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Pareto analysis of critical success factors of total quality management

A literature review and analysis
G. Karuppusami
Kumaraguru College of Technology, Coimbatore, India, and

372

R. Gandhinathan
PSG College of Technology, Coimbatore, India
Abstract
Purpose The purpose of this literature review is to identify and propose a list of few vital critical success factors (CSFs) of total quality management (TQM) for the benet of researchers and industries. Design/methodology/approach Even though there has been a large number of articles published related to TQM in the last few decades, only a very few articles focused on documenting the CSFs of TQM using statistical methods. The main objective of this literature review is to investigate and list the CSFs of TQM according to the descending order of frequencies of occurrences. The domain of review is the scale development studies and the TQM effect versus performance measurement studies. The review period is between 1989 and 2003. Rigorous statistical reliability tests and validity tests were conducted during these studies to factorize the CSFs and hence these studies were chosen for the literature review. Finally, the quality tool Pareto analysis was used to sort and arrange the CSFs according to the order of criticality. Findings An examination of 37 such TQM empirical studies resulted in compilation of 56 CSFs. Implementation difculties exist to operationalize such a large number of CSFs in organizations. This study analyzed and sorted the CSFs in descending order according to the frequency of occurrences using Pareto analysis. A few vital CSFs were identied and reported. The results of this study will help in a smoother penetration of TQM programs in organizations. Practical implications In future, the researchers in quality management may develop models to measure and sustain the level of implementation of TQM in industries. CSFs are the essential constructs based on which further statistical analysis can be carried out. The present study will guide the researchers in selecting the reliable set of CSFs for empirical studies. Industries can benet by adopting the results of this study for effective implementation of TQM. Originality/value This paper presents a solution to the difculties hitherto faced by the organizations in operationalizing the very large number of CSFs proposed by the various empirical studies published in TQM during the last two decades. Keywords Pareto analysis, Critical success factors, Total quality management Paper type Literature review

The TQM Magazine Vol. 18 No. 4, 2006 pp. 372-385 q Emerald Group Publishing Limited 0954-478X DOI 10.1108/09544780610671048

Introduction Total quality management (TQM) is an integrative management philosophy aimed at continuously improving the quality and process to achieve customer satisfaction.
The authors gratefully acknowledge the anonymous referees comments and advice that contributed to the improvements of this paper.

Simply stated, it is the building of quality into products and process and making quality a concern and responsibility for everyone in the organization (Juran, 1989). Empirical TQM studies, started to increase after 1989 when the critical success factors (CSFs) of TQM were rst operationalized by Saraph et al. (1989). A survey approach to the operationalization of TQM CSFs by this research work set a new direction for TQM researchers interested in the set of CSFs that constitutes TQM. The similar survey studies include those conducted by Ahire et al. (1996), Anderson et al. (1995), Black and Porter (1996), Flynn et al. (1994), Wali et al. (2003), Wilson and Collier (2000) and several other studies that are detailed in this paper. These studies identied TQM frameworks with CSFs ranging between four and twelve. Over the past few decades, the quality gurus Crosby (1979), Deming (1986), Feigenbaum (1983), Juran (1986) and others have developed and advocated certain prescriptions in the area of quality management. Their insights into quality management provide a good understanding of quality management principles. Worldwide, there are several Quality Awards, such as the Deming Prize in Japan, the European Quality Award (EQA) in Europe and the Malcolm Baldrige National Quality Award (MBNQA) in the USA. The European Foundation for Quality Management (EFQM) Excellence Model introduced in 1991 has its origins in TQM (Sandbrook, 2001). Excellence is dened as the outstanding practice in managing the organization and achieving results. Truly Excellent organizations are those that strive to satisfy their stakeholders by what they achieve, how they achieve it, what they are likely to achieve and the condence they have that the results will be sustained in the future (EFQM, 2005). Each award is based on a perceived model of TQM. They do not focus solely on the product, service perfection or traditional quality management methods, but consider a wide range of management activities, behaviour and processes which inuence the quality of the nal offerings. These award models provide a useful audit or assessment framework against which the authors have formulated CSFs of quality management. Subsequent empirical studies focused on the relationship between quality practices, quality performance and business performance. The works of Adam (1994), Flynn et al. (1995), Hendricks and Singhal (1997, 2001), Kaynak (2003), Powell (1995) and many others further activated theoretical advances in the area. In general, these studies provide support for the hypothesis linking quality practices to quality performance. But the support for quality practices-business performance hypothesis is more mixed. Hendricks and Singhal (2001) found evidence on the relation between the nancial performance from effective implementation of TQM to characteristics such as rm size, the degree of capital intensity, the degree of rm diversication, the maturity of the TQM implementation, and the timing of the TQM implementation. CSFs of TQM are latent variables, which means they cannot be measured directly (Ahire et al., 1996). Hence, items are generated that represent manifestations of these CSFs. For example, top management commitment to quality is a CSF that cannot be measured directly. However, when top management is committed to quality, adequate resources will be allocated to quality improvement efforts. Thus, allocation of adequate resources to quality improvement efforts can be one of the manifestations of top management commitment to quality. For a eld study, each manifestation is measured with an item in a scale.

