1.93

7. Rate of material spoilage. 4.4 5 3.9 4 2 1.49 4.2 5 3.3 5 2 1.38 4.4 5 3.7 5 2 2.02

8. Rate of defects in production

output. 4.5 4 4.1 1 2 1.04 4.3 2 3.8 2 2 0.83 4.4 2 4.0 1 2 1.25

9. Percentage of returned goods to

total sales. 4.5 3 3.6 7 2 2.65

3.9 6 3.7 3 2 0.38 4.0 7 3.7 4 2 0.90

10. On-time delivery of goods or

services to customers. 4.6 2 3.9 3 2 2.14

4.3 3 3.2 6 2 1.69 4.4 4 3.8 3 2 1.74

11. Total number of customer

complaints. 4.8 1 4.1 2 2 2.94

4.3 1 4.0 1 2 0.62 4.6 1 4.0 2 2 2.44

Notes:

Signiﬁcant at 0.10 level;

signiﬁcant at 0.05 level; M ¼ Mean; R ¼ Ranking

Table VIII.

Results of the

independent-samples

t-tests in relation to

utilization frequency of

quality performance

measures by subgroups

Quality

performance

measurement

itemized quality cost reporting (signiﬁcant at 0.05 level);

analysis of quality cost components (signiﬁcant at 0.05 level);

quality cost budgeting and variance analysis (signiﬁcant at 0.05 level);

comparison of quality costs to industrial standards (signiﬁcant at 0.05 level);

multi-period trend analysis of quality costs (signiﬁcant at 0.05 level);

percentage of product rework (signiﬁcant at 0.10 level);

rate of material spoilage (signiﬁcant at 0.10 level);

on-time delivery of goods or services to customers (signiﬁcant at 0.10 level); and

total number of customer complaints (signiﬁcant at 0.10 level).

All these measures are utilized by COQ system-adopting companies more frequently

than non-COQ system-adopting companies (see Figure 4). The gap which shows the

differences in implementing ﬁnancial measures is wider than the gap between

non-ﬁnancial measures.

Conclusion

This study evaluates the extent whether the top 500 industrial enterprises in Turkey

utilize and perceive ﬁnancial and non-ﬁnancial quality performance measures as

effective.

The ﬁndings indicated that the top 500 industrial enterprises signiﬁcantly utilize

ﬁnancial quality performance measures less frequently than non-ﬁnancial quality

performance measures (this result is consistent with Carr et al. (1997)'s study ﬁndings).

This situation can be explained by another ﬁnding of this study that the top 500

industrial enterprises perceive ﬁnancial measures signiﬁcantly less effective than

non-ﬁnancial measures. Other possible reasons for this could be (Horngren et al. , 2006,

p. 669):

non-ﬁnancial measures of quality are easier to quantify and understand; and

non-ﬁnancial measures provide immediate short-run feedback on quality

improvements efforts.

Overall, the ﬁndings in relation to job functions showed that quality professionals

perceive quality performance measures more effective than accountants, and

Figure 4.

Comparison of COQ

system adopters by non-

COQ system adopters

based on utilization

frequency of quality

performance measures

TQM

21,1

accountants perceive them more effective than "others". It is more appropriate that

quality professionals should explain the signiﬁcance of utilizing quality performance

measures to the other members of the organizations by due to the fact that this is their

expertise.

According to the subgroup analysis, some signiﬁcant differences were found on the

basis of characteristics of ﬁrms as being listed or not, having ISO certiﬁcation or not,

and implementing COQ system or not. The results of subgroup analysis indicated that:

the listed companies signiﬁcantly utilize especially non-ﬁnancial quality

performance measures more frequently than non-listed companies;

ISO certiﬁed companies signiﬁcantly utilize ﬁnancial quality performance

measures more frequently than non-ISO certiﬁed companies; and

COQ system adopters signiﬁcantly utilize both ﬁnancial and non-ﬁnancial

quality performance measures more frequently than non-COQ system adopters.

The study has some managerial implications as well. Today, almost every

organization engages in quality initiatives, which aim at increasing quality of

processes and products. Without performance evaluation, managers can not know how

much they are successful in achieving the targets. In addition, managers need to

evaluate performance in order to take corrective actions immediately. Therefore the

proposed ﬁnancial and non-ﬁnancial measures in the study are very useful tools for

measuring quality performance, and are recommendable to be utilized in a balanced

way. If organizations do not have experienced personnel to utilize those measures,

managers need to prepare required conditions for necessary training.

Although the study restricts the sample to the top 500 industrial enterprises in

Turkey and the ﬁndings resulting from the data collected from manufacturing

companies are not generalizable to other sectors, the study describes the general

practices and perceptions of eleven different industries on quality performance

measures across Turkey, evaluates the degrees of their successes and failures in their

respected industries, and examines the top 500 manufacturing companies in terms of

quality initiatives in Turkey.

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Corresponding author

Ali Uyar can be contacted at: aliuyar@hotmail.com

TQM

21,1

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Problems, success factors and

beneﬁts of QCs implementation:

a case of QASCO

Salaheldin Ismail Salaheldin

Department of Management and Economics,

College of Business and Economics, Qatar University, Doha, Qatar

Abstract

Purpose – The purpose of this paper is to attempt to: explore the problems that the production division

of Qatar Steel Company (QASCO) typically encounter in implementing QCs, identify the critical success

factors promoting QCs implementation and discern the real beneﬁts of QCs implementation.

Design/methodology/approach – Data for this study were collected using a self-administered

questionnaire that was distributed to 400 QCs members within the ﬁve departments (i.e.

Manufacturing, Maintenance, Direct Reduction, Material Control and Technical departments) which

comprised the production division of QASCO. Of the 400 questionnaires posted, a total of 197 were

returned and used for the analysis.

Findings – The results of the study indicated that lack of support from top management was

reported as the biggest problem impeding the implementation, and also commitment and support from

top management were reported as the most important success factor of QCs implementation in the ﬁve

departments. More importantly, the ﬁndings indicated that QCs implementation has created an

atmosphere of cooperation within QASCO and produced many positive results including improving

quality, increasing productivity, and improving the management style.

Research limitations/implications – The sample is restricted to only a single division, i.e. the

production division of QASCO, so it would be strongly recommended that data be gathered from

various divisions of QASCO, i.e. replications of this study are required to generalize its ﬁndings.

Studying the deriving and inhibiting forces to QCs implementation in practice remains a task that

requires further attention from researchers, whatever their motivations .

Practical implications – The ﬁndings are important and relevant to all the departments in QASCO.

The study hopes to create more awareness among management and employees of the strategic

importance of QCs to operational processes. More importantly, the beneﬁts attained would be a

motivating factor for managers to use QCs.

Originality/value – The research provides empirical insights to the growing body of knowledge on

QCs implementation. Most of QCs research has been done in developed countries. The study presents

the successful adoption and implementation of QCs in a manufacturing ﬁrm in a developing country of

the Middle East where published research results on the successful use of QCs have been rather scarce.

Keywords Quality circles, Critical success factors, Qatar

Paper type Research paper

Introduction

The current competitive environment and globalization of business have created new

challenges that can affect and alter manufacturing environment. Therefore, adopting

and implementing new management techniques and approaches is a strategic option

for manufacturing companies that might help them survive under global competition.

