Tài liệu The impacts of incorporating total quality management (tqm) principles towards the cost effectiveness in the steel industry

  • Số trang: 91 |
  • Loại file: PDF |
  • Lượt xem: 131 |
  • Lượt tải: 0
thuvientrithuc1102

Đã đăng 15893 tài liệu

Mô tả:

Mai Thi Thu Phuong E0600101 THE IMPACTS OF INCORPORATING TOTAL QUALITY MANAGEMENT (TQM) PRINCIPLES TOWARDS THE COST EFFECTIVENESS IN THE STEEL INDUSTRY BY MAI THI THU PHUONG Graduation Project Submitted to the Department of Business Studies, Help University College, in Partial Fulfillment of the Requirements for the degree of Bachelor of Business (Accounting) Hons MARCH, 2011 i Mai Thi Thu Phuong E0600101 Declaration I hereby declare that the graduation project is based on my original work except quotations and citations which has been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other course/degree at Help University or other institutions. The word count is 14,304 Words. 2 Mai Thi Thu Phuong E0600101 Acknowledgement First of all, I am grateful to Mr Pham Duc Hieu , the professor who gave lots of useful advices as well as materials for this thesis. And I would like to say thank to productions, marketing, and accounting managers and all of employees of 50 manufacturing companies, who allowed and assisted me to collect all of necessary information to finish this thesis. My thesis can not be finished without your supports. It is a great lucky when I can get responses from you. 3 Mai Thi Thu Phuong E0600101 Table of Content Declaration ............................................................................................................................................ 2 Acknowledgement ................................................................................................................................ 3 Abstract: ................................................................................................................................................ 5 CHAPTER I: Introduction .................................................................................................................... 7 1.1. Introduction about the topic ....................................................................................................... 7 1.2 Need for Research ....................................................................................................................... 9 1.2.1 Research question ......................................................................................................... 11 1.2.2 Research objective ........................................................................................................ 11 1.3 Elements of the Research .......................................................................................................... 12 CHAPTER II: Literature review ......................................................................................................... 15 2.1 History of WCM and TQM....................................................................................................... 15 2.1.1 History of WCM and TQM general review .................................................................. 18 2.1.2 TQM concepts................................................................................................................. 22 2.2 Judgments about the TQM in general ....................................................................................... 28 2.2.1. TQM appreciations........................................................................................................ 29 2.2.2 TQM criticism .................................................................................................................. 33 2.3 Impacts of TQM on decision making process of manager as well as its influences on the organizations ................................................................................................................................... 36 CHAPTER III: RESEARCH METHODOLOGY .............................................................................. 39 3.1 Research objective .................................................................................................................... 39 3.2 Research strategy ...................................................................................................................... 40 3.3 Research hypothesis .................................................................................................................. 40 3.3.1 Impact of Total Quality Management (TQM) on ABC costing method .................. 42 3.3.2 Impact of Total Quality Management (TQM) on Plant Performance ...................... 44 3.3.3 Impact of TQM on plant performance: A mediation mechanism ............................ 46 3.4 Measurement of variables ......................................................................................................... 50 3.4.1 Dependent variables (Plant performance) ................................................................. 50 3.4.2 Independent variables ................................................................................................... 50 3.4.2.1 Total quality management (TQM) implementation ............................................ 50 3.4.2.2 Plant-level control variables .................................................................................. 54 3.5 Research methodology .............................................................................................................. 55 3.6 Data sources and sampling........................................................................................................ 57 3.6.1 Sample selection ............................................................................................................ 57 3.6.2 Data collection method .................................................................................................. 