Pareto analysis of critical success factors 373

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The congruence of TQM and six-sigma Mikel Harry at Motorola developed six-sigma in the late 1980s, and it has roots back to the teachings of Dr Joseph Juran and Dr W. Edwards Deming (Thawani, 2004). Six-sigma is a high performance, data driven method for improving quality by removing defects and their causes in business process activities. Six-sigmas target is to achieve less than 3.4 defects or errors per million opportunities hence the name. Higher the number of sigmas, the more consistent is the process output or smaller is the variation. It is particularly powerful when measuring the performance of a process with a high volume of outputs. Six-sigma links customer requirements and process improvements with nancial results while simultaneously providing the desired speed, accuracy and agility intodays e-age. Lucas (2002) asserts that six-sigma is essentially a methodology within not alternative to TQM. Because this quality improvement is a prime ingredient of TQM, many rms have found that adding a six-sigma program to their current business gives them all, or almost all, of the elements of a TQM program. Lucas has thus concluded that:
Current business system six-sigma total quality management

Six-sigma uses a project based structured problem-solving method linking customer requirements with processes and tangible results. It selects the appropriate tools from a wide variety of statistical tools. One of the most common methodologies used is dene, measure, analyze, improve, and control (DMAIC). Yang (2004) developed an integrated model of TQM and GE-six-sigma based on 12 dimensions: development, principles, features, operation, focus, practices, techniques, leadership, rewards, training, change and culture. The author concluded that although management principles of TQM and GE-six-sigma are somewhat different, there is congruence among their quality principles, techniques, and culture. Hence, the integration of TQM and GE-six-sigma is not difcult. Objectives of the study Objectives of this literature review were to investigate and report as follows. . Compilation of the CSFs reported by the scale development studies and the studies that correlated the quality, plant performance measures with business performance measures. These studies were chosen for review because the reliability and validity of the CSFs were statistically tested during these studies. . Application of Pareto concept and sorting of the CSFs in the descending order according to the frequencies of their occurrences. . Compilation and nal reporting of the few vital CSFs. Scope of the study The online databases were searched extensively to identity research papers published in referred journals. The scope of the search is for TQM articles published in referred journals because of the thorough professional review of these papers undergo before acceptance and publication. Since, the rst research paper in the proposed research review was published by Saraph et al. (1989), the search was limited to the period between 1989 and 2003. The procedure described below was adopted to identify the relevant TQM research articles. A set of keywords was formulated and used for the articles title search:

. . . . . . . . . . . .

quality instrument; empirical quality; quality performance; quality improvement; quality critical factors; empirical TQM; TQM factors; TQM construct; TQM instrument; TQM performance; quality index; and TQM evaluation.