One of the most popular management techniques adopted by organizations around the

world has been the Continuous Improvement (CI) which is thought to play an

important role in maintaining a company's competitiveness. CI generally takes account

of the activities performed under the names of Statistical Quality Control (SQC),

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

www.emeraldinsight.com/1754-2731.htm

QCs

implementation

The TQM Journal

Vol. 21 No. 1, 2009

pp. 87-100

q Emerald Group Publishing Limited

1754-2731

DOI 10.1108/17542730910924772

Quality Circles (QCs), Quality Improvement Team (QIT), Six Sigma, etc. The signiﬁcance

of QCs as one of the most effective means to Continuous Improvement cannot be over

emphasized (Zailani, 1998). Accordingly, more has been written about QCs technique

than any other technique about Japanese management during the past three decades.

There is a consensus among academics and practitioners that QCs implementation

leads to increasing productivity, improving product quality, narrowing the gap

between workers and administration, enhancing worker pride, allowing subordinates

to air their concerns about working conditions and instilling a spirit of democracy. The

results are a mutual trust and respect, an atmosphere of cooperation and the

attainment of a proud, productive, and proﬁtable organization (Zailani, 1998; Goh,

2000; Canel and Kadipasaoglu, 2002).

However, review of the literature indicated that there are very few case studies

which explore and illustrate, in detail, how QC is implemented and used in

manufacturing ﬁrms whether in developed or less developed countries (Al-Khatib and

Radi, 2003; Salaheldin and Zain, 2007). In particular, there have not been any reported

studies of success in the use of QCs in any of the Gulf Cooperation Council (GCC)

countries. Responding to this need, the current study ﬁlls this gap and contributes to

the extant literature by reporting a success story of the effective use of the technique in

the State of Qatar, a member of the GCC countries. From previous research in this area

done in the Far East, USA and Japan, manufacturing ﬁrms in less developed countries

may not be in a position to beneﬁt from their ﬁndings since they were based on a

different manufacturing environment.

Considering the literature ﬁndings, the following research questions are addressed

in this study:

RQ1. Do quality circles work equally well as in the Japanese, USA and Western

companies?

RQ2. If so, how can QCs be implemented successfully in Qatar?

To answer the aforementioned questions, this study attempts to explore the problems

that the production division of Qatar Steel Company (QASCO) typically encounters in

implementing QCs, to identify the critical success factors promoting QCs

implementation in the production division of QASCO and to discern the real beneﬁts

of QCs implementation.

After this introduction, the proﬁle of QASCO is presented followed by the review of

the literature pertaining to our study. Next, we present the contribution of this study to

current knowledge. This is followed by the research methodology. Next, we present the

data analysis and hypotheses testing. Finally, we provide conclusion, implications and

limitations and directions for future research.

QASCO proﬁle

Qatar Steel Company (QASCO) is a wholly-owned subsidiary of Industries Qatar (a

Qatari shareholding company) and is the ﬁrst integrated steel plant in the whole

Arabian Gulf. The company was established on 14 December 1974, but steel

production at the plant started only in 1978. The mill is located in Mesaieed Industrial

City, 45 kilometers south of Doha, the capital of Qatar (Salaheldin and Zain, 2007).

The integrated plant consists primarily of four units: Direct Reduction, Electric Arc

Furnace, Continuous Casting, and Rolling Mill. Other auxiliaries include the Material

Receiving/Handling, Main Power Substation, Quality Control Centre, Maintenance

Shops, and other facilities as sea/fresh water, compressed air, natural gas and a clinic.

TQM

21,1

The whole plant including its administrative ofﬁces occupies a land area of

707,000 sq.m. Adjacent to the land is a further land area of 375,000 sq.m reserved for

future development and expansion of the plant.

With its latest production technology and equipment, the plant generates an annual

production of 1.2 million tons of molten steel and 740,000 tons of rolled iron per year.

The plant employed a total workforce of approximately 1,250 employees comprising 12

different nationalities. With the exception of the ofﬁce staff, the mill is run on a

three-shift system. Since the start of its ﬁrst production, the company has undergone

rapid growth and expansion and has achieved many milestones, certiﬁcations and

awards.

Over the years, QASCO has gained a reputation as a manufacturer of ﬁrst class

products. Its product quality is tailored in accordance with international standards. For

example, in addition to getting ISO 9002 certiﬁcation in 1992, the product and

management quality of the company has been endorsed by the UK-based Certiﬁcate

Authority for Reinforcing Steels (CARES), an authority which is accredited by the

United Kingdom Accreditation Service (UKAS) to ISO Guide 65 (product certiﬁcation)

and ISO Guide 62 (quality management systems certiﬁcation using ISO 9001 (www.

qasco.com.qa/, 14 October 2006). The product is supported by an effective and reliable

delivery and after sales service. Its proximity to the Gulf Cooperation Council (GCC)

countries enables it to supply a sizeable portion of the region's requirements, as well as

Qatar's own domestic need.

Review of relevant literature

QCs were deﬁned by Ishikawa (1985) as "small group of workers, from the same work

place, who meet together on a regular, voluntary basis to perform quality control

activities and engage in self and mutual development". A QC is a team of up to 12

people who usually work together and who meet voluntarily on a regular basis "to

identify, investigate, analyze and solve their work-related problems" (The Department

of Trade and Industry, UK, 1992; Millson and Kirk-Smith, 1996; and Davis et al., 2003).

These people are trained to structure problem identiﬁcation, evaluation, solution and

presentation stages and to use associated techniques such as Ishikawa's seven tools –

process ﬂowcharting, histograms, check sheets, Pareto analysis, cause and effect

diagrams and control charts (Stevenson, 2007).

According to Piczak (1988), Harris (1995), Hill (1996), Pinnington and Hammersley

(1997), Olberding (1998), Goh (2000), Canel, and Kadipasaoglu (2002), Konidari and

Abernot (2006), and Stevenson (2007), among the potential advantages of QCs include:

increased self-conﬁdence for both workers and staff, improved quality of product, Staff

are better motivated in QCs departments, staff are more productive in QCs

departments, customers are happier at QCs departments, saved time on operational

matters, saved money, increased staff satisfaction, increased empowerment , reduced

the number of errors in the department, improved the work environment, increased the

work accountability, improved organizational climate, improved the work integrity,

improved the management style and improved staff awareness of organizational goals,

meeting customer expectations and increased workers satisfaction.

An extensive review of the literature reveals that the successful implementation of

QCs programs require commitment and support from top management, commitment

and support from middle and ﬁrst – line managers, circles members training,

involvement and support of employees, circles leaders training, and organizational

stability (Hill, 199; Pinnington and Hammersley, 1997; French, 1998; Goh, 2000; Davis

et al., 2003; Stevenson, 2007).

QCs

implementation

Although advantages of QC implementation are inspiring, possible negative

repercussions may occur. Various writers (e.g., Millson, and Kirk-Smith, 1996; Goh,

2000, Canel, and Kadipasaoglu, 2002; Konidari and Abernot, 2006; Slack et al., 2006)

have claimed that lack of support from top management, lack of involvement from

employees, lack of members experience with QCs, poor training/education on QCs, lack

of clear goals for QCs effort, lack of co-operation from middle management, lack of

ﬁnancial and morale extrinsic rewards, lack of co-operation from ﬁrst line supervisors,

circle members disillusioned with QCs philosophy, delay in responding to QCs

recommendations, circles leaders take long time to organize meeting and high labor

turnover (transfers, promotions, retirements, etc.), present obstacles to the successful

implementation of QCs programs.

