Professional Documents
Culture Documents
Muhammad Naveed
F20-BS-BBIT-1033
January 3, 2024
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1. Introduction
First time the term TQM used to describe the management approach to quality
improvement. Since then, it got so many meanings. The general meaning of TQM is, Total
Everyone in an organization contributes to make their work, process, products, service, and
TQM is the for most part common sense. The word Total Quality Management
Therefore, by analyzing these three words we can conclude that, TQM is an art of
Due to its potential to improve operational efficiency, product quality, and increase
we can see the competition is growing both locally and globally by adopting TQM principles
Pakistani businesses can get benefit to remain competitive. TQM helps us in minimizing
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improvement that also play a vital role to meet international quality standards which will
open the opportunity for Pakistani industries in global market. These businesses can’t only
meet the evolving demands of customers but, by focusing on quality management they can
also gain a competitive benefit in both local and international markets. The implementation of
TQM in Pakistani industries can improve employee morale and participation. As we know
implementing it the workforce will be more engaged and motivated that will be beneficial for
Pakistan where traditional management practices may not fully utilize employee’s potential.
landscape. This sector has various segments which include cars, motorcycles, trucks, buses,
and rickshaws. Over the past few years automobile sector has seen considerable growth
which is due to increasing demand and government policies supporting the localization. Both
local manufactures and joint venture with international automakers are the key players of this
Pakistan’s GDP. It also faces challenges to keep up with global standards which are
considerations. Recently to meet the global environmental standards we can see trend shift
towards more fuel-efficient vehicles and the introduction of electric vehicles (EVs).
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TQM Principles
Committed and Involved Management: This TQM principle emphasizes that the
long term top-to-bottom organizational support is necessary for Total Quality Management.
Management should actively participate and guide the TQM process. A quality council
should also establish to set a clear vision, develop long term goals, and direct the TQM
program. Quality goals must be added into the business plan and an annual quality
improvement plan should create by involving the entire workforce. This principle makes it
clear that the TQM is not a one-time initiative but it is a continual activity which should be
participate in quality improvement teams but also act as a coach to make ensured that TQM
principle emphasizes the importance of focus on customers (internal and external) in all
both internal and external customers is the core of an effective TQM program. According to
this principle customer satisfaction should be the most important goal of an organization and
it should be the driving force behind all organizational activities. Organizations must pay a
close attention to voice of the customer which means organizations should actively listen to
customer feedback to understand the needs and expectations and by using this information
make improvements in their products and services. TQM also focus on internal customers
(employees) and internal suppliers in decision making and improvement processes. This
approach ensures that those who are affected by the processes are involved in their
Effective involvement and utilization of the entire workforce: TQM is not limited
that every individual in the organization regardless of their role is responsible for quality
management. All employees must have training in TQM, statistical process control (SPC),
and other relevant quality improvement skills. These trainings make employees able to
effectively take part in project teams and contribute to quality improvement initiatives.
Employees should not only perform their jobs but also think about the ways to improve their
work. This will motivate the employees to make decisions and take actions to improve
processes and enhance quality. This mindset shift of employees is essential for making a
culture of continuous improvement in the organization. Managers can play a key role in
setting up quality improvement programs that involves input from the entire workforce.
organizational processes. This principle says that there should be a continuous effort to
improve all aspects of business and production processes. Organizations are encouraged to
initiate quality improvement projects in various areas, such as on-time delivery, order entry
efficiency, billing error rate reduction, enhancing customer satisfaction, reducing cycle time
and scrap, and effective supplier management. These projects are related to specific areas for
techniques are employed to facilitate problem solving and process improvement which
include statistical process control (SPC), benchmarking, quality function deployment, ISO
9000 standards, and designed experiments. These techniques provide structured and effective
Quality models
interrelated processes:
1. Quality Planning: This is the initial phase where organizations define their
objectives and determine the steps necessary to meet these objectives. Key activities in this
phase include:
- Identifying who the customers are and understanding their needs and
requirements.
