Reid, Richard A


Although staff in small businesses acknowledge the inherent value of conducting a Total Quality Management (TQM) process improvement project, many members of a continuous improvement (CI) teams are unaware of how to apply TQM structures and techniques in a coordinated manner. After presenting the concepts and techniques associated with the TQM philosophy, advantages and limitations associated with their implementation in small businesses are considered. A case study involving a comprehensive process improvement effort at a small bakery-cafe demonstrates that application of a CI structured framework and the coordinated use of TQM tools provides insights and understanding relative to the project’s goal. The team’s ruminations and reflections relative to improving the customer service process and the lessons that were learned are documented.


The conceptual foundation of the Total Quality Management (TQM) philosophy is the principle of continuous improvement (CI). By promoting an attitude of constant improvement in performance, CI seeks to identify and implement ongoing enhancements in a firm’s products, services, and processes. TQM and the quality movement provide managers with a broad collection of methods and tools to accelerate the improvement process in their organizations.

In contrast to large business firms, with their emphasis on vertical reporting relationships and hierarchical organizational structures, many small businesses can be characterized as being focused on customers and the horizontally-oriented work processes that serve them. With this orientation, it is logical to think of natural groups or small teams of directly involved employees being established to improve the processes by which work is performed. Although it is possible that these teams can benefit from the productive use of CI concepts and techniques, it is often difficult for personnel in small business to find time for TQM training and the evolving process improvement responsibilities (Ghobadian & Gallear, 1996). Nevertheless, upon becoming aware of TQM concepts and tools, most employees acknowledge their potential contributions because the inherent value associated with TQM tools is readily apparent when they are studied in isolation or illustrated through simple exercises. However, CI teams may fail to see how to utilize TQM structures and techniques in a coordinated and systematic manner within their own organizations. Thus, adapting the concepts and applying the tools to address a specific process improvement situation in a small business often presents a significant challenge to a CI team.

In operationalizing the CI improvement philosophy, it is necessary for small businesses to understand that these TQM structures and methods are valuable because they aid in the team learning. However, the effective application of the TQM tools to help analyze data collected or to facilitate team-based interaction is only part of a team’s ongoing learning experience. Of equal importance, however, is the realization that the use of TQM tools should unfold in a natural sequence as teams apply them in the improvement process. That is, it is important to emphasize that using the TQM tools in a rational and orderly fashion can improve the understanding of a problem and often leads to a better solution while extracting the highest level of collaboration and contribution from each of the CI team members.

The purpose of this paper is to describe and illustrate the process and results of a team-based application of TQM tools in a logical and orderly fashion within the guise of a structured approach to process improvement. First, major ideas and concepts associated with the TQM philosophy and its implementation are considered. second, some of the advantages and limitations associated with implementing TQM in small businesses are discussed. Third, the team-based reflections and results associated with the application of TQM concepts and tools to improve the service creation and delivery process in a small bakery are documented. Finally, the lessons learned from this experience in process improvement by the CI team are presented.


TQM seeks to create an organizational culture that advocates continuous and incremental improvement by all employees in everything associated with designing, creating, and delivering satisfaction to a firm’s customers. The rationale for CI is that customer needs are not static but are dynamic and change continually. Although a firm’s outputs and/or its processes may be considered innovative today, competitive forces may render them just routine tomorrow. Thus, a firm is able to remain competitive in today’s marketplace only by continuously upgrading its performance in the mind of its customers. In short, CI can be an effective operations strategy if it (1) embraces the TQM philosophy with its focus on satisfying the needs of its customers, (2) exploits the firm’s internal capabilities, and (3) seeks to improve upon the competencies of its competitors (Schonberger & Knod, 1997).

