CASE STUDY

Analysis of roles of ITon quality management

E.A.M. Mjema, M.A.M Victor and M.S.M MwinukaDepartment of Engineering Management and Entrepreneurship,

University of Dar es Salaam, Dar es Salaam, Tanzania

Abstract

Purpose – The purpose of this paper is to present results of a research conducted to test the methoddeveloped by Ang et al. in a different environment and setting.

Design/methodology/approach – To conduct this study the approach developed by Ang et al. wasused to examine the accrued benefits of using information technology (IT) in quality management. Theinterview and questionnaire method was mostly used; however, direct observation and archivalrecords data collection were also used to extract more precise data towards a better conclusion. Thefocus was on the analysis of the use of IT on enhancing quality awareness, improving product quality,and reducing quality-related costs.

Findings – The findings of the study show that the introduction of IT on quality management hascontributed greatly to the enhancement of quality awareness, in the improvement of product qualityand in the reduction of quality costs.

Practical implications – The research shows the importance of the existence of the rightenvironment for the implementation of a quality system. It also shows that the introduction of IT hasreally reduced the quality cost and improved the product quality. The research developed constructsfor the eight dimensions of quality, which helps to measure the impact of IT on quality management.

Originality/value – The paper reports systematic investigations on how companies can measure theimpact of IT in quality management.

Keywords Quality management, Tanzania, Cost analysis

Paper type Case study

IntroductionIt is generally agreed that high-quality products or services are the essence of acompany’s survival and competitiveness in the highly competitive global market(Misterek et al., 1994; Garvin, 1987). To meet the increasing quality expectations of thecustomers, companies strive to provide their customers with the highest possiblequality products and/or services. Therefore, in order to win a status in ever-increasingcompetition in a global market, it is necessary to provide high-quality and price worthyproducts. The realization of continual improvements in quality depends on how qualityis being managed in a company. Thus continuous quality improvement has become animportant strategic objective for the companies, which strive to be successful (Lee andEbrahimpour, 1985).

It is anticipated that application of information technology (IT) in the qualitymanagement will improve the operational tasks of quality management and henceincrease quality output. However, Roach (1991) after doing a research on application ofIT in service industry commented that service industries are investing heavily intechnology, especially IT, to improve productivity, but with apparently very limited

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success. Nevertheless, the quality programs differ greatly from company to companydepending on the type of activity and to the product or service being offered. Thesituation observed by Roach (1991) may not be the case for other industries.

The use of IT in quality management can help in quality improvement through thefollowing:

(1) enhancing quality awareness;

(2) reduction of quality costs;

(3) speedy processing of quality data; and

(4) online information about the quality level.

ObjectiveThe objective of this work was to test the method developed by Ang et al. (2000) in adifferent environment and setting. A study was conducted in a processing industry inTanzania to assess and investigate whether or not the introduction of IT in qualitymanagement system has:

. enhanced quality awareness;

. reduced quality costs; and

. improved quality processes and productivity of the company in general.

Literature reviewIT for quality managementIT can be defined as computer and telecommunications hardware and software that aidin processing, collection, and transmission of text, voice, and pictorial information(Lahti, 1994). Application of IT in various areas including quality management isgrowing and continually expands. One of the reasons for this growth rate is thedramatic increase in the cost/performance ratio of all types of computer technology(Mensching and Adams, 1998). They argue that, this decrease in cost has madecomputer processing economical for more and more firms.

Much has been written about how IT could be and has been used to enhance qualitymanagement (Cortada, 1995). However, the focus of the literature has been descriptive,rather than reporting systematic investigations on how IT enhances qualitymanagement. For example, Hughes (1994) used a qualitative case studymethodology to investigate the role of IT in TQM processes in administrative andbusiness operations in four institution of higher education. He found that IT wasperceived to be a tool that facilitated TQM and that the use of IT in a TQMenvironment required significant change in organizational culture by highlycommitted top management leadership. His study did not attempt to answer howand where, IT should be used in TQM processes.

Rogers et al. (1996)) examined the relationship between the utilization of IT and firmperformance in the warehouse industry. Their work provided empirical evidence of theimportance of IT in quality performance. Another exception is the reference modeldeveloped by Forza (1995a) to link quality management practice, information systems,and quality performance for empirical research. Using his own model and associatedmeasures Forza (1995b) investigated the use of IT in the quality assurance aspect only.

