A quality management system (QMS), which is a functional area that exists on its own and practically does not affect the company’s business results. What is the reason for this phenomenon? In this article, the authors have tried to answer this question.
When implementing organizational projects in the field of improving the efficiency of companies, we are constantly faced with such a phenomenon as an “isolated quality management system”.
External Reasons
According to ongoing surveys, the need of Indian enterprises for a certified QMS, as a rule, is explained by external reasons, such as:
- the need to enter international markets.
- obtaining the opportunity to fulfill the state order.
- the presence of requirements from the legislation, customers, parent companies.
- the need to participate in tenders for the supply of products (services).
- the need to attract investments, loans.
Thus, most projects for the development and implementation of QMS are carrying out voluntarily and forcibly, which gives rise to the “formal” implementation of the QMS, aimed at obtaining a “certificate of health status, and not at the actual achievement of this health”, i.e., the creation of an effective management system that leads to commercial success.
Understand core of QMS
As a rule, as a result of such a “formal implementation”, there is a feeling of dissatisfaction with the results of the implementation of the QMS, a lack of understanding of the need and significance of these works for the enterprise on the part of shareholders, managers, and personnel of the organization.
In connection with this practice, the idea of introducing QMS in India has largely discredited itself. And here the point is not even in the dishonesty of consulting, which easily finds clients interested in formal implementation, but in the incorrect positioning of quality management in the overall management system.
Functions of Enterprise | QMS
To understand the place of QMS in the management system, all functions of the enterprise are classified into three groups (Program 1):
Group A
Primary activities aimed at implementing the processes of the product life cycle (services): the manufacture of specific products (for example, cars or corrugated packaging) or the provision of services (for example, medical care or engineering) and closely related operational management functions (planning, control, regulation).
Group B
Management activities aimed at improving and increasing the efficiency of the main and managerial functions of group A.
Group C
Activities aimed at regulating the performance of the functions of group B. Based on experience, for most Indian
At the present stage of their existence, only the activities of group A are most critical. Performance management is already from the scope of the functions of group B. But the presence of QMS is a rare example of systematized functions of group C.
In other words, the QMS “sets” the requirements for building an efficiency management system and “monitors” compliance with the principles of their implementation. That is why the standards for management systems are universal for all enterprises, since the activities of Group A are unique. It is a subject of competition in the modern world, and otherwise it is necessary to know and skillfully apply various library management technologies.
What is the situation with this in Indian companies?
After a long period of extensive growth, the most advanced enterprises, mainly for the purpose of cost management, begin to think about increasing profits by optimizing management processes, i.e., they begin to deal with the functions of group B.
In most other enterprises, not only was there no performance management system, but also any efforts in this direction were observed with difficulty. Fortunately, the market allows.
And then they were offered to certify the non-existent system for compliance with the best world practice. As a result, such a managerial “big leap” was beyond the power of many, and the matter was reduced to imitation of the system with mutual satisfaction of the parties.
The QMS worked on its own, and the enterprise worked on its own. And now great efforts are needed to restore the confidence of managers and owners of enterprises in the systems and principles of quality management. But the ISO 9000 series standards objectively accumulate the world experience of successful business.
System & Process Approaches: QMS Principles
It is an effective organization that is one of the key ideas in quality management. Two of its basic principles are aimed at this – the system and process approaches.
The founding fathers of this system (for example, E. Deming) believed that at least 80% of the effectiveness of the management system lies in the good organization of the business system, the requirements for which are set by the QMS. This is the so-called structural capital – the strongest weapon of competition today.
The fact is that in the company, due to the increased dynamics of the markets, the emphasis on management is shifting. In other words, in addition to the currently prevailing “pilot” managers, who work well in a relatively stable organization, making operational decisions.
There are “flight mechanics” managers who constantly improve this organization, adapting it to changing goals and setting it up for better efficiency.
Technical System
Moreover, the organizational system is built similarly to the technical system:
Strategic goals are identified. the necessary functionality and system of processes are determined, then the desired results of the processes and the requirements for them. The design of each process is formed. the connections between them are designed, etc.
It seems that this shift in the emphasis of management to the formation of “and use of structural capital”, i.e., developed abilities of optimal organization of activities is not noticed by the majority of managers of Indian enterprises.
The task of top management, from the point of view of quality management, is to build such an effective system. And this should not be done because it is “required by the QMS”. This is required by the logic of modern business, when in the competitive struggle the winner is the one who is able to rebuild his activities quickly and better, constantly improving its efficiency (the principle of “continuous improvement”).
Organizational Design: QMS
The activity of optimizing the business system now does not even have an established name. It is most commonly referred to as “Organizational Development,” “Organizational Design,” “Organizational Management,” or “Organizational Design.” However, these activities should be carried out on an ongoing basis, i.e., they should occupy a permanent place among such traditional functions as marketing, R&D, supply, production, sales, finance, personnel, and may even displace them.
The peculiarity of this activity lies in the fact that it is not concentrated in one specialized service but should be distributed throughout the organization (the principle of “involvement”).
The entire management of the company must in one way, or another participate in improving its efficiency. Let us recall once again the statement of E. Deming: “The task of management is to improve the system, and not constant interventions in operational activities.”
That is why the person responsible for the effective construction of the organization is the main designer of the corporate architecture and claims to be the second person in the organization (ISO Recommendations).
However, these functions can be performed by the CEO, since it is good organization that allows him to move away from operational activities.
