Impact of Total Quality Management on Production Cost of an Organization (A Case Study of Nigeria Bottling Company Plc, Kaduna)
Chapter One
Objective of the Study
The primary objective of the study is to identify the impact of quality management on production cost of an organization.
- To identify the challenges faced by manager in implementing Total Quality Management
- To identify the major cost component of Total Quality Management
- To identify the contribution of Total Quality Management on material and cost reduction
- To identify the method the Nigeria Bottling Company used in storage of raw material
- To identify the attributes of quality products
CHAPTER TWO
literature Review
Introduction
This chapter will look at various ideas, opinion theories and definitions on the subject matter; the research reviews existing works of those groups of people.
Evaluation of Total Quality Management
It is believed that total quality management evolves from japans who first travelled and studies have the western industry achieved quality. The listened of quality experts like Dr, Juram and Deming. They were supervised at what they saw but believed that they could do better, the works of the likes Demine, Juram and Philips Crosby the total quality management concept by the Japanese. Before this time managers though viewed quality as an expensive addition to operating closets and so quality becomes a matter of compromise that customers did not have choice. The Japanese had learnt to work another way. They invested in preventing rather than increasing level of inspection, which means makes it right the term quality was not longer an expensive addition in the words of American quality authors Philips Crosby “quality is free”.
Deming’s contribution
Before the death of Dr. Edward Demine he thought the Japanese about quality control. He designed a four days seminar for Japanese executives in 1950sand subsequently become almost a “guru” to Japanese industries. To honour his contribution to quality improvement techniques Japanese industry create the Deming Prize in 1954, high esteemed in Japanese this annual price recognized organization that have meet the qualification for supplying Company Wide Quality Control (CWCEC). Deming soon was in great demand and he signed a long term consulting contract with Ford. Demine believed that poor quality is 85% a management problems and 15% a worker problems. His recommendations for quality are Deming 14 points. But base on this the researcher review the following:
- Quality
- Cost of quality
- Quality determinants
- Responsibility for quality
- Quality control
- Inspection
- Cost of quality products.
Conceptual framework quality
Today, there is no single universal definition of quality. Some people view quality as “performance to standards. Others view it as meeting the customer’s needs, or satisfying the customer. Let’s look at some of the more common definitions of quality. This chapter will look at various ideas, opinion theories and definitions on the subject matter; the research reviews existing works of those groups of people.
- Conformance to specifications: measures how well the product or service meets the targets and tolerances determined by its designers. Conformance to specification is directly measurable, though it may not be directly related to the consumer’s idea of quality.
- Fitness for use: focuses on how well the product performs its intended function or use. You can also see that fitness for use is a user-based definition in that it is intended to meet the needs of a specific user group.
- Value for price paid: is a definition of quality that consumers often use for product or service usefulness. This is the only definition that combines economics with consumer criteria; it assumes that the definition of quality is price sensitive.
- Support services: provided are often how the quality of a product or service is judged. Quality does not apply only to the product or service itself, it also applies to the people, processes, and organizational environment associated with it. For example, the quality of a university is judged not only by the quality of staff and course offerings, but also by the efficiency and accuracy of processing paperwork.
- A psychological criterion: is a subjective definition that focuses on the judgmental evaluation of what constitutes product or service quality. Different factors contribute to the evaluation, such as the atmosphere of the environment or the perceived prestige of the product similarly; we commonly associate certain products with excellence because of their reputation.
CHAPTER THREE
Research Methodology
This chapter highlights the various methods employed in data collection .therefore it’s consist of the framework and structure adopted for the conduct of the research.
Area of the Study
This research work was conducted in Nigerian Bottling Company Kaduna plant. Situated at kakuri industrials area, Kaduna south local government Kaduna state. The study specifically makes use of production, store, engineering, inventory control and purchasing departments of the organization.
Research Design
The research design adopted in this work is the descriptive design methods because it helps in determine the relevant concept and ideas on the impact of total quality management production cost in Nigerian bottling company Kaduna plant.
Population of the Study
It is necessary to make sample from the targeted population. The system of selection of a portion from the population for examination purpose of the research consist of staffs of production store, engineering, inventory control, and purchasing department of NBC plc the population of work force is 120 staffs.
CHAPTER FOUR
Data Presentation and Analysis
The researcher made use of simple arithmetic mean to analyze data collected rule for accepting or rejection of any items on the research question is 25 .Questionnaires were used to collect data the questionnaire were administer by the researcher directly among respondents. 25 instruments were administered and all were returned.