Research methodology

Survey instrument

The survey instrument used in this study was largely derived from the literature

review. These include the adoption of questions from successful studies previously

conducted in related ﬁeld of study such as: Hill (1997); Pinnington and Hammersley

(1997); Canel and Kadipasaoglu (2002); Zetie (2006). The questionnaire distributed

contained eight questions in four different categories as follows:

(1) Questions 1-5 – preliminary information on the respondent (i.e. title, work

experience, experience on QCs, specialization and QCs meetings).

(2) Question 6 – data on the critical factors promoting QCs implementation.

(3) Question 7 – data on QCs implementation problems.

(4) Question 8 – data on the beneﬁts have been achieved.

The sample

Data for this study were collected using a self-administered questionnaire that was

distributed to 400 QCs members within the ﬁve departments (i.e. Manufacturing,

Maintenance, Direct Reduction, Material Control and Technical departments) which

comprised the production division of QASCO. The study focused on the production

division, since it has been a leader in implementing QCs in Qatar. Although one could

claim that a focus on one division may make the results less generalizable, we ensured

a high level of internal consistency.

It was requested that the questionnaire be completed by QCs members i.e. workers

and their mangers participating in the QCs implementation. Of the 400 questionnaires

distributed, a total of 203 questionnaires were returned after two follow-up. About 6

questionnaires were unusable because they had missing values. The overall response

rate was thus 49.25 per cent (197/400), which was considered satisfactory for

subsequent analysis. Care was taken to include the ﬁve departments which comprised

the production division in the sample. Consequently, the ﬁnal usable sample was

drawn from all the departments as follows: 43 members from manufacturing

department, 34 from maintenance department, 38 from direct reduction department, 49

from material control department and 33 from technical department.

A majority of the respondents were workers (74 per cent), and approximately 26

per cent were managers. With respect to years of working with QCs programs,

approximately 72.3 per cent of the sample had used QCs programs for more than

ten years, and 27.7 per cent had used it for less than ten years. In terms of working

years in the production division 60.56 per cent of the respondents had worked for

TQM

21,1

more than 15 years, 28.14 per cent had worked in it between 10 and 15 years and

22.40 per cent had worked for less than 10 years. Finally, a majority of the

respondents indicated that they had met voluntarily under the leadership of their

supervisor on a regular basis, usually for about one hour every month or week (93.3

per cent), and the rest of the respondents (6.7 per cent) had met on a daily basis or

when there was a problem.

Reliability and validity of the instrument

The instrument was examined by Cronbach's alpha which is a widely accepted index

to indicate the reliability of the instruments. These coefﬁcients are represented for each

of the constructs in (Table I). All scales have reliability coefﬁcients ranging from 0.83

to 0.91, which exceed the cut-off level of 0.60 set for basic research (Nunnally, 1978),

and all the alpha values indicate that the study's instrument is reliable. Moreover, the

questionnaire was pre-tested to ensure that the wording and sequencing of questions

were appropriate and it was also validated (face validity) by 24 QCs members in the

production division of the QASCO.

Hypotheses

Thus, in order to shed light on the perception of QCs members and their managers

concerning QCs implementation in the ﬁve departments which comprise the

production division of QASCO, the following hypotheses were set up:

H1. There is no signiﬁcant difference between workers and their managers

participating in QCs programs in the production division concerning the

critical factors promoting QCs implementation.

H2. There is no signiﬁcant difference between workers and their managers

participating in QCs programs in the production division concerning the

problems of QCs implementation.

H3. There is no signiﬁcant difference between workers and their managers

participating in QCs programs in the production division concerning the

beneﬁts obtained from QCs implementation.

H4. There is no signiﬁcant difference among QCs members in the ﬁve

departments concerning the critical factors promoting QCs implementation.

H5. There is no signiﬁcant difference among QCs members in the ﬁve

departments concerning the problems of QCs implementation.

H6. There is no signiﬁcant difference among QCs members in the ﬁve

departments concerning the beneﬁts obtained from QCs implementation.

Constructs Number of items Alpha

Factors affecting QCs implementation 6 0.86

QCs implementation problems 12 0.83

The beneﬁts obtained from QCs implementation 15 0.92

Table I.

Internal consistency

coefﬁcients of the study

variables

QCs

implementation

Statistical analysis

Preliminary analysis was carried out in terms of frequency and means and it covered

respondent's proﬁle, factors promoting QCs implementation, QCs implementation

problems and the beneﬁts obtained from the implementation of QCs.

Procedures for testing H1 , H2 and H3. They were tested using the Mann- Whitney

test and the T-test (for double accuracy) to ﬁnd out whether or not there is a difference

between workers and their managers participating in QCs programs in the production

division of QASCO.

Procedures for testing H4, H5 and H6. They were tested using the Kruskal Wallis

test and One Way Analysis of Variance (ANOVA) test (for double accuracy) to ﬁnd out

whether or not there is a difference among QCs members participating in QCs

programs in the ﬁve departments.

To ensure that valid responses were representatives of the larger population, a

non-response bias test was used to compare the early and late respondents. x

tests

show no signiﬁcant difference between the two groups of respondents at the 5 per cent

signiﬁcance level, implying that a non-response bias is not a concern.

Analysis and discussion

QCs formation at QASCO

The respondents were asked to identify how QCs were formed at QASCO. They

indicated that foremen were instructed, during the period from January to March of

every year to form QCs. The tasks of these circles are varied (technical or quality

improvement or cost saving or safety). A circle consists of a small group of workers (less

than ten workers) who do similar work or who are from the same work unit, and who

meet voluntarily under the leadership of their supervisors on a regular basis, usually for

about one hour every week or month. During these meetings the circle selects a problem,

analyses the causes (using Pareto analysis), recommends a solution to the management,

and after obtaining management approval, implements the solution.

Factors promoting QC s implementation

Workers and their managers participating in QCs programs were asked to identify

how important each of the following critical factors is that might promote QCs

implementation in their departments. Notably, commitment and support from top

management was reported as the most important factor, with a high level of agreement

between respondents about this (SD 0.21), that promote the implementation of QCs in

the production division of QASCO (Table II). To a large extent this result is similar to

Boaden and Dale (1993); Goulden (1995); Goh (2000); and Lagrosen and Lagrosen

(2006), where they found that top management support (i.e. providing the required

resources, offering some back-seat guidance if required, etc) is an essential factor to the

success and continuity of any improvement program such as QCs. This supposes that

when manufacturing ﬁrms engage in continuous improvement strategy, they must be

aware of the competitive beneﬁts that can be derived from the impact of improvement

tools such as QCs on continuous improvement.

Moreover, it appears from Table III that the organizational learning was the second

important factor in promoting QCs implementation. This ﬁnding can be interpreted in

light of fact that QCs members will be exposed to new ideas, will expand their

knowledge of quality issues and will encourage them to think differently about the

nature of their gobs (Hill, 1997; and Goh, 2000). Accordingly, QC can be used as both a

quality tool and a knowledge management tool (Zetie, 2002).