W. Edwards Deming has stated that managers must constantly and forever improve their service and production processes. Emphasizing that improvement is not just a “one-time effort”, he has said that managers are obligated to continuously search for and implement ways to reduce waste and improve quality (Walton, 1986). Juran (1989) verbalizes his agreement with Deming in the following two imperatives: (1) to maintain and increase sales income, companies must continually evolve new product features and new processes to produce these features, and (2) to keep costs competitive, companies must continually reduce the level of product and process deficiencies. Moreover, he believes that both customer needs and competitive cost structures are moving targets.

From an international perspective, kaizen, is the name that the Japanese have given to the concept of continuous incremental improvement. It is considered to be the single most important concept in Japanese management and the key to their competitive success (Imai, 1986) because it is operationalized throughout the total organization and expected to be practiced by all employees at every level. Kaizen means making changes for the better on an ongoing basis.

Continuous improvement is usually embodied in a team-based, structured approach that is focused on the need to establish an organizational commitment to a systematic, ongoing increase in the capability, reliability, and efficiency of business processes (Conway, 1993). A process or sequence of activities involved in performing work is comprised of inputs, transformations, and outputs. The six basic types of inputs are personnel, capital, energy, materials, technology, and competitive/environmental forces. Transformation processes involve three types of work activities (Hammer, 1996): value-added, non-value added, and waste. Value-added work represents those activities for which the external customer is willing to pay. Three requirements are needed for a work process activity to add value (AMA, 1993): (1) the customer cares about the process, (2) it physically changes the thing being processed, and (3) it is done right the first time. Nonvalue added activities create no direct value for the customer but are required to get the value-added work done; examples include administrative overhead activities such as reporting, documenting, supervising, controlling, coordinating, and reviewing. Waste includes all activities that neither add nor enable the creation of value. Finally, outputs are the products and/or services produced by a firm’s business processes.

Although there are several standard approaches for structuring the implementation of CI, one of the most common is the Shewhart or Deming PlanDo-Check/Study-Act Cycle (Deming, 1982 & 1986). Figure 1 displays the important characteristics and content of the four stages in this structured approach.

Plan. Typically, CI teams spend the vast majority of their time and effort in this first stage. Planning involves many activities associated with thinking about, studying, analyzing, and understanding the current situation. There are six components involved in the CI approach to planning. First, the problem or improvement opportunity must be defined. This includes setting boundaries around the process under consideration while noting that problems are often embedded in a process and to solve a problem may involve improving the process in which it resides, that is, the environment of the problem. second, data on customer needs must be collected and analyzed. Here it is worth noting that customers are represented by the next and all subsequent workstations/activities in any work process, all the way to and including, of course, the end-user or ultimate consumer. Third, learning about products/services and the creation and delivery processes offered by the firm and its competition. Certainly, there is value in knowing how your firm compares to its major competitors, in particular, the firm’s advantages as well as its shortcomings must be understood. Fourth, all possible causes and a root cause or core problem must be identified. That is, the CI team must probe beneath the large number of the symptoms or undesirable effects to uncover the real issue that is responsible for the current situation. Fifth, a number of possible improvement alternatives to address the situation must be developed and evaluated. The more viable alternatives that can be generated, the greater the probability is that an effective one will be selected for implementation. Finally, an effective action plan, including performance targets, needs to be established. As the foundation for the Deming Cycle, planning is considered to be the most important step in the P-D-C/S-A cycle.

Do. Once a plan has been formulated, resources identified, responsibilities assigned, and the staff trained, it is time to execute the improvement plan. Usually this implementation is done on a small scale or as a pilot project. During this stage, it is necessary to: (1) follow the plan, (2) document any changes to the plan along with the rationale for the change, and (3) measure progress from both the customer’s and the firm’s perspective. This sequence of actions is suggested to enable the CI team to maximize its learning from this experience. In order to assess the success of the plan, it is necessary for a relatively comprehensive set of performance data to be systematically collected during this stage.

