CHAPTER I THE PROBLEM AND ITS BACKGROUND

Introduction For more than two decades, Sindo Resources Incorporated has been known for its pursuit for design, quality and innovation. In the discriminating markets of United States, Japan, Canada, Australia, Germany, Spain, Italy, Mexico, Korea and other countries in America, Europe and Asia, Sindo was able to demonstrate the excellence of their contemporary Asian furniture products. While such reputation might took several times to acquire, through the outpouring of innovative ideas, its cravings for new product design, and excellence in product quality, Sindo won the world during its early years of operations. Locally, Sindo serves its market through its showrooms in the countrys infamous malls in Mandaluyong City (SM Megamall), Paraaque City (SM Southmall), and Makati City (Ayala Center) and through the various contract projects it has done for top hotels, restaurants and other businesses. With the current implemented quality

control practices, Sindo has been in an average to satisfactory level in its stand in the industry. Moreover, since recession has taken place globally, Sindo has experienced decreases in revenue and has lowered down some cost associated with operations. Which is why, Sindo Resources has worked intensively to find new ways to retain and even alleviate its stability and goodwill to its market. Apparently, for a company to regain, preserve and keep their markets intact, product and/or service quality is the primary consideration or priority. Reduction of cost while keeping the quality at its best is the primary key for the sustenance of the company.

Recently, SINDO Resources Incorporated's Quality Management has not been rooted deeply and consequently, was not able to justify their market somehow unlike some other companies who were able to keep their competitiveness in spite of the global economic recession. A successful set of activities begins with an organizational environment that fosters quality, followed by an understanding of the principles of quality and then an effort to engage employees in the necessary activities to implement quality. When these things are done well, the organization typically satisfies its customers and obtains a competitive advantage. The ultimate goal is to win customers. Because quality causes so many other good things to happen, it is a great place to start (Heizer & Render, 2006, p.192). Acknowledging different quality issues and considering its impact to the company as a whole, enticing the employees and its workers to share with the common goal of the organization would lead to an advantage for the company.

Background of the Study In the Philippines, manufacturing of furniture is one of the industries excelling when it comes to quality as it increases Philippine exports to several countries. Philippine-made furniture had marked its name through the years, keeping its status robust because of existing competent companies manufacturing world-class furniture designs. Apparently, its not just the design that counts. A good design with poor quality presupposes a weak market. That is why; most companies nowadays had worked on several factors that would help them push quality in every product that their company

would manufacture. Sindo Resources Incorporated, though not established as huge as other furniture-manufacturing companies, had the means to promote quality in all its products. The company may have been reduced its manpower, still the company was able to sustain its reputation for producing high-quality furniture among others. In this research, the researchers focused on Total Quality Management, particularly Deming's principles as compared and related to Sindo Resources Incorporated's quality control practices. Sindo Resources Incorporated, though

performing its best towards manufacturing high-quality products, still had insufficient knowledge about Total Quality Management as a useful tool towards gaining consistent high-quality furniture produced with low cost yet yielding higher profit. SRI has

implemented Quality Control points, as it is seen through their high-quality furniture. Having Deming's program in the company, if so, will trigger the company to stress a commitment to have a continuing companywide drive towards excellence in all aspects of products that are most important to the customers/clients.

Theoretical Framework Almost all products and services that we consume, utilize, and avail is an output of the Production and Operations Management function. In the very competitive,

volatile, and unrest business world, the firms ability to withstand all the adverse effects of financial, socio-economical, legal, and technological downturns depends normally on its ability to reach preferences of their customers and having competitive advantage over other competitors. According to Heizer and Render, 2006, Competitive advantage

implies the creation of a system that has a unique advantage over competitors. The idea

is to create customer value in an efficient and sustainable way. Company may compete through Differentiation, Low cost leadership, and Response. Managing Quality helps build successful strategies of differentiation, low cost leadership, and response (Heizer & Render, 2006). For instance, management may use market quality preference, acquired through feasibility studies, to differentiate among others. By fully utilizing the facility effectively may drive down cost and thus, increase in profit. And with quality systems, during inconsistencies in environmental conditions, the company may adjust accordingly without sacrificing the quality of output and remain its cost within its acceptable level. advantage of the firms. As defined by the American Standard Institution and the American Society for Quality Control, Quality is the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs. Quality is further defined into user based, manufacturing based, and product based. User based quality definition falls under the definitions of the marketing people that the quality lies on perceptions of end users that high quality is better performance, nicer features, and improvements. For other views, quality is a precise and measurable variable product based. While for Thereby, quality has to do with competitive

operations manager, quality is manufacturing based which means conforming to standards and making things accordingly, even though happened for the very first time. Thus, quality is not just on the output of production process, it is integral part of the whole production process. Perhaps, it starts from the procurement of the production materials from suppliers up to the after sale services of the products sold (Heizer & Render, 2006).

