Control & Quality Management: Systems, Steps, TQM & Tools

TAKEAWAYS

• Control is a feedback loop (plan-do-check-act) that ensures goals are met by comparing actual vs. desired performance.
• Types of control (preliminary, concurrent, feedback) differ in timing and purpose—each has pros/cons for businesses like Daraz or Nabil Bank.
• Total Quality Management (TQM) is a customer-centric philosophy (not just tools) used by Toyota and Himalayan Java to reduce defects and improve efficiency.
• 7 tools of TQM (flowcharts, Pareto charts, fishbone diagrams) help solve problems like NTC’s delayed project timelines or Pathao’s driver complaints.
• Effective control systems must be flexible, timely, and participative—unlike rigid systems that fail in dynamic markets (e.g., eSewa’s fraud detection).
• Contingency theory explains why no single control method works for all organizations (e.g., NEPSE’s strict rules vs. startups’ adaptive approaches).

1. Control in Management: Definition and Importance

Control is the fourth function of management (after planning, organizing, and leading) that ensures organizational goals are achieved efficiently and effectively. It involves:

• Monitoring performance
• Comparing results with standards
• Taking corrective action if deviations occur.

Why is Control Necessary?

mindmap
  root((Why Control?))
    Prevents Deviations
    Ensures Efficiency
    Facilitates Adaptation
    Improves Decision-Making
    Enhances Accountability
    Example: NTC’s control over infrastructure projects prevents cost overruns.

2. The Control Process: Steps and Cycle

The control process follows a continuous cycle (PDCA model):

flowchart LR
  A["1. Establish Standards"] --> B["2. Measure Performance"]
  B --> C["3. Compare Results"]
  C --> D{"4. Identify Deviations?"}
  D -->|"Yes"| E["5. Take Corrective Action"]
  D -->|"No"| F["6. Reinforce Success"]
  E --> A
  F --> A

Key Steps Explained:

1. Establish Standards: Define clear, measurable goals (e.g., Daraz’s delivery time standard of 48 hours).
2. Measure Performance: Collect data (e.g., Khalti’s transaction success rate).
3. Compare Results: Use variance analysis (e.g., Ncell’s actual vs. target customer satisfaction scores).
4. Corrective Action: Fix issues (e.g., NTC’s traffic control adjustments after accidents).
5. Reinforce Success: Celebrate achievements (e.g., Himalayan Java’s quality awards).

Worked Example: Nabil Bank’s Loan Approval Control

• Standard: 80% of loans approved within 7 days.
• Measurement: Track approval time for 100 loans → average = 9 days.
• Variance: 2 days over standard → root cause: manual paperwork delays.
• Action: Implement digital loan processing (reduced time to 5 days).

3. Types of Control Systems

Control can be classified based on timing and scope:

4. Characteristics of an Effective Control System

An effective control system must be:

1. Flexible: Adapts to changes (e.g., eSewa’s fraud detection updates).
2. Economical: Costs less than benefits (e.g., Daraz’s automated inventory checks).
3. Timely: Provides data when needed (e.g., NTC’s real-time traffic alerts).
4. Accurate: Reliable metrics (e.g., Ncell’s call drop rate tracking).
5. Acceptable: Employees support it (e.g., Himalayan Java’s worker feedback surveys).
6. Forward-Looking: Predicts future issues (e.g., Nabil Bank’s credit risk models).

Mermaid Diagram: Effective Control Checklist

flowchart TD
  A["Effective Control?"] --> B["Flexible?"]
  A --> C["Economical?"]
  A --> D["Timely?"]
  A --> E["Accurate?"]
  A --> F["Acceptable?"]
  A --> G["Forward-Looking?"]
  B -->|"No"| H["Redesign System"]
  C -->|"No"| H
  D -->|"No"| H
  E -->|"No"| H
  F -->|"No"| H
  G -->|"No"| H
  B -->|"Yes"| I["Success"]
  C -->|"Yes"| I
  D -->|"Yes"| I
  E -->|"Yes"| I
  F -->|"Yes"| I
  G -->|"Yes"| I

5. Total Quality Management (TQM): Philosophy and Tools

TQM is a customer-focused approach to long-term success by eliminating defects and improving processes.

