A Review on Major Business Excellence Frameworks

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technics technologies education management

Abstract

In increasingly competitive business environ-ments, business excellence models play crucial roles in organizational successes. Numerous or-ganizations implement business excellence mod-els to obtain business excellence. To monitor the progress towards business excellence, thousands of organizations across the world use business ex-cellence frameworks. This paper reviews the prin-cipal concepts of excellence and the leading quali-ty awards, including the Deming Prize from Japan, the Malcolm Baldrige National Quality Award (MBNQ) from the United States, the European Foundation for Quality Management (EFQM) ex-cellence model and The ISO 9000 quality system and describes how they may be applied to direct organizational improvement by means of the pro-cess of self-assessment. Ultimately, these business excellence frameworks were evaluated against a set of 12 sub-systems which they constructed to include all aspects of the Total Quality Manage-ment philosophy. The results of this evaluation have been discussed as a summary of comparison between major business excellence frameworks.

Key words: Total Quality Management, Busi-ness Excellence Models, EFQM, MBNQA, Dem-ing Prize, ISO 9000

Introduction

The late 1980s and early 1990s perceived a worldwide perception of the strategic significance of quality, and numerous countries instituted pro-grams to recognize quality and excellence. These enterprises pursued the earlier instance of Japan, which commenced to identify quality practices with the run of the Deming Prize in 1951. The framework and criteria for these award programs

enhanced quality to a strategic level, and cause some of the thoughts of business excellence which they are well known nowadays. The greater num-bers of these programs have experienced constant improvement in structure design and award ad-ministration [1, 2].

Companies following an excellent strategy promptly knew that the award structures presented more than just a tool for recognition. The frame-works were perceived to be best-practice models for executing excellence strategies, directing self-assessments, benchmarking and, finally, express-ing improved performance [3-7].

In addition, quality award criteria, including the Japanese Deming Prize, the MBNQA, and the EFQMs excellence award are perpetually be-ing applied by companies in both the private and public sectors to perform self-assessments in order to assess their improvement progress and poten-tial [8]. Every award criterion makes a structure of standardized items against which a company is able to assess its performance. This standard-ization lets contrasts to be done and best-in-class performance recognized [9]. Achieving to one of these annual awards is a highly esteemed happen-ing, but the most useful point is being the assess-ment process itself which is expressed by appli-cants regularly [10-12].

Since last ten years, the award frameworks and award processes over the world have improved continually as the most current ideas on quality and excellence have been included. In this process there has been growing assembly of all the excel-lence models and because we are still some way from a Unified Global Model, the majority of the models have a high level of commonality [13-15].

In several countries, governments have sup-ported national quality awards to encourage qual-ity excellence for organizations to reach world-

A Review on Major Business Excellence FrameworksJ.Dodangeh1, M.Y. Rosnah1, N.Ismail1, Y.Md.Ismail2, M.R.Biekzadeh3, J.Jassbi41 Department of Mechanical and Manufacturing Engineering, University Putra Malaysia (UPM), Malaysia,2 School of Manufacturing, University Malaysia Perlis, Malaysia,3 Senior Staff Researcher in Artificial Intelligence Center, MIMOS Berhad, Malaysia, 4 Department of Industrial Management, Islamic Azad University, Malaysia.

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class standards. During the last few years, vari-ous national quality awards have been founded around the world and the majority of the awards are designed following the three principal quality awards, comprising the Deming Award, the MB-NQA and the EQA [3, 16, 17].

2. Literature Review

Fundamental concepts of excellence

Although most excellence approaches take roots in to TQM, the excellence concept as defined in most excellence models is more holistic in nature rapport with the earlier models of TQM. Obviously, thorough integration of the improvement activity into the company is yielded by business excellence or organizational excellence. Business excellence or organizational excellence is not an extra part which is added to business as usual. The main ideas of excellence comprise (Deming, 2009; NIST, 2009; Porter, et al., 2004):

* Leadership: The particular leadership practices of determining an obvious direction and values for the company, initiating customer focus, and authorizing the company and its employee in the following of excellence are crucial to all excellence approaches.

