Effect Of Total Quality Management (TQM) On Manufacturing Sector’S Performance In Nigeria (A Case Study Of Cadbury Nigeria Plc)

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Effect Of Total Quality Management (TQM) On Manufacturing Sector’S Performance In Nigeria (A Case Study Of Cadbury Nigeria Plc)


Abstract


This study is designed to determine the effect of Total Quality Management (TQM) on manufacturing sector’s performance in Nigeria, using Cadbury Nigeria Plc, As A Case Study. This topic came into existence as a result of enhances the quality of goods and services that will enhances consumer patronage and reduce competitive disadvantage.

Ineffective quality management system of operation has been creating challenges to the operations of most Nigerian manufacturing firms. The objective of this study is to determine whether Total Quality Management have effect on the known whether the organization has increase in sales in other to achieve its Total Quality Management (TQM) and also enable to determine organizaitonal outputs on return on the investment in an organization.

The hypothesis formulated is to research on the relationship between training or development and employee skill, relationship between Total Quality Management and organizational performance and relationship between Total Quality Management and career prospects.

A survey research design is used for this research of which selected samples are drawn for the intensive study of the characteristics of the population.

A total number of (100) one hundred respondents have been selected from the population of the study in which (68) sixty eight respondents completed and returned theirs.

The finding reveals that Total Quality Management (TQM) play an important role in an organization performance using Cadbury Nigeria Plc as a case study.

It is therefore recommended that organization should concentrate on and put in place an effective method of developing quality of management in manufacturing sectors that would improve and develop the organization in other to adapt to the dynamic changes in its environment and thereby meets its goals.


Chapter One


Introduction

1.1 Background of the Study

The success of any organization is completely determined by the quality of services that they produce, especially in competitive market place, this therefore bring the relevance of the ideology and practice of Total Quality Management(TQM) into place. Most organizations still believes that the traditional quality control techniques and the way they have always been is still the best and resolve their quality problems, but this however is wrong. Employing move inspectors developing correction repairs and re-work teams doesn’t promote quality. Traditionally, quality has been seen as the responsibility of quality control (QC) department and it has still not been recognized in some organization that many quality problems originate in the marketing , sales service and administrative areas.

Total Quality Management (TQM) is move than shifting the responsibility of problems from the customer to the produces. It requires an approach, which must first be implemented if the rewards are to be realized. Today’s business environment is such that managers must plan to maintain a hold on market share. If definitions are needed, Total Quality Management (TQM) is an approach to improving the competitiveness and flexibility of the whole organization.

It can be said to be the way of planning, organizing and understanding each activity involving each individual at each level. Total Quality Management (TQM) is also a way of riding peoples lives of wasted effort by involving everyone in the process of improvement, increasing the effectiveness of work so that results are achieved in less time.

The methods and techniques used in Total Quality Management (TQM) can be placed through any organization. They are equally in Marketing, health care, education and hospitality industries. The impact of Total Quality Management (TQM) on an organization is first to ensure that the management adopts a strategic overview of quality. The approach must focus on developing a problem prevention mentality, but it is easy to underestimate the effort that is required to change approaches.

Many people will need to undergo a complete change of mind to their institution, which rushes into the inspection mode to solve quality problems. The correct mind set may be achieved by working at the sorts of barriers that exists in the key arrears. Staffs will need to be trained and shown how to relocate their time and energy to studying their process in teams, searching for cause to problems and correcting the causes, not the symptoms for once and for all. This will require of management a positive initiative to promote the night first time approach to work situations. Through process improvement teams, which will need to be set up, these actions will reduce naturally the inspection-rejection syndrome.

If things are done correctly first time around, the usual problems that create the need for inspection for failure will disappear.

Total Quality Management (TQM) strategy is a business management strategy that sees the organizational customers and create as the key to organizational success. However, some Nigerian Companies define quality by engineering standards. Effective Total Quality Management (TQM) Strategy entails that the product quality must go beyond acceptability for a given price range. It must involve every staff in the organization and in every department. It express the conviction that in order to improve quality, the organization must regularly conduct surveys most from its customers (Internal and External customers) to evaluate its quality improvement programmes and strategies. Total Quality Management (TQM) strategist in Nigeria organization should measure performance against customers standard not determined by the company’s quality engineers. However, Nigerian firms that do not practice Total Quality Management (TQM) might experience internal and external loss of faith by the organizations senior staffs on each other and low morale.

Finally, the ideology of Total Quality Management (TQM), emphasis on the improvement of product quality and service delivery. Managers improve durability and enhance a product passes through its lifecycle managers also strive to speed delivery and improve other services to keep their brands (products) competitive.


1.2 Statement of the Problem

It is unlikely that all Nigerian firms will behave so differently towards their clients and customers that they will survive in a competitive business today, and that they must incorporate that listening into their strategies planning processes through TQM concepts and strategies.

