Measuring the Effectiveness of the Quality

Asian Research Consortium Asian Journal of Research in Business Economics and Management Vol. 5, No. 1, January 2015, pp. 00-00. ISSN 2249-7307

Asian Journal of Research in Business Economics and Management www.aijsh.org

Measuring the Effectiveness of the Quality Management Systems Configuration with Process Groups of Standard ISO 21500 with Data Envelopment Analysis Meysam Jafari Eskandaria, Meysam Mirib*, Samira Rajabic a

Assistant Professor, Department of Industrial Engineering, Payam Noor University, Tehran, Iran [email protected] b

Master of Industrial Engineering, Payam Noor University, Tehran, Iran [email protected]

c

Master student of Industrial Engineering, Payam Noor University, Tehran, Iran [email protected]

Abstract The importance of quality management systems are so much in advance strategic decisions of organizations that can be said necessary to achieve organizational goals and the success of organizations is the adoption and implementation of quality management principles. There are eight principles of quality management system that can be considered as a basis for writing the quality management system standards of ISO structure. The purpose of this paper is the adaptation and integration of 39 process groups of standard ISO 21500 with the eight principles in: semantic and conceptual and also establish a sub processes in each of the eight groups that display the version of ISO standards are based on the eight principles. The new approach is proposed to implement the sub processes of standard ISO 21500 from the perspective of the eight principles. The initial grouping efficiency of standard ISO 21500 and its new implementation was determined by using of new techniques of data envelopment analysis (DEA) and DEA Frontier software. The results of this study show that the concept and goal of the new implementation is equal to grouping the initial sub processes. Therefore, the published standards by ISO organization in each fields, are located in the framework of this organization.

Keywords: Improve process, efficiency, quality management systems, standard ISO 21500, data envelopment analysis (DEA).

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Jafari Eskandari et al. (2015). Asian Journal of Research in Business Economics and Management, Vol. 5, No. 1, pp. X-X.

1. Introduction Today, the application of quality management principles in any organization is crucial as an essential to advance organizational goals and decisions. Also, the implementation of quality management systems in organizations and manufacturing enterprises has attracted the attention of managers. Quality systems are a set of activities of planning, organizing, coordinating and guiding of organization to ensure customer satisfaction that can lead to more satisfaction of Organizations customers. (Hosseinian and Moharrami, 2013) Audiences of the two approaches may have different careers and personal knowledge. Comprehension of new standard is hard for them. Thus, by providing to layout and a new approach and measure the efficiency of the two approaches together is it possible for the audience that according to his knowledge level and personal experience, He use which layout and approach and yet reach a desired outcome. Ann and Lee (2008) presented a paper titled: Assessment of process improvement in organizational change. The aim of this paper is to evaluate the process improvement of organizational change in the areas of application, gathering resources and reduce time and costs. Selection process and design alternatives have been extracted from the analysis of organizational requirements. Variables and relationships between them are identified and analysis of cost, time, resource usage is done. The results of this study interested companies and organizations to redesign business processes to create mechanisms of related information on upcoming performances. Lypmtz and Colleagues (2012) presented a paper titled: Alignment with the goals of improving the process. The aim of this paper is to explore the impact of assessment process on improving of process. Specifically, this paper presents alignment of an organizational process with organizational goals and the evaluation share of process to align with the goals of the study. The results show that there is a little knowledge and experience in the industry to align the goals of processes and the objectives of the organizational business. Sanjvan and ferrous (2013) studied the application of standards and factors of project management in the development of assessment tools for project management. The examples given in this article that unique reviews the skills of project management and approaches of organizational competencies of project management. In this paper we have used the standard PMBOK and standard ISO 21500. Butista Marin and Colleagues (2012) presented a paper titled: Implementing and monitoring quality management systems based on the standard ISO 15189 in the field of health and medicine. The aim of this paper is to assess the implementation of a quality management system in the field of health and medicine based on the standard ISO 15189. The results of this study indicate that decrease the percentage of sampling error during the 4 years and improve the management of clinics in Spain. Brady and Milur (2010) presented a paper titled: Improving performance of project management with using of organizational knowledge and eliminate disputes. The purpose of this paper is to eliminate disputes and make the expected utility in improving project management performances. The results show that has improved project management performance.