Pareto analysis of critical success factors 375

The ve online journal databases: www.Emeraldinsight.com, www.Ebsco.com, www. Infotrac.com, www.ProQuest.com and www.Sciencedirect.com were searched. In this process, articles related to TQM survey by Ahire et al. (1995), Fynes (1999), Sila and Ebrahimpour (2002), Thiagarajan and Zairi (1997a, b, c) and Yong and Wilkinson (1999) were identied. The bibliographies of these articles were screened in addition to online searches to locate articles related to the objectives stated. During this entire process, 37 articles were found. The titles of the journals where these articles were published are listed in Table I.
Journal title 1 Decision Sciences Survey articles Saraph et al. (1989), Anderson et al. (1995), Flynn et al. (1995) Black and Porter (1996), Ahire et al. (1996), Curkovic et al. (2000) Wilson and Collier (2000) Forza (1995), Huarng and Chen, 2002 Forker et al. (1996), Adam et al. (1997) Tamimi (1995), Forker et al. (1997), Joseph et al. (1999), Ho et al. (2001), Merino (2003) Motwani et al. (1994), Badri et al. (1995), Zhang et al. (2000) Grandzol (1998), Tamimi (1998) Adam (1994), Flynn et al. (1994), Choi and Eboch (1998), Samson and Terziovski (1999), Kaynak (2003) Benson et al. (1991) Dow et al. (1999), Fynes and Voss (2001) Mohanty and Lakme (1998), Wali et al. (2003) Powell (1995) Roethlein et al. (2002) Quazi et al. (1998), Rao et al. (1999), Hua et al. (2000), Claver et al. (2003)

2 3 4 5 6 7 8 9 10 11 12 13

Industrial Management & Data Systems International Journal of Operations & Production Management International Journal of Production Research International Journal of Quality & Reliability Management International Journal of Quality Science Journal of Operations Management Management Science Production and Operations Management Production Planning & Control Strategic Management Journal The Quality Management Total Quality Management

Table I. Title of journals where TQM survey articles published

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Pareto analysis of critical success factors Understanding processes so that they can be improved by means of systematic approach requires knowledge of the seven basic quality control (QC) tools, which are used in problem identication (Herbert et al., 2003). These tools are largely quantitative and help answer the questions associated with them: (1) Process owcharting what is done? (2) Pareto analysis which are the big problems? (3) Cause and effect analysis what causes the problem? (4) Histograms what does the variation look like? (5) Check sheets/tally sheets how often does it occur? (6) Scatter diagrams what are the relationships between factors? (7) Control charts which variations are to be controlled and how? A Pareto analysis is a QC tool that ranks the data classications in the descending order from the highest frequency of occurrences to the lowest frequency of occurrences. The total frequency is equated to 100 per cent. The vital few items occupy a substantial amount (80 per cent) of cumulative percentage of occurrences and the useful many occupy only the remaining 20 per cent of occurrences. The CSFs and the statistical tests reported by the selected articles were extracted and presented in a table (not shown). The locations were these studies were carried out; the initial and nal number of items, the chosen sample size and the responses to the studies were also compiled. Only those CSFs that were recommended by the authors for effective implementation of TQM were included in the Pareto analysis. The CSFs associated with the output performance measures were excluded from the analysis. However, if such CSFs were recommended by the authors as a part of TQM implementation, those CSFs were also included in the analysis. The Pareto analysis of CSFs compiled from selected articles is presented in Tables II, III and Figure 1. Through a judgmental process of grouping similar CSFs, the frequencies of CSFs with similar description were grouped and reported under single label. The frequencies of CSFs shown in italic letters (Table II and III) accounted for the frequencies of the CSFs shown in parenthesis also. The total number of CSFs extracted and grouped from all the 37 studies taken for review was 56 and the total frequency of occurrences was 306. In the vital few groups, 14 CSFs accounted for 80 per cent (Table II). The remaining 42 CSFs accounted for only 20 per cent of occurrences frequency and were reported as useful many groups (Table III). The rst ve CSFs operationalized by the highest number of authors were the role of management leadership and quality policy, supplier quality management, process management, Customer focus and training. The CSF, customer focus with 7.52 per cent frequency of occurrences was not factorized by Saraph et al. (1989) study. The most vital CSF, the role of management leadership and quality policy was split and listed as two separate CSFs, top management leadership and quality policy by some authors. In this study, quality policy was grouped with quality planning and it occupied the second place in the useful-many group with an occurrences frequency of 1.63 per cent. The frequency of 35 CSFs grouped under useful many (numbered 8 to 42, Table III) was one only.