57 3.7 Limitation of research ............................................................................................................... 58 CHAPTER IV: ANALYSIS ............................................................................................................... 61 4.1 Results Analysis ........................................................................................................................ 61 4.1.1 Percentage method........................................................................................................ 61 4.1.2 Results analysis for hypothesis 1 to 3 ........................................................................ 67 4.1.2.1 Impact of Activity-based Costing on Total Quality Management .................... 67 4.1.2.2 Impact of Total Quality Management (TQM) on plant performance ............... 67 4.1.2.3 Impact of TQM on plant performance: A mediation mechanism ..................... 75 4.2 Discussion ................................................................................................................................. 76 CHAPTER V: CONCLUSION........................................................................................................... 78 5.1 Implication of research ............................................................................................................. 78 5.2 Conclusion ................................................................................................................................ 78 4 Mai Thi Thu Phuong E0600101 THE IMPACTS OF INCORPORATING TOTAL QUALITY MANAGEMENT (TQM) PRINCIPLES TOWARDS THE COST EFFECTIVENESS IN THE STEEL INDUSTRY BY MAI THI THU PHUONG MARCH, 2011 Supervisor: Mr PHAM DUC HIEU Abstract: Based on the results o f previous studies, choosing a suitable managing method is really important. However, manufacturing practices have different kind of methods such as: Just-InTime method (JIT), Total Quality Management (TQM), Formal Continuous Process Improvement, Competitive Benchmarking, and Self-directed Teams. Hence, it is quite difficult for managers to choose. Comparing to other manufacturing method, Total Quality Management (TQM) can be considered as the most suitable method to adopt since it brings lots advantages to manufacturers. That is why the author wants to focus on this method more. In fact, TQM has direct and positive impacts on the costs allocation and quality improvements. However, there are not many researches mentioned about the indirect impacts of TQM. Therefore, in this thesis, indirect influences of TQM will be clarified with the supporting of ABC costing method. The same as World Class Manufacturing, costing methods include different kinds like traditional costing method, variable method, throughput costing method, and ABC costing method. Compare to others, ABC not only inherent good characters of previous method but also adapts rapidly to the changes of business environment. As a result, 5 Mai Thi Thu Phuong E0600101 when managers can adopt and combine both TQM and ABC, the performance of manufacturing firms will be enhanced twice. Vietnamese business environment changes quickly. Therefore, the author thinks carrying a survey might be a good way to conclude about the reality of the most suitable management method that Vietnamese enterprisers adopted recently. 6 Mai Thi Thu Phuong E0600101 CHAPTER I: Introduction 1.1. Introduction about the topic In general, for one cost accounting method, there are many manufacturing practices can be adopted in an organization. However, until now, only some researchers focus on which manufacturing methods should apply for what cost accounting method. Specific in Vietnam, a lot of changes occurs especially when most of companies turn into a new trend in using the cost accounting method from 2000. Instead of adopting the traditional method, Activities Based Costing method or ABC seems more workable and precisely. This does not mean all of these companies use the same manufacturing practices. Based on different situations as well as strengths and weaknesses of various companies, each of companies can find the most suitable manufacturing practice to adopt. In order to have a clear and objective point of view about the relationship between cost accounting method which are traditional costing method and ABC method and WCM, a survey will be implemented. 20companies will be chosen to carry this survey. After receiving all of answers from these companies, we can see 7 Mai Thi Thu Phuong E0600101 which kind of WCM is adopted more for which costing methods. This study in nature can be considered as a conclusion about the most popular manufacturing practices which are adopted in most of companies in the steel industry. Upon this survey result, companies can figure out what method is adopted most and whether the current method that they use is effective and efficient. In case they see the advantages of another manufacturing practice, they can decide whether they should change and use a new one. During this thesis, some questions will be focused such as: - What is WCM and TQM - Advantages and disadvantages of TQM - What are current manufacturing practices applied now especially in Vietnam - How many companies use WCM until now - How many of them adopt the Total Quality Management (TQM) as a manufacturing practice. 8 Mai Thi Thu Phuong E0600101 In the next part, some term will be added and explained to ensure that the readers can follow all of ideas that the author want to share. 