TQM IN SERVICE INDUSTRIES

ABSTRACT

Total Quality Management (TQM) has emerged as a potent competitive weapon in increasing productivity and improving quality in many manufacturing firms.  Lately, many service industry organizations have started to implement TQM as well.  This paper discusses the essential elements for successful TQM implementation in hospitals and universities, as well as the challenges that occur with such implementation.

Keywords:  Total Quality Management, Service Industries, Hospitals, Universities


1.  INTRODUCTION

In the eighties, American companies faced severe competition from high quality Japanese products.  As a result, many American companies reluctantly adopted a "Quality Focus" approach to manufacturing.  Slowly but surely, many quality management philosophies and techniques, such as customer focus, teamwork, employee empowerment, continuous improvement, and Statistical Process Control (SPC) have been introduced and practiced widely by most major manufacturers.  The results have shown a significant improvement in product quality, and increased productivity and profitability, as well as competitiveness of American companies.

In the last several years, there has been a great deal of interest among service organizations, hospitals and academic institutions in particular, to adopt TQM concepts.  TQM generally refers to an organization-wide commitment to the continuous improvement in the quality of its products and/or services.  This implies that the process of delivering services should be guided by four key concepts:

1.	Serving the customer
2.	Respect for people
3.	Managing with facts
4.	Continuous Improvement

In translating these concepts for use in their environment, hospitals and universities face many opportunities as well as challenges.  Hospitals and universities are indeed at the edge of new territory when it comes to implementing TQM.  There is still limited TQM experiences in the service industries.  However, more and more hospitals and universities are willing to leap into the unknown, face the challenges and reap the rewards of high quality and cost effectiveness.


2.  TQM IMPLEMENTATION IN HOSPITALS

In recent years, many hospitals have been under constant pressure to become more cost effective.  The rising cost of health care, the increased government intervention, the pressure from insurance companies, and stiffer competition are all forcing hospitals to look for ways to improve and become more efficient.  In addition, hospitals are now required to adopt the approach and methods of continuous quality improvement as part of their accreditation requirements by the Joint Commission on Accreditation of Health Care Organizations [17].  The Joint Commission accredits approximately eighty percent of the nation's hospitals [16].  Since 1994, the accreditation standards are incorporating more extensive changes in quality improvement activities [4].

The quest for quality improvement by this $600 billion a year industry has just begun and TQM (or Continuous Quality Improvement [CQI] as it is usually called in health care), if applied intelligently in hospitals, might provide the necessary means and tools to make hospitals more cost effective and to improve service quality.

Applying TQM philosophy and tools in hospitals is a challenge, to say the least.  McLaughlin and Kaluzny [12] state that the current direction toward TQM is a paradigm shift conflicting with the way the health care industry is currently run.  In reviewing the existing literature, hospitals implementing TQM/CQI are facing primarily four challenges.  First is the commitment to quality efforts by health care professionals.  Second is the question of who the customer is.  Third is how quality itself is defined.  The last two of these are highly interrelated.  Fourth is how to define and manage processes with Statistical Process Control techniques in a hospital setting.

COMMITMENT OF HEALTH CARE PROFESSIONALS

Historically in health care, it has been the professional, and his/her function/skill that has been the object of quality assessment.  To now begin emphasizing the process, which is integral to TQM, and take away control from the professional is a major issue.  Thus gaining the professional's cooperation, and possibly acknowledging quality problems, may be a major obstacle.  In addition to his/her initial cooperation, obtaining the professional's time commitment to quality programs is also vital for achieving success.  Mueller [15] states that, to be successful in implementing TQM in health care, one should not suggest that improvements will be made in the professional provider's work but that patient satisfaction will increase.  No implication regarding less than top quality should be perceived by the professional.

Godfrey, et al. [5] cites problems regarding unsalaried physicians' willingness to attend time-consuming meetings during which their beepers often go off requiring their exit.  The authors indicate however that doctors often emerge as champions in the TQM process and should be involved from the beginning.  Lawrence and Early [9] stress that the physicians play a crucial role in the management of health care quality.