2. Quality Control: This phase involves the execution of the plans and monitoring of
the process to ensure that it is performing as intended. The key activities in this phase
include:
- Identifying when the process is deviating from the plan and taking corrective
action.
Quality Control is about operating the processes and producing the output with the
- Seeking out new ways to improve process performance and product quality.
In Pakistan, automobile companies need to plan for products that are not only high in
quality but also cost-effective. Juran’s Trilogy can guide these companies in aligning their
quality goals with market demands. With increasing global and national regulations on
vehicle safety and emissions, Pakistani automobile manufacturers can utilize the Quality
Control process of Juran’s Trilogy to ensure compliance with these regulations. In a market
with growing competition, both from local and international players, continuous
Trilogy can aid in the continuous enhancement of products and processes, leading to better
customer satisfaction and market share. As the Pakistani automobile industry seeks to
integrate more deeply into the global supply chain, adopting a robust quality management
framework like Juran’s Trilogy can help in meeting international quality standards, essential
3. Sector Analysis
Pakistan’s automobile industry is the one of the oldest industries in the Asian
countries. Automobile sector of Pakistan is made up of different segments like Cars, Light
Commercial Vehicles (LCVs), Bus, Jeep, Tractor, Truck and two/three wheelers. Pakistan
significant industrial output of the country. During the fiscal year 2021-2022 (July to March)
automobile sector recorded 54% growth in sales and 57% growth in production of cars. 21
companies were granted with greenfield status for manufacturing of cars, trucks, LCVs,
sports utility vehicles (SUVs), and buses under the Automobile Development Policy (ADP)
2016-21 and more than USD 1 billion total investment was committed (InvestPakistan,
2023). With the vision to make Pakistan automobile industry a hub for competitive
manufacturing of auto parts and vehicles for local market and exports the government has
developed Auto Industry Development and Export Policy (AIDEP) 2021-26. The goal of
making AIDEP is to improve car quality, adding safety features, and making small cars more
affordable for Pakistani buyers (Times, 2021). AIDEP provides incentivized custom duty on
the locally produced small cars of up to 800cc engine and reduce 10% to 25% of import duty
on import of electric vehicles. The automobile industry was badly affected by the COVID 19
in 2019-20 has been started to revive and coming back on tack with positive trend in all
segments of automobile industry. The analysts are more optimistic about the automobile
manufacturing industry expected to see 41% earnings growth per year over the next few years
(Simply-Wall-Street, 2023). Pakistan has achieved localization almost 95% in tractors and
motorcycles, 20-25% in trucks and busses, and 50% in cars. To achieve localization, it is
necessary to produce one million cars per year but unfortunately only around 200k cars are
Characteristics
wheelers and two-wheelers. Suzuki held a significant market share but adjusted its strategy
when competitors like Master with low-cost vehicles entered the market. Suzuki's market
share in pickup trucks grew, while Master dominated the light commercial vehicle (LCV),
van, and jeep segment. In motorcycles, Japanese brands lost market share to low-cost Chinese
models.
High-income groups in Pakistan mainly drive demand for large passenger cars,
limiting market expansion. In contrast, India and China see demand for smaller, cheaper cars
from low and middle-income groups. Small businesses and individuals primarily buy buses
and trucks in Pakistan, unlike other developing countries where companies and the state are
major buyers.
Consumer preferences are strongly inclined towards certain brands. Popular brand
manufacturers often operate at full capacity, leading to supply shortages and long waiting
periods for vehicle delivery. This shortage sometimes results in consumers paying extra to
According to current economic situation in Pakistan, the major reason behind the
increase of automobile prices is Rupee’s devaluation against the US Dollars. The increase of
inflation in Pakistan makes it difficult for people to afford the cost of owning a car.
