CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Embarking the total quality management (TQM) phenomenon is a call for organizational excellence. The phenomenon which started spreading like will fire across the Globe in early 1980 has been spurred on by the fierce competitions raging between companies of Japan, North America and Europe, Japan which occupies only 0.3 percent of the worlds land surface and has only 2.7 percent of the world population with no natural resources, recorded in early 1980 overall percent of the worlds gross national product. That was the period the Japanese were like to the American’s and Europeans by lending and selling quality products at prices which lower than what it was costing the Americans and Europeans to product them.
TQM is a customer forced performance enhancing tools which can be applied to any type of organization. It balances the diverse elements of business (leadership, strategic, planning, human resources development and management, work processes, management, information system, external customers, employees and stalk holders) and aligns them to achieve excellent business results. TQM aims at achieving increasing better production and services at progressive competitive prices, with minimum production or service cost. It involves doing things right in an organization on the first try, rather than making and correcting mistakes. By focusing on doing things right the first time, organization will avoid the high cost of that is associated with re-work. Many people perceive attention to quality as one of the most important competitive issues of today and tomorrow infact, quality may be one of the most important way a manager can add value to products and services to set them apart from those of this competitors.
Most business organization with in the manufacturing and service industries have in one time or the other experienced a drop in their level of productivity while some are still suffering from it till today. At one time, managers believed that there was an inevitable trade of between productivity and quality. They through that the two were diametrically opposed that is, increasing one meant decreasing the other. Today however through a systematic application of TQM, effective managers consider productivity and quality as two sides of the same coin that is increasing one meant increasing the other. Productivity simply means the ratio out put(that is the quantity of goods and services produced) to input ( that is the quantity of labour, capital, energy).
A manufacturer is faced with the problem of product development or modifications that do not meet the required specifications of a quality product, embodies all its characteristics would definitely have to device a means of preventing waste, cost re-mark. In such a situation, the ratio of resource input would be higher than what the manufacturers produces as output. More also resources will be wasted as a result of rework in trying to manufacture a quality product. This the level of productivity would be adversely affected, similarly, in the service industry, firms that render quality customers services are also confronted with the problems of cost of quality which makes it difficult for them to achieve a positive growth of productivity. This is because in rendering this quality services, there are six categories of cost which a firm must be able to prevent or control if it is to maintain a growth in productivity. But through the application of total quality management (TQM), a firm can comfortably render quality service and also increase its productivity level. The categories of cost of quality would be discussed.
1. The cost of activities which are designed to ensure conformance to agreed customer requirement cost of conformance of cost of goods quality.
2. The cost of activities which result from failure to conform to agreed customer requirements-cost of non-
conformance or cost of bad or poor quality.
3. The cost of lost opportunities-cost of lost sales.
These are the cost of activities, additional to a basic work process used in a business according to Akpeiyi (1996).
As already mentioned ,total quality management (TQM) is a management concepts that leads to achieving, the best result on the first try. It stresses on during the right things at the first time and every time. It eliminates wastes scrapes and also enables a company to avoid the problem of re0work of alternative. Be it a manufacturing or a service company. Total quality management prevents problems from occurring by creating the attitude and control that make prevention possible and also builds a philosophy of continuous improvement, efficiency, productivity and long terms success.
1.2 STATEMENT OF PROBLEMS
For total quality management to be successful, there has to be management commitment to it. In many cases, where total quality management is practiced, management often show sings of greater commitment of determination to achieve the success. Most of the companies that practice total quality management pursued their total quality management efforts for 10 years before seeing returns. This may be due to pressures faced by management to set priorities that will help to maintain or improve company’s performance. Total quality management application requires that management dedicate time, money, labour and other resources, since this is the case, total quality management often conflicts with higher priorities or initiatives. Consequently, management may out of necessity or convenience redirect its attention or resources to other priorities.
Another problems that is associated with total quality management practice which invariably have a dwindling effect on productivity is lack of skill and knowledge . not every one in a company has the prerequisite attributes to make total quality management a reality. Necessary attributes include a special knowledge of the business processes a background in statistics or some mathematical aptitude, the capacity to work as a team member, the ability to communicates effectively and the ability to take advantage of business opportunities. Nevertheless, any employees lack the necessary attributes to execute total quality management successfully or the knowledge of or experience with applying its principles tools.
It has also been observed that most organizations fail to develop a plan that outlines how to make total quality management a part of the company, implement that plan determine progress towards achieving that plan and take any necessary corrective action to improve processes of manufacturing and distribution .
Furthermore, it appears that the general feeling concerning total quality management is that employee co-operation is not recessively needed. Total quality management is seen as a culture which requires management to loosen reigns and give employee greater role in managing the firm. To make total quality management successful;, it requires greater involvement by the people doing the work.
1.3 OBJECTIVE OF THE STUDY
This work deals on the following objectives:
1. To determine the extent on which total quality management (TQM) influenced the productivity of the company Diamond Bank Ltd?