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Implementation of Total Quality Management
Case Study of IBM (International Business Machines) Computers
A Partial Fulfilment of Requirement in Total Quality Management
By:
Acuna, Emerald Rose D.
Bon, Alyssa Jane M.
Dondon Jr., Ronnie D.
Vilches, Elyza T.
May 2018
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I. Executive Summary
Total Quality Management (TQM) is the continuous process of reducing or
eliminating errors in manufacturing, streamlining supply chain management, improving
the customer experience, and ensuring that employees are up-to-speed with their
training. Total quality management aims to hold all parties involved in the production
process accountable for the overall quality of the final product or service.
TQM was developed by William Deming, a management consultant whose work had
great impact on Japanese manufacturing. While TQM shares much in common with
the Six Sigma improvement process, it is not the same as Six Sigma. TQM focuses on
ensuring that internal guidelines and process standards reduce errors, while Six Sigma
looks to reduce defects.
Total Quality Management (TQM) is a structured approach to overall organizational
management. The focus of the process is to improve the quality of an organizations
outputs, including goods and services, through continual improvement of internal
practices. The standards set as part of the TQM approach can reflect both internal
priorities and any industry standards currently in place. Industry standards can be
defined at multiple levels, and may include adherence to various laws and regulations
governing the operation of the particular business. Industry standards can also include
the production of items to an understood norm, even if the norm is not backed by official
regulations.
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II. IBM Computers Overview
International Business Machines, or IBM, nicknamed "Big Blue", is a
multinational computer technology and IT consulting corporation headquartered
in Armonk, New York, United States. IBM originated from the bringing together of
several companies that worked to automate routine business transactions. In
1911 the company that leased Unit record equipment, especially
Hollerith punched cards and card readers to government bureaus and insurance
agencies, became the Computing-Tabulating-Recording
Company (CTR). Thomas J. Watson (1874-1956) took over in 1924, using the
name "International Business Machines." IBM expanded into electric typewriters
and other office machines. Watson was a salesman and concentrated on building
a highly motivated, very well paid sales force that could craft solutions for clients
unfamiliar with the latest technology. His motto was "THINK"; customers were
advised to not "fold, spindle or mutilate" the delicate cardboard cards. IBM's first
experiments with computers in the 1940s and 1950s were modest advances on
the card-based system. Its great breakthrough came in the 1960s with its Model
360 mainframe. IBM offered a full range of hardware, software and service
agreements, so that users as their needs grew would stay with "Big Blue." Since
most software was custom-written by in-house programmers, and would run on
only one brand of computers, it was too expensive to switch brands. Brushing off
clone makers, and facing down a federal anti-trust suit, the giant sold reputation
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and security as well as hardware, and was the most admired American
corporation of the 1970s and 1980s.
The late 1980s and early 1990s were cruel to IBMlosses in 1993 exceeded
$8 billionas the mainframe giant failed to adjust quickly enough to the personal
computer revolution.Desktop machines had the power needed, and were vastly
easier for both users and managers than multimillion-dollar mainframes. IBM did
introduce a popular line of microcomputersbut it was too popular. Clone
makers undersold IBM, while the profits went to chip makers like Intel or software
houses like Microsoft. After a series of reorganizations IBM has become one of
the world's largest computer companies and systems integrators. With over
400,000 employees worldwide as of 2014, IBM holds more patents than any
other U.S. based technology company and has twelve research laboratories
worldwide. The company has scientists, engineers, consultants, and sales
professionals in over 175 countries. IBM employees have earned five Nobel
Prizes, four Turing Awards, five National Medals of Technology, and five National
Medals of Science
The roots of IBM date back to the 1880s. Since the 1960s or earlier, IBM has
described its formation as a merger of three companies: The Tabulating Machine
Company (with origins in Washington, D.C. founded in 1896), the International
Time Recording Company(founded 1900 in Endicott), and the Computing Scale
Company (founded 1901 in Dayton, Ohio, USA).However the 1911 stock
prospectus states that four companies were consolidated; the three described by
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IBM and the Bundy Manufacturing Company(founded in 1889). Further, there
was no merger, no consolidation. The new company, named the Computing-
Tabulating-Recording Company(CTR), was incorporated on June 16, 1911 in the
state of New York, U.S.A.
CTR was a holding company; the now five companies
were an amalgamation. The individual companies continued to operate using
their established names until the holding company was eliminated in 1933. The
amalgamation was engineered by noted financier Charles Flint. Flint remained a
member of the board of CTR until his retirement in 1930.