In his articles supporting TQM in health care, as well as the use of current statistical process control methods and voice of the customer surveys, Milakovich [13] cites the necessity of top management involvement to sustain the long range process.  McCarthy [16] lists "if the CEO is charged up to lead a TQM change" as one of three criteria required before initiating a TQM effort.  Godfrey et al. [5] indicates that CEOs, board members, and other senior executives must be committed to investing great amounts of time and energy for TQM to be successful, stating that TQM must be owned by the top of the organization.

WHO IS THE CUSTOMER?

A very complex issue presenting a problem with the implementation of TQM in health care is the designation of the customer.  This designation plays a major role in determining the focus of the quality effort, the measures of satisfaction that must be gathered and analyzed and the processes that are initially targeted for quality improvement are dependent on customer designation.

Physicians may be designated as suppliers as well as customers of hospital services as are nurses.  In its preamble to the "Quality Assessment and Improvement" chapter from the 1992 Accreditation Manual for Hospitals, the Joint Commission [17] states: "A hospital can improve patient care quality--that is, increase the probability of desired patient outcomes, including patient satisfaction, by assessing and improving those governance, managerial, clinical, and support processes that most affect patient outcomes."

Lawrence and Early [9] stress that, to be successful, a strategy must 
attract and retain customers making the customer satisfaction focus 
imperative.  Thus, customer focus must be the bottom line as it is with quality efforts in other industries.  However, the customer to be attracted and retained may well be a new physician just as well as a patient.  The Joint Commission's preamble continues to emphasize the importance of coordinating and integrating the multiple groups involved in carrying out the processes that affect the patient outcomes, therefore, acknowledging the internal customer.  Omachonu [16] also stresses the importance of identifying the needs of internal customers, in addition to those of external customers, for quality specifications as is standard procedure for TQM philosophy.

WHAT IS QUALITY?

While the definition of quality is obviously dependent on which customer is making the definition, Morrison and Heineke [14] stress the complexity in the number of variables involved in providing medical treatment to particular types of customers and thus the complexity of the quality definition.  This makes health care unique and, at the same time, difficult for specifying measurable quality outcomes.  Gummesson [6] states that "Total quality is viewed as customer perceived quality."  This presents another difficult aspect for quality assessment in health care.  The patient himself, by not following medical advice may decrease a previously high quality outcome.  Measures of quality may include quality as perceived by 
those providing medical processes, measures based on financial/cost- control attributes, or patient satisfaction indices.  The question of the patient's ability to measure quality may also be debated.  While patients are often not technically qualified to judge the quality of the care they receive, it is a judgment that they often make.

HOW TO DEFINE AND MANAGE PROCESSES WITH SPC

Though many agree with the value of using SPC tools to assist in managing processes as well as measuring and controlling quality improvement efforts in health care, there still are few examples of the actual utilization of these tools.  This may be due to the newness of the concept's application in hospital settings.  Some early examples are beginning to surface, such as Jackson's [8] suggestion to use HPDDs (hospital processes description documents) for increasing the level of understanding.  The HPDDs include flow charts on the various hospital processes involved just like those used in manufacturing industries.  Morrison and Heineke [14] have also acknowledged the value of using the standard statistical tools of TQM to assist in measuring quality in health care.  Fahey and Ryan [2] report the use of flowcharts and fishbone diagrams in Australia to asses hip and knee replacement related processes, while Matherly and Lasater's [10] report the use of Pareto charts and fishbone diagrams to describe hospital processes in a Tennessee hospital. In addition, the use of P-charts to control and improve the percentage of C-Section deliveries has been documented by Zimmerman and Stephens [21].

3.  TQM IMPLEMENTATION IN UNIVERSITIES

Lately, many universities have been taking their first steps toward employing TQM techniques in their operations, as well as in the academic side of business.  Bailey and Bennett [1] cite that the challenge to implement quality is not from international competition but from the domestic competition for qualified graduates.