Check/Study. This stage focuses on a review and evaluation of both the original improvement plan and the results generated during its implementation in the previous stage. Performance data are summarized and analyzed. Comparisons are made between actual and expected results of the implemented change. The idea is to determine if the planned changes were successful in addressing the core problem and whether the symptoms have diminished or been eliminated. Emphasis is directed toward determining (1) what was learned, (2) what can be generalized for use in future improvement activities, and (3) what, if anything, remains dysfunctional. Even though the plan may have been successfully carried out, permanent implementation may still require some finetuning during the next stage. If the implementation was only partially successful, or at worst, unsuccessful, then it may be necessary for the CI team to revisit either the first stage (incorrect core problem or poorly conceived action plan) or the second stage (poorly implemented action plan). Figure 2 shows a macro flow chart of these possible actions and responses.

Act. During this stage, successful improvements are codified as the new standard operation(s). Changes are institutionalized to assure that progress made is permanently captured in revised policies, procedures, and processes. Moreover, the new, improved change needs to be communicated to all employees and selected aspects of the CI team’s experience need to be documented and/or extrapolated for future use. The P-D-C/S-A cycle is continued by (1) identifying additional arenas within the firm for applying the lessons learned, and/or (2) developing a new initiative for improving some aspect of the original process that did not totally measure up to prior targeted expectations. In short, it is necessary to iterate through the Deming Cycle for the purpose of applying lessons learned to still other organizational situations and/or addressing additional improvements associated with the original problem.


Although the CI principle was initially developed and implemented in large organizations, it provides a value that is relevant to firms of any size (Ahire & Golhar, 1996). There is evidence (McTeer & Dale, 1994) that small businesses are no less concerned with the introduction and development of TQM approaches than larger organizations. Two investigators (Lee & Oakes, 1995; Ghobadian & Gallear, 1996) discuss several advantages associated with implementing TQM in small enterprises as opposed to larger organizations. First, implementation is easier due to the simplicity of organizational size, structures, and systems. second, a fewer number of personnel suggest that it is easier to inspire and motivate employees. Third, resistance to change is not as prevalent because of the ease of addressing employee concerns through face-to-face interaction. Fourth, often employees are involved holistically with their firm and have a better understanding of its capability for being profitable. Fifth, there is a natural tendency to cross-train personnel leading to easier functional integration of improvements. Sixth, employees are closer to their products and services, and hence, feel more responsible for satisfying customers.

On the other hand, four factors inhibit some small businesses from introducing TQM-based projects (Lee & Oakes, 1995; Ghobadian & Gallear, 1996). First, there is difficulty in introducing TQM to employees as a basis for an effective business strategy. second, it may be costly to free-up personnel from their regular activities for TQM training and team-based process improvement responsibilities. Third, small businesses have a limited set of human resources with little or no backup available to meet, analyze, recommend, and implement change. Fourth, the owner or CEO, often with little formal management knowledge, dominates the organization’s culture and may professes the principle “if it is not broken, there is no need to fix it.”

In spite of these potential difficulties, empirically-based research (Ghobadian & Gallear, 1996) has demonstrated that given an opportunity for implementation, TQM has helped small firms sharpen their market focus, become more efficient, make better use their human resources, and improve their competitiveness. Moreover, they conclude that the adoption of the CI principle increases the likelihood of a firm’s long-term survivability and growth. In short, although small businesses must continuously change their product and service offerings to reflect the dynamic and competitive marketplace, managers need to also realize that, in the long run, time and energy must be allocated to improving processes by which work is performed in their organizations.


This case study represents a relatively comprehensive CI project that was undertaken by a team of employees working at a small bakery and cafe. It is presented in a descriptive-analytical framework and provides periodic reflections on the team-based learning that occurred. The approach taken focuses on documenting the thoughts and reflections by various team members during the actual process improvement experience.

The Continuous Improvement Team

Integral to the success of the CI team was a focus on implementing the six components within the planning stage of the Deming P-D-C/S-A Cycle. Employees selected for membership on the CI team were encouraged to structure their thinking in the problem solving/process improvement arena by reading about various TQM tools in The Quality Toolbox (Tague, 1995). A team facilitator was asked to attend team meetings to help the team identify and employ selected TQM tools.