From the manufacturing based definition of quality, perhaps, W. Edward Deming, quality expert, derived his philosophy that management has the responsibility for building goods systems. That the employees cannot produce product than on average exceed the quality of what the process capable of producing. After the World War II, the world economy was found on a crisis. To move on from war and the recession that causes so much poverty, Japan has implemented strategies that accounts for the success of the Japan's economy in its implementation of Total Quality Control (TQC) Program which is an adaptation of the quality management teachings of Shewhart and Deming. TQC is defined as the totality of an integrated product and process development which aims is to build quality into the design of the product and process (Talavera, 2001). Because of the quality improvement in Japan, Americans saw it fit to adopt a quality management system that could improve the quality of their products in 1980s and it is referred to as Total Quality Management (TQM). Total Quality Management refers to a quality emphasis that encompasses the entire organization, from suppliers to customers. TQM stresses a commitment by

management to have a continuous companywide drive towards excellence in all aspects of products and services are important to the customer. W. Edward Deming used 14 points to indicate how he implemented TQM. 1. Create consistency of purpose. 2. Lead to promote change. 3. Builds quality into the product; stop depending on inspections to catch problems. 4. Build long term relationships based on performance instead of awarding

business on the basis of price. 5. Continuously improve product, quality and service. 6. Start training. 7. Emphasize leadership. 8. Drive out fear. 9. Break down barriers between departments. 10. Stop haranguing workers. 11. Support, help, and improve. 12. Remove barriers to pride in work. 13. Institute a vigorous program of education and self improvement. 14. Put everybody in the company to work on the transformation. These fourteen points, as used by W.E. Deming in implementing Total Quality Management in various entities before, were developed into seven concepts for an effective Total Quality Management program, namely: (1) Kaizen or Continuous Improvement, (2) Six Sigma, (3) Employee Empowerment, (4) Benchmarking, (5) Just in Time, (6) Taguchi Concepts, and (7) Knowledge of TQM Tools (Heizer & Render, 2006, p.196).

Conceptual Framework Based on the general apprehension, total quality adds a companywide effort to establish a climate for continuous improvement that is, a simultaneous pursuit of everhigher levels of customer and employee satisfaction and productivity in the products or services. Total quality management utilizes a combination of methods, theories,

INPUT --Profile --Age --Gender --Civil Status --Highest Educational Attainment --Number of Economic Dependents --Length of Service --Demings Total Quality Management Principles --Continuous Improvement/ Kaizen --Six Sigma --Benchmarking --Just-in-Time --Taguchi Concepts --Employee Empowerment --Knowledge of TQM Tools -- SRIs Quality Control Practices Implemented --Continuous Improvement/ Kaizen --Six Sigma --Benchmarking --Just-in-Time --Taguchi Concepts --Employee Empowerment --Knowledge of TQM Tools --Socio-Economic Impact --Problems Encountered --Possible Solutions

PROCESS --Survey Questionnaire --Documentary Search --Unstructured Interview --Statistical Analysis --Frequency Distribution --Average weighted mean --Ranking --ANOVA --Likert Scale

OUTPUT Policy Recommendations for : --Amending quality control practices in adherence to Demings TQM principles. --Factual decisions making to justify problems to gain superiority among others in the industry. --Maintaining made to order system as proposed by Just in Time system . --Improving internal control to safeguard raw materials to reduce cost associated with losses. --Improving internal control to eliminate defects. --Establishing good relationship with customers. --Involving of employees in all parts of quality management implemented by the company. --Practicing due degree of responsibility by the management in implementing TQM. --Recommendation for further research.

FEEDBACK

Figure 1. Conceptual Paradigm

techniques, and quality guru strategies for achieving world-class quality. This research is conceptualized under the systems approach. The system of three frames is composed of input which went through the process or operation and emerges as the output. The input focuses on the demographic profile of the respondents and the factors affecting total quality management. The second frame is the processing of data; the researcher uses survey questionnaires, documentary search, unstructured interviews and statistical treatment. The third frame is the output. It contains policy recommendations that the researchers suggested for the enhancement of a more effective quality control system/program.

Statement of the Problem This research aimed to determine the significant difference of SINDO Resources Incorporated's quality control practices to Deming's Total Quality Management principles. Moreover, the profiles of the management people from middle to top management, the Total Quality Management concepts applied in the company, and the management people's' perception pertaining to the quality of SRI's production process and products, and any significant difference among variables were factored in, in researched efforts. Finally, the study inquired into the firms socio-economic impact in relation to Demings total quality management principles, problems encountered and, its proposed solutions thereto.