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Dyn and Colleagues (2011) presented a paper titled: certificate and instruction of project performance of ISO 9000. The purpose of this article is the relationship between certification of ISO 9000 and quality management systems and elements of project management performance. Functional elements include: project management, financial management and project success. The results of this study indicate that ISO 9000 certification has a positive impact on project management and project success and improve financial and organizational performance. Esdmir and Pinigton (2013) presented a paper titled: measure project management performance that show the relationship between project management performance and project success. The purpose of this paper is to provide a multi-dimensional framework for measuring project performance which is obtained from the analysis of 154 completed projects in the United Arabic Emirates. Results indicate that is directly related to project management performance and project success together. Saho and Colleagues (2013) presented the DEA approach to improve multiple responses in electric cars AISID2. The present study presents an optimization methodology to select the best parameters of process in the multiple responses. Due to achieve the best machining conditions, a single response is required of all unique responses. In this paper, we use a LINGO software to determine DMU Zhao and Yu (2012) presented a fuzzy DEA model of multiple sub-systems with its application to the evaluation of competitive bilateral investment management of companies. An Empirical Study on China's 32 fund management companies leads to meaningful analysis and symptoms of management. This approach can be used to assess many issues. Wen and Lee (2009) presented a model and a method for ranking fuzzy DEA. This paper extends fuzzy DEA models in fuzzy environment. According to resolve the fuzzy model, the proposed algorithm is combined with fuzzy simulation and genetic algorithms. With a numerical example are shown the fuzzy DEA model and rating of DMU. When inputs and outputs are trapezoidal and triangular numbers, we can convert the model into linear model. In determining and evaluating the efficiency (subject of interest in this study) have been used the six indicators: simple understanding, fluency, Comprehensiveness, being Technical , being popular and having a good applications record and history as INPUT and Eight indicators: increase productivity, reduce errors, reduce costs, reduce time, improve quality, increase the knowledge of individual, increase productivity of team-working, increase a well done job and increase customer satisfaction as an OUTPUT that all these parameters have been extracted from the standard text PMBOK and Prince2 and library studies and has been used by scholars, experts with many years experience of working, project managers and consulting firms to develop and improve. Sub processes of standard ISO 21500 are matched in terms of: a conceptual and practical with the eight principles of quality management systems and each of these sub processes are the new arrangement of the eight main groups. In fact, thirty-nine of sub processes of standard ISO 21500 have been classified in 10 groups that are the new arrangement of the eight main groups and with that, the new approach is obtained. The efficiency of this new arrangement was tested with using input and output parameters extracted from the library studies and data envelopment analysis (DEA) techniques.

2. Theoretical Foundations

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2.1. Eight principles of quality management systems: Eight rule of quality management systems as follows: (ISO 9000:2005, Page 9, and ISO Magazine) 2.1.1. Determine the requirements and expectations of customers and other stakeholders. 2.1.2. Establish policy and quality objectives of the organization. 2.1.3. Define processes and necessary responsibilities to achieve quality goals. 2.1.4. Determine and provide the necessary resources to achieve quality objectives. 2.1.5. Establishment of the suitable methods for measuring the effectiveness and efficiency of The process. 2.1.6. Using measurements to determine the efficacy and reducing the process. 2.1.7. Providing procedures for preventing the establishment of non-compliance and eliminate its causes. 2.1.8. Establishing and applying a process for continual improvement of the Quality Management System. Increase in productivity has been associated with the use of organizational resources to increase customer satisfaction, surveys to understand customer expectations and requirements, Communicate with customer expectations and ensure connectivity organizational goals to the expectations and requirements of customers. These are the first principle as: “focus on the customer “. The second principle as: “ Leadership “ can be cited, such as: removing obstacles to goals, taking into account all relevant units of the organization, such as customers, employees, suppliers, etc., to establish a clear vision of the organization future, build trust and eliminate the stress and fear. Reasons such as: evaluating the performance with the objectives, understand the importance of collaboration and play roles, assess performance against goals, participation in continuous improvement that located on the third principle, namely: “ the use of persons “. Identification of key activities within the organization, such as: lower cost and shorter time periods, focusing on opportunities for improving, the definition and systematic necessary actions to achieve the desired result and focusing on the factors such as: resources, methods, raw materials, risk assessment, succession and the effect of the customers, .... that improve The key operations, be interpreted as a fourth principle called: "process approach". Integration and alignment of processes that have the best achievement and desired results and continuous improvement of the system by measurement and evaluation, the ability to focus on key processes, understanding the interdependencies between processes of systems, all of the reasons that have been named as the fifth principle: "approach to the management system." To increase processing efficiency by improving the ability of organizations, to align all improvement activities with strategic objectives of the organization at all operational levels, to improve the flexibility to