Customer satisfactions are linked closely to product and service quality. Therefore, quality improvement programs normally increase profitability.

The well known profit impact of marketing studies show a high correlation between relative product quality and profitability.

Nigerian firms today have no choice but to adopt TQM. If they want to stay In business, let alone be profitable Quality is best assurance of customer, strongest defense against competition and the only path to sustained company growth and earnings.

The Essence of Total Quality Management
  1. Aim at defect free: if really is possible to achieve defect free work most of the time
  2. Prevention culture most be created most poor quality can be avoided through design, structure processes and trained people.
  3. Total by quality approach is essential
  4. All business function must be involved in quality improvement.
  5. Quality is free, it pays for itself.

1.3 Objectives of Study

Total Quality Management (TQM) is a business tool. As such it is about achievement and progress if they are not captured on regular basis, it becomes very difficult to maintain to the motivation and the desire to achieve higher standards.

This study have the following as some of its objectives:

  1. To determine whether TQM have effect on the profitability on an organization.
  2. To find out whether the organization has increase in sales in other to achieve its TQM objectives.
  3. To examine whether TQM have effect on an organizational outputs.
  4. To ascertain whether TQM have effect on return on equity.
  5. To determine whether TQM have effect on return on investments in an organization.

NOTE: Many Poor business performances can be traced back to poor implementation of Total Quality Management (TQM). In many instances, TQM implementation has lacked strategy focus and was introduced as a bolt on to unchanged business performance and only be established if they are implemented.


1.4 Significance of Study

Total Quality Management (TQM) requires considerable survey research, Zikmud 94. It express the convictions that in order to improve quality, the organization must regularly conducts survey’s to evaluate quality improvement and exploration stage during which organizational management makes a commitment on total quality assurance and business researchers explore the needs and belief of external and internal customer. Thus, this study is significantly designed and carried out in order to enlighten products promoters of products about the importance and relevance of high quality products since it increases sales and organizational productivity and also to prove that only high quality product succeed and that this can only be attained through the practice of Total Quality Management (TQM).


1.5 Research Questions

The following questions constitute some of the research questions for the study.

  1. Does TQM have effect on the profitability of an organization?
  2. To what extent does an organization increase in sales in other to achieve its TQM objectives?
  3. Does TQM have effect on an organizations outputs?
  4. To what extent does TQM have effect on organization return on equity?
  5. Does TQM have effect on return on investments in an organization?

1.6 Research Hypotheses

In order to facilitate this study, the researches intend to use these hypotheses for the study.

  1. HO: Total Quality Management does not have effect on organizational output.
    HI: TQM has effect on organizational output.
  2. HO: There is no significant relationship between the adoption of TQM strategy and return on investment in an organization.
    HI: There is significant relationship between the adoption of TQM strategy and return on investment in an organization.

1.7 Methodology

The methods being used would be based on primary data and secondary data.

Primary data involves the things that are seen physically i.e. Fresh data that taken from interviews, fresh data with the help of questionnaires that are freshly taken or seen.

Secondary data involves the help of textbooks from different authors, journals taken from libraries and the ones extracted from the internet. And the use of information people used and its being re-used openly and legally.


1.8 Limitation of Work

This study is being designed and structured to cover all aspects of Total Quality Management (TQM) and its effects on sales of product in an organization, which would be Cadbury Nigeria Plc, Agindigbi in Ikeja, Lagos State, Nigeria.


1.9 Definition of Terms

Total:

Means everybody in the organization is involved in the final product or services.

Quality:

This is often used to signify excellence of a product or service. In some companies the word may be used to indicate that a pieces of metal conforms to certain physical dimension characteristics often set down in the form of a particular tight specification. If we are to define quality in a way that is useful in its management, then we must recognize the need to include in the assessment of quality the true requirement of the customer, the need and expectations. Quality therefore is said to be meeting the customer’s requirement.

Management:

This concept does not have any universally accepted definition; however, there are two (2) prospective to it. They are:

  1. Firstly, it can be defined as the efficient and optimum utilization of available resources (human and material) in order to achieve predetermined objectives. It entails the performance of certain functions like controlling, coordinating, staffing, planning, directly etc.
  2. Secondly, the concept of management refers to certain individuals who are in-charge of the administration and control of an organization they take charge of policy formulation and maintenance of the overall affairs to the organization.

There are three (3) basic levels of management namely:

  1. Top Level Management: This level of management is in charge of formulating the corporate policies of an organization. E.g. CEO’s of companies.
  2. Middle Level Management: This level of management is in charge of interpreting the corporate policies formulated by the top level management personnel(s).
  3. Low Level Management: This level of management is in charge of enforcing and implementing the corporate policies of an organization that have developed and interpreted by both the top and middle level management before given them to perform. E.g. Head of Depart (H.O.D).
Total Quality Management (TQM):

This is a system approach to Management that aim to enhance value to customers and clients by designing and continually improving organizational process and system. We have seen that it involves the entire organization all the functions including external organization and suppliers several facts of TQM have been reviewed including:

  1. Recognizing customer and discovering their needs.
  2. Setting standards that are consistent with customers requirement.
  3. Controlling process, including systems and improving their capability.
  4. Empowerment of people at all levels in the organization to act for quality improvement.