The team was encouraged to use the TQM tools in a coordinated fashion so that the output of one tool often became the input for the next tool. Although logic was preferred as the underlying rationale for a structured CI approach, it was not always the primary criteria used by the team in determining what to do next. On occasion, the CI team became frustrated when they attempt to apply TQM tools to understand or analyze the firm’s problem situation. Some dysfunctionality seemed to occur as a result of an inherent conflict among team members. Concurrently, they wanted to (1) utilize CI concepts and TQM tools, (2) work effectively as team players, and (3) move ahead logically in a problem solving situation. This interaction seemed to add a degree of complexity to the situation that hindered the overall effectiveness of the team. The dimensions of complexity included dealing with uncertainty that is present in all problem solving situations, trying to collect and analyze information relevant to the situation, and coping with the interpersonal dynamics of the team-based environment.

By providing an opportunity for team members to improve work processes in a small retail organization, the team’s focus was on creating a win-win situation. First, team members win because they learn that being an effective team player often involves subordinating their own desires for individual accolades in order to produce a more effective team performance. The business manager-owner wins because the organization benefits from having their employees focus on improving the potential for customer satisfaction by addressing a problem situation and developing a set of recommendations for improving organizational performance. Not only do employees gain a sense of ownership in the improvement process, but their investment in learning benefits the firm when it is needed to address future problems. The followin narrative is presented to describe how the improvement project unfolded and what lessons were learned.

Existing Situation

The owner of a small, independent combination bakery and coffee shop located in a metropolitan area of the Southwest formed a team of five young and enthusiastic employees. A single facility produces and distributes baked items to local grocery stores and small cafes. It also functions as a retail operation for serving walk-in customers who purchase food to take home or consume on the premises. Although its 25 employees function in a variety of roles, there are four major operations:

1. Bread and other items are baked for both wholesale distribution and over-the-counter sales.

2. Pastries and bagels are made for over-the-counter sale only.

3. Pre-prepared, kitchen-based items are readied for over-the-counter sale.

4. Front-counter food and beverages are prepared and served for onpremise consumption.

Initially, the team focused on understanding the kitchen-preparation process because the owner of the bakery suspected that process improvement in that area would alleviate product shrinkage problems and reduce wastes. After reviewing the situation at their first meeting, the team members reflected on their individual perspectives of how front-counter and kitchen-based processes were functioning. To creatively generate and organize their collective experiences and observations, the team decided to create an affinity diagram. An affinity diagram provides a structured method for organizing a large number of ideas and issues into natural groupings (Brassard & Ritter, 1994). These groupings can provide insight into the essence of a problem situation. Figure 3 contains logical groupings of the team’s initial observations about the bakery’s retail operations. The team used the affinity diagram to help structure their collective understanding of the situation and to develop an objective for their CI project. Broadly speaking, their stated goal became “To Improve In-Store Customer Satisfaction.”

Next, the team developed a macro process flowchart to better understand how the firm’s different operations interacted with one another. In general, flowcharts are schematic diagrams used to describe all the steps in a process or system that is under investigation. Figure 4 presents a flowchart that depicts the relationships between the four basic operations within the bakery. This chart provided the team with information that supported their conclusion that over-the counter sales represented the bakery’s primary customer service operations center. That is, this area was interconnected with all other operations within the firm. Of the four processes feeding the over-the-counter operations, the team and the owner agreed that various bakery production processes appeared to be operating in a relatively effective manner while the kitchen preparation area was somewhat suspect. Moreover, the CI team concluded that customer service operations at the front counter appeared to have numerous problems associated with customer satisfaction. Supporting evidence included long lines of customers forming at various times throughout the workday, some customers having excessive waits for service, and occasional balking and reneging by potential customers during these periods of congestion.