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respond quickly to opportunities, people who have been trained in the use of methods and tools for continuous improvement, interpret the sixth principle called: "continuous improvement". Informed and clear decisions, ensuring efficient and accurate data and information, analyzing data and information using valid, decisions and taking action based on realistic analysis and intuition that cause that is mentioned in the seventh principle called: "pragmatic decisions ". To share expertise and resources with partners, identifying and selecting key suppliers, and clear two-way communication, enhanced ability to create value for both sides, optimize costs and resources and sharing information and future plans are reasons which introduced the Eight principle as a: "mutually beneficial in relationship with suppliers." Table 1 - Summary of the eight principles of quality management systems

Principle Summary

Row

focus on the customer

The first

Leadership

The second

the use of persons

The third

process approach

The Fourth

approach to the management system

The fifth

continuous improvement

The sixth

pragmatic decisions

The Seventh

mutually beneficial in relationship with suppliers

The Eight

2.2. Standard ISO 21500: More than 5 years, the top 30 developed and developing countries around the world have requested the compilation and publication of the standard in relation to management from the International Organization for Standardization (ISO). Then in October of 2012, published by the same organization as the standard ISO 21500. This standard is as planned first standard in the field of project management. It provides a detailed and complete description of the concepts and applications of project management processes. By using this standard, a new project managers will be able to work well as experienced project managers that ensure the success of their project goals and achieve those goals. The standard ISO

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21500 have 5 process groups and 10 major groups and 39 groups of processes that have taken place in 10 major categories. (Hosseini, 2013). 2.2.1.

Main groups and sub processes of standard ISO 21500:

2.2.1.1. Integration: The major group of integration consists of those processes is essential that identify the definition, composition, independence, coordination, control, and completion of project activities and processes. Sub-processes of this group includes following:       

Developing a project charter develop project plans conducting project operations project control change control project phase is completed gather Experiences gained

2.2.1.2. Stakeholders: The main groups of stakeholders include processes to identify and discuss the project sponsor, customer and other stakeholders to understand their needs and requirements and to control them when they expressed their expectations and claims. Sub-processes of this group includes following:  Identification of stakeholders  Stakeholder management 2.2.1.3. Application domain: The main groups of application domain include processes to ensure that the project includes all the work required to achieve specific goals to complete the project successfully. Sub-processes of this group includes following:  Definition of application domain  Create a Work Breakdown Structure  Defining Activities  Control Application Domain 2.2.1.4. Resources: The main groups of resources include processes that this is to ensure that the project has enough human resources, material, facilities, infrastructure, and other resources to achieve project objectives. Subprocesses of this group includes following:

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 Establishment the project team  Estimate Resources  Define project structure  Develop Project Team  Control Resources  Manage Project Team 2.2.1.5. Time: The main groups of time include processes that is to schedule project activities, monitoring progress to achieve timely completion of projects. Sub-processes of this group includes following:  Prioritize activities  Estimate Duration of Activity  Timing 2.2.1.6. Cost: The main groups of cost include requirements for the establishment of budgets, control costs, and complete the project in accordance with the budget. Sub-processes of this group includes following:  Estimate Costs  Develop Finance  Control costs 2.2.1.7. Risk: The main groups of risk include processes that is to increase the maximum probability of achieving the project objectives by professional activities management of opportunities and threats. Sub-processes of this group includes following:  Identifying risks  Risks Assessment  Responding to risks  Risks Control 2.2.1.8. Quality: The main groups of quality include Project Quality and Delivery possible. This group include required processes to ensure delivery possible of project and project management processes and outputs will be carried out in accordance with the stated requirements. Sub-processes of this group includes following:  Quality Planning  Implementation of quality assurance  Run Control Quality 2.2.1.9. Supplies:

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The main groups of supplies include required processes that Purchase or obtain goods, services or results are used to complete the project. Sub-processes of this group includes following:  Supplies planning  Select suppliers  Monitoring of contracts 2.2.1.10. Community: The main groups of community include required processes that insure of timely, appropriate production, collection, distribution, storage, retrieval, and final status of project information. Sub-processes of this group includes following:  Community Planning  Generalized information  Control Communications