Moreover, govt tax policies also impacted the car prices i.e., now govt calculate tax based on
the price of car instead of its size engine size which also caused the increase in price of a new
car. All these economic difficulties also caused financial loss to the car companies like Pak
Suzuki Motors. In 2023 due to inflation the demand for new cars is decreased which caused
the drop in both car production and sales as compared to the 2022. Due to the limitation on
imports by State Bank of Pakistan because of US dollar shortage for importing automobile
industry is also facing problems with getting car parts which has forced companies like
Honda and Suzuki to stop manufacture at times. As the value of Rupee’s go down the cost of
imported parts go up which cause the increase in overall cost of making a car. In this
challenging situation some models are still doing well in Pakistan like Suzuki Alto is a first
choice of buyer in below 1000cc category and Toyota model like Corolla and Yaris are
Opportunities
Pakistan for this government has develop AIDEP 2021-26. Government has increased 50%
account deficit. This strategy is adopted to boost the local manufacturing of cars and to
reduce the import of cars. Under the AIDEP the 10% to 25% subsidy will be given on import
duty on import of the electric vehicles. This shows the government effort towards the
promotion of the new energy vehicles specifically towards EVs to change climate. There's a
global trend towards EVs, and with China's core advantage in developing electric vehicles
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and its investment in Pakistan, this sector is poised for growth. Pakistan government is also
welcoming the new domestic manufacturers of automobile specially car companies. The
entry of new players will diversify the market lead to increase in competition that led to
provide better options for consumers. Pakistan has a rapidly growing middle class, which
could drive demand in the automobile sector. This demographic change is likely to increase
the demand for affordable and mid-range vehicles. Pakistan has made several improvements
thanks to investments from the China Pakistan Economic Corridor (CPEC). These
improvements include upgrading its infrastructure, developing the Gwadar port, and solving
Organization (SCO) and the South Asian Association for Regional Cooperation (SAARC)
has helped Pakistan strengthen its relationships with neighboring countries in South Asia and
Central Asia. By offering these countries access to the Gwadar port and proposing trade
agreements with them, Pakistan aims to boost not just its automobile industry but its entire
economy.
The Pakistani automobile sector is currently facing several quality-related issues and
Build Quality Concerns: A significant issue in the Pakistani auto industry is the
deteriorating build quality of locally assembled vehicles. This includes problems such as
panel gaps, missing trim pieces, and malfunctioning mechanical or electrical parts. In
contrast, Completely Built-Up (CBU) units of the same vehicles being assembled locally tend
to have better build quality. This disparity in quality is attributed to the high rate of parts
However, the use of a majority of locally manufactured parts and panels in vehicles has
raised concerns regarding the overall build quality. Hyundai Nishat is noted for producing
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vehicles of higher build quality, attributed to its use of non-localized Completely Knocked
various vehicles from different companies. While this issue was raised earlier and seemingly
addressed by automakers, the lack of recent details on failed airbags remains a concern.
major car companies have led to the omission of standard features in vehicles. For example,
certain Toyota models, including the expensive Toyota Fortuner, were reported to be sold
without standard sash strips, a feature typically expected in vehicles of their class.
enable 100% localization of vehicle parts need to be coupled with strict quality standards
enforcement. This would ensure that while localization reduces production costs and prices
and provides work opportunities, it also benefits the consumers by maintaining high-quality
standards.
Need for Policy Support for Local Manufacturing: To improve the quality of
locally manufactured vehicles, there is a need for government policies favoring parts
manufacturing companies. Supporting companies such as Denso, Aisin, NGK, Takata, Bosch,
ecosystem for the automotive industry and offer better quality products.
