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Impact Of Total Quality Management On Production Cost Of An Organization
(A Case Study of Nigeria Bottling Company Plc, Kaduna)
Abstract
This research seek to identify the impact of total quality management on production cost of an organization in Nigeria bottling company Plc, Kaduna Plant as a case study. Background of the study create awareness on total quality management as the hub for customers satisfaction quality become a primary source of global competitive advantages, and lead indicator for improved profitability. The statement of problem layered more emphasis on poor quality of product and personnel and the management behaviors towards the concept of Total Quality Management. The research work also attempted to identify the methods of quality control, cost of product, cost components that make up production cost and as Total Quality Management can reduce cost. The researcher went further to review related literatures on the project topic such as Evaluation and definition ofTotal Quality Management. The traditional vs Total Quality Management approach, as well as quality and product cost. The research methods use in the collection of data the justification for using the method as well as the statistical instrument used is established. These is one research hypothesis for which the questionnaire is drown and designed, administered to sample size of 25 respondents of the organization in question.
Table of contents
Title page. . . . . . . . . . i
Approval. . . . . . . . . . ii
Declaration . . . . . . . . iii
Dedication. .. . . . . . . . . iv
Acknowledgements . . . . . . . v
Abstract . . . . . . . . . vii
CHAPTER ONE: introduction
1.1 Background of the study . 1
1.2 statement of problem 2
1.3 Objective of the study 3
1.4 significance of the study 4
1.5 Scope of the study 4
1.6 Research Questions 5
1.7 Definitions of the Terms 5
CHAPER T WO: literature review
2.1 Evaluation of Total Quality Management 7
2.2 Conceptual Framework Quality 9
2.3 Cost of Quality 13
2.4 Quality Determinants 16
2.5 Dimensions of Quality 19
2.6 Responsibility for Quality 20
2.7 Quality Control 25
2.8 inspection 27
2.9 Cost of Quality Product 32
CHAPET THREE: Research Methodology
3.1 Area of the Study 39
3.2 Research Design 39
3.3 Population of the Study 39
3.4 Sampling and sampling Techniques 40
3.5 Instrumentation for Data Collection 40
3.6 Administration of the Instruments 40
3.7 Techniques for Data Analysis 41
CHAPTER FOUR: Data Presentation and Analysis
4.1 Data Presentation 42
CHAPTER FIVE: summary, conclusion, and Recommendations
5.1 Summaries of Procedures 47 5.2 Discussion Findings 48
5.3 Implication of Findings 49
5.4 Conclusions 50
5.5 Recommendations 51
5.6 Suggestion for further Study 53
5.6 Bibliography 54
Appendix
CHAPTER i: Introduction
1.1 Background of the Study
Total quality management is known as the primary role of management to lead an organization in its daily operations and maintains it as a viable entity into the future. Quality has become an important factor in these. Although ostensibly always. an objective of business is customer in customer terms, because a specific goal in the late 1980’s provide higher quality are recognized as a key element for success, most large operations taking that path have document the success, first they survived the competitors that has set the higher quality levels and now have regained some of their former market. Total Quality Management is perhaps the leading management approach that compares employed to improve their product and services, quality with the aim of improving typical measures of business performance. (e.g profit, increased market share reduced cost). The Japans have capture more than 30% of the American and electronic markets. It was achieved by offering higher value products. In response to the boom in the competitor market, many American firms have implemented require the integration of Human resources, production engineering store and purchasing marketing, distribution, and planningis a continuous improvement process; it is much wider than the traditional quality view of incoming inspection and process control. It means that the entire organization is working as a team including the cooperate top managers and each an every employee, it is on innovative way of thinking that affect the culture, the strategy and technology of company. The organization needs a holistic approach so that every department in the organization should come together for cost reduction and improve products, approach will reduce cost and quality will be achieve for competitive advantage.
1.2Statement of the Problem
This Empirical research has identified some general problems that are associated with Total Quality Management which are listed below. One of the problems is the failure of organization to understand the importance of material quality control and often ignore its application. This has led to the receipt of low quality and substandard lots of materials into the in process, culminating in poor quality out put and increased cost for these organizations.
The problem of organization over-relying on suppliers ability as a result of trust thereby falling to check and/or monitor the incoming materials for any possible defect or deviations from specification.
Others are manpower related problems were also observed to be a major barrier for achieving a Total quality management program. Most organizations lack the service of specialists to handle materials quality control trained/retrained or lack of proper supervision due to top management neglect.
Facilitates related problem in organizations, there are inaccuracies in machineries, tools, fixtures, measuring instruments etc. that are required in managing quality and total quality control process which can be disastrous for decision making as a result of the unreliable outcomes. The existence of these problems brought about the head for the research work so as to proffer solutions that are workable at the end.
1.3 Objective of the Study
The primary objective of the study is to identify the impact of quality management on production cost of an organization.
- To identify the challenges faced by manager in implementing Total Quality Management
- To identify the major cost component of Total Quality Management
- To identify the contribution of Total Quality Management on material and cost reduction
- To identify the method the Nigeria Bottling Company used in storage of raw material
- To identify the attributes of quality products
1.4 Significance of the study
The study will be of immense benefit to the researcher, the organization under study in achieving its goal and objective, other researcher, and the general public. It is sincerely hoped that the result of the study will be applied in areas that need to be improved in the organization under study. The study will also widen the horizon of the research on the topic under study and it will serve as reference to the researchers.
Finally, the research is a pre-requisite for the award of Higher National Diploma (HND) in Purchasing and Supply of Kaduna Polytechnic.
1.5 Scope of the Study
The research is limited to the Nigerian Bottling Company Kakuri Kaduna Plant, but the research will look at the entire concept of Total Quality Management as well as the major cost component of production and finally the application of Total Quality Management on material cost of production and finished goods cost.
1.6 Research Questions
- What are the challenges faced by manager in implementing total quality management?
- What are the major cost components of quality management?
- What are the contribution of quality management on material and cost reduction?
- What method does the organization used in storage of raw materials?
- What are the attributes of quality products?
1.7 Definition of Terms
Quality: fitness for purpose at lowest cost
Management: the process of planning organizing coordinating directing and controlling.
Effectiveness: the ability to bring about the intended result in respective of cost
Quality management: this is the overall management function that determines and implements quality policy.
Specification: this is the detailed description of an item.
Scrap: this is defect, materials or staffs that cannot be repaired or used
Total Quality management: (TQM) this is a management approach to an organization centered on quality based on participation of all its members of the organization and society.
Inspection: To check incoming materials with specification so as to accept or reject based on evaluation.
Performance: performance means doing a job as per specification with efficient use of resources.
Reliability: the ability to yield an acceptable outcome consistently.
Materials: materials are resource used directly or indirectly to produce or incorporate finish goods.
Purchasing: the management function of buying the right materials from the right source, at the right quality, at the right price, at the right quantity and purpose as economically as possible.
Standard: A predetermined and accepted way of doing things or the accepted state of thins.
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