2.3. Data Envelopment Analysis (DEA): DEA was founded in 1978 by Charnr-Cooper and Rhodes. DEA is a mathematical model to calculate the efficiency of decision making units based on multiple inputs and outputs. (Aldler and Colleagues, 2002, page 250) Efficiency is how to use an organization from its resources to produce with the best performance at some point in time. The concept of efficiency in data envelopment analysis (DEA) is the following: the ratio of weighted sum of outputs to the weighted sum of inputs. When weight of inputs and outputs is often uncertain and or the measurement scales are different, the DEA is used to measure efficiency. The aim of the DEA is to determine the weight of inputs and outputs, thus, efficiency of the unit is maximum compared to other units. (Safaee and Colleagues, 2012) The DEA is an efficiency measure evaluated based on two perspectives: input-oriented and output-oriented. Once, we have (n) decision-making units, (m) inputs and (s) outputs, Formula 1 is efficiency ratio (DMU K) based on the nature of the output:

(1)

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That (yrj) the following: the output (r) for (DMUJ) and consumed input (i) by (DMUJ). (vi) and (ur) are the weight of input (i) and output (r). This problem is solved in (n) order to obtain the efficiency ratio of all (DMU). If DMU is effective amount equal to 1, The DMU is efficient and otherwise is inefficient. (Mehregan, 2012)

3. Methodology: The standard ISO 9000:2005 describes the basic foundation and principles of quality management systems and helps to achieve the organization to increase customer satisfaction. (Registered ISO) Principles of quality management described in paragraph 2 and 3 of this standard. None of the standards published by the ISO are not exempt from these principles. Although the standard ISO 21500 was written in the field of project management, but are developed and published by ISO and is located within this organization (ISO). So, by the approaches of quality management systems, standard ISO 21500 to be looked at to increase productivity. Because increase productivity is a key criterion for evaluating the performance and social activities and economic systems, quality and art of good produce. (Gordon 2001, page 108) In this study, all sub-processes of the standard ISO 21500 are consistent with the eight principles of quality management systems. After the review are placed in one of eight groups. Finally, a new approach is presented for the project management processes of standard ISO 21500. To assess the effectiveness of these two approaches, first are provided input and output indexes from the standard PMBOK, Prince2 and consult with an experienced and has over 8 years experience staffs, project managers and construction companies in a field study and are weighted by the recent persons and relevant linguistic variables. Due to the qualitative nature of the responses, each response is provided with a triangular fuzzy number (a,b,c) and using Minkowski formula (Formula 2), fuzzy numbers are converted to absolute numbers. (Esfandiar and Colleagues, 2011, page 18, and Frshadmhr and Colleagues, 2011).

Using the software DEA Frontier, is examined the efficiency of two ways. Because most managers tend to increase outputs, this model is computed in nature of output.

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Figure 1 - Conceptual Model of Research Methodology Conformity the sub-processes of standard ISO 21500 with quality management systems principles

No

Is there conformity?

Yes

The review sub-process is in the principles of quality management systems

Provide a new approach for standard ISO 21500 processes

Field surveys by experts and scoring criteria

Results analysis of software Frontier DEA

Analysis and conclusion of Results

4. Findings: Direct and indirect project’s beneficiaries or clients can have a huge impact on the project. Interest of both sides of a project and come to a common point can accelerate the progress of the project (Hosseini, 2013, page 36, and the Project Management Institute, 2013, page 327). So according to the first principle