1.2 Need for Research As mentioned in the introduction, there are various types of costing methods for example: traditional or absorption costing method, variable costing methods, Activities based costing method (ABC), throughput costing method, and lean costing methods. Each method carries both advantages and disadvantages. To analysis careful about each method will require lots of time and capacities since documents for some methods was destroyed. As a result, in this thesis, only traditional accounting method and ABC methods, the most popular costing methods, are concentrated and analyzed. It is quite difficult to say which method between traditional and ABC method is better. Therefore, advantages as well as disadvantages of each one should be shown. According to this, readers can understand why in different circumstances, different methods will be adopted. For example, in the beginning of the industrial century, traditional costing method is still the most popular. But now, when the global trend dominated and international transactions developed, traditional or absorption costing 9 Mai Thi Thu Phuong E0600101 method slowly starts showing its inconveniences. ABC method was invented and become more and more suitable with the current accounting environment. After a short time, it is widely adopted because of lots of strengths. WCM refers to the way that the managers can manage the manufacturing process of a specific company. There are different kinds of manufacturing practices such as Just-In-Time method (JIT), Total Quality Management (TQM), Formal Continuous Process Improvement, Competitive Benchmarking, and Self-directed Teams. According to different researchers, each method can be the best way to manage the manufacturing process if the managers know how to use the strength of them. For many companies in the World, Just in time can be considered as the most popular method. However, in Vietnam, TQM is the most suitable one. Therefore in this paper, the author will define and analyze the advantages and disadvantages this method only. 10 Mai Thi Thu Phuong E0600101 1.2.1 Research question There are two questions that the author wants to focus on this thesis are what TQM is and how the TQM affects on the performance of organizations. Normally, most people think that only costing method can affect the operation of organizations. However, in fact, besides costing method, TQM is also a factor which decides the success of the organization as a whole. 1.2.2 Research objective In order to achieve the expectation of the author about this thesis, doing surveys and calculating the statistics will be used mostly during the project. As mentioned above, questions will be covered in 3 categories: plant characteristic, cost accounting method and WCM. And three hypotheses will be designed based on: + Impacts of TQM on the cost accounting methods + Impacts of the cost accounting methods on the plant characteristics + Impacts of TQM on the performance of organizations 11 Mai Thi Thu Phuong E0600101 It is quite easy to see that the characteristics of a plant can decide the costing method as well as WCM that they need. This means there is a relationship between costing method and WCM. The statistics number can proof this relation. Although this can show the evidence for the interaction between WCM and cost accounting, this research still faces some limitations such as the quantity of companies which are involved in the survey process, changing in the business environment as well as changing in the internal operation of companies. Therefore, the result of this survey might be difficult to conclude if the author implements the survey on a large sample with different types of business enterprisers. 1.3 Elements of the Research In order to reach the decision about which manufacturing practices is adopted most for traditional method and ABC costing method, 20 companies in steel industry will be picked up. These companies will answer a survey with specific question as below: - Plant characteristics 12 Mai Thi Thu Phuong E0600101 - Cost accounting method that they adopted before 2000 and after 2000 - WCM method Depending on each question, the answer can include various options.  Plant characteristics will focus on size, plant age, mix and volume, discrete, and downsize. Size can be defined into 5 options based on the number of the employees in each plant such as 1-less than 100; 2-100 to 249; 3-250 to 499; 4-500 to 999; and 5-more than 1000 employees. The second factor-plant age will separate these companies into 5 categories depending on the years that companies start-up like 1-less than 5years; 2-5 to 10 years; 3-11 to 20years; and 4- more than 20years. The rest factors also will be class different companies based on different key point. This will be mentioned more detailed in the survey and the thesis.  Cost accounting method can be divided into 2 periodsbefore and after 2000. For some companies, traditional method is still applied now. But for others, ABC method is considered from the early of the 20th century. The third trend is that before 2000 they used traditional 13 Mai Thi Thu Phuong E0600101 method then they change into ABC method after 2000. Each company has their own thinking in choosing the method to adopt. There are 3 options will be applied in this part: 0-no implementation; 1-plant to implement; and 2-extensive implementation.  The same as cost accounting method, TQM manufacturing method will be judged based on three options: 0-no implementation; 1-plant to implement; and 2-extensive implementation. Different company will have different decisions on the leverage of TQM that adopted in their business. From the survey responses and statistics number, the author can conclude some points of view about the relationship between the cost accounting method and WCM. 14 Mai Thi Thu Phuong E0600101 CHAPTER II: Literature review 2.1 History of WCM and TQM In general, WCM can be defined as a set of concepts, principles, policies and techniques to manage and operate a manufacturing company. This can be considered as an improvement process started from before the World War II with an achieved result of the Japanese manufacturing resurgence. Time by time, this is enhanced and harmonized with different ideas of Japanese in various fields