In some reflections, the CI team determined the affinity diagram to be a powerful tool that was useful and easy to implement. After recording their initial observations, they felt that the affinity diagram worked well in allowing them to organize them into natural groupings. Insights from the macro flow chart included a functional depiction of the front-counter as an area with multiple difficulties and some significant improvement possibilities. Moreover, it helped the team focus their attention on a potentially high-leverage problem area, namely, the customer service counter.

Understanding the Customer Service Process

After defining their focus to be over-the-counter customer service, the CI team created two additional diagrams to better describe and understand their selected area of focus. Figure 5 schematically depicts the process by which a customer is served at the front counter. This micro flowchart describes the sequence of events that is followed by customer service personnel. When a customer enters the bakery, s/he approaches the cash register at the front counter directly, looks around to find the overhead menu of available items for purchase which is situated high on the wall to the left and away from the order counter, determine items for his/her order, and then, upon request, communicates the choices to one of the counter personnel. The server takes the order, collects payment, and then starts to fill the order. If the items ordered do not require preparation, the counter person assembles and serves the customer immediately while s/he stands waiting at the counter. If, however, the order requires preparation, the customer is given an oversized playing card attached to a metal stand for order identification purposes, and the customer is asked to find a seat at a table or booth within the shop. Meanwhile, the server prepares the items such as a toasted bagel with a flavored cream cheese smear and a cappuccino. Once the order is ready, the order taker finds the customer by searching for the correct playing card, delivers the order, and returns to the counter to serve another customer. Normally, there are several servers working at the front counter.

Figure 6 provides additional information about the front counter activities by documenting the physical location of the baked goods and equipment used in providing customer service. This floor plan presents the relative size and location of consumable items and facilitating goods that are typically utilized by the counter personnel in meeting customer needs. Some significant customer/order relationships include:

* Fountain drinks are prepared and served by counter personnel.

* Water, coffee, and bottled beverages are self-serve.

* At the end of their visit, customers are expected to clear their table.

The CI team observed that these descriptive diagrams and related activities were necessary in understanding the current customer service process. The team realized that it was necessary to describe the existing situation before it could prescribe any potential improvements as required in the planning stage of the P-DC/S-A improvement cycle. In addition, they felt that by developing the flowchart and layout diagram, they were able to broaden their perspective, which helped facilitate progress toward a collective mental model of the process under investigation for improvement.

Value-Added Analysis.

Through study of the micro flowchart that depicts the current relationships among the steps involved in serving over-the-counter customers, the CI team began to think about the value that was being added during each of the steps of the service process. To address this issue, the team decided to create a value-added analysis chart (AMA, 1993). In order to better serve their needs, the team modified the standard value-added chart by creating two additional columns to indicate whether a step was done right always or only sometimes. This enhanced value-added matrix is shown in Figure 7.

The value-added analysis identified twenty-eight possible distinct steps in the process of fulfilling a customer order. For a step to be viewed as value-added from the perspective of the customer, it had to meet each of the following three criteria: (1) the customer cares whether the step is done; (2) the step results in a physical change in the customer service process situation; and (3) the step is done right the first time. The team found that fifteen of these order fulfillment process steps did add value. Sometimes, both columns under the “it is done right” heading were checked. This indicated that a step would occasionally be done incorrectly, but was usually done correctly. In these situations, the outcome dramatically affected the processing of the order. The development of the valueadded chart generated much discussion among the team members. The team’s unanimous consensus on the designation of a step as value-added was crucial because these findings provided a significant input to the set of ultimate recommendations generated during the planning stage.

The CI team observed that if they had used the value-added matrix in the standard manner, the results would not have contributed many insights into their improvement efforts. Moreover, they thought their modifications of this TQM tool represented an important new insight in that it required focused, out-of-thebox thinking about the use of a specific TQM tool that needed to be adapted for their specific situation. This was an important team achievement that was motivated by their need to gain some utility from this chart for their improvement effort. The team was quite pleased with their creative approach to utilizing this tool.