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definition, it correspond to a customer focus. Thus, “identification of beneficiaries “placed in this category. “ Leading the project operations “ and “ define the project organization “ are the most important sub processes in this standard that are placed in “ integrity “ group. The project organization is main responsible for the conduct of a project that play a crucial role in achieving the project objectives. This role is shaped by the conduct of all project operations. According to the specification and defined in the second principle and "integrity" group and consistent of definitions is placed in the second group: "Leadership". The project team is responsible for the main responsibility of carrying out the project. In this team are employees and staff from project managers to technical workers. Individual merits of the project team has a very important role in achieving the goals and pre-defined conditions of quality. So "the establishment of project team" by definition and properties of the second principle is placed in the category of "the use of persons ". Having a consistent and planned approach is required throughout the project. Understanding the interdependence between processes, systematic definition of activities to achieve the desired results, focusing on the sources, methods and materials, the effects of activities on customers, all specifications and descriptions are in the fourth principle. These attributes correspond to the attributes of main categories: "application domain, resources, time, cost, risk, quality" of standard ISO 21500. Thus, "defining activities, estimating resources, define the functional scope, establishment of work breakdown structure, activity duration estimating, cost estimating, risk identification, quality planning" are placed in fourth principle : “Process approach “. Always procedures and approaches exists for project control. These approaches are predetermined and systematic and interaction will affect the project. Assess of trends and cultural barriers are given in the definitions of the fifth principle that are consistent with concepts such as: “ operations management, change control, applications scope control, control of interest, prioritize activities, cost control, schedule control, risk management, control of communications, implementation of quality assurance and quality control and monitoring of contract performance “.So these cases are placed in the fifth principle: "A system approach to management". Developmental processes are the means: assess, track and documented improve that are continuously improving. This improvement is the result of the feedback of processes Implementation with a well-functioning organization. Therefore, "develop project charter, develop project plans, gathering experience records, project team development, budget development, popularization of information" are placed in the fifth principle called: "continuous improvement". "Risk assessment, risk response" are the sub processes that lack of attention to them, makes a huge impact on the progress of the project. If the risk occurred during the project, it could have a negative and positive impact on the progress of the project. (Avazkhah and Mohebbi, 2011, page 16) So, we need a serious and prudent decision for these two sub processes, the best place of these two sub processes is in the seventh principle: "Factual Approach to Decision Making". “"The choice of suppliers, schedule communication" are the clearest sub processes that are placed in the eighth principle: "mutual benefits with the supplier." Identification and selection of suitable and qualified suppliers, optimize costs, increase reliability of supplying interaction profitability and timely resources, are the common face between standard ISO 21500 and principles of quality management systems. Because they are consistent together with the definition and characteristics.

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Table 2 - Summary of Findings First principles: Focus on customer

Identification of stakeholders

Second principles: Leadership

Leading the project operations , define the project structure

Third principle: the use of persons

Establishment of The project team

Fourth principle: a process approach

Defining activities, estimating resources, define the application domain, creating a work breakdown structure, activity duration estimating, cost estimating, risk identification, quality planning

Fifth principle: System Approach to Management

Operations control, change control, applications scope control, control interest, prioritize activities, cost control, schedule control, risk management, control of communications, implementation of quality assurance, implementation of quality control, monitoring contract.

Sixth principle: Continuous Improvement

develop project charter, develop project plans, gathering experience records, project team development, budget development, popularization of information

Seventh principle: realistic approach to decision

Risk assessment, risk response

Eighth principle: mutual benefits with the supplier

The choice of suppliers, schedule communication

The calculations output of the software “ DEA Frontier ” showed that efficiency of both approaches are equal and effective , contrast of new and unprecedented standard ISO 21500. (Table 3) shows the graphical output of the software. In the EFFICIENCY, the number 1 represents the efficiency of both approaches.

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Table 3 – Output of OUTPUT ORIENTED tab of software DEA Frontier

OUTPUT VRS

Optimal Lambdas with Benchmarks

DMU

DMU

Efficiency

No.

Name

1

ISO 21500

1.000

1.0

ISO 21500

2

New Approach

1.000

1.0

New Approach

5. Conclusions: In this paper, from the perspective of quality management systems that listed in the standard ISO 9000:2005, was attended to sub processes of standard ISO 21500:2012. According to the findings, it was determined that logically, the sub processes of standard ISO 21500:2012 placed in the eight principles of quality management systems. Since, the ISO 9000 standard has been known as a basis of the quality management systems, it may be concluded that the standards published by ISO, in any field, located in the standard configuration. This article reviews the new standard of ISO organization which was published in the field of project management. According to the definition, characteristics and applications of each of the sub processes is like: characteristics and applications of the principles of quality management systems. Because both standards are published in one organization, followed by a special law. Thus, according to the results of calculations that showed the same effectiveness of using standard and new approaches, standard users can use both of them (both standards: ISO 9000 and ISO 21500) according to their own knowledge and understanding. In the end, it is recommended to executive directors and experts in the field of process improvement and implementation of quality management systems that ISO 9000 is used as the base and foundation of their work. Because all operations of process improvement is based on the principles of quality management systems. Therefore, applying the provisions of ISO 9000 with improved processes and complement in the use of other standards, increase their productivity and efficiency and effectiveness.

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