* Customer focus: Product quality and service delivery is judged ultimately by the customer. Customer faithfulness and memory are best obtained by recognizing the present and future demands of current and prospective customers. The customers opinion is important in modelling the product or service offer, and in planning the processes that influence on the customer.

* Strategic alignment: All the excellence models focus on the prominence of strategic development, alignment and planning. With regards to this matter, an excellence approach can be distinguished from numerous types of TQM programs, while an absence of strategic integration regularly causes bolt-on quality programs.

* Organizational learning, innovation and improvement: Motivating individual and organizational learning, innovation and

improvement using the impressive sharing of knowledge and information is a vital component in an excellence approach.

* People focus: An organizations prosperity is considerably relied on the knowledge, skills, creativity and inspiration of its people. This people potential is best controlled by way of shared values provided by a culture of faith and authorization. Esteeming people is a key factor in an excellence approach.

* Partnership development: Companies require developing longer-term strategic reciprocally useful partnerships with a variety of external partners, comprising customers, suppliers and education organizations. Prosperous longer-term partnerships concentrate on giving constant value for the partners.

* Fact-based processes management: Processes are the engines that provide every organizations value offer. All excellence approaches concentrate on developing processes to comply with customer needs, systematically administering processes assuming facts and improving processes based on customer feedback and response from the process itself. Process ability depends on the capability of the organizations processes to comply with customer needs.

* Results focus: Excellence is involved in providing value for all the critical stakeholders, comprising customers, employees, suppliers and partners, the public and the community at large. Balancing the requirements of all these critical stakeholders is an important element of progressing prosperous strategies.

* Social responsibility: Responsibility to the public, ethical behavior and good citizenship are prominent in an excellence approach, and are important to the longer-term benefit of the company [18-20].

The Malcolm Baldrige National Quality Award (MBNQA)

The MBNQA was instituted in 1987, when congress approved the Malcolm Baldrige Nation-al Quality Improvement Act. Following the earlier secretary of commerce, the award is called Mal-

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colm Baldrige, and is planned to deliver reward and encourage quality enterprises. It is created to identify organizations that institute and display high quality standards. The award is offered to no more than two organizations in each of three clas-sifications, including manufacturing, service, and small business. Motorola Corporation, Xerox, Fe-dEx, 3M, IBM, and the Ritz-Carlton are previous winners. A lengthy application must be lodged by organizations followed by an initial screening in order to compete for the Baldrige Award. Organi-zations that succeed this screening depart toward the subsequent step, in which a severe assessment process will be administered by certified Baldrige examiners. The examiners carry out site inspec-tions and examine various organizations docu-ments and records. They found their assessment on seven categories, which are illustrated in Fig-ure 1.

Figure 1. The Malcolm Baldrige National Qual-ity AwardSource:[21]

Categories Points 1. Leadership 2. Strategic Planning 3. Customer and Market Focus 4. Information and Analysis 5. Human Resource Focus 6. Process Management 7. Business Results

TOTAL POINTS

The first category is leadership. Examiners regard commitment by top management, their attempt to establish an organizational condition dedicated to quality, and their active concerning with elevating quality. In addition, they consider

120 85 85 90 85 85 450

1000

the companys tendency toward complying with customer, community and even society require-ments and requests [22, 23].

The second category is strategic planning. The examiners search for a strategic model with high quality aims and particular methods for execution [24].

The next category which is customer and mar-ket focus is based on how the organization gath-ers market and customer information. Prosperous organizations are supposed to apply a diversity of tools toward this end, including market surveys and focus groups. Consequently, the company re-quires showing its action on this information [25].

The fourth category is information and anal-ysis. Examiners assess how the organization achieves data and how it acts on the information. The organization requires displaying how the in-formation is apportioned within the organization and with other parties, comprising suppliers and customers [26].

The fifth and sixth categories are related to management of human resources and management of processes, respectively. As a whole, these two categories together are associated with the people and process issues. Human resource focus is in-volved in issues of employee participation which includes continuous improvement programs, em-ployee training, and functioning of teams. In fact, employee involvement is proposed as a vital com-ponent of quality. Likewise, records of processes, application of tools for quality improvement in-cluding statistical process control, and the level of process integration within the company are in-volved in process management.

