Relationship Between Total Quality Management and Procurement

A Thorough Review of Practices of TQM and SCM based on Scholarly Sources

Management issues are very important for the success of any organization. It occurs in every detail in an organization. That is, in any given organization, things do not just happen. Everything is made to happen for a reason, and as implemented by somebody. Therefore, each activity is planned, organized, led and controlled. The four functions form the core of management. Planning defines what, where, and why an activity happens in the organization. The organization function assigns roles to employees and equips them with the necessary resources to implement the function. The leading function in management motivates employees to work towards the success of the goals of an organization. Control, on the other hand, monitors and evaluates the planning and achievement of the goals. Nevertheless, a suitable management technique has to be adopted since management as a tool for achieving success in an organization is often faced by numerous challenges. The first being the suitability of management approach and secondly, the application of chosen management approaches (Draft 2012, p. 179).

Management occurs in the presence of conflicting interests that ought to be managed effectively and efficiently. The main stakeholders for any business include customers, investors, employees, suppliers, legal and regulatory bodies, social and physical environment. The effectiveness of management lays in identifying all the stakeholders that can be affected by the business and those that may affect the business in the process of stakeholder mapping (Parker & Michael 2008, p. 30). According to Bowersox, Closs, & Cooper (2002, p. 64), management is always evolving due to the dynamism of the business environment. Thus, management has moved from case management to the process management approach. The case management approach is learning by making an approach, where a manager gains experience through hands-on practice. It is based on trial and error. The process management approach uses specific information and practical techniques to handle processes in a firm. It is an interactive process that links operations, human resources, ethics, and so forth.

Management approaches include Total Quality Management (TQM), 6 Sigma and ISO 9000 amongst others. TQM is the most dominant management approach. Other approaches, such as 6 Sigma and ISO 9000, are customization of TQM. TQM is an example of a process management technique. According to Morfaw (2009, p. 1), TQM is defined as an exclusive engagement of sections of an organization with the aim of increasing the quality of commodity. Charantimath (2006, p. 13) notes that ‘Total’, as applied in TQM, means everybody is responsible for the quality of the product. ‘Quality’ refers to the level of satisfaction derived from a product. The ‘Management’ component ensures that high quality is obtained within the organization through efficient and effective communication of institutional goals and objectives. TQM is achieved by empowering employees, increasing individual responsibility in final products, enhanced customer satisfaction, and effective and efficient communication within an organization.

According to Mandal (2011, p. 79), the components of TQM include customers, people, process, teamwork, creativity, leadership, empowerment, training and development, continuous improvement, and management of change. The components can further be summarized into two categories: customer-supplier relationships and management. The customer-supplier relationship is found on the premise that TQM considers production as a chain. It means that there is the final customer who consumes the final product. However, before that stage, a product is often received from the previous stages to have its quality increased. The recipient is considered as a customer. The next stage in production is a customer of the previous stage. Thus, there exist internal suppliers as well as external ones (Mandal 2011, p. 82). Management, on the other hand, integrates human and non-human factors involved in the achievement of objectives of a firm. It handles the relationship between various stakeholders involved in the production process. According to Morfaw (2009, p. 4), the application of TQM differs in different firms. For instance, Texas Instruments considers customer, planning, teamwork, excellence, and policy, while Hewlett Packard considers customers, management, product improvement, and planning.

The proposal seeks to evaluate the integration of TQM in green procurement. TQM has several components that are applicable in procurement. Thus, the proposed study aims at identifying processes and characteristics of procurement that are applicable in TQM and components of green procurement that relate to TQM.

Problem Statement

The application of TQM requires that the entire process is identified and analyzed to discover the components of procurement that are applicable to TQM. TQM is a process management technique that is applicable to the procurement. TQM works by identifying problems and reducing defects and errors. As a result, there are components of TQM that can be used to improve procurement. At the same time, the field of procurement has evolved with the introduction of green procurement. Thus, the proposed study will explore the various factors that should be improved to make procurement efficient, effective, and sustainable. Procurement is the core of business because it may contribute to defects and wastages (Stock & Lambert 2001, p. 32). Most recently, ethical issues have marred the image of the business in resources, and compensation of junior and resource extractors.