Alternative Generation and Evaluation

Now that counter operations had been fully described and evaluated from both the server’s perspective and the walk-in customer’s perspective, the CI team needed to identify some specific areas for improvement. To aid in this effort, the CI team sought to identify logical linkages between the original set of observations and their areas of focus as specified in the affinity diagram (see Figure 3). This coupling was done through the determination of a set of directives. As shown in Figure 8, the team used a tree diagram to visually display these resultant relationships.

In general, tree diagrams systematically map out in increasing detail the full range of paths and tasks that need to be accomplished to achieve a primary goal (Brassard, 1989). This tree diagram uses linear logic to graphically link the stated goal with the initial set of observed problems or issues from the affinity diagram. By identifying increasingly detailed actions that must be accomplished to achieve increased in-store customer satisfaction, the diagram shows the means and subsequent directives needed to address the specified problems. In particular, the group defined three means: Improve Layout, Reduce Employee Inefficiencies, and Improve Operations Procedures. These means lead to five distinctive directives: Shorten Lines, Create Better Layout, Define Employee Standards, Redesign Customer Order Process Relationships, and Redefine Employee Responsibilities.

Within the team, questions arose regarding which means could provide the greatest improvement and the extent to which the directives were interrelated. It was determined that a prioritization matrix would be an appropriate TQM tool for deciding which directive had the greatest potential for achieving the stated goal. Items considered in the prioritization matrix flowed directly from the tree diagram’s directives as specified in Figure 8. Given the large number of observations, symptoms, and problems identified in the affinity diagram, this approach was seen as an effective method of ranking the directives in regard to their potential impact on walk-in customer satisfaction.

As required in constructing a prioritization matrix (Brassard & Ritter, 1994), the CI team performed an exhaustive set of pair-wise comparisons to establish the relative importance of each directive in creating customer service improvements and then normalized the resultant totals. In analyzing these results shown in Figure 9, “Create Better Layout” appears distinctly as the most significant directive. The next two most important directives were Shorten Lines followed by Redesign Customer Order Process Relationship. In their quest for understanding and insight, this activity allowed the team to make the following observations:

1. Certain situational factors were deemed to be out of the team’s sphere of control or influence. These included significant changes in the cash register operations, menu design, employee appearance, and table bussing procedures. The team requested that their concerns relative to these factors be communicated to the owner by the team facilitator. It was thought that other procedural inefficiencies, such as the playing card approach to customer order identification and employee specific duties during peak times, could be best affected through improving the flows of customers and service personnel that would result from a new design of the physical layout.

2. After an intensive, yet informative, discussion, the team concluded that the top three directives were strongly interrelated. In particular, they thought that the long lines of customers at the counter were a symptom of inefficiencies in the counter layout and in associated operational procedures.

To help identify the source of the congestion and customer waiting problems, the CI team decided to perform a root cause analysis. A fishbone diagram or cause-effect diagram was ideally suited for an analysis of the long lines of customers. As generated by the team, Figure 10 displays the major potential causes of the long lines and congestion that were observed at the bakery. As shown, nine of the contributing causes are directly related to existing counter service procedures or physical layout problems. It appears that the long customer waiting lines were a symptom of confusion and congestion associated with the order fulfillment process. These conditions were caused by more fundamental root causes. Primarily, the root causes of these problems resided in the layout of the customer service area and the accompanying operating procedures and practices.

This analysis resulted in solidifying two observations. First, the team determined that the physical layout of the service facility was the core problem. second, it reasoned that once the layout was changed, associated changes in operating procedures would naturally follow to eliminate much of the congestion and reduce customer waiting lines.

Next, the CI team used a matrix diagram to better understand the relationship between the physical layout and customer order processing. This TQM tool helped the team systematically identify, analyze, and rate the presence and strength of the relationship between various dimensions of (1) layout and procedures, (2) customer order processing time, and (3) customer satisfaction. Because a t-shaped matrix can be used to combine and compare three sets of items (Brassard, 1989), it was used by the team to address this situation. The influence and effect of the layout and procedures relative to (a) customer action or time to receive order, and (b) customer action and satisfaction, is presented in Figure 11.

