Total Quality Management in Service Industry

Topics: Quality assurance, ISO 9000, Quality management Pages: 12 (3440 words) Published: March 7, 2011
This paper reports on the importance of total quality management in service sector. It also reports on means to achieve total quality in service sector. There are various dimensions of quality are present to measure it. This paper looks on these dimensions and also addresses the Quality assurance system which is used to get assurance of standard quality. The paper also discuss about the various quality standards used by service sector and principles of ISO 9000:2000. Problem Statement:

Whenever the concept of total quality management is heard, the first thing that strikes to our mind is manufacturing industry. Though the concept of total quality management is invented by manufacturing sector, in respect to improve their product quality and cutting cost to increase revenues; it is also equally applicable to service industry. The answer to the question of in which area of service industry, quality management principles are applied? how they are applied? Introduction:

Total Quality Management:
Total quality management is a broad, including whole organization’s efforts to improve the quality of products and services, applicable to all businesses. It is a method by which management and employees can become involved in the continuous enhancement of the production process of goods and services. It is a combination of quality and management tools which is aimed at increasing business and reducing losses due to inefficient and wasteful practices. Quality management can be considered to have three main components that are quality control, quality assurance and quality improvement. Quality management is focused not only on product or service quality, but also the ways to achieve it. Quality management therefore uses quality assurance and control of processes as well as products to attain more constant/ consistent quality. Service Sector/Service Industry:

Definition of service given by various authors is-
Service is work performed by someone else. – by J.M.Juran Effective work of non-physical product. – by K. Ishikawa
Useful immaterial product for society. – Japanese D.

Businesses or industries can be categorized into two sectors that are: goods- producing sectors and service- producing sectors. But this general category of service sector includes variety of industries. These can be categorized primarily into consumer- oriented which provides services directly to customers, business- oriented which provides services to other businesses or mixed which includes providing services directly to customers or other businesses. Therefore the example of service industries or businesses can be given as- transport, communications, banking, insurance, hotels and restaurants, trade, other financial services, medical and hospital services, educational institutions, public administration and defence services, etc. This service sector contributes a major portion of Gross Domestic Product of developed countries. And in India, service sector contributes over 40% of total GDP. And in all service sectors, banking sector has been one of the fastest growing segments that seen from the table given below: ServicesAnnual Rate of Growth in %

Banking and Insurance Services7.9
Transport Service6.8
Communications Service6.5
Hotels and Restaurants Services5.1
Real Estate and Business Services 4.4
Railway Service3.4
Other Services4.9

Need of Quality Management in Today’s Business:
Various reasons that make quality to be a key priority for most the organizations: 1.Competition – As today’s market demands high quality products or services at lowest possible cost. Having `high quality’ reputation is not just enough! Internal cost of maintaining the reputation should be minimum. 2.Changing consumer mind – The new consumer’s priority is not only based on the volume but is also demanding more about the “quality system.” 3.Changing the product mix – The shift of product line from low volume and high price to high volume and...
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