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Saraph et al. (1989) elaborated the key practices that are important to know whetheran organisation has explicit quality policies or not. The key practices include specificquality goals, comprehensiveness of the goal setting processes, importance attached tothe quality in relation to other goals, and the extent to which quality goals are reviewedand their attainment emphasised. All of the elaborated key practices need informationdissemination and analysis; therefore, it is obvious that IT is required in all thoseaspects to be able to implement the key practices. The founder of TQM philosophyDeming (1986) shows the importance of extracting the information inherent in thequality process variations. He, however, insisted on the use of statistical techniques.

Taguchi (1986) emphasises on the role of information acquisition in qualitymanagement by suggesting that experiments must be designed to measure anddetermine the causes of quality problems. Therefore, the data analysis will involve theidentification of deviations from expected norms, and revealing the causes for thesedeviations. Therefore, it is obvious that IT has an important role to play in the area ofquality management.

Ang et al. (2000) developed an instrument to measure the impact of IT on qualitymanagement, with the purpose to understand how IT supports quality management.The proposed measures were empirically tested to be reliable and valid. This methodwas adopted in this work, and was used to test those quality dimensions in aprocessing industry in Tanzania.

IT and quality awareness in a companyIn order to sustain the quality level of its products and services, a company needs awell-defined policy, standard operating procedures and a built-in auditing system forcontinuous improvement. However, these provide only an organized outer frameworkthat will not automatically ensure the attainment of the desired end result. The attitudeof mind of company’s employees and their commitment to the company’s goals aboutquality is the living principle of the quality systems (UNCTAD/GATT, 1993).

The most important responsibilities of quality management are to orient employeetowards quality and to create the right environment for the implementation of thequality system. IT can enhance the value of many distinct parts of an organization. Itskey value is in integrating isolated pockets of activity to improve the overall strategicbusiness goals. By using IT, leaders can communicate with their employees the rightvision and mission towards quality, and employees can do their work virtuallyanywhere and anytime that IT allows. Spangler and Gal-Or (2001) commented that, theapplication of IT helps the management to offload the routine and time-consumingactivities to the information system, which allows the company to begin emphasizingimportant managerial tasks that heretofore had been neglected. The fundamentals ofthe technology allow us to explore many ways of providing accurate and accessibleinformation to enhance quality awareness within an organization. However, this canonly be achieved if employees are motivated to accept the technology, and this meansthat the whole human ware in the organization must be computer literate in order tointeract intelligently.

IT and quality costQuality is related to profitability through increase of customer satisfaction achievedfrom meeting and/or exceeding customer’s requirements. Quality management

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activities such as prevention and appraisal helps to maintain or exceed customerrequirements, but at the same time it adds to running costs. Quality literatures considerTQM as a solution of achieving high-quality with substantial reductions in the overallcosts of quality. However the reduction of quality costs by TQM is through increasedprevention quality activities.

The performance profile of introducing IT can be viewed in the following aspect:increase in the speed of data processing (i.e. shortening of through put time),simplification of documentation, lower rate of making mistakes, increased security ofdata and data protection, improved quality of communication, better transparency ofwork processes, and improvement in the customer services. All of these benefits havequality features, which are difficult to quantify, but a persistent effort can often showthe benefit of IT in cost reduction.

IT can be applied for prevention activities such as quality planning, design anddevelopment, implementation and maintenance of the TQM system, so that the effortand time used to perform these activities can be reduced, thus reducing cost ofprevention activities.

IT and quality improvementContinuous quality improvements, and achieving quality through the backing of all inthe concern, are the main pillars of TQM philosophy. Hackman and Wageman (1995)argue that TQM is a valid management construct comprising four components: aprocess focus, analysis of variance, management by fact, and learning and continuousimprovement. However, very little is reported in the literature regarding the successstories leading to the achievement of continuous quality improvement, which is notonly a means, but also the ultimate goal of TQM. This is mainly due tomisinterpretation as an ideal goal of TQM that is not normally possible to achieve.

By defining, identifying, and analysing the potential cause of a problem,organizations can make necessary commitment for defect prevention in the businessprocesses. The aim of continuous quality improvement is to eliminate waste; i.e.internal failures and external failures. In general, continuous quality improvement canbe categorized into: defect prevention, improved actions, and cost of qualitydeficiencies (Juran, 1992). In manufacturing a product, the purpose is to create productswith zero defects. The emphasis, from detection to prevention, makes it necessary tofind out the route cause of the problems in processes and to hold all the workersaccountable for quality (Cameron et al., 1993).