Information developed in this exercise and shown in Figure 11 helped the team establish some important associations:

* The customer service counter area influences both time required to fill an order and the customer’s perception of service quality. For example, a revised physical layout and customer flow pattern could direct the customer’s attention to the wall menu immediately upon entering the service wait line, and subsequently, the time required to decide what to order could be reduced.

* The location of the food preparation area and the ordering of prepared items are directly correlated, and consequently, the sale of high margin prepared food items could be stimulated by directing the customer’s attention to the food preparation area.

* The customer order identification playing card system appears to affect both customer satisfaction and the lengths of time it takes to find customers and deliver their orders.

* In regard to customer satisfaction, order time could be significantly reduced through advocating the self-service concept in dispensing customer beverages.

Recommendations for Change

The team had used a large number of TQM tools to help them structure their description and analysis of the customer order fulfillment process. It was now ready to develop and present its recommendations. In general, the team felt that customer satisfaction would be improved by reducing congestion and customer wait times. Thus, it would be necessary to redesign the physical layout of the service counter area and develop new operating procedures to support the change in customer flows and employee work patterns.

As shown in Figure 12, the team redesigned the layout associated with service walk-in customers. The recommended physical changes, shown as shaded areas, sought to significantly reduce the distances that employees would be required to travel to prepare and serve customer orders. Moreover, they would eliminate the need for customers to search for the overhead wall menu. The water fountain, soft drinks, and coffee would be consolidated in a single self-serve unit. The servers would give customers the appropriate beverage container after the order is placed and the customer would then serve himself/herself. This would permit the server to stay at the order counter and serve more customers. To offset higher costs associated with free refills, all beverage prices would be increased slightly.

Not surprisingly, the team recommended the elimination of the customer order identification playing card system. Changes involve giving a customer an order number and when their order is ready, their number will be called and they will pick-up their own orders at the counter. While this change appears to reduce customer service, there are several positive effects. Both service and waiting times for all customers are expected to be reduced, which should increase customer satisfaction. Additionally, it will lead to a decrease in average customer service cycle time and result in a higher customer throughput rate. This has the effect of increasing the service capacity of the bakery. Moreover, servers will not have to leave the service counter or search for the appropriate identifying playing card to deliver a customer’s order. Obviously, these benefits of additional customer participation in the service creation and delivery process will be most important during periods of peak customer demand.

Additional changes for times of peak demand include the assignment of specific duties and responsibilities to counter service personnel. Two personnel will take orders at the cash registers and serve those orders that do not require any preparation, such as a cup of coffee and a cinnamon roll. A third person will be permanently assigned to the food preparation area and announce the customer’s identification number when his or her order is ready. This policy organizes personnel resources more efficiently by eliminating much of the non-productive employee travel time while concurrently increasing server accountability of the monetary receipts at the cash registers.

Figure 13 presents a revised process micro flowchart for the new operations at the redesigned front service counter. In comparison with Figure 5, this chart illustrates the reduction in complexity associated with the new layout and operating procedures.

To test and compare these recommendations for change, the team simulated customer transactions under both the existing layout and proposed layout. Order times were measured for four different types of customer orders. The simulations provided a reasonable basis for quantitatively estimating the impact of the proposed changes. Each type of order was performed five times and the mean processing time was computed. Results are shown in Figure 14. The simulation tests indicated that the recommended changes would reduce the expected time required to process each type of customer order except for the single soft drink order, which consumed the same amount of server time under both layouts.

The CI team made several other observations relative to the proposed changes that reflected some of the less tangible aspects of customer service. First, they felt the by eliminating the “quirky and somewhat eccentric” customer order identification playing card system, customers would spend less time waiting. second, the recommended changes require the customers to serve their own drinks but also allow them to have free refills. From an overall perspective, the team noted that since the bakery caters primarily to university students, the proposed changes in serving methods seems consistent with the service expectation of this group of clientele. Finally, customers became more active participants in the service creation and delivery process.