Critical success factor

Cumulative Percentage percentage of of Occurrences occurrences occurrences

29

9.48

9.48

28 28

9.15 9.15

18.63 27.78

23 22 22

7.52 7.19 7.19

35.29 42.48 49.67 (continued)

1 The role of management leadership and quality policy (top executive support, top management commitment, top management support, top management, committed leadership, visionary leadership, senior executive involvement, supervisory leadership, leadership creativity and quality strategy, management leadership, executive commitment) 2 Supplier management (supplier co-operation, supplier development, supplier integration, supplier involvement, supplier partnership, supplier performance, supplier quality, supplier quality management, supplier relates with responding entity, supplier relationship, TQM link with suppliers, co-operative supplier relations, vendor quality management, closer to suppliers, relations with the supplier, responding entity relates with supplier) 3 Process management (processes, process ow management, process improvement, production process, process control, process control and improvement, process design (SQC), exible manufacturing, advanced manufacturing systems, use of JIT principles, inventory reduction, technology utilization, process quality) 4 Customer focus (customer focus and satisfaction, customer involvement, customer orientation, customer relates with responding entity, customer relationship, customer satisfaction, customer satisfaction orientation, customer service, customers, TQM link with customers, close customer leadership, closer to customers, relation with the customers, responding entity relates with customer) 5 Training (quality training, specialized training, personnel training, education, education and training, employee training) 6 Employee relations (employee participation, employee satisfaction, employee empowerment, employee involvement, employee fulllment, delegation and empowerment, worker manager, interactions)

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Table II. CSFs vital few

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7 Product service design (product design, product design process, product design simplicity and producibility, product service innovation) 8 Quality data (quality improvement measurement system, quality information, quality information availability, quality information ows, quality information systems, quality information usage measurement, internal quality information usage) 9 Role of quality department (quality, quality assurance, quality citizenship, quality continuous improvement, quality system improvement) 10 Human resource management and development (providing assurance to employees, employee selection and development, feedback and employees relations, workforce management, people management, Congenial inter personal Relations) 11 Design and conformance (design and development of new products, design quality, design quality management, conformance and design, product cost product durability, product improvement, product quality, product reliability, conformance quality) 12 Cross functional quality teams (communication across the organization, communication of improvement information, cross functional communications to improve quality, use of teams, team working, teamwork structure) 13 Bench marking (bench marking on quality and service, benchmarking on cost, use of benchmarking) 14 Information and analysis (information and data management, information technology, information technology for quality) 15 Critical success factors useful many (Table III)

Table II. Cumulative Percentage percentage of of Occurrences occurrences occurrences 17 17 13 13 12 9 7 5 61 5.56 5.56 4.25 4.25 3.92 2.94 2.29 1.63 19.93 55.23 60.78 65.03 69.28 73.20 76.14 78.43 80.07 100.00

Critical success factor

Critical success factor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Statistical control and feedback (statistical method, SPC, SPC usage) Quality planning (quality policy, strategic quality planning, strategic quality management) Strategic planning (vision and plan statement, planning, shared vision) Continuous improvement Learning Knowledge Work attitudes Adopting philosophy Behavioural Brand image Co operation Company reputation Compensation Competitive assessment Corporate quality culture Evaluation External internal management External quality in-use Financial results Impact of increased quality Impact on society Internal and external co-operation Internal support Maintenance Measuring product and service Open organization Operation procedures Operational quality planning Organizational commitment Participatory orientation People and customer management Policy and Strategy Proactive business orientation Recognition and reward Results and recognition Rewards and SPC Rewards to employees for quality department Traditional engineering Values and ethics Work culture Workforce commitment Zero defects mentality Cumulative occurrences

Occurrences 5 5 5 4 3 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 61

Percentage of occurrences 1.63 1.63 1.63 1.31 0.98 0.65 0.65 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33