CHAPTER FIVE
Summary, Discussion, conclusion and Recommendations
This chapter summarize the entire project work it bring out the findings arrive at a conclusion and as well made recommendations to the management on the impact of Total Quality management on production cost of an organization.
Summary of Procedure
This research is focus on the impact of total quality management on production cost in Nigerian Bottling company plc, Kaduna plant situated at kakuri industrial area of Kaduna south. Kaduna .The chapter of the study include a formal introduction to the topic under consideration of problems related to the study also identified specific objective, significance of the study and questions were developed to assist the researcher to study the situation carefully and come up with possible solutions, suggestions, for the definitions of the terms used in the study were also provided.
The second chapter of the research work center on the previous works of authors and scholars on the topic under study consideration, the definitions evaluation of the topic under consideration. Especially the contributions of Walter A. Shewhart W. Edwards Deming , Joseph M. Juran, Armand V. Feigenbaum, Philip B. Crosby, Kaoru Ishikawa , and Genichi Taguchi. Who are known as TQM gurus’ were vividly reviewed by the researcher.
The methodology adopted by the researcher is based on the area of study, research Design, Population of the study, sample and sampling techniques, instruments for data collection, Administration of the instruments, and techniques for analyzed data and the justification for using the methods etc.
Finally in chapter four, the researcher issuer out 25 questioners which all were filled and return and this formed the basis for the presentation of analysis. The instruments were administered personally by the researcher for the respondents and this was done randomly among the sample size drawn from the Nigerian Bottling company Kaduna.
Discussion of findings
In this section, the researcher discussed major findings in relation to research objectives and gave interpretations and explanations of the findings base on the research question relating the findings to existing works and knowledge. The important of TQM in Nigerian Bottling company reviled that Quality must be applied to the entire organization ranging from incoming material, in-process materials, finish products, machineries, human capacity and equipments .and it was revealed that managers gives less attention or ignores the concept of TQM in the running affairs of the organization this has lead to reductions in the Quality and increase cost of production such as prevention cost of rework and cost of discarding and waste to the organization .the research question two ask to know what are the major cost components of total quality management and also research question three ask on the contributions of quality materials on cost reduction responses from respondents shows that effective application of total quality minimize cost and waste of resources in the Nigerian bottling company.
Implications for findings
The following implications can be deduced that if action is taking or not, the findings show that TQM helps to improve the levels of service rendered to customers elimination of cost of internal failure, cost of external failure and waste and cost of rework. The study also reviled that TQM stresses that quality is an organizational effort to facilitate the solving of quality problems, it places great emphasis on teamwork using techniques such as brainstorming, discussion, and quality control tools, teams work regularly to correct problems. The study also emphasis that the new concept of TQM, which provides incentives for employees who identify quality problems should be adopted to ensure probity in the process. The study also reviled that the organization should optimize the numbers of it suppliers in order to reduce variety of unwanted material and sub standard m materials in the organization. The non implementation of these findings could lead the organization not realizing or achieving successful adherence to TQM which could leads to lost of goodwill, and lost and targeted market shares.
Conclusion
Part of the TQM philosophy is to empower all employees to seek out quality Problems and correct them with the old concept of quality, employees were afraid to identify problems for fear that they would be reprimanded. The new Concept of TQM provides incentives for employees to identify quality problems. Employees are rewarded for uncovering quality problems, not punished. TQM stresses that quality is an organizational effort to facilitate the solving of quality problems, it places great emphasis on Teamwork using techniques such as brainstorming, discussion, and quality control tools, teams work regularly to correct problems. competitive Evaluation the important thing here is to identify which customer requirements we should pursue and how we fare relative to our competitors companies know that a high reliability is an important part of customer-oriented quality and try to build this into their product design the old concept focused on inspecting goods after they were produced or after a particular stage of production. If an inspection revealed defects, the defective products were either discarded or sent back for reworking. All this cost the company money, and these costs were passed on to the customer. The new concept of quality focuses on identifying quality problems at the source and correcting them. Managing Supplier Quality traditionally, companies tended to have numerous suppliers that engaged in competitive price bidding. When materials arrived, an inspection was performed to check their quality TQM views this practice as contributing to poor quality and wasted time and cost. The philosophy of TQM extends the concept of quality to suppliers and ensures that they engage in the same quality practices. If suppliers meet preset quality standards, materials do not have to be inspected upon arrival. The responsibility of improving product and Service quality should be a company top priority due to vast knowledge that people now have on quality and eliminate in effective implementation of TQM which always result in lower sales lost of market shares and low profit, many organization that adopt this has document success as their reason for increase profitability. They see TQM as the key to create customers value and satisfaction in customers’ term which comprise the functions of purchasing, finance, store, engineering and marketing. Accurate communication needs to be build among all the function to achieve the desire result quality in customers term and in the organization.