TQM

21,1

On the contrary, Table III suggests that support from middle and ﬁrst line managers is

not a major factor (SD 1.51) in promoting QCs implementation. This may stem back

from the fact that QCs programs at QASCO are embraced as a strategic approach for

improving quality and increasing productivity to remain competitive in the market

place, rather than as a technique in isolation or as a special activity or quick prelude to

TQM (Goh, 2000).

QCs implementation problems

Lack of support from top management was reported as the biggest problem impeding

the implementation of QCs in the ﬁve departments (Table II). This result may stem

from the fact that top-level managers have a better understanding of the needs of QCs

programs because they are the most cognizant of the ﬁrm's continuous improvement to

remain competitive in the market place. Moreover, they must commit the time,

personnel and ﬁnancial resources to support the workers or middle managers who are

willing to participate in QCs programs.

Likewise, Table II shows that there is a consensus among respondents that poor

training/education on QCs (SD 0.21) is considered as one of the strongest problems

impeding the implementation of QCs. This supports the literature review concerning

the need to design QC education and training programs and which reﬂect the

Problems Mean score

A lack of support from top management 4.6 0.18

Lack of involvement from employees to be part of the circle 3.9 0.88

Lack of members' experience with QCs 3.5 0.25

Poor training/education on QCs 4.5 0.21

Lack of clear goals for QCs effort 4.4 0.30

Lack of co-operation from middle management 4.3 0.31

Lack of ﬁnancial and morale extrinsic rewards 2.8 2.80

Lack of co-operation from ﬁrst line supervisors 3.6 0.31

Circle members disillusioned with QCs programs 3.8 0.98

Delay in responding to QCs recommendations 4.1 0.33

Circles leaders take long time to organize meeting 3.7 1.08

High labor turnover (transfers, promotions, retirements, etc.) 4.0 0.39

Notes:

Based on a Likert scale: 1 ¼ "weak problem"; 5 ¼ "strong problem";

the standard deviation

is used in order to state the degree of consistency

Table II.

QCs implementation

problems

Factors Mean score

Commitment and support from top management 4.8 0.21

Commitment and support from middle and ﬁrst-line managers 3.5 1.51

Circles members' training 4.4 0.26

Involvement and support of employees 4.1 0.31

Circles leaders training 3.7 1.43

Organizational learning 4.7 0.23

Notes:

Based on a Likert scale: 1 ¼ "extremely unimportant"; 5 ¼ "extremely important";

the standard deviation is used in order to state the degree of consistency

Table III.

Critical factors promoting

QCs implementation

QCs

implementation

important ingredients of QCs implementation, the correct use of it and how QC

constitutes a form of knowledge and skills development to its members (Boaden and

Dale, 1993; Zailani, 1998; and Goh, 2000).

In contrast, the ﬁndings in Table II indicate that lack ﬁnancial and morale extrinsic

rewards received a low level of agreement among respondents (SD 2.80). To a large

extent this result is similar to Boaden and Dale (1993), where they found that there is no

agreement in the literature about whether QCs members should be rewarded for their

membership of a QC or for successful improvements which result from the QC's

activities.

Beneﬁts ob tained from QCs implementation

The respondents were asked to give their opinions about the beneﬁts obtained from

QCs implementation based on a ﬁve – point scale, score "1" for strongly disagree, "5"

for strongly agree. Table IV shows that the highest ratings were given to increasing

productivity, improving product quality and increasing self-conﬁdence for both

workers and staff which support the claim that the major reasons for implementing

QCs programs are, improving product quality, creating high level of enthusiasm,

saving costs, increasing productivity, allowing subordinates to survive a spirit of

democracy as well as enhanced worker pride (Zailani, 1998; and Canel and

Kadipasaoglu, 2002).

There is a big deviation among respondents about the effect of QCs implementation

on empowerment, as shown by the large standard deviation (2.63). In contrast, Zailani

(1998) and Canel and Kadipasaoglu (2002) reported in their studies that increased

empowerment is one of the major desired outcomes of QCs implementation. This result

suggests that QCs members in QASCO do not understand that the effective

implementation of QCs could lead to increasing the decision making direction of

workers and which is the proper mechanism to facilitate empowerment (Margulies and

Kleiner, 1995; Robbins and DeCenzo, 2005).

Beneﬁts Mean score

QCs increased self-conﬁdence for both workers and staff 4.7 0.15

Staff are better motivated in QCs departments 4.4 0.35

Customers are happier at QCs departments 3.8 0.68

QCs improved product quality 4.8 0.11

QCs saved time on operational matters 4.2 0.57

QCs increased staff satisfaction 4.5 0.23

QCs increased productivity 4.9 0.08

QCs increased empowerment 3.1 2.63

QCs reduced the number of errors in the department 3.5 0.23

QCs improved the work environment 4.3 0.48

QCs increased the work accountability 4.0 0.98

QCs improved organizational climate 3.9 0.07

QCs improved the work integrity 4.6 0.22

QCs improved the management style 3.6 0.81

QCs improved staff awareness of organizational goals 4.1 0.69

Notes:

Based on a Likert scale: 1 ¼ "strongly disagree"; 5 ¼ "strongly agree";

the standard

deviation is used in order to state the degree of consistency

Table IV.

QCs implementing

beneﬁts

TQM

21,1

Hypotheses testing

H1. It appears from Table V that there are no signiﬁcant differences between workers

and their mangers participating in QCs programs concerning the critical factors

promoting QCs implementation (i.e. H1 is supported). This result is supported by prior

research that have noted that QCs programs can only ﬂourish in an organization where

management is open to genuine two-way communication with the workers, where

there is a reasonably good level of industrial relations, and where there is a total

organizational commitment towards quality and productivity (Zailani, 1998).

H2. The results indicate that real differences exist between workers and their

managers participating in QCs programs with respect to two implementation problems

i.e. lack of clear goals for QCs effort and delay in responding to QCs recommendations

(H2 is relatively supported). Using Mann-Whitney and T-test to ﬁnd out if these

differences are statistically signiﬁcant or not showed the following ﬁndings:

The ﬁndings indicate that there are some respondents who pointed out that lack

of clear goals for QCs effort was not one of the problems that hinder the

implementation of QCs in the production division. This may stem from the fact

that the majority of QCs at QASCO meet on a regular basis whether or not there

is a speciﬁc goal for such a meeting i.e. some of QCs members felt that QCs were

running out of clear goals.

It appears from Table VI that delay in responding to QCs recommendations was

not regarded as one of the problems that impede QCs implementation based the

points of view of some of respondents. That is not surprising, because some QCs

members realize that the role of QCs is consultancy i.e. top management can take

into account their recommendations or ignore them.

H3. The results of Mann-Whitney and T-test in Table VII support H3, that there is a

consensus between workers and their managers that all beneﬁts, except for one,

mentioned below have been achieved.

There is a signiﬁcant difference between workers and their managers concerning the

impact of QCs implementation on improving the management style i.e. developing a more

participative style of management and increasing the departmental interaction. This

result is supported by the results of Zailani (1998), where she found that there was little

doubt that QCs programs have made a signiﬁcant impact on the management styles and

organizational climate of manycompaniesin Malaysia.However,it is important to bearin

mind that one of the major tasks of top management is to inﬂuence the setting of

organizational values and develop suitable management styles to improve the ﬁrm's

performance.