The companies that were amalgamated to form CTR manufactured a wide
range of products, including employee time-keeping systems, weighing scales,
automatic meat slicers, coffee grinders, and punched card equipment. The
product lines were very different; Flint stated that the "allied" consolidation
... instead of being dependent for earnings upon a single industry, would own
three separate and distinct lines of business, so that in normal times the interest
and sinking funds on its bonds could be earned by any one of these independent
lines, while in abnormal times the consolidation would have three chances
instead of one to meet its obligations and pay dividends.
III. Implementation of TQM at IBM Computers
1. Implementing TQM in IBM Company Total quality management, TQM is
an important aspect of large multinational companies used in management. The
TQM philosophy for management is a comprehensive procedure, structured
within the organization such that there is improved quality on services and
products. This is achieved through continuous processes of refinement to get
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feedback generated every day. The requirements are different between
organizations. This follows the standards laid down by international organizations
like the ISO 900 Company. The TQM can be applied and succeed in any
company. According to Berry (1991), TQM is defined as the actual process of
corporate world that deals with meeting necessary requirements of customers’
experience and expectation, then reducing the costs associated with company’s
poor quality significantly. This is achieved through employing a unique system of
management and business culture. The core values which the company and in
particular the IBM include in its TQM are leadership in management,
commitment, involving the internal employees of the company, collaborating well
with suppliers and a continuous improvement. This helps to manage the
company so that it could realize excellence. It is important to study total quality
management in this thesis paper because of the following reasons. By getting
information on TQM, the IBM will ensure their products and services are of high
quality. The primary considerations the company employs to give good quality
include good performances, durable products and reliability. The use of quality
management program in IBM will at the end release products which satisfy the
client needs in the market. In addition, the study of TQM is an important aspect
that helps to satisfy clients. The basic research done on customer satisfactions
based on the local surveys will ensure that IBM Company knows the quality of
service and products manufactured. It is also important to include surveys done
on people who are not necessarily company’s clients. This will help in getting an
oversight on why potential IBM customers prefer to use a competitor’s products
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and services. By getting to learn and implement on the TQM at the IBM, there is
an automatic increase in sales, thus additional revenues. This is important in
retaining reputation among competitors. With a good reputation, there are new
clients buying IBM products. Good managing processes will remove
inefficiencies in the company. With the removal of unethical processes, the
productivity in the employee production automatically shoots up. An employee
will produce more within a short time, while working for the same salary. The best
TQM programs bring lost monies back, since there is efficiency (Choisne, Kumar,
Grosbois 2008). By using TQM in IBM, the process enables people to work as a
team in departments. Each department relies on the others to ensure there is
quality and satisfaction to clients. This is achieved by implementing measures
that trigger positive effects of the operations, sales, finance, marketing and client
relations. There is reduced waste in company’s resources. All inventory prices
are built on the product prices, thus reducing operation costs. The successful
organizations have realised that TQM will help to monitor performances, thus
reduce unwanted costs. In the end, the company achieves its clients’ satisfaction
(Hackes 1991). To make analysis on the IBMs total quality management, the first
major point was to find out how clients see and view it. These include product
performances worldwide. The analysis found that clients were never satisfied
100%. Improvement to packaging and making it necessary for IBM products to
be integrated with others, including competitors, had to be done after research.
To solve this, a big team composing of managers had to be incorporated in the
research. The plan involved educating employees and company suppliers . In
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order to implement the findings and project fully, the study initiative was based on
changing needs and demands on the client side. Competition from various
companies in Far East is a major concern that has brought negative flows in the
business. This means the company’s decision to make an evaluation of its
business relations and help clients to achieve goals
When implementing TQM philosophies for efficient management with a company
like IBM, it is highly recommended that the process becomes gradual. With this, it
becomes possible to get information on how these concepts can be employed by top
managers for the benefit of IBM. It is thus important to involve six concepts. These
include internal and external customers, continuous improvement of the company
department, controlling the IBM business process streamlining the preventive
management functions, having an ongoing action to prevent bad policies through
TQM and then making sure that the company policies are reflected in the teamwork
as well as the leadership from the employers, employees and the end users .
2. Initiating and implementing total quality management programs require
great amount of planning and research. Managers need to get trained in various
TQM practices before implementing the same. There are costs involved with the
entire process of total quality management. It is the manager’s responsibility to
allocate budgets for TQM at the beginning of every financial year. You need to be
convinced first why quality is such an important parameter in every business. If
you yourself are not convinced, it would be very difficult for you to convince other
departments for implementing TQM. Know who your customers are? Understand
your target market carefully. Go out, meet customers and find out as to what all
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