Marler (1998) after studying the effects of TQM training on continuousimprovement came to the suggestion that employee continuous improvement iscontingent upon how work is designed and integrated into the organization’s IT.Continuous quality improvement is a fact-based management technique in which theuse of up-to-date data is a prerequisite for identifying problems, their root causes, andthe solutions (Dimancescu, 1992). According to Dimancescu, the use of IT is essentialnot only for collaboration purposes, but also it helps in integrating the enterprisesolutions of the problem. Also the use of IT in quality management systems not onlycreates vast amounts of necessary information related to quality improvement, but alsooffers analytical capabilities to improve processes (Davenport and Short, 1990).

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MethodologyIn this study, Ang’s et al. (2000) instrument was used for the interview andquestionnaire method. However, direct observation and archival records datacollection was used to get more precise data to come out with better conclusion. Thisinvolved accessing a range of documents and archival material, as well as face-to-facesemi-structured interviews with managers and a selection of non-managementpersonnel. The personnel interviewed included four senior managers and six personnelfrom quality management department. The questionnaire was filled by six seniormanagers, ten personnel from quality management department, 18 shop floorpersonnel from the production department and eight supervisors.

The structure of questions, which were to be used in the interview, was chosen toemulate the ones found on the questionnaire. Furthermore, some general questionswere added during the interview. The questions were then linked to the dimensionsthat were identified in the questionnaire, and earlier experiences from the literaturereview.

Ang’s et al. (2000) instrument for measuring various variables, which show theimpact of IT on quality management, has the following dimensions:

(1) leadership;

(2) strategic quality planning;

(3) important innovations;

(4) information and analysis;

(5) output quality assurance;

(6) human resource utilization;

(7) customer satisfaction; and

(8) quality results.

Since it is difficult to measure each the eight dimensions as they are, then a set ofconstruct was developed for each of the eight dimensions. A construct is a latentvariable, which means that it cannot be measured directly. However, constructs can beinferred and, therefore, measured indirectly from their manifestations, which can bemeasured (Rao et al., 1999).

Results and discussionThe study was based on both quantitative and qualitative data from the case studyorganization. The aim was to assess the impact of IT on quality management processwith the overall aspect of improving product quality. The findings of the study havebeen categorized into three major areas:

(1) Quality awareness within an organization that includes the effect ofimplementation of IT on leadership, strategic quality planning and humanresource utilization.

(2) Quality improvement that includes the effects of implementation of IT onoutput quality assurance, information and analysis, and customer satisfaction.

(3) Quality costs that include the extent of IT usage on quality results, effects ofimplementation of IT on prevention, appraisal, internal failure, and externalfailure costs.

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For the questionnaire data approach, several practices related to the above mentionedcategories were listed in the questionnaire. Just like Ang et al. (2000), a seven-pointLikert scale was used (1-2 ¼ not at all, 3-5 ¼ moderate, and 6-7 ¼ maximum feasibleamount), the extent to which each of the mentioned items was evident in theirorganization. A descriptive statistical analysis of the data collected focused on theaspect of measures of central tendency, particularly the mean and standard deviation.

Analysis of quality awareness using interview and observation methodLeadership. The case study organization adopts a decentralized management system,in which each department is making all principal decisions and reports to competencecountry co-ordinator for approval. The organization has vision and mission statementthat leads to the organization objectives including product quality. According to theinterviewees, the vision and mission are well communicated between seniormanagement through the use of intranet system within the organization. Leadersuse computer to specify product/process requirements using visual management.Quality values are communicated to staff through awareness campaign, meetings andmission-direction work teams, which takes place each morning (15-20 minutes) beforestarting daily works.

Strategic planning process. Managers in various departments use different softwareto analyse strategic issues, making strategic decision and formulating strategic plans.The engineering section uses the Onkey software for window 1.42 for the planning ofthe maintenance tasks. The production section uses “Daily Operating Return (DOR)”software to know carry out production planning. The quality systems section apartfrom using intranet system was on the way to install Archiver Plus software. Thissoftware will enhance communication between quality management department andother departments to make sure that all necessary actions regarding quality are takencare of by all concerned.

Human resource utilization. The intranet system is used to disseminate informationamong the employees. However, the efficiency of this system depends on thepromptness of the user of system to open and respond to information sent, otherwise,the information may not reach the recipient in the desired time.