Cumulative percentage of occurrences 1.63 3.27 4.90 6.21 7.19 7.84 8.50 8.82 9.15 9.48 9.80 10.13 10.46 10.78 11.11 11.44 11.76 12.09 12.42 12.75 13.07 13.40 13.73 14.05 14.38 14.71 15.03 15.36 15.69 16.01 16.34 16.67 16.99 17.32 17.65 17.97 18.30 18.63 18.95 19.28 19.61 19.93

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Table III. CSFs useful many

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Figure 1. Pareto analysis of CSFs of TQM

Comparison with previous studies The rst survey study on TQM literature was published by Ahire et al. (1995). In this study, the authors analyzed a total of 226 articles from the TQM literature published between 1970 and 1993 using the seven MBNQA criteria as a framework. Youssef and Zairi (1995) benchmarked CSFs of TQM generated based on MBNQA and the teaching of quality gurus and checked the applicability, order of criticality and relevance of TQM in various countries. Thiagarajan and Zairi (1997a, b, c) also analyzed the TQM literature using sets of criteria similar to those of the MBNQA and the EQA. In another literature review paper, Fynes (1999) examined 20 empirical TQM studies that tested and validated the CSFs of TQM. The next review of TQM literature was by Yong and Wilkinson (1999). This study had a limited focus in that it only examined those articles that argued that TQM was benecial to companies and those that argued on the contrary. The article also provided a comparative summary table of 15 survey studies that analyzed the link between TQM practices and performance. Sila and Ebrahimpour (2002) investigated how TQM survey research evolved over an 11 year period from 1989 to 2000. A total of 76 of the 347 studies analyzed contained CSFs that were mostly extracted by factor analysis. However, a few of these 76 survey articles that also used an integrated approach to TQM but rated the CSFs using descriptive statistics were also included. The other 271 articles were not used to come up with a framework to examine the TQM literature simply because they did not use a holistic approach to TQM. Analyzing the CSFs extracted by the 76 studies, the authors found 25 CSFs. Rahman (2002) surveyed TQM literature for studies that described scale development efforts in the context of Australian business and identied four studies. These studies were then reviewed and the statistical analyses used in the scale development process were identied. In the present research, the studies which reported CSFs only after

systematic reliability and validity tests were selected. Fifty-six CSFs reported in such articles were extracted and analyzed. Analysis was free from xed framework like MBNQA, EQA and quality gurus.