such as automotive, electronics and steel companies to create the core competitive edge. In other words, this continually enhances the effectiveness and efficiencies in quality, cost, lead time, flexibilities as well as customers’ service. In order to implement WCM, manufacturing companies needs time and personnel to be familiar with WCM. Different WCM method requires different factors. As a result, for most of managers, WCM is a process-driven approach. It usually includes all of activities as below: Make-to-order Streamlined flow Small lot sizes 15 Mai Thi Thu Phuong E0600101 Families of parts Doing it right the first time Cellular manufacturing Total preventive maintenance Quick changeover Zero Defects Just-in-time Variability reduction High employee involvement Cross functional teams Multi-skilled employees Visual signaling Statistical process control Most of companies which are applied WCM strategies not only focus on improving the operational hierarchy but also concern about the method to limit the wasted and save the costs as well as resources. This will lead to a higher productivity with a lower costs and time consuming. Moreover, by this way, the burden of selling inventory will not be a problem since the delivery speed is improved every day. In stead of focusing on the results of performance, managers concern about the process and method of working to judge. Teamwork defeats functional 16 Mai Thi Thu Phuong E0600101 and hierarchical trends and becomes the dominated trend in the world. For many people, WCM is still mistaken with standards of quality and image such as Volkswagen and Rolex. And it also leads to changes in working place. In fact, middle and lower managers refused to adopt WCM since they want to maintain the traditional working style. Therefore, to adopting WCM, involvement of employees should be required at highest level. Moreover, to adapt with the needs of quickly changeover, shorter time consuming and higher operational flexibility, capitalization should be concerned as the most important issue of manufacturing companies. More alternatives will be taken into account to save investment costs and increase the applicability of results. However, if WCM can be applied probably and precisely, a new dimension will be created with high quality products, shorter delivering time, and higher inventory turn over. 17 Mai Thi Thu Phuong E0600101 2.1.1 History of WCM and TQM general review As mentioned above, WCM is invented before the World War II and improved time by time. This includes many methods such as just-in-time manufacturing (JIT), process improvement continuously, total quality management (TQM), competitive benchmarking, and worker autonomy by need of self-directed of work teams. However, in this thesis, the author will focus only on the TQM as the most popular and developed method. In the period from 1927 to 1932, some experiments of Elton Mayo’s Hawthorne about the delegation power to workers leads to a wave for a new trend. This is the first time, a person can proof that the participation of workers in decision making process can increase the productivity. Hawthorne carried his study on his plant of Western Electric Company based on some factors such as: lighting levels, workday lengths, and rest period lengths. And he figured out that all of these factors can affect the level of productivity. For example, workers can work more effective and increase the productivity when the light is brighter and in contrast. Another researcher 18 Mai Thi Thu Phuong E0600101 Walter Shewhart also invented control charts to reflect the interaction between the level of involvement of employees in decision making process and productivity improvement during the 1930s. These changes remarked a huge change in the management accounting. Following the inventions from 1930s, the ISO 9001 standards were born in the World War II as a result of satisfying the requirements for the war. It pushed standardization, statistical control, and best manufacturing practices developed a bigger movement. In 1950s, statistical methods and quality management techniques was delivered to Japanese with the supports from Edward Deming and Dr Juran while the first book about Total Quality Control was written and become background to develop many WCM theories later. In 1954, self actualization needs of Abraham Maslow defined clearly the needs of employees which can be considered as the motivations to increase the effectiveness and efficiencies of productivity. This shows that higher level workers will focus on higher needs. Based on these, managers can design suitable prizes to encourage the workers contribute to the companies and enhance the 19 Mai Thi Thu Phuong E0600101 productivity easily. Sometimes, small gifts can have the same effect as valuable presents. Therefore, managers can do both purposes: motivating the workers while maintaining effective capitals to companies. In 1960s, new leadership model with theory X and theory Y of Douglas McGregor made the WCM becomes more and more various. This declared that the way managers access and motivate the employees can be also a factor which can enhance the productivity. Theory X states that workers need some enforcement from managers to do their works while theory Y focuses on creating the trust between manager and employees. Based on this relation, employees will be involved in the problem solving as well as decision making process. When the employees think they are a part of the companies, they will try harder and contribute more to the companies as a natural result. During 1970s to 1980s, the phrase of Total Quality Control was shaped by Japanese and this also the key philosophy which helped Japan became the world quality leader. Other countries also tried to access and apply this new philosophy therefore the gaps between countries became smaller and smaller. In fact in 1980s, 20
- Xem thêm -