Analysis of quality awareness using questionnaire dataLeadership. The results show that the use of IT on quality management has helped theorganization leadership to perform various activities by moderate to maximum effects.IT helped the organization leadership to formulate vision and mission of theorganization, create quality as a way of life to the organization employees, facilitatecommunication between top management and other staff, encourage staff involvementto improve work process and empower staff for continuous quality improvement.

The mean value for the effects of the implementation of IT on leadership constructsranges from 5.0 to 5.7, which indicates a moderate effect. The range corresponds torespondents who believe that IT helped the organization leadership by moderateamount, and those who agree that IT helped the organization leadership by maximumfeasible amount. The average mean value on leadership is 5.46. Thus most respondentsagree that implementation of IT on quality management has moderate effect onleadership.

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Strategic quality planning. Results show strong evidence that management used ITto perform various activities related to strategic planning process. IT has been used toidentify and analyse strategic issues, make strategic decision, formulate strategicplans, and to document strategic planning. The mean values on the extent of IT usageon strategic planning construct ranges from 5.5 to 6.1. This range corresponds torespondents who are between moderate and maximum feasible amount. The averagemean value on strategic quality planning is 5.77, which shows that the majority of therespondents considered the contribution in this aspect as moderate.

Human resource utilization. Quality awareness cannot be enhanced if humanresources are not well utilized. The questionnaire results on the implementation of ITon the ability of human resources utilisation show that IT has moderate effect in theability of the organization to carry out various activities related to human resourceutilization. IT has moderately helped the organization to make information available tostaff for carrying out their responsibilities, form work team or quality improvementgroups, facilitate team working to solve problems, and to solicit suggestions from staffon quality improvement. Also, IT has affected moderately the ability of theorganization to provide feedback to staff on quality improvement, enable staff to sharetask-related skills, provide work-related skills, and appraise staff participation inquality improvement. The mean values of the effect of implementation of IT on theability of human resource utilization range from 4.5 to 5.35.

Analysis of quality improvement using interview and observation methodOutput quality assurance. The case study organization use company standards foroutput quality assurance. Most of the interviewees believe that the success of theorganization relies on the delivery of quality products and services that best satisfytheir customers. To meet this requirement, several ways are used to control qualityduring work processes in production. One line of production process uses automaticsensors and monitors to control quality during production. Statistical process controltools such as process flow charts are used to monitor the reliability of the process.Apart from that the strict product inspection and sampling is done to assess actualperformance against established standards. However, it was very difficult to accessarchival data on product quality report prepared by quality control section, since, theauthority in the case study area refused to provide quality data report.

Information and analysis. Each section gathers and maintains its own databases ofinformation. The quality management manager maintains quality information,production manager maintains production information, and asset care managermaintains asset care information. Finally all these information are reported tocompetency manager for decision-making. According to interviewees, it is difficult fornormal line staff to access information since computers are only installed in the headsof section offices.

Customer satisfaction. From the case study organization, satisfying customerdemands is cited as one of the crucial factors leading to success of the business. Themajority of the interviewers admit that IT is the best and easier way to improvecommunication between organization and customers for the purpose of identifying andassessing customer needs.

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Analysis of quality improvement using questionnaire dataOutput quality assurance. The literature review indicates that the use IT in qualitymanagement could help the organization to establish product quality requirements.The data show that the use of IT in the quality management could moderately help theorganization to set up product quality standards and control work processes inproduction and delivery of products. However, maximum effect was found on the useof IT on quality tools such as flow charts, histograms, and Pareto charts for qualitycontrol. Also IT has helped the organization to assess actual performance againstestablished standards, document work procedures/processes, determine suppliersquality, and facilitate inter-organizational co-operation for service quality. In total, thequestionnaire method shows that implementation of IT on quality assurance havemoderate effect since the average value is 5.28.

Information and analysis. The questionnaire results on the extent of IT usage oninformation and analysis reveal that the organization has a high degree of IT use oncollecting, maintaining, and dissemination of information. The organization has beenusing IT to collect data about staff, customer, suppliers and work processes. Companydatabases and quality information system are maintained in computer programs.Decision-making tools such as statistical techniques and cause-effect diagrams areprovided to staff by the use of IT. Also IT has been helping to improve accuracy andconsistency information throughout the organization. The mean values for IT use oninformation and analysis range from 5.2 to 6.2. The average mean value on informationand analysis is 5.85. Therefore, the use of IT on information and analysis is highlyacceptable by the organization for improvement of product quality.