Factors Mann-Whitney

t-test

Commitment and support from top management 0.812 0.641

Commitment and support from middle and ﬁrst-line managers 0.562 0.352

Circles members training 0.934 0.613

Involvement and support of employees 0.141 0.100

Circles leaders training 0.426 0.273

Organizational learning 0.683 0.412

Notes: Based on a Likert scale: 1 ¼ "extremely unimportant"; 5 ¼ "extremely important";

using

Mann-Whitney and t-test;

signiﬁcant at level 0.05

Table V.

Signiﬁcant levels

(p values) for the

differences between

workers and their

managers concerning

factors promoting QCs

Implementation

QCs

implementation

H4. The results of Kruskal Wallis and ANOVA in Table VIII clearly support H4, that

there is a consensus among QCs members in the ﬁve departments that all critical

factors mentioned below are regarded as forces that promote the implementation of

QCs programs in manufacturing ﬁrms. This result suggests that manufacturing ﬁrms

can have successful QCs programs only if they can get the relevant management

support, the support of middle and ﬁrst line managers and the proper training on QCs

for both workers and managers.

H5. It appears from Table IX that real differences exist between QCs members in

the ﬁve departments with respect to two problems that impede QCs implementation

scored by the respondents (i.e. the results provide only partial support for H5). Using

Kruskal Wallis and ANOVA to ﬁnd out if these differences are statistically signiﬁcant

or not showed the following ﬁndings:

Problems Mann-Whitney

t-test

A lack of support from top management 0.841 0.632

Lack of involvement from employees to be part of the circle 0.436 0.263

Lack of members' experience with QCs 0.461 0.241

Poor training/education on QCs 0.681 0.432

Lack of clear goals for QCs effort 0.001

0.000

Lack of co-operation from middle management 0.312 0.142

Lack of ﬁnancial and moral extrinsic rewards 0.345 0.211

Lack of co-operation from ﬁrst-line supervisors 0.156 0.096

Circle members disillusioned with QCs programs 0.213 0.167

Delay in responding to QCs recommendations 0.021

0.013

Circles leaders take long time to organize meeting 0.421 0.263

High labor turnover (transfers, promotions, retirements, etc.) 0.659 0.369

Notes: Based on a Likert scale: 1 ¼ "weak problem"; 5 ¼ "strong problem";

using Mann-Whitney

and T-test;

signiﬁcant at level 0.05

Table VI.

Signiﬁcant levels

(p values) for the

differences between

workers and their

managers concerning

QCs implementation

problems

Beneﬁts Mann-Whitney

t-test

QCs increased self-conﬁdence for both workers and staff 0.592 0.298

Staff are better motivated in QCs departments 0.345 0.245

Customers are happier at QCs departments 0.463 0.234

QCs improved product quality 0.642 0.359

QCs saved time on operational matters 0.591 0.361

QCs increased staff satisfaction 0.367 0.210

QCs increased productivity 0.532 0.412

QCs increased empowerment 0.436 0.299

QCs reduced the number of errors in the department 0.534 0.325

QCs improved the work environment 0.328 0.198

QCs increased the work accountability 0.538 0.301

QCs improved organizational climate 0.732 0.467

QCs improved the work integrity 0.347 0.214

QCs improved the management style 0.008

0.001

QCs improved staff awareness of organizational goals 0.423 0.225

Notes: Based on a Likert scale: 1 ¼ "strongly disagree"; 5 ¼ "strongly agree";

using Mann-Whitney

and t -test;

signiﬁcant at level 0.05

Table VII.

Signiﬁcant levels

(p values) for the

differences between

workers and their

mangers regarding the

beneﬁts obtained from

QCs implementation

TQM

21,1

It appears from Table IX that lack of ﬁnancial and morale extrinsic rewards is

not regarded as one of the problems that inhibits QCs implementation based on

the points of view of some of the respondents. That is not surprising, because QC

is a great opportunity provided by the management for those workers who want

to contribute, albeit voluntarily, to something towards the betterment of the

organization (Zailani, 1998).

The ﬁndings indicate that some QCs members pointed out that circles leaders

take long time to organize meeting is not one of the problems that hinder the

implementation of QCs in QASCO. This may stem from the fact that QCs

members and their supervisors meet on a regular basis, usually for about one

hour every week or month.

H6. The results of Kruskal Wallis and ANOVA in Table X support H6, that there is a

consensus among QCs members in the ﬁve departments that all beneﬁts mentioned

below are regarded as the beneﬁts have been achieved as a result of QCs

implementation by the ﬁve departments.

This result is consistent with the previous literature that indicated that serious

beneﬁts from the QCs programs have been clearly demonstrated, not only in terms of

the ability of the QC members to identify and eliminate problems, but also in terms of

Problems ANOVA

K-W

A lack of support from top management 0.341 0.373

Lack of involvement from employees to be part of the circle 0.453 0.455

Lack of members' experience with QCs 0.250 0.271

Poor training/education on QCs 0.540 0.550

Lack of clear goals for QCs effort 0.131 0.143

Lack of co-operation from middle management 0.244 0.287

Lack of ﬁnancial and moral extrinsic rewards 0.001

0.009

Lack of co-operation from ﬁrst line supervisors 0.326 0.337

Circle members disillusioned with QCs programs 0.230 0.250

Delay in responding to QCs recommendations 0.124 0.135

Circles leaders take long time to organize meeting 0.004

0.007

High labor turnover (transfers, promotions, retirements, etc.) 0.421 0.441

Notes: Based on a Likert scale: 1 ¼ "weak problem"; 5 ¼ "strong problem";

using Kruskal-Wallis

and One Way Analysis of Variance (ANOVA);

signiﬁcant at level 0.05

Table IX.

Signiﬁcant levels

(p values) for the

differences among the

ﬁve departments

concerning QCs

implementation problems

Factors ANOVA

K-W

Commitment and support from top management 0.471 0.393

Commitment and support from middle and ﬁrst-line managers 0.144 0.146

Circles members training 0.375 0.396

Involvement and support of employees 0.213 0.215

Circles leaders training 0.141 0.164

Organizational learning 0.621 0.451

Notes: Based on a Likert scale: 1 ¼ "extremely unimportant"; 5 ¼ "extremely important";

using

Kruskal-Wallis and One Way Analysis of Variance (ANOVA);

signiﬁcant at level 0.05

Table VIII.

Signiﬁcant levels

(p values) for the

differences among the

ﬁve departments

concerning factors

promoting QCs

Implementation

QCs

implementation

the increased readiness of the QC members to overcome future quality problems and

the possibility of advancement in the organization, increased productivity, increased

job satisfaction and increased employees involvement, (Dean and Bowen,1994;

Olberding, 1998; Zailani, 1998; and Konidari and Abernot, 2006).

Conclusion, managerial implications, and contribution to current

knowledge

It is evident from the above data analysis that QCs implementation has helped the

production division of QASCO in improving product quality, increasing productivity,

improving organizational climate and improving working relationship among staff

within the ﬁve departments and may boost the demand for QASCO products in

international markets.

Many believe that QCs are only successful in electronics industry, while others

suggest that they can be successful only in Japanese and American companies. It is

true that many of the early successful circles were established in electronics companies

due to the labour intensive nature of their operations. However, the practical example

given within this paper clearly proves that QCs programs can be successfully

implemented in steel industry in developing countries as in the Japanese, USA and

Western companies. More importantly, our ﬁndings indicated that manufacturing

ﬁrms can have successful QC only if there is a total organizational commitment i.e. top

management support, middle management support and employees involvement,

towards improving product quality and increasing productivity.