the AIDEP 2016-21, is expected to increase competition, which could potentially lead to
KIA is an old car manufacturing company who initially targeted a market segment
that was more price-sensitive than quality-conscious. In Pakistan, it is a joint venture between
KIA Motors and Lucky Group. KIA Lucky Motors Pakistan recently changed it name to
Lucky Motors Corporation in 2020 but it does not mean that both companies ended their
partnership. The company's strategy was to attract buyers who were primarily interested in
the affordability of a car, rather than its luxury features like its design or safety. KIA used
cheaper materials in the manufacturing process to keep costs low. This decision made a
significant impact on the car’s overall quality and reliability. This strategy makes possible for
KIA to offer lower prices, but they also contributed to a perception of the brand as being
lower in quality compared to other car manufacturers. In its early years, KIA paid less
attention to aspects that are typically valued by consumers, such as the comfort of the vehicle,
interior and exterior design, and overall customer satisfaction. This focus on cost reduction
often led to the neglect of these important factors in car manufacturing. While KIA's cars
were inexpensive to purchase, they often required frequent repairs and maintenance, leading
to higher long-term costs for the owners. This not only affected the consumer's perception of
value but also negatively impacted the brand's image as a reliable car manufacturer. KIA did
not initially focus on strategies that would ensure long-term customer loyalty, such as
establishing a strong brand identity or creating a base of returning clients. The absence of a
focused branding strategy and customer satisfaction policies meant that KIA missed
opportunities to build a strong, loyal customer base. The history of KIA show that how the
compromise on quality to reduce the cost of cars negatively affected the company’s image.
However, the prices were low but as compared to the reliability low prices are less attractive
to the consumers. Consumers was interested in such low prized cars but due to low quality
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and unreliability they don’t want to buy the company’s cars. To deal with this issue KIA
worked on making their cars better and reliable also focused on making the designing better.
This change was the part of their Total Quality Management (TQM) implementation strategy.
TQM strategy involves improving all parts of the business to make the overall product better.
The management of the KIA decided to use TQM practices which was the good choice. At
KIA Motors uses strategies that fit with Total Quality Management (TQM) principles.
Customers like KIA cars because they are more affordable than many others. KIA focuses on
both low prices and good quality. The main idea is that what customers think about quality is
very important. KIA used to be seen as not very reliable, so they started by listening to
customer feedback. Most of this feedback was negative, showing that just being cheap isn't
enough if the quality isn't good. A key part of Total Quality Management (TQM) is
continuously trying to make products better. For KIA, this meant focusing on improving the
quality of their cars. Hyundai, which owns KIA, invested in this idea to build a better future
for the brand. This focus on quality and the use of TQM practices by KIA's management is
shown in how they run the company. The awards KIA has won for quality and the increasing
number of loyal customers are proof that their efforts to improve in certain areas are working.
KIA Motors has been using Total Quality Management (TQM) for the past ten years. This
approach has helped KIA become known globally as a top car maker that offers good quality
products. Examples of TQM at KIA include the way they handle customer service, what they
focus on improving in their company, and how they manage their manufacturing and business
processes. These efforts show KIA's commitment to quality in every part of their work.
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Businesses try hard to fulfil the customer demands so that they buy their products.
KIA focus on providing customer support both before and after the purchase of a car.
According to the information available on the KIA’s official website they give a special
seven years of warranty to their customer which is far better then other brand who give only
three years of warranty. KIA implemented this strategy without the fear of financial loss
because they trust on their product quality. KIA also have a dedicated customer support team
willing to assist consumers by answering their questions, concerns, or technical issues. The
rare seven-year warranty make KIA more competitive in automobile industry because
consumers trust more on its quality. KIA offers other good services for customers. They
have reasonably priced repair services using real KIA parts. Also, KIA gives a 2-year
warranty for any genuine parts they put in or fix at their service centers. This is all part of
making sure customers get what they need and the best quality. KIA's goal is to make sure
customers have the best experience and get high-quality products, even for car parts and
repairs.
Car companies, like KIA, must follow certain rules to make sure they are safe and
honest with customers. KIA follows the Vehicle Sales Code. This means they focus on
customer safety. The code requires KIA to give accurate information, do safety checks on
cars when they are sold to a new owner, offer test drives, and provide all the needed
paperwork when selling a car. These steps help make buying and selling cars safe for both the
customers and the company, ensuring a trustworthy purchase from a reliable seller.