Pareto analysis of critical success factors 381

Discussion and conclusions Developing reliable instruments or testing hypothesis based on CSFs is a tedious and time-consuming process. However, it is important that researchers understand the importance of CSFs and include vital few CSFs in their work. It seems from this review that there is a lack of a well-established framework to identify CSFs and guide researchers through the various stages of scale development/hypothesis testing process. Even though a researcher may possess a strong quantitative and statistical foundation, the process of identifying CSFs may not be well understood, thus the research may only be partially successful. Hence, in the present research work, TQM empirical studies conducted between 1989 and 2003 were taken for review and Pareto analysis. An examination of 37 TQM empirical studies resulted in compilation of 56 CSFs. Implementation difculties exist to operationalize such a large number of CSFs in organizations. This study analyzed and sorted the CSFs in descending order according to the frequency of occurrences using Pareto analysis. Industries can select the most critical 8 to 12 CSFs reported in this study and implement over a planned period of time. Following are the concluding points: . This review provides a list of 56 CSFs arranged in the order of criticality. Vital few CSFs were identied and reported. . From this study, the beneciaries will be those who develop instruments, those who study the effect of TQM on performance and those who review and evaluate work for possible publication. . The results of this study will help in much smoother implementation of TQM programs in industries.
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Sandbrook, M. (2001), Using the EFQM excellence model as a framework for improvement and change, Journal of Change Management, Vol. 2 No. 1, pp. 83-90. Saraph, J.V., Benson, P.G. and Schroeder, R.G. (1989), An instrument for measuring the critical factors of quality measurement, Decision Sciences, Vol. 20 No. 4, pp. 810-29. Sila, I. and Ebrahimpour, M. (2002), An investigation of the TQM survey based research published between 1989 & 2000: a literature review, International Journal of Quality & Reliability Management, Vol. 19 No. 7, pp. 902-70. Tamimi, N. (1995), An empirical investigation of critical TQM factors using exploratory factor analysis, International Journal of Production Research, Vol. 33 No. 11, pp. 3041-51. Tamimi, N. (1998), A second-order factor analysis of critical TQM factors, International Journal of Quality Science, Vol. 3 No. 1, pp. 71-9. Thawani, S. (2004), Six sigma strategy for organizational excellence, Total Quality Management, Vol. 15 Nos 5/6, pp. 655-64. Thiagarajan, T. and Zairi, M. (1997a), A review of total quality management in practice: understanding the fundamentals through examples of best practice applications Part I, The TQM Magazine, Vol. 9 No. 4, pp. 270-86. Thiagarajan, T. and Zairi, M. (1997b), A review of total quality management in practice: understanding the fundamentals through examples of best practice applications Part II, The TQM Magazine, Vol. 9 No. 5, pp. 344-56. Thiagarajan, T. and Zairi, M. (1997c), A review of total quality management in practice: understanding the fundamentals through examples of best practice applications Part III, The TQM Magazine, Vol. 9 No. 6, pp. 414-7. Wali, A.A., Deshmukh, S.G. and Gupta, A.D. (2003), Critical success factors of TQM: a select study of Indian organizations, Production Planning & Control, Vol. 14 No. 1, pp. 3-14. Wilson, D.D. and Collier, D.A. (2000), An empirical investigation of the Malcolm Baldrige National Quality Award causal model, Decision Sciences, Vol. 31 No. 2, pp. 361-90. Yang, C.C. (2004), An integrated model of TQM and GE-six-sigma, International Journal of Six Sigma and Competitive Advantage, Vol. 1 No. 1, pp. 97-111. Yong, J. and Wilkinson, A. (1999), The state of total quality management: a review, The International Journal of Human Resource Management, Vol. 10 No. 1, pp. 137-61. Youssef, M.A. and Zairi, M. (1995), Benchmarking critical factors for TQM: Part II empirical results from different regions in the world, Benchmarking for Quality Management & Technology, Vol. 2 No. 2, pp. 3-19. Zhang, Z., Waszink, A. and Wijngaard, J. (2000), Developing an instrument for measuring TQM implementation in a Chinese context, International Journal of Quality & Reliability Management, Vol. 17 No. 7, pp. 730-55. Further reading Nunnally, J. (1967), Psychometric Theory, McGraw-Hill, New York, NY. Zairi, M. and Youssef, M.A. (1995), Benchmarking critical factors for TQM: Part I empirical results from different regions in the world, Benchmarking for Quality Management & Technology, Vol. 2 No. 1, pp. 5-20. About the authors G. Karuppusami received his BE and ME degrees from PSG College of Technology, Coimbatore, India. Presently he is working as Assistant Professor in the Department of Mechanical

Engineering, Kumaraguru college of Technology, Coimbatore, India. He has 15 years of industrial experience as manufacturing engineer and six years of teaching experience. He has 12 publications to his credit in national and international conferences. His elds of research interest include TQM, Benchmarking, Six Sigma and Computer aided Engineering. He is a life member of Indian Society for Technical Education and Indian Institution of Industrial Engineering. He is currently working on his PhD thesis in Quality Engineering. G. Karuppusami is the corresponding author and can be contacted at: karuppusami_g@yahoo.com R. Gandhinathan received his BE, ME and PhD degrees from PSG college of Technology, Coimbatore, India. At present, he is working as Assistant Professor in the Department of Mechanical Engineering, PSG College of Technology, Coimbatore, India. He has more than 17 years of teaching experience and ve years of industrial experience. He has 40 publications to his credit in national/international journals and conferences. His elds of research interest include, Quality Engineering, Cost Management, Industrial Economics and Concurrent Engineering. He is a life member of Institution of Engineers (India), Indian Society for Technical Education and Indian Institution of Industrial Engineering. He has also investigated Government of India research projects in the elds of near net shape manufacturing and high speed machining. E-mail: gandhinathan@hotmail.com

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