One of the most precious lessons brought about by QCs implementation is that

creative and problem-solving talents are not the monopoly of managers, but workers at

the operative level are also capable of providing great ideas. Managers should perceive

that there is a need for all employees to work in teams, and to measure and chart out

the quality of their own work in order to enable them to identify and solve quality

problems and to eventually enhance its manufacturing operations.

Training became the heart of quality improvement. Therefore, improving workers'

skills and quality consciousness and supporting the use of problem – solving tools

through enhancing training programs is important for QCs implementation. Policy

Beneﬁts ANOVA

K-W

QCs increased self-conﬁdence for both workers and staff 0.401 0.420

Staff are better motivated in QCs departments 0.221 0.234

Customers are happier at QCs departments 0.424 0.436

QCs saved time on operational matters 0.161 0.215

QCs increased staff satisfaction 0.153 0.177

QCs increased empowerment 0.213 0.267

QCs reduced the number of errors in the department 0.211 0.231

QCs improved the work environment 0.513 0.571

QCs increased the work accountability 0.612 0.623

QCs improved organizational climate 0.241 0.250

QCs improved the work integrity 0.312 0.324

QCs improved the management style 0.513 0.583

QCs improved staff awareness of organizational goals 0.424 0.431

Notes: Based on a Likert scale: 1 ¼ "strongly disagree"; 5 ¼ "strongly agree";

using Kruskal-Wallis

and One Way Analysis of Variance (ANOVA);

signiﬁcant at level 0.05

Table X.

Signiﬁcant levels

(p values) for the

differences among the

ﬁve departments

concerning the beneﬁts

obtained by QCs

implementation

TQM

21,1

makers should realize that QCs are not appropriate for everyone. Accordingly, they

have to consider its pros and cons before its implementation.

This study makes several important contributions. Notably, it helps to provide

important ideas and insights to academics and practitioners for undertaking a deeper

investigation into the impact of QCs implementation on continuous improvement of

manufacturing ﬁrms.

This study is one of the few that provides a structured overview of the state-of-

the-art of the adoption and implementation of QCs in a manufacturing ﬁrm in

developing countries where published research results on the use of QCs have been

rather scarce. Such studies are equally important in a global context. It helps illustrate

that operations management is not just technical problems but also deals with

behavioral issues such as team work and quality circles.

Finally, the current study is distinguished from previous studies in investigating

the holistic beneﬁts obtained from QCs implementation. Moreover, the results of this

study provide recognition for the importance of QCs implementation in increasing

productivity and improving product quality.

Research limitations and recommendations for future research

Despite the interesting results of this research, several limitations need to be

emphasized. First, the study considered data from a single informant i.e. the production

division of QASCO. Although the use of single informants is widespread in operations

research, using multiple informants creates better quality data and achieves an

external validity (Hogarth, 1978; Hill, 1982). Therefore, replications of this study are

required to generalize its ﬁndings.

Second, the data on QCs implementation beneﬁts were based on the respondents'

perceptions and not on hard data. Objective measures of QCs beneﬁts could provide a

better test of the proposed hypothesis concerning QCs implementation beneﬁts.

Third, developing a deeper understanding of the deriving and inhibiting forces to

QCs implementation in practice remains a task that requires further attention from

researchers, whatever their motivations.

Finally, the role of organizational culture is not considered. Possibly, different

organizational cultures affect how can QCs programs be implemented? Further, research

can study the effect of organizational culture on this relationship in more depth.

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TQM

21,1

100

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The TQM philosophy and the economic downturn

Article Type: Editorial From: The TQM Journal, Volume 21, Issue 1

At the time of writing the world's banking and financial systems are in turmoil and we could be facing a

global economic recession on a scale not seen for generations. In order to combat this downturn many

organisations will resort to downsizing or as it has been variously called, redundancy, right-sizing,

delayering, shedding, sacking, firing, paying-off, laying-off, restructuring, axing, cutting or re-

engineering. Whatever the term used the result is a reduction in the numbers of people employed by

organisations based on a deliberate decision by senior management.

Quality goods and services are delivered by people to people for people. It is people that have allowed the

organisation to acquire wealth and prosper. However, at the least sign of a downturn in profits the typical

knee-jerk reaction of many organisations is to reduce costs to appease shareholders. The easiest way to do

that quickly is to lay-off employees or close plants and outlets that are not making large enough profits.

Tom Peters argues that sacking someone is awful because you are messing up their lives in a "big-league"

way, even if it is for the long-term good. If this is the case for individuals then the consequences of a plant

closure must be much worse in terms of the economic and human consequences to the employees, the

company, the community and even the country.

The TQM philosophy is simple. Instead of focusing on cost cutting exercises such as downsizing TQM

organisations should concentrate on revenue enhancing efforts. The quality gurus recognised the

importance of reducing costs, but the "Gold in the mine" that Joseph Juran enthused about was associated

with reducing the costs of poor quality in order to increase profitability. This is much more difficult to

achieve with regards to time and effort than the reduction of costs by reducing the head count of a

company, and as Phil Crosby pointed out "Quality is free but not a gift". For many companies mass

redundancy is the easier option but this goes against the TQM philosophy that views people as an

organisation's number one asset. Let us hope that in the 21st century organisations' do not have a cavalier

approach to the way they treat their people and that they will take the time and effort to find alternatives

to cost reduction other than downsizing.

Alex Douglas



... An interesting example of strategic implementation is represented by the use of RM as an essential and formalised process to integrate the ISO 13485:2003 quality management system in SMEs (Hamimi Abdul Razak et al., 2009). RM can be seen as a guarantee for the effectiveness and rigour when implementing the standard. ...

... RM can be seen as a guarantee for the effectiveness and rigour when implementing the standard. Hence, that has a crucial and strategic impact on the company, also in terms of reputation (Hamimi Abdul Razak et al., 2009). Even in the case of the SOBANE risk prevention strategy (Malchaire, 2004), the implementation of a simple model was supposed to have a fundamental role in the development of a dynamic plan of RM, communication and risk culture. ...

... threshold values for emissions), many other risk levels are normally defined by considering the cost for RM activities and acceptable costs for repair. Companies need trained and knowledgeable employees and aids by consultants if they want the implementation of the process to be much smoother and effective (Hamimi Abdul Razak et al., 2009;Hudin & Hamid, 2014;Malchaire, 2004;Oncioiu, 2014). According to that, a sample of SMEs in the greenfield, in which an occupational health and safety system was implemented, proposed a strategic risk approach to enhance sustainability issues and quality management in the adoption of ISO Quality Management standards. ...