Figure 15 presents a revised value-added analysis chart for the new layout and operating procedures at the redesigned customer service counter. In comparison with Figure 7, the new value-added chart shows a reduction to twenty-six possible steps in customer order processing. Although thirteen of these steps remained non-value-added, most were considered as required to support the value-added work. In addition, a new column indicating whether a step was improved has been included. This column was established to capture some of the intangibles that appeared to be associated with the proposed changes. As an example, because the server does not have to walk as far to make a coffee drink, the customer no longer waits as long as he or she did under the existing layout. The team agreed that twelve process steps were improved as a result of the proposed layout and new operating procedures.


Effective teaming is an important element in process improvement. TQM principles and tools for process improvement provide valuable assistance in helping a CI team describe, summarize, and analyze a problem situation in a small business. Moreover, they help the team structure, generate, understand, and evaluate alternative solution approaches. The CI process gains structure through the utilization of the two basic types of TQM tools which, in general, focus on either (1) data collection and analysis or (2) facilitation of team-based activities. Normatively, a CI team moves from problem definition through alternative evaluation and recommendations in a logical manner. Because a coordinated use of the TQM tools is most effective, these tools seem to work best when the output of one becomes the input for the next. Although generic frameworks have been developed for guiding a structured use of TQM tools (see, for example, Brassard, 1989, page 7; Oddo, 1995, page 227), the CI team experience has shown that their most effective use is often governed by common sense. Keeping their goal firmly in mind, teams need to assess the outcome provided by a tool before determining what to do next. Because every process improvement opportunity is somewhat unique, CI teams should reflect on their current situation and select their next tool so that they have the best possibility of moving them toward their stated goal. Moreover, teams should not hesitate to modify a tool to meet their needs. Finally, the CI team realized that the TQM tools will work if they are used as they were designed to be used rather than trying to extract a predetermined result.

A prerequisite to successful process improvement in small businesses is the ability of dedicated employees to work effectively in teams. The CI experience stresses teamwork and employees soon realize that the project will proceed, but with great difficulty, unless the team collectively works together and all members actively participate. Through a positive team-based experience, employees in small businesses readily become active contributors to problem solving and process improvement efforts. Moreover, they will want to use the TQM tools because of their successful experience. Guided by a generalized framework for improvement, the tools add a sense of structure to a seemingly ad hoc process. Additionally, progress can be further guided by data-based decisions and tool-generated results that reflect a current understanding of the situation in contrast to gut-feel or intuition about what to do next.

As the CI team matured, significant opportunities were identified for conducting additional analyses. For example, the team suggested that data could be collected and analyzed in the form of customer satisfaction surveys and that actual customer order processing times could be recorded and summarized periodically. These efforts would provide documentation on actual performance and information on trends that would serve to guide future improvement efforts. As various TQM tools were used, new understanding and insight was provided about improvement opportunities for the team and their value became more appreciated

In sum, four fundamental lessons are illustrated by this case study. First, a relatively objective and logical set of recommendations is obtained when TQM concepts and tools are used in the planning stage of Deming’s Cycle. second, the TQM tools are effective in moving the team toward their goal when they are used appropriately and correctly. Third, by proceeding logically from one step to the next, the output of one tool often becomes the input for the next tool. Finally, the full participation of each team member is crucial to realizing a successful experience in process improvement.


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Richard A. Reid

University of New Mexico

Richard A. Reid is the James Rutledge Professor of Management in the Anderson School of Management at The University of New Mexico, where he teaches undergraduate and graduate courses in system thinking and production/operations management. He received his Ph.D. in system research and a M.B.A from Ohio State University as well as a BSME from case Institute of Technology. Dr. Reid has published over 100 articles in national and international journals and is the co-author of one book entitled Competitive Hospitals. He has been a consultant to the private sector and governmental agencies in the application of analytical models and process improvement tools to production and service delivery systems.

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