Universities are very complex organizations.  A typical campus encompasses a bookstore, dining hall (restaurant), dorm (hotel), public safety (police force), plant operations (maintenance and construction company), athletics club, entertainment center, and health center (clinic).  All of which supposedly support and complement a collection of fiercely competitive (internally) academic departments that deliver the institution's core product.  Each segment shares attitudes and technologies common to its industry, albeit tempered by its association with the others and with the traditions and expectations of academe.  Hubbard [7] states that any attempt to slavishly apply Deming's, Crosby's, Juran's, or any other guru's model to every segment of an educational institution is probably doomed from the outset.  Nonetheless, the system in all of its diverse dimensions - from the registration of students to the presentation of ideas - can be managed in ways that maximize quality outcomes.  Furthermore, while there are identifiable differences between manufacturing a product, teaching a course, and delivering a service, many of the principles and techniques used in managing manufacturing quality can be applied to managing educational quality.

Adopting the philosophy of TQM and its tools in universities could revolutionize how higher education is delivered and managed.  Unfortunately, Turner [20] has found that most college faculty members perceive TQM as an alien business philosophy, especially when terms such as "customers," "suppliers" and "processes" are used.  Because of that, it is obvious that the road to TQM implementation in universities is difficult with traditional obstacles and many challenges.  In reviewing the existing literature, universities implementing TQM are facing three main challenges.  First is the faculty's resistance to change and the traditional university system.  
Second is how quality is defined.  Third is the question of who the customer is.

RESISTANCE TO CHANGE

Universities are very well structured systems that are built around professors, who value their academic freedom and are protected with tenure. Universities are also "traditional," encourage specializations, foster "compartmentalization," and do not subscribe to "competition."

Definitely some faculty will play a major role in resisting change and TQM.  Some will resist it because they believe it is a fad.  Others perceive TQM as a threat to "academia" because it brings many business terms and concepts such as customers, processes, suppliers, accountability, efficiency, cost reduction, quality, etc.  Some faculty may not trust TQM because, in their opinion, there is nothing "total," faculty exemplify "quality" and you cannot "manage" academia.
Faculty usually do great "describing" - course outlines, scheduling, what courses students should take to graduate, the qualifications of faculty to be hired, and so on.  They spend much less time, however, analyzing the way they work, teach, advise, admit or register students, or attempt to become better at what they do in a systematic and continuous manner.  Faculty are not bashful about recommending changes; that is for everyone else but themselves.  Traditional university structures are designed to withstand change, not precipitate change.  It is very difficult to institute change in a university where little perceived need for change exists.  In many ways, universities have institutionalized the old maxim, "If it ain't broke, don't fix it," while at the core of never-ending improvement is another, equally venerable maxim, "Standing still is moving backward."

WHAT IS QUALITY?

Seymour [18] cites that there is prevailing "quality" paradigm on campus - "Quality is ours to define and manage even if we are not quite certain what it's all about."  Therefore, many of the issues relating to quality are processed within the boundaries of this paradigm; one that provides comfort and stability to professors, administrators, and staff in the course of their daily decisions.

Traditionally, universities tend to define "quality" in their own technical term: the number of Ph.Ds on the faculty; number of faculty publications published in refereed journals or presentations; the size of library holdings; size of the endowment; amount secured in grants; or gaining and maintaining accreditation from appropriate accreditation agencies.  According to Seymour [18] these are the nuts and bolts of higher education, but it has become evident that employees and students, the primary customers of universities, need and want more than library books and an impressive set of faculty degrees enumerated at the end of the college catalog. Furthermore, many of the overseers and castanets of universities, such as federal agencies, parents, employers, and state citizens are increasingly raising their concerns regarding the quality of higher education.  In addition, with the continuously increasing cost of higher education, more universities are being asked to define and measure their quality in a more meaningful term to their stakeholders.

WHO IS THE CUSTOMER?

Any TQM implementation begins with identifying customers, assessing their needs and requirements, and focusing the organization's efforts to meet or exceed them.  Identifying customers in universities is a major challenge.  Universities often work with many constituencies, including students, parents who pay tuition bills, employees, government agencies, surrounding communities, and state citizens.  Fram and Camp [3] recommend that each university must determine, based on its own circumstances, how many of these constituencies are part of its customer base.