The last Baldrige category which absorbs the greatest importance is business results. Various measures of performance from percentage of faulty products to financial and marketing mea-sures are considered. Organizations require dis-playing progressive improvement in these mea-sures during time, not only a one-time improve-ment. The Baldrige criteria have developed from simple award criteria to an inclusive framework for quality evaluation. Numerous organizations apply these criteria to assess their own perfor-mance and determine quality goals, even though they are not intending to officially achieve to the award [13, 27, 28].

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The Deming Prize

The JUSE instituted the Deming prize in 1951 in acknowledgment of Dr. W Edwards Demings work in the area of industrial quality control. Ap-plicants must describe progress with respect to ex-ecuting the following situation [2, 13].

1. How are policies defined and transmitted? What results have been obtained?

2. How are areas of responsibility and power clarified? How are collaboration improved and quality control conducted?

3. How is quality control instructed, and how is training presented to employees? How much are QC and statistical techniques comprehended? How are QC circle activities employed?

4. How is information gathered and shared within different parts of inside and outside of the company? How well is it employed? With which quickness?

5. Are important problems found and analyzed against general quality and the production process? Are they interpreted properly, employing the appropriate statistical methods?

6. How are standards applied, managed and systematized? What is their effect on the improvement of company technology?

7. Are quality procedures reexamined for maintenance and improvement? Are responsibility and power or authority investigated, control charts and statistical methods examined?

8. Are all components of the production operation that are necessary for quality and reliability (from product development to service) inspected, in company with the quality assurance management system?

9. Are products of adequately good quality being vended? Have there been betterments in quality, quantity and price? Has the whole organization been improved in quality, interest, scientific manner of thinking, and determination to work?

10. Are strong and weak sides in the current status identified? Is promotion of quality control designed and distinctly possible to go on?

Furthermore, the judges can consider these is-sues:

Profits

Cost controls Research Product development and design Equipment maintenance Instrumentation and inspection Manufacturing processes Inventories Safety Personnel and labor relations Delivery performance Education and training Quality assurance coordination Complaint handling Customer opinion utilization After-sale service Relationships (Associates, subcontractors,

suppliers, customer companies)[2, 12, 13]

ISO 9000 Standards

Growing of international trade over the 1980s led to a necessity of the progression of universal standards of quality. Universal standards were per-ceived as essential for affording organizations to impartially record their quality practices around the world. Subsequently in 1987 the International Or-ganization for Standardization (ISO), which is an international organization whose aim is to found concord on international quality standards, pub-lished its initial set of standards for quality man-agement named ISO 9000 [29]. ISO presently has members from 91 countries, comprising the United States. ISO 9000 includes of a set of standards and a certification process for organizations. By reach-ing to ISO 9000 certification, organizations indicate that they have complied with the standards defined by the ISO [30]. All types of companies can apply for the standards which have obtained global ap-proval. In various industries ISO certification has turned to a need for doing business. Furthermore, ISO 9000 standards have been chosen by the Euro-pean Community as a standard for companies do-ing business in Europe [13, 27, 28, 31, 32].

European Foundation for Quality Management (EFQM)

In 1991 the EFQM started the EQA to identify proper organizations which demonstrate a high de-

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gree of commitment to quality. The most prosper-ous adopter of TQM in Europe achieves the EQA which is possessed nominally by the recipient for one year. Applicants should manifest that their ap-proach to TQM has involved considerably in ful-filling the demands of customers and employees. Companies can take advantages of applying for this quality award in several ways, comprising en-hancing the concentrations of a company and its improvement processes, encouraging teamwork, growing the awareness of the necessity of TQM. Furthermore, advantages of achieving EQA are including managing the winner by the EFQM, providing the opportunity for the winner to apply the logo of the EQA in corporate literature, obtain-ing support of the European Commission and the European Organization for Quality, and appoint-ing the winners as members of the most prosper-ous group of companies in Europe. There are four award categories comprising whole companies or parts of companies known as independent busi-nesses, operational units of companies or parts of the company known as cost centers, public sector organizations or units operating within the public sector, and small and medium enterprises or whole organizations and part organizations employing less than 250 people [12, 16, 33].

The EFQM observes that many of organizations applying its framework in Europe and all over the world is sharply growing, with more than 20,000 organizations at the present time employing the model to handle their improvement activities [13].