Research Objectives

Study Justification

The success of TQM as a management tool cannot be underestimated. Though many managers understand that TQM reduces wastage and defect in the production process, they find it difficult to translate its usage into improved procurement. Procurement is an important process in production since it establishes the amount of wastage and defects applicable to production. However, if not well executed, it can also compromise the quality of the final product. This is where TQM comes in handy. It presents a new dimension by designing a stepwise production process. It helps managers to ensure that every stakeholder is responsible for the final output. Similarly, the product is considered raw material for the subsequent stage in production. Fundamentally, the principles of TQM identify these processes before seeking to improve them. Other studies have majorly focused on other mechanisms that can also be used to make procurement sustainable. Though factors, such as ethics and environmental sensitivity, aim at achieving the same function as TQM, the tool has proved to be much effective to those knowledgeable in its application. Thus, by evaluating the extent, to which TQM can improve procurement, the study will enable organizations to know how to take advantage of TQM to improve their competitive advantage.

Initial Literature Review

According to the International Training Centre (2008, p. 2), the application of TQM is useful in procurement, where it is effected through best practices. International Training Centre considers planning, control, assurance, and improvement aspects for procurement. Effective procurement processes bring inputs, which maintain the quality and effectiveness of the achievement of organizational objectives. According to Caddick & Dale (1998, p. 135), the application of TQM in an organization alters the role and activities of procurement in an organization. The four factors identified in the studies that affect the procurement chain include supply market, organizational and cultural changes, economics, and costs. According to Sollish & Semanik (2012, p. 227), the procurement department is critical for supply management functions. However, the application of TQM is an interactive process in the development of a new product. The process may consider even identifying new suppliers. The process of implementing TQM aims at reducing the costs of materials used in manufacturing.

Lascelles & Dale (1989, p. 12), like Caddick & Dale (1998, p. 135), note that the quality of materials purchased as input is critical for the improvement of an organization. As a result, 50 percent of non-quality conformance results in ineffective procurement decisions. Lascelles & Dale (1989, p. 11), in quoting Deming note that at least 70 percent of ineffective procurement decision lies within the organization. Buyers have the responsibility of considering new responsibilities other than price. Thus, the application of procurement decisions considers new management approaches. Nonetheless, the use of quality management techniques by a firm still places responsibilities of the acquired items on the firm.

According to Bowen et al. (2012, p. 50), there is a strong link between effective management of project time, cost, and quality. These factors strongly contribute to the realization of a firm’s objectives and goals. Sollish & Semanik (2012, p. 220) note that Just-in-Time Production (JIT), human resource management and TQM help enhance the productivity of an organization. The process identifies inventory, delivery time, production time, costs, and flexibility as important factors within the model. The management approaches applied in lean production, whether Just-in-Time or TQM, implement operating performance variables, such as quality, cost, delivery, and flexibility. However, JIT only cuts costs. For a firm to realize quality, it has to implement TQM.

Talib, Rahman, & Qureshi (2011, p. 286) conclude that there are six major TQMs and supply chain management (SCM) practices that are applicable to procurement management. The studies reviewed 50 TQM practices and 40 SCM practices before settling on six Sigma. These factors include management support, management commitment, employee relations, customer focus, and supplier relations. Therefore, it can be before the strong integration of TQM and SCM. Enhanced TQM and SCM practices can improve customer service and, as a result, business performance.

Vanichchinchai & Igel (2011, p. 3422) further assess the relationship between total quality management, supply chain management, and a firm’s supply productivity. According to Vanichchinchai & Igel (2011, p. 3422), TQM has a strong influence on SCM and TQM. TQM improves competitiveness, flexibility, and effectiveness of a firm for the benefit of all stakeholders. According to the Department of Trade (2014, p. 4), the building components of TQM are people, processes, management systems, and measurement of performance. Everything within the organization is judged based on the processes.

Shanin & Dabestani (2011 p. 275) study a number of soft factors that enhance the success of the process of implementing TQM. The factors include committed leaders, customer relationship benchmarking, and training, as well as improving the process. Training is not a soft factor but is a key success factor for the successful implementation of TQM. At the same time, leadership is also a basis for TQM practices to be successful. The application of TQM as an integrated approach to managing quality can be used by a firm to develop a competitive advantage.

Proposed Method Methodology

The research will employ a qualitative approach based on the secondary data of Total Quality Management, procurement, and supply chains. Particularly, the studies will be based on a thorough review of practices of TQM and SCM based on scholarly sources. The aim of the scrutiny is to identify components of TQM suitable for procurement, components of green procurement related to TQM, and the most sustainable factors that work for effective and efficient procurement systems. The study will use descriptive and analytical tools to evaluate the three study points.

Thus, there will be a detailed description of the factors on TQM and SCM. Further, it will be followed by an empirical analysis of outstanding factors on procurement. The analysis will outline practical TQM components applicable to the procurement process. The suitability of study methodology takes cognizance of the availability of a lot of literature on TQM and SCM practices. The link from the two practices will be useful in evaluating factors that are most suitable for sustainable procurement practices.