Specifically, this research endeavored to answer the following: 1.0 What is the profile of Sindo Resources Incorporated's (SRI) management people in terms of the following: 1.1 Age; 1.2 Gender; 1.3 Civil status; 1.4 Highest educational attainment; 1.5 Number of economic dependents; and 1.6 Length of service? 2.0 What is SRIs management people awareness of Demings Total Quality Management concepts as to the following: 2.1 Continuous improvement/Kaizen; 2.2 Six sigma; 2.3 Benchmarking; 2.4 Just-in-time; 2.5 Taguchi concepts; 2.6 Employee empowerment and; 2.7 Knowledge of TQM tools?

3.0 How do the Deming's established Total Quality Management principles relate to SRIs quality control practices implemented as to the following: 3.1 Continuous improvement/Kaizen; 3.2 Six sigma; 3.3 Benchmarking; 3.4 Just-in-time; 3.5 Taguchi concepts; 3.6 Employee empowerment and; 3.7 Knowledge of TQM tools? 4.0 What is the socio-economic relevance of Sindo Resources Incorporated in relation to Deming's Total Quality Management principles? 5.0 What are the problems encountered by the Sindo Resources Incorporated? 6.0 What are the possible solutions thereby formulated? 7.0 Is there a significant difference between the profile of the respondents and Demings Total Quality Management principles as implemented in Sindo Resources Incorporateds quality management practices?

Hypothesis The null hypothesis tested in this research is: There is no significant difference between the profile of the respondents and Demings Total Quality Management principles as implemented in Sindo Resources Incorporateds quality management practices.

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Scope and Limitations This research will look into the evaluation of the management people of the Sindo Resources Incorporated as to Deming's Total Quality Management principles as harmonized to the quality control practices of the company. This was done to have an understanding if the company adopted, if so, the Total Quality Management principles of Deming that boosts the quality of the products manufactured by the company leading to greater profits and lesser costs. The respondents of the study were composed of 38 management people of the Sindo Resources Incorporated, from the middle level management to the top level management. The questionnaires were administered in 14th day of September, 2009 and were all retrieved on the 16th day of September, 2009 at the SRIs compound in Marick Subdivision, Cainta, Rizal. The questionnaires prepared based on Deming's principles and SRI's Quality Control practices will be administered to all the management people, without further need for any sampling technique.

Significance of the Study This research entitled Harmonizing Sindo Resources Incorporated's Quality Control Practices to Deming's Total Quality Management principles wants to provide not only the company and its management, but also other related parties the significance of quality as the wonderful tonic for improving operations, thus increasing the organization's stand in the industry. Specifically, it will be beneficial to the following:

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Management.

The eventual impact is for the company management.

The

context of this research will be effective for the use of the company management in initializing a highly productive manufacturing process and highly effective control procedures on its Productions and Operations Management, particularly in its Quality Control practices. Employees. Realization of employees capabilities and calibre will be brought about through this research. Hence, employees' confidence will be boosted when they partake in the production processes. Customers/Clients. Customer/clients are one of the most interested parties when it comes to quality. Customers as end user of the product, ultimately experience the product. Through this research, customers/clients will have more definite answers to their questions regarding the quality of the product which is vital to them. Researchers. This will help the researchers in analyzing the factors that they may encounter in Quality Management in their future careers. Related Companies and the Industry. The research will help not only the subject company but also those companies that are in same fields. Other related

companies are now aware of the possible drawbacks of the similar methods they have applied regarding Quality Management. The benefit of the research that goes to the subject company might also be beneficial to the related companies. Other Researchers. This will aid ensuing researchers as a reference for their further study of Total Quality Management. Finally, any result of this undertaking is expected to be of help in having general knowledge with regards to the Total Quality Management. Anything that will be

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identified in the survey as contributor to Total Quality Management that will be recommended for its preservation and improvement.

Definition of Terms For better understanding and interpretation of this study, the following terms are operationally defined. Age. In this research, it refers to the entire period of life and existence of the respondents or the period of stage of life measured by the time already or previously passed. Civil Status. In this study, refers to the marital status whether single or married. Economic Dependents. In this research, it refers quantitative measurement of a persons legal dependents Gender. In this research, it refers to the classification of respondents according to male or female. Highest Educational Attainment. In this research, it refers to the degree or level of a persons academic or vocational accomplishment. Length of Service. In this research, it refers to the span of time a person had stayed in the entity where we worked with. Management. In this research, it means improving and maintaining business systems and their related processes or activities. of the respondent,

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Profile. In this study, it refers to the respondents classification as to age, gender, civil status, educational attainment, length of service, rank/position, and average monthly salary. Quality. In this research, it refers it means meeting or exceeding customer

(internal or external) expectation. Quality Control. In this research, it refers to the manner of evaluation of the product against requirements, and due detection and correction of problems. Socio-economic. In this research, it refers to the relationship between economic activity and social life of employees. Total. In this research, it means that everyone participates and that it is integrated into all business functions.

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