The mechanism
In addition, these responsibilities can be assigned to the quality management service. Then its employees should have a completely different level of training in the field of management. Become not only methodologists, but also “flight mechanics”, i.e., architects of the business system.
Therefore, it is more correct for the quality management service to act as a “promoter and guardian of the standard”. A carrier of knowledge about the best standardized practices, controlling whether the company’s activities are built in accordance with the fixed principles. It seems appropriate to make the quality management service one of the units of the “organizational development” service, delegating the above functions to it.
Levels
In general, the model of activity based on the above principles can be represented as follows (Figure 2):
- The upper level is the area of strategic plans and the definition of ways to achieve them.
- At the second level of the organization of the system, its effectiveness is laid.
- The next level is projects that take the business system to a new state.
The last level is the level of operational activity, which actually unites all management decisions made in the past. From this model it can be seen that most of the modern company is not focused on the current result. But on the result of the future, on future efficiency.
By the way, such a future can also have different horizons: It can be the operational efficiency of the next “budget period” and strategic efficiency achieved through the correct choice of guidelines for the company’s development.
Strategic Management
In other words, another level appeared in this model – “Strategic Management”, the requirements for the organization of which are not represented in the existing ISO 9000 series standards. In 2005.ISO/TC 176, issued the Japanese national standards “Recommendations for Sustainable Growth” and “Recommendations on Self-Assessment” (document TC 176/SC2 No. 690 JIS/TR Q0005:2005). There are some recommendations that make up the subject of novelty:
- Definition and application in intra-company management of corporate strategies and policies, taking into account the concept of sustainable development.
- Self-learning and innovation as the main technological tools of strategic development.
- integration of corporate strategy and process approach.
- In addition, new management principles have appeared in the drafts of new standards (there are now 12 of them), which should guide companies wishing to achieve success, for example:
- Understanding core competence: the organization should be aware of the key competencies it possesses or should possess, consisting of technology, production capacity, organizational capabilities, and culture.
- Agility: The organization must make decisions and act quickly, responding to and anticipating changes in the environment.
Actually, because of this efficiency, the importance of organizational management has increased, forming the ability of the enterprise to rebuild its activities quickly and effectively, responding to market challenges.
Customer Orientation approach
However, before restructuring its activities in accordance with the new recommendations. It is desirable to master in practice the principles of existing standards.(Most of them have been included in the new ones).
To begin with, you need to learn how to correctly understand their meaning. For example, the meaning of the process approach is to improve processes for the sake of a better result at the output. By adopting this understanding, we enter a new subject area – the area of managing results, not the costs of achieving them. The result is evaluates by the consumer. And the price is only one of the factors of evaluation. With which he always compares the consumer value of this result.
Recall also that the first of the principles of quality management is “Customer orientation”:
Organizations depend on customers and therefore must understand. The current and future needs of the customer, fulfill his requirements, and try to exceed his expectations.
New approach and QMS
Therefore, the second global idea of quality management is a new approach to the very concept of “quality“. Here, too, we are dealing with an unfortunate interpretation of a term that does not allow us to correctly position, and therefore apply.
The recommendations contain in the ISO 9000 series standards. Problems arise from a fuzzy demarcation with the traditional understanding of quality “as compliance with to”. The main task of the quality department.
The “quality” referred to in the ISO 9000 standard is the correspondence to the genuine needs of the customer. The value of the product or service recognized by him. If he does not see this value, then he abandons products that do not suit him, even passed the OTC, and goes to a competitor.
What contributes to this “confusion of concepts”? The fact that the first task of reproducing stable characteristics of products has not been solved in our country.
Therefore, to the question:
“Can a competitive strategy be built on the idea of operational excellence?”
We give a paradoxical answer for the whole world.
“Yes”.
Such an answer is possible precisely. Because most competitors also have not solved the problem of achieving a regularly reproduced “quality according to EU”. The “well done among the sheep” strategy works quite well.
We will not further analyze in detail other principles of quality management. But still recall that the first of them in the draft of the new standards sounds like creating customer value:
The organization must create products (services), the value of which is recognized by consumers.
Competition
This must be complete, because in competitive markets, where the buyer rules, not the seller. The rules of the game are completely different. Already, many Indian markets are becoming truly competitive. However, CEOs of companies working in such markets are wary of embarking on the path of non-price competition.
Hence the even rows of almost indistinguishable products in our supermarkets, the price of which is considerable. Although studies show tremendous opportunities in the upper price segments, and in general in quality competition. If you combine with this the already emerging competencies in cost management, then this is really the key to success.
What is holding Back Indian Companies along the way?
It is the quality of management. One can, of course, complain that “it is very expensive to produce a high-quality competitive product in our country”. The underdevelopment of infrastructure, etc., but by and large everyone is on equal terms.
It’s more about something else. Implementing a new management system is very difficult.
For example, it is necessary that in parallel with a well-developed financial and economic system. That plans and calculates the resources of the enterprise. It is necessary to build a result-oriented system, and with approximately the same degree of detail. To create an additional system of goal setting and measurement. Or rather not additional, but to accept it as the main one! “Traditional financial indicators only sum up the success of the business (the results of the autopsy).” Success itself is determined by indicators related to the value chains for the client and the achievement of his satisfaction. And such chains must be able to build and measure.
This “best practice”, fixed in the ISO 9000 series standards, is what guides the enterprises of properly constructed QMS. This is a certain standard for building an effective enterprise. Which needs to check the main organizational decisions in the field of building a business system.
The role of such a controller in the enterprise is performed by the QMS structures.