they can offer the best service. KIA's website says they have been training their team since
the early 2000s to make customers happier. They even have competitions for mechanics
worldwide to encourage good work and skills. In 2019, over 25,000 employees took part in
these events. This shows how KIA works to improve quality by teaching their staff new ways
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to meet what customers want. While competitions at work can help with skills and
productivity, a better way is to give specialized training to employees. KIA spends money to
train their full-time workers, especially in areas like production and service. They focus on
employees who are really committed to helping the company in the long run, teaching them
about quality control, making things, and customer service. This costs a lot of money, but it
helps the company stay up-to-date with the latest ways to improve quality. This fits well with
Total Quality Management (TQM), which is all about constantly improving and training the
After KIA started using Total Quality Management (TQM) methods, it became more
successful and made more money. These TQM ideas really helped KIA in many ways and
made the brand stronger. Because of this focus on quality and making customers happy, more
people want to buy KIA cars, the brand is known all over the world, and the company is
KIA Motors was once a failing company, so Hyundai bought most of its shares. Back
in the 90s, KIA and many other Korean car companies were struggling. But after making
some big changes, KIA's money earned grew by more than 600% from 2006 to 2016. This
improvement happened because Hyundai focused on making better quality cars, improving
KIA's image, and changing how they attract customers. By using Total Quality Management
methods, KIA got past its tough times and is now one of the most popular car makers in the
world.
In the 90s and early 2000s, people bought KIA cars because of its low prices, but
many people thought the brand was not reliable and the cars had quality issues. Everything
changed when KIA started using Total Quality Management (TQM) in how they ran the
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company. Before, owning a KIA car meant you might have problems and technical issues.
But now, this has changed. KIA has become more popular worldwide, and more people are
thinking about buying KIA cars because they are seen as reliable, good quality, and still
affordable. Using TQM helped KIA completely change how people see the brand, attracting
Every company wants to make more money, but Total Quality Management (TQM)
focuses on using that money to make better products and train employees. KIA's money
earned has grown a lot, and it's now one of the top 69 brands in the world. This is a big deal,
especially since KIA had money problems before. The fact that KIA is now making more
money shows that TQM works for them. TQM needs a lot of investment in improving quality
and training people, but the money KIA makes from these improvements is worth it. KIA's
success today is because of changes they made in how they run things and their focus on
quality.
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TQM Framework
company involves a series of strategic, systematic, and cultural changes. Here's how each
1. Leadership:
- Vision and Mission: Develop a clear vision and mission statement that
and challenges.
2. Customer Focus:
3. Employee Involvement:
practices.
4. Process Management:
5. Supplier Partnership:
- Quality Standards: Set clear quality standards for suppliers and conduct
quality objectives.
7. Strategic Planning:
- Long-term Goals: Set long-term goals for quality improvement and align them
initiatives.
to mitigate them.
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8. Continuous Improvement:
improvement.
enhance quality.
Implementing TQM is a long-term strategy that requires commitment from all levels
of the organization. It's not just about tools and techniques; it's about creating a culture that
values quality in every aspect of the business. Regular training, effective communication, and
automobile company.
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Conclusions
Based on the detailed analysis of the application of Total Quality Management (TQM)
in the Pakistani automotive industry, it is evident that TQM plays a crucial role in enhancing
operational efficiency, product quality, and customer satisfaction. The key findings of the
organizational processes and overall performance. The Pakistani automotive industry, with its
growth potential and emerging market dynamics, stands to benefit greatly from TQM
principles. The successful application of TQM in this context not only aligns with global
quality standards but also addresses local industry challenges. The case studies and sector
analyses within the study demonstrate the practical applicability of TQM, highlighting its
conclusion, TQM emerges as a vital tool for the Pakistani automotive industry to achieve
sustained growth and integration into the global market, fostering a culture of continuous
References
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https://en.wikipedia.org/wiki/Total_quality_management
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industry-in-pakistan
Qadir, U. (n.d.). Pakistan's Automotive Industry: A Case of Stalled Development. Islamabad: Pakistan
Simply-Wall-Street. (2023). Pakistani (KSE) Auto Industry Analysis. Retrieved from Simply Wall Street:
https://simplywall.st/markets/pk/consumer-discretionary/auto
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