The purpose of this paper is two-fold: to reconsider the fundamental role of risk management (RM) in small and medium enterprises (SMEs) by identifying and critically analysing the most important international works; and to define opportunities for further studies by suggesting a different approach to study the topic. This research is based on a new hybrid method developed by the authors, called Advanced, Reasoned and Organised (ARO) literature review, which improves the quality of literature reviews by integrating the systematic review for quantitative papers, the meta-synthesis for qualitative research and the critical interpretative analysis. Forty-eight articles were included in the literature review. Bibliometric and cluster analyses were carried out. Two hypotheses were applied as filters in the interpretative synthesis of the content and guided the analysis to answer two research questions. The findings underline that RM in SMEs is still a 'spot' subject as they put little effort into the risk identification, assessment and monitoring. The lack of procedures and strategies is due to the lack of risk mindfulness and knowledge, and it is related to the managers' and owners' risk attitudes. It is fundamental to understand why risk procedures are not implemented and to find a way to raise awareness of the potential benefits of risk and control measures. The topic is current, and the multidisciplinary perspective and mixed-method approach enhance both theoretical and practical contributions for academics and SME owners.

... ISO 13485:2003 refers to ISO 14971, a standard for medical device risk management, recommending it as complementary and a sometimes obligatory item to be included in the management system. Although it is not required in some countries, it is strongly recommended that organizations take its applicability or relevance into account before developing their own risk evaluation process (Westgard, 2013, Ullmann et al., F o r P e e r R e v i e w , Troschinetz, 2010, Razak et al., 2009. ...

... The adoption of RDC No. 59 is compulsory, while ISO 13485 is an exporting requirement in many countries, in addition to the hardships companies face getting certified, compliance with such standards is seen as a mere notarial aspect, which does not correspond to the reality of managing manufacturing systems. These initiatives should create real value for developing an integrated management system (Bernardo et al., 2012, Razak et al., 2009. ...

... Bell and Omachonu (2011) comment that few quality system researchers target the implementation process for analysis. Implementation is also receiving attention from medical device manufacturers, as can be seen in the work of Luczak (2012) and Razak et al. (2009), which provides guidelines for QMS adoption, implementation and use. This paper adopts the "Cambridge Process or Engineering Approach" for systematizing the implementation process. ...

Purpose – The purpose of this paper is to develop and test a quality management system (QMS) implementation process for a medical devices manufacturer, which are covered by ISO 13485:2007 and RDC No. 59:2000 and based on operations strategy content definitions. Design/methodology/approach – The research strategy is based on the Cambridge approach which is supported by action research techniques for producing "application" processes. This research strategy is also known as the "Process Approach" or "the Engineering Approach" and was developed in the mid-1990s by researchers from the "Institute for Manufacturing" (IFM/University of Cambridge). Findings – The results reveal how real conditions "shape" implementation, indicating solutions for integrating procedures for performance and control indicators that represent manufacturing strategy objectives. The regulatory framework and the manufacturing environment offer these real conditions. The operations strategy that is underlying implementation shows how to reconcile regulation and strategy through its content. Research limitations/implications – The developed process can be improved by increasing the number of test cases until they bring no new contributions for its evolution. However, because it is a long-term and complex implementation process, the present research was concluded with a full understanding of process development. Practical implications – The QMS implementation process based on the Cambridge Engineering approach creates several opportunities for discussing QMS design requirements, but also in testing procedures for quality policy deployment. Learning by doing is a practical contribution of the process as a participative component effectively applied in different moments at the mentioned workshops – WSH. The logical organization of the QMS implementation process shows causalities among manufacturing strategy, QMS and performance measurements, creating strategic coherence among the connected elements. Originality/value – Although many studies had approached the QMS implementation, few of them actually addressed the system integration with the business strategic objectives. None of the studies to date related the implementation to the ISO 13485:2003 and the RDC No. 59.

... Therefore, to ensure compliance with regulatory requirements, the challenge for manufacturers is to determine which information technology (IT) and software systems need to be validated and how much validation is appropriate (McDowall, 2005;Hrgarek, 2008). While larger companies in general have sufficient resources to outsource CSV to external service providers, the implementation and application of CSV in small and medium-sized enterprises (SMEs) is often tedious and complicated due to limited resources, e.g., lack of human resources or insufficient financial resources (Razak et al., 2009;Buschfeld et al., 2011). ...

... 829, they cannot always reflect the existing diversity of industries, size differences, or special requirements of, in particular, small and medium-sized medical device manufacturers. In addition, the implementation of these directives in SMEs is often hampered by limited resources, such as the lack of existing staff capacities or insufficient funding (Nguyen, 2009;Razak et al., 2009;Buschfeld et al., 2011). With regard to the aforementioned key problem, the following research questions are to be answered within the scope of this research: ...

The medical device industry in Europe is one of the sectors actively regulated by directives. Medical device manufacturers face the challenge of implementing the statutory regulations. In the context of current trends regarding the digitalization of enterprises, among other things, a focus is on the computer system validation (CSV). The present research shows why the CSV in the medical device industry is necessary, which different validation approaches exist, and which tasks and activities are to be carried out within the CSV. One focus of this research is the critical consideration of the problems associated with CSV for small and medium-sized enterprises (SMEs). As a result of this research, it can be stated that the identified literature sources are very homogeneous, and the validation approaches do not show any significant differences.

... 829, however, these cannot always reflect the existing diversity of industries, size differences, or special requirements of, in particular, small and medium-sized medical device manufacturers. In addition, the implementation of these directives in SMEs is often hampered by limited resources, such as the lack of existing staff capacities or insufficient funding (Nguyen, 2009;Razak et al., 2009;Buschfeld et al., 2011). With regard to the aforementioned key problem, the following research questions are to be answered within the scope of this research: ...

Marius Schönberger

The medical device industry in Europe is one of the sectors actively regulated by directives. Medical device manufacturers face the challenge of implementing the statutory regulations. In the context of current trends regarding the digitalization of enterprises, among other things, a focus is on the computer system validation (CSV). The present research shows why the CSV in the medical device industry is necessary, which different validation approaches exist, and which tasks and activities are to be carried out within the CSV. One focus of this research is the critical consideration of the problems associated with CSV for small and medium-sized enterprises (SMEs). As a result of this research it can be stated that the identified literature sources are very homogeneous, and the validation approaches do not show any significant differences.

O PRESENTE ARTIGO TEM POR FINALIDADE IDENTIFICAR OS IMPACTOS PÓS-CERTIFICAÇÃO DO SISTEMA DE GESTÃO DA QUALIDADE SEGUNDO A PERCEPÇÃO DE TRABALHADORES E GESTORES DE UMA PEQUENA FABRICANTE DE DE PRODUTOS MÉDICOS, A QUAL FOI CERTIFICADA, RECENTTEMENTE, PELAS NORMAS ISO 9001 E ISO 13485. COM O OBJETIVO DE IDENTIFICAR SOB QUAIS PONTOS DE VISTA ESTE TEMA TEM SIDO ESTUDADO, BEM COMO AS NORMAS ABORDADAS E OS PRINCIPAIS RESULTADOS OBTIDOS, OPTOU-SE POR REALIZAR UMA REVISÃO SISTEMÁTICA DE ARTIGOS CIENTÍFICOS PUBLICADOS EM PERIÓDICOS INTERNACIONAIS, O QUE PERMITIU A IDENTIFICAÇÃO DE UM GAP NA LITERATURA NO QUE TANGE AO ESTUDO DA ISO 13485, ALÉM DO APRIMORAMENTO DO INSTRUMENTO DE COLETA DE DADOS. REALIZOU-SE UM ESTUDO DE CASO EM UMA PEQUENA EMPRESA FABRICANTE DE PRODUTOS MÉDICOS COM A UTILIZAÇÃO DE ENTREVISTAS ESTRUTURADAS. O ARTIGO CONTRIBUI, DE FORMA PRÁTICA, COM A IDENTIFICAÇÃO DOS PRINCIPAIS IMPACTOS PERCEBIDOS POR GESTORES E TRABALHADORES DE OPERAÇÃO DECORRENTES DO PROCESSO DE CERTIFICAÇÃO RELACIONADOS A ASPECTOS OPERACIONAIS E DE GESTÃO (I.G. INFLUÊNCIA NO PCP, COMUNICAÇÃO, CARGA DE TRABALHO, AMBIENTE DE TRABALHO, ETC). ESTE TRABALHO DIFERENCIA-SE DOS ESTUDOS ENCONTRADOS NA LITERATURA QUANTO AO SETOR (PRODUTOS DA ÁREA MÉDICA) E NORMA (ISO 13485, ALÉM DA ISO 9001) ESTUDADOS, ALÉM DA FORMA DE ANÁLISE (CONSIDERANDO E DIFERENCIANDO AS PERSPECTIVAS DE TRABALHADORES E GESTORES).