Many TQM in universities model treat students as the main customers.  This idea is probably the most controversial for educators according to Turner [20].  This idea implies a shift in power.  Customer focus means that a customer's needs should be met, and success is determined by how well those needs are met.  Therefore, instructors should measure success by how well students are learning and how worthwhile the students find their class experiences.  In addition, instructors should become more open to student feedback since it is the most important feedback they can receive regarding quality.  Sirvanci [19] suggests that students as customers can play four different roles within educational institutions.  In the first role, students are the product-in-process.  They are the raw material when admitted to the school and the finished product following graduation.  In the second role, students are the internal customer for many campus facilities, such as food services, dormitories, and bookstores for example.  
In the third role, students are the laborers of the learning process.  
Students are not just passive recipients of education; they are actively involved in the learning process.  Lastly, students are internal customers for the delivery of course material.  To improve this component of classroom teaching, the best feedback comes from the students taking the class.  In this case, student evaluations and satisfaction are appropriate measures of performance.

5.  CONCLUSIONS

By its very nature, TQM is a never ending cycle of improvement.  The quest for TQM by the service industry has been and continues to be a complex process.  However, many hospitals and universities have made significant efforts toward TQM implementation and all projections show a good future for TQM in service industries.  For successful implementation, a quality vision and strategy has to be led and supported by top management, and a wide program of communication, education and training must be followed by the use of SPC principles in managing processes.  The total involvement and commitment of everyone concerned with quality and efficiency of service are essential for TQM to be a reality._

REFERENCES

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2 - Fahey, P. and Ryan, S.; "Quality Begins and Ends with Data"; Quality Programs, 1992, vol. 25, no. 4, pp. 75-79.

3 - Fram, E. and Camp, R.; "Finding and Implementing Best Practices in 
Higher Education"; Quality Progress, 1995, vol. 28, no. 2, pp. 69-73.

4 - "Framework for Improving Performance"; 1994, Illinois, Joint Commission on Accreditation of Health Care Organizations.

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6 - Gummesson, E.; "Marketing-Orientation Revisited: The Crucial Role of the Part-Time Marketer"; European Journal of Marketing, 1991, vol. 25, pp. 60-75.

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9 - Lawrence, D. and Early, J.; "Strategic Leadership for Quality in Health Care"; Quality Progress, 1992, vol. 25, no. 4, pp. 45-48.

10 - Matherly, L. and Lasater, H.; "Implementing TQM in a Hospital"; Quality Progress, 1992, vol. 25, no. 4, pp. 81-84.

11 - McCarthy, G.; "TQM is Key to Improving Services But It's Not For Every Hospital"; Health Care Strategic Management, 1991, vol. 9, pp. 18-22.

12 - McLaughlin, C. and Kaluzny, A.; "Continuous Quality Improvements in Health Care"; 1994, Maryland, Aspen.

13 - Milakovich, M.; "Creating a Total Quality Health Care Environment"; Health Care Management Review, 1991, vol. 16, pp. 9-20.

14 - Morrison, P. and Heineke, J.; "Why Do Health Care Practitioners Resist Quality Management"; Quality Progress, 1992, vol. 25, no. 4, pp. 51-56.

15 - Mueller, R.; "Implementing TQM in Health Care Requires Adaptation and Innovation"; Quality Progress, 1992, vol. 25, no. 4, pp. 57-59.

16 - Omachonu, U.; "Quality of Care and the Patient: New Criteria for 
Evaluation"; Health Care Management Review, 1990, vol. 15, pp. 43-50.

17 - "Quality Assessment and Improvement"; 1992, Accreditation Manual for Hospitals, Oakbrook Terrace, IL: Joint Commission on Accreditation of Health Care Organizations.

18 - Seymour, D.; "On Q: Causing Quality in Higher Education"; 1992, MacMillan Publishing Co., New York.19 - Sirvanci, M.; "Are Students the True Customers of Higher Education?"; Quality Progress, 1996, vol. 29, no. 10, pp. 99-102.

20 - Turner, R.; "TQM in the College Classroom"; Quality Progress, 1995, vol. 28, no. 10, pp. 105-108.

21 - Zimmerman, M. and Stephens, S.; "Clinical Applications of Quality 
Improvement; Concepts and Tools: C-Section Process Improvement"; Journal of AHIMA, 1993, vol. 64, pp. 63-69.

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