The EFQM excellence model (see Figure 1.2) is a non-prescriptive framework with nine dimen-sions, named criteria, of which five are enablers (leadership, strategy, people, partnerships and resources and processes, product and services il-lustrate how things are performed in the organi-zation) and four results criteria (customer, people, society and key results illustrate what is obtained by the enablers). Each criterion is weighted on the basis of its prominence; the most important crite-rion which is customer and key results has a 15 percent weighting. The four results and five en-abler criteria have a total weight of 50 percent. The Model, which identifies there are numerous approaches to reaching sustainable excellence in all aspects of performance, is established on the basic assumption that states [19]:

Excellent results with respect to Performance, Customers, People and Society are achieved through Leadership driving Policy and Strategy that is delivered through People, Partnerships and Resources, and Processes.

The models 9 boxes depict the criteria against which to evaluate an organizations progress to-wards excellence. Each of the nine criteria has a definition, which describes the high level meaning of that criterion [8, 9, 19, 34].

EFQM and ISO 9001 (2000), the Deming prize and the Baldridge Award is evaluated against a set of 12 sub-systems which they constructed to in-clude all aspects of the TQM philosophy. The re-sults of this evaluation are illustrated in table 1.1.

3. Discussion and Conclusion

The ISO 9000 series is a proper commencing point toward TQM. ISO 9001(2000) concentrates companies on the necessity to document their systems and to hold indictable systems in place. The standard stresses the need to choose rectify-ing action when mistakes take place and direct management systems towards the philosophy of continuous improvement. Nevertheless, is does not engage in the matters of statistical quality or process control in depth [30, 35-37].

Hence, the Deming prize contains most aspects of a TQM program. It is not formally involved in matters including procurement and subcontracting connections, treating, storage, labeling and safety, checking stock processes, marketing, delivery and customer service and satisfaction. Its strengths are its focus on quality control and assurance, produc-tion process and statistical quality control [35, 36].

Obviously, the Baldridge Award criteria con-centrate on a number of areas which are dealt concisely with other structures, including human resources development and management and cus-tomer satisfaction. It is not as potent with regards to needs to documentation [37, 38].

The EQA criteria stress on several area such as leadership, policy and strategy, human resources management, partnerships and resources, pro-cesses, customer result, human resources result, society result and key performance result. It is not as potent with regards to needs to documentation and handling, labeling, storage, safety, packaging,

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handling and inventory procedures. As a whole, it is an exhaustive approach for organizational eval-uation [37, 39-41].

This analysis indicated that all approaches have merits and demerits in the sense of adoption and concentration of TQM principles. No individual framework is complete or provides outstanding opportunities for business excellence. However, knowledge of the different current frameworks can help organizations to completely execute these principles and consequently grasp business improvements [20, 35, 42-45].

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Table 1. A Summary of Comparison between Major Business Excellence Frameworks

Subsystem

ISO

900

0:20

00

Dem

ing

Priz

e

Bald

ridg

e Aw

ard

EFQ

M

Management leadership/operational performance/continuous program elements/wall-to-wall deployment 2 3 4 4

Market research/ planning design procedures/ product-service development 3 1 4 4Purchasing- procurement proficiency/ contracting methods/supplier performance 3 1 2 3Handling/labeling/storage/ safety 1 1 1 2Documentation/records/ control procedures/ policies/ traceability 4 3 1 2Human resources management/ training/development/education 2 2 4 4Transformation and added value (production/service process activities) 3 3 4 4Process quality control/ standards/quality results/benchmarking/auditing 4 3 4 4Inspection/testing/test equipment/tagging/ corrective action/ control of non-conforming output 3 4 3 4

Packaging/handling/inventory procedures 2 1 1 2Marketing/distribution/delivery/ installation/operation 0 1 2 3Customer service/customer satisfaction/ guarantees-warranties 1 1 3 4Codes: 0 No attention, 1 Slight attention, 2 Moderate attention, 3 Heavy attention, 4 Great attention

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Corresponding Author J. Dodangeh Department of Mechanical and Manufacturing Engineering, University Putra Malaysia (UPM), Serdang, Malaysia, E-mail: [email protected]

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