Finally, the core of TQM must be the customer supplier both internally and externally and the fact that at each interface, there are process which converts inputs to outputs.

Sales:

This is simply the process of selling goods and services produced to customers.

Product:

This simply refers to nature that a marketer is selling out to society. The product can either be inform of goods and services and also be tangible and intangible.

Product Sales:

This simply refers to the process through which an organization engages in the selling of their goods services to their customers directly or indirectly.

Furthermore, sales potentials are qualitative estimates of the maximum possible sales opportunities present in particular market segments open to a specified company selling a good or services during a period. The estimate for sales potential indicates how much period a company could sell it as all the necessary and desire to sue them.


Chapter Five


Summary, Recommendations and Conclusion

5.0 Introduction

There is no way that any successful organization can separate the relevance of Total quality Management from its success and the general organizational function.

In the same vein, there is no way organization attain and maintain competitive edge over other organization in the same industry without a well formulated and implemented total quality management (TQM) program.

Total Quality Management gives a focus and participative approach by all stages of production to guide and sustain continuous improvement on the quality of products produced by an organization. To this end, this study focused on how the generalized adaptive principle of TQM could be used as an administrative tool so as to increase production sales in a competitive market. Total Quality Management (TQM) is an approach towards improvement, which has established itself, this is because there is a notion in people mind that the status quo is not sufficient. In built in us is a common desire to improve TQM has evolved as a process which can facilitate improvement efforts within organizations.

We are not just talking about increase profitability, but overall improvement where standard of service and products are of primary concern.

Some organization may start their journey into Total Quality Management from a position of financial strength and reputation. Others may starts from a position of survival where the alternatives are either “get smarter” or go out of existence.

Several literatures were viewed sub-consideration that were discussed includes the following.

  1. Alternative approaches to budgeting
  2. Condition for quality products
  3. Control concepts
  4. Quality management and leadership
  5. Quality of work life change process benefits of TQM
  6. Principles of production and influence of Total Quality Management of cost control.

5.1 Conclusion

The issue, effect and prospects of Total Quality Management (TQM) for organizational success cannot be over emphasized this is because total quality management is interwoven with success. In Nigeria, however, Total Quality Management holds a lot of prospects especially within the corporate environment and industrial environment. A look around would reveal the proliferation of technological driven products growing geometrically with the result that customers experience a level service and standard of goods that could only be imagined few years ago.

The Nigeria customers are not insulated from development in markets elsewhere and competition is now based on delivery values with state of the art technology and knowledge based on human resources capital.

Furthermore, Nigeria organization that are not doing well, can re-invest the finds of their companies using Total Quality management tools which will certainly yield the following results.

  1. Increased customer loyalty
  2. Better customer service
  3. Increased and improved productivity
  4. Greater efficiency, a committed and enthusiastic workforce
  5. Increased profit and
  6. Satisfied customers and stakeholders

Adder to this Cole (1998) identified certain things and inadequacies that total quality management (TQM) is meant to eliminate and correct within organizations.

  1. Preventive and early identification of errors
  2. Doing the right thing at the right time first, so as to ensure efficiency in service and production of goods.
  3. Continuously striving for improvement and blocking all possible loopholes and faults.
  4. Managing an organization through teamwork and organizational integration.
  5. Operating a flat organization, and breaking all bureaucratic bottle neck.
  6. Using total quality tools to generate hard facts to manage business rather than depending on opinions.
  7. Providing a quality leadership and motivation to enable all employees to practice Total Quality Management (TQM).

In conclusion however, effective administration is the fundamental key to success of any organization success of any organization, coupled with the inclusion of Total Quality Management (TQM).


5.2 Recommendations

The economic and industrial sector of all emerging countries, especially in Nigeria is undergoing transformation which is predicated upon competition (the fight to maintain market dominance and competitive edge) and in other to survive this ensued up situation, total quality management (TQM) will have to be a compulsory inclusion in the activities of the organization in any of the industry.

In other for an organization to achieve this dominance market edge, and long-term success, they have to pursue all their priorities without compromise and give equal attention to all matters having direct implication on the organization success.

I therefore recommend more research to be done in the following areas:

  1. Possible cause of customer’s dissatisfaction
  2. The cause of inadequate use of organization resources
  3. Identifying the factors responsible for slowing down the pace of company’s effort in achieving TQM so as to ensure customers
  4. How to identifying and meet the need/demand of market and customers.
  5. How to ensure the maintenance of social relationship of workers that will facilitate the quick achievement of the total quality management objectives. How to operate a leader style that will sustain the achievement of the total quality management objective (TQM).

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