Hanuv Mann
Inder Mann
Nehul Gullaiya

The alignment of strategic sustainability goals can be very challenging for industries where stringent product requirements restrict the ability to innovate environmentally friendly alternatives. This case studies an instance of medical equipment being designed to increase functionality and decrease disposability, creating greater utility. The primary outcome of this research is a demonstration that cost is not prohibitive when introducing reusable medical tools and equipment when innovative solutions satisfy stringent standards and can provide superior functionality.

The medical device industry is one of the important industries in the world, which is now growing rapidly with an estimated market growth rate of about 10 percent annually. In 2012, the value of global market for medical devices was USD307.7 billion, while the market in Malaysia is expected to grow by 15.9 percent annually and reached USD2.8 billion by the year 2017. There are more than 180 manufacturers of medical devices in Malaysia involved in the production of sophisticated products such as orthopedic products, surgical instruments and dialysis machines. Recently, local companies experience the trend towards complying with internationally recognized quality standards such as ISO13485 as an attempt to penetrate the global market. However, there is a religious need to provide medical devices that are certified halal in order to cater to the needs of Muslim consumers who make up 64.3% of the Malaysian population. Therefore, this article will discuss the trend of medical device industry in Malaysia, recommendations and challenges in the development of halal medical devices. The article focuses on the application of surgical sutures that frequently implanted in the human body compared with other medical devices. This study discovers that there are two major challenges in the medical device industry namely, (i) lack of law on halal which specifically subjected to the medical devices, and (ii) halal aspect is not mentioned in the present medical device standard to guarantee the quality of products in order to compete globally.

Burhan F Yavas

The paper explores the perceptions of different dimensions of product quality that managers in the US and Asian manufacturing firms may have and investigates some of the implications of these differences. Survey data analyzed using factor analytic methodology to develop "quality inventory". Firms were then classified into two groups using the condensed quality dimensions (factors) as the set of predicted variables with the purpose of investigating if the two groups differ. Finally, several hypotheses relating to the question of how managers perceive product quality are tested. Quality attitudes in the two groups appear to be more similar than dissimilar. However, there are some differences on views of how quality is operationalized.

Richard C. Fries

The Basics of Reliability Reliability The Concept of Failure The Product Design and Development Process The Concept Phase Defining the Device Safety and Risk Management Documents and Deliverables The Feasibility Phase The FDA The Medical Devices Directives Important Medical Device Standards Human Factors Requirements Engineering Liability Intellectual Property The Project Team The Reliability Goal and Plan Documents and Deliverables The Design Phase Hardware Design Hardware Risk Analysis Design and Project Metrics Design for Six Sigma Software Design Software Coding Software Risk Analysis Software Metrics Documents and Deliverables Verification and Validation The Basis and Types of Testing Hardware Verification and Validation Hardware Data Analysis Software Verification and Validation Software Data Analysis Documents and Deliverables Design Transfer and Manufacturing Transfer to Manufacturing Hardware Manufacturing Software Manufacturing Configuration Management Documents and Deliverables Field Activity Analysis of Field Data Monitored Activity Appendices Index

Lynn W. Phillips
Dae Ryun Chang
Robert D. Buzzell

This study uses a causal modelling methodology to examine competing methodological and theo- retical hypotheses concerning the effects of prod- uct quality on direct costs and business unit re- turn on investment (ROI). Results show that the PIMS' measures under study exhibit high reliabil- ity across all samples. The findings fail to support the widely held view that a high relative quality position is incompatible with achieving a low rel- ative cost position in an industry.

Stephen Murgatroyd

This paper examines the use of Quality Function Deployment (QFD) methods for the design, development, and delivery of courses and programs through distance education. QFD is a methodology for ensuring that the needs of students provide the design basis for activity in organizations and that the assessment of quality is constantly related to student needs.

Mohamed Zairi

Total quality management continues to spread in industry and commerce on a global basis. Despite the various levels of scepticism and doubt expressed on its potential to lead to competive benefits, TQM continues to reshape organizations at all levels. When one looks at providers of education and training, there is little evidence to suggest that there is a high degree of enthusiasm and positive response to the challenges that industry has to face. Analyses how education is responding to TQM implementation and highlights the various obstacles. Discusses the critical aspects of TQM implementation in education and the areas which need to be addressed for a complete and radical transformation of education and training provision capable of meeting modern business requirements. Finally, suggests a way forward for developing an integrated approach to total quality education (TQE) which will assist providers of education and training to become more competitive.

Masoud A. Azhashemi
Samuel K. Ho

Presents the Japanese initiative of total integrated management and identifies the multiple factors which can influence management quality and business performance in organisations. Explores the UK/European model for business excellence and the process of self-assessment that can be applied by organisations in all sectors to improve their business results and competitive superiority. Compares the main features of the Japanese and the European frameworks and notes their differences together with their benefits and possible downsides. Uses case examples to demonstrate the application and the implications of these initiatives to practising managers. Concludes that for organisations to be effective they should use the dynamics of the integrated business excellence tools and value the quality level of the management policies and strategies as key success factors

In order to formulate an effective strategic plan in a customer-driven education context, it is important to recognize who the customers are and what they want. Using Quality Function Deployment (QFD), this information can be translated into strategies to achieve customer satisfaction. Since the final strategic plan relies heavily on the way QFD is used, this paper will first describe the existing problems in its use and then propose a better way to improve it. In this paper, the customers are divided into two major parties, namely, the internal and the external customer. The internal customer comprises of the lecturers and the students, while the external customer is the employers of the graduates. After collecting the Voice of Customer (VOC), the Analytic Hierarchy Process (AHP) technique was employed to generate the priorities of the VOC for each group of customers. Then, the results were used as the input for formulating strategies or Quality Characteristics (QCs) to meet the Demanded Qualities (DQs) using QFD. A simple case study is provided to demonstrate the usefulness of the methodology. A sensitivity analysis was also conducted to anticipate the changes in the DQs that will affect the output of the QFD. This is useful for providing a better strategic planning for the education institution to meet the future needs of its customers.

Source: https://www.researchgate.net/publication/241702033_ISO_134852003_Implementation_reference_model_from_the_Malaysian_SMEs_medical_device_industry

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Freeman Shapleigh

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