Customer satisfaction. The effect of implementation of IT on customer satisfactionwas analysed using the questionnaire method. The results show that there are positiveinfluences on the implementation of IT on customer satisfaction. The IT hasmoderately helped the organization to identify and assess customer needs. The use ofIT has helped the organization to improve communication between the organizationand customers.

Analysis of quality costs using interview and observation methodTable I shows summary of deduced data of total cost of quality from 1998 to 2000.From this table it can be observed that maintenance, inspection, warranty repair, andrework costs have been decreasing. The total costs of quality have decreased from45.36 million in 1998 to 33.24 million in 2000. This is due to the fact that, the plantstarted operation in 1997, thus with time employees gains experience on how to run thesystem with minimum costs, and product quality improvement leads to reduced cost ofquality.

Years and amount spent in millions TshActivities 1998 1999 2000

Maintenance 4.32 4.25 4.22Inspection 8.736 8.30 7.86Warranty repair 2.62 2.50 2.00Rework 4.54 3.75 3.00Idle 25.15 20.20 16.46Total 45.36 39.00 33.24

Table I.Summary of total cost of

quality

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Analysis of quality cost using questionnaire methodQuality result. The interviewees were asked to show their feeling on the use of IT inperforming various activities related to quality results. The results show that the casestudy organization has been using IT moderately to measure service and productquality, monitor waste such as waiting, rework and damage of equipment, and toevaluate employee satisfaction. The maximum use of IT for quality result is found onmeasuring reduction in operational costs.

Prevention costs. This section concerns the effect of implementation of IT onprevention costs. In particular, this section examines, how much the use of IT inquality management has reduced prevention related costs. The results show that theorganization is only achieving moderate effect from the use of IT on prevention costs.This has been achieved through reduced quality planning time, control and processcontrol engineering costs, and improved administration and audit.

Appraisal cost. The effects of implementation of IT on appraisal costs are examinedin this section. It is realized from the questionnaire results that the implementation ofIT on quality management has moderately reduced appraisal costs. The reduction hasbeen achieved through reduced effort and time of laboratory acceptance testing,inspection and test, data processing and preparation of test report. Also throughreduced set-up time for inspection and testing, reduced total defects as compared toproduction, and reduced number of quality control inspectors compared to directproduction operators.

Internal failure cost. The respondents were asked to show the extent that the use ofIT in quality management has reduced internal failure costs. The results show that thecalculated mean score from the respondent ranges from 4.3 to 5.05. This implies thatthe implementation of IT on quality management has moderately reduced internalfailure costs, largely focusing on reduced scraps, rework and repair, reducedre-inspection and retest, downgrading, and reduced troubleshooting and defectanalysis.

External failure cost. Apart from the tangible external failure costs, such ascustomer complaints, warranty replacement, product service and returned material;there are other intangible external failure costs, such as loss of customer goodwill andloss of sales, that can result in failure to compete and hence business failure. Theresponses on tangible external failure costs show that the use of IT in qualitymanagement has moderately helped the organization to reduce complaints fromcustomers, warranty replacement costs, and returned product repair costs.

ConclusionThe empirical evidence provided by this work shows that the introduction of IT onquality management processes enhanced quality awareness, improved product qualityand reduced quality related costs. The use of IT in the organization supportsorganization leadership to formulate vision and mission towards organizationobjective including product quality. IT creates quality as a way of life to theorganization’s employees, and facilitates communication between top managementand other staff.

Regarding quality improvement, the study shows that the introduction of IT onquality management has improved product quality by helping the organization toestablish product quality requirements. The use of IT on quality tools such as flow

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charts, histograms, and Pareto charts for quality control helped to control work processin production and to deliver consistent product quality.

Practical implicationQuality appraisal costs such as inspection and testing costs contribute the largestamount to the quality costs in many organizations. The use of IT in qualitymanagement could reduce appraisal cost through reduced effort and time of laboratoryacceptance testing, inspection and testing, data processing, and preparation of testreport. Also if the system is computerized, the number of quality control inspectorscould be reduced, hence reducing appraisal costs.

An effective implementation of IT in prevention activities would lead to reducedinternal and external failure cost such as scraps, rework, and repair activities.However, the findings from the study show that implementation of IT on qualitymanagement has moderately reduced internal and external failure costs. In general, thequality costs could be highly reduced if the organization put more effort intoprevention activities, such that in an ideal situation no defective product could beproduced. This will imply that there will not be failure costs and thus no need forquality appraisal. This could be realized if IT is well implemented from the strategicplanning process.

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