Recommendations
Base on the finding and conclusions the following recommendations are made to the managements of Nigerian Bottling Company plc
- The company must first recognize the importance TQM as it relate to their line of business operation and direct efforts to enforce straight quality management on its materials and all process components.
- Manpower related problems should also be address to achieve superior quality. Training and development of staff should be for personnel of the company in the area of TQM, and areas as quality control, inspection, technical education and engaging the service of specialist while management should ensure accurate supervision.
- Adequate machineries and tools should be provided by the management so as to achieve higher quality to meet the defined terms of costumers.
- Standard should be set for materials input so that supplied materials can be measured against such standard. Quality requirement should be well spelt out in specifications to supplier so as to avoid conflict.
- Management should not rely on the ability of their suppliers to provide the best quality of materials .there the are received and used for production.
- The management should know that application of Quality is not only apply to the product or service itself; it also applies to the people, processes, and organizational environment associated with it with this superior quality will be achieved. Companies that consider quality important invest heavily in prevention and appraisal costs in order to prevent internal and external failure costs the Nigerian bottling company should not be an exception because The earlier defects are found, the less costly they are to correct.
- Additional quality control measure should be applied to inputs such as statistical process control, testing trial runs sampling etc.
- Inspection should be conducted before a commitment is made to suppliers and after such commitment is made so as to effectively and efficiently tackle any quality discrepancy or related problems before they occur.
- Quality of materials must be a strategic priority of Nigerian Bottling Company it seeks to achieve success as a basis for competition in soft drink industry.
- Decision on the methods of inspection, the timing of inspection and individual office to handle the function must be made appropriately.
Suggestion for further studies
In the process of conducting the research the researcher discovered some additional areas related to the studies which are not discussed in the work doe to the scope of the research. These areas are recommended or suggested for additional studies as they form a fertile grand for conducting subsequent research .they are total quality control, Continuous improvement on quality, Effective use of quality tools, Six sigma of Quality, quality cost, Prevention cost, Appraisal cost, Internal and external cost of quality, Quality function Development, Managing suppliers quality, and Process management of quality at the source.
Bibliography
- Badi,R .V.& Badi N.V (2008).production and operation management.2ND edition India: vrinda publication
- Leeders, M .R Fearon, H.E.,Flynn, A.E. & Johnson, P.F (2006) purchasing and Supply chain management, 12th Edition Boston: McGraw Hill/Irwin
- Kotler, P. & Armstrong, G.(2004). Principles of marketing .10th Edition. New York: Pearson
- Lyson, C.K & Farrinton, B.(2006). Purchasing and Supply Chain Management. 7th Edition. London: prentice Hall FT/Pearson Edition.
- Hassan, M.(2008).purchasing for the Tyro. Kaduna :Arziki Global publishers.
- Lysons, C.K. & Gillingham,M(2003). Purchasing and Supply Chain Management. 6th Edition. London: prentice Hall
- Hassan, M.(2009).Business Management. Kaduna :Joyce Publishers
- Arnold, T.J. R & Chapman, N. (2006). Introduction to materials management. 6th Edition. New Delhi: Pearson Edition
- Burt, D. N., Peteravage, s. & Pinkerton, R. (2010). Supply management: 8th Edition. Boston: Mcgraw Hill
- Jain, K.C. & Aggarwal, (2008). Production, planning, control and Industrial management .6th Edition. New Delhi: Khanna publishers
- Baily, P., Farmer, D., Jessop, D. & Jones, D.(2008). Procurement principles and management. 9th Edition London. Prentice Hall/FT
- Stevenson, W .J. (2007). Operations management, 9th Edition Boston: McGraw Hill/FT
- Pinto, J.K. (2007).project management. Achieving competitive Advantage. Upper Saddle River, NJ, Pearson Prentice Hall