Core Principles of TQM

mindmap
  root((TQM Principles))
    Customer Focus
    Employee Involvement
    Process-Centered
    Integrated System
    Strategic and Systematic Approach
    Continuous Improvement
    Fact-Based Decision Making
    Communications

7 Tools of TQM (with Nepali Examples)

6. Control vs. Quality Management: Key Differences

## In the Real World

1. eSewa’s Fraud Detection (Feedback Control)

   • How it uses control: eSewa employs real-time transaction monitoring (concurrent control) and post-transaction audits (feedback control) to detect fraud.
   • TQM tool used: Control charts track unusual activity patterns (e.g., sudden high-value transactions from one IP).

2. Daraz’s Inventory Management (Preliminary Control)

   • How it uses control: Daraz uses predictive analytics (preliminary control) to forecast demand and automated reorder points to prevent stockouts.
   • TQM tool used: Pareto analysis identifies the 20% of products causing 80% of delays.

3. NTC’s Traffic Management (Strategic Control)

   • How it uses control: NTC’s long-term traffic plans (strategic control) include real-time signal adjustments (concurrent control) based on sensor data.
   • Quality link: ISO 9001 certification ensures NTC’s projects meet international quality standards.

## Case Study: Toyota’s TQM in Action

Toyota’s Toyota Production System (TPS) is a global benchmark for TQM:

• Just-in-Time (JIT): Reduces waste by producing only what’s needed (e.g., Himalayan Java’s daily coffee bean orders).
• Kaizen (Continuous Improvement): Employees suggest 50,000+ improvements/year.
• Andon System: Workers can immediately stop production if a defect is found (feedback control).
• Result: Toyota achieves <1 defect per million units (vs. industry average of 100+).

Mermaid Diagram: Toyota’s TQM Loop

flowchart LR
  A["Customer Demand"] --> B["JIT Production"]
  B --> C["Worker Quality Checks"]
  C --> D{"Defect Found?"}
  D -->|"Yes"| E["Andon Stop"]
  D -->|"No"| F["Ship to Customer"]
  E --> G["Root Cause Analysis"]
  G --> H["Kaizen Improvement"]
  H --> B

## Exam Tip

1. Control Process Questions:

   • Always draw the PDCA cycle (Plan-Do-Check-Act) and label all steps.
   • Use real examples (e.g., "How would NTC control a delayed metro project?").

2. TQM Tools:

   • Pareto chart is the most tested—practice drawing one with Daraz’s customer complaints.
   • Fishbone diagram is key for root cause analysis (e.g., "Why are Pathao drivers late?").

3. Differentiate Control Types:

   • Preliminary = "before" (e.g., NTC’s road design approvals).
   • Concurrent = "during" (e.g., Khalti’s fraud alerts).
   • Feedback = "after" (e.g., NEPSE’s quarterly reports).

4. Quality Management:

   • TQM is not just tools—it’s a culture (customer focus, employee involvement).
   • Mention ISO 9001 or Six Sigma if asked about standards.

5. Common Pitfalls:

   • ❌ Saying "control is only about punishment."
   • ✅ Emphasize corrective action (not just criticism).
   • ❌ Ignoring human relations in control systems.
   • ✅ Effective control systems involve employees (e.g., Himalayan Java’s feedback surveys).

Final Visual Summary

graph TD
  A["Control System"] --> B["Types: Preliminary/Concurrent/Feedback"]
  A --> C["Process: PDCA Cycle"]
  A --> D["Characteristics: Flexible, Economical, etc."]
  A --> E["Quality Management: TQM Tools"]
  E --> F["7 Tools: Flowchart, Pareto, Fishbone, etc."]
  E --> G["Case Study: Toyota’s TPS"]
  C --> H["Example: Nabil Bank’s Loan Control"]
  B --> I["Example: eSewa’s Fraud Detection"]