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“A STUDY OF TOTAL QUALITY MANAGEMENT”
SAMARTH CHEMICAL PRODUCTS PVT LTD.
Submitted in partial fulfillment of the requirement for the
MASTER OF BUSINESS ADMINISTRATION
In (PRODUCTION MANAGEMENT) UNDER INTERNATIONAL UNIVERSITY OF VIENNA, AUSTRIA Submitted By:Mr. SAGAR K KOTECHA
Guided By:-MR.VISHAL RANA G. H. Raisoni Institute of Management. (2007-09)
CERTIFICATE OF THE GUIDE
This is to certify that the Project Work titled “( A STUDY OF TOTAL QUALITY MANAGEMENT Mr./Ms SAGAR KOTECHA. Enroll No:…………….. Carried out in partial fulfillment for the award of degree of MBA : JALGAON (Branch) of IUV under my guidance. This project work is original and not submitted earlier for the award of any degree / diploma or associateship of any other University / Institution.
Signature of the Guide:
I, Mr./MsSAGARKOTECHA. hereby declare that the Project Work titled “ A STUDY OF TOTAL QUALITY MANAGEMENT” is the original work done by me and submitted to the IUV in partial fulfillment of requirementsfor the award of Master of Business Administration in MARKETING.(Area of specialisation) is a record of originalwork done by me under the supervision of Dr/Mr. Sri.SIDDHARTH .of SAMARTHCHEMICALS PVT.LTD .(Orgn. of the guide)
Date Signature of the Student
First of all I would like to thank the Management at Reliance Money Ltd.for giving me the opportunity to do my two-month project training in their esteemed organization. am highly obliged to Mr.SIDDHARTH (Operations Manager) for granting me to undertake my training at SAMARTH CHEMICALS PRODUCTS PVT LTD. At Khamgaon.Distt :Buldhana I express my thanks to all Centres Managers under whose able guidance and direction, I was able to give shape to my training. Their constant review and excellent suggestions throughout the project are highly commendable. My heartfelt thanks go to all the executives who helped me gain knowledge about the actual working and the processes involved in various departments.
1. COMPANY PROFILE 2. CHAPTER ONE 3. CHAPTER TWO 4. CHAPTER THREE 5. CHAPTER FOUR 6. CHAPTER FIVE 7. CHAPTER SIX 8. CHAPTER SEVEN INTRODUCTION INTRODUCTION CONCEPTS AND PHILOSOPHIES OF TQM THE ACCEPTABILITY OF TQM THE ESSENTIALS OF TQM THE EFFECTS OF TQM IMPLEMENTATION OF TQM TQM TOOLS
CHAPTER 2: COMPANY PROFILE 2.1 INTRODUCTION ABOUT THE COMPANY SAMARTH CHEMICAL PRODUCTS (P) LTD. is one of the pioneers in the field of manufacturing of sodium silicate & potassium silicate. The company was established in the year 1991. The company has its registered office at Mumbai. The group has other two plants at Khamgaon of Buldana district & third plant is at Wada, district Thane of Maharashtra. The SAMARTH CHEMICAL company manufactures sodium and potassium silicate as per customer’s specification. The company is one of the leading manufacturers & suppliers of various unique grades of silicates, which are known for their superior quality and for varied customized features. These products face extensive demand in varied industry applications across the entire region. To keep them abreast with international standards, they follow the ISO 2001:9000 quality standards and norms. For ensuring flawless chemical products, the company uses the best quality raw materials including soda ash, silica sand and others. These are procured from the reliable sources after rigorously checking their quality specifications.The company sustain its high endeavor to abreast the quality standard of the products as per their commitment made to the clients. The company manufacture and offer the following types of chemicals: Sodium Silicate Liquid/Lumps Potassium Silicate Liquid/Lumps Modified Sodium / Potassium Silicate Liquid/Lumps The annual combined installed capacity of plant is 21,000 MT (i.e. Metric Tonnes) of Sodium Silicate and 3,500 MT (i.e. Metric Tonnes) of Potassium Silicate. The firm uses state-of-art technology and equipments with a firm focus on thecontinuous improvement to manufacture best quality products at all times. Samarth Chemicals at present serves the Adhesives, Buidling Materials & Contruction, Soaps & Detergents, Foundry Binders, Mineral Processing, Pulp & Paper, Refractories, Textile Processing, Silica manufacturers, Titanium Dioxide and Allied Chemical Industries. The company is leading manufacturer and supplier of sodium and potassium silicate in Maharashtra & central India.
2.2 STRATEGIES Samarth Chemicals has strong position in Maharashtra and is market leader in most of the segments in which it offers product. The company concentrates on strengthening its position within segments where it is already strong and has core competence. The Group has three overall strategic directions: Expansion & Diversification Producing Best At Right Time Innovations & Continuous improvements (1)EXPANSION & DIVERSIFICATION Samarth Chemicals is planning to increase its production capacity by 1200 to 1500 M.T( Metric Tonnes ) this year assuming the future demand & thus minimize the average cost. The company has already entered in new field of hardware manufacturing. The company has started making mild steel wires which is called as drawing. Also the company has started manufacturing wire nails & j-bolts of various sizes with the drawn wires. (2)PRODUCING BEST AT RIGHT TIME The company is always commited to manufacture and supply Best Quality Sodium Silicate and Potassium Silicate as per customers specifications.The company believes in Total Customer Satisfaction and works towards acheving it. The firm uses state-of-art technology and equipments with a firm focus on the continuous improvement to manufacture best quality products at all times. The company has contracts with transporters for meeting the due date of delivery given by the customers.
(3)INNOVATION & CONTINUOUS IMPROVEMENT The company is always in search of new and innovative things like new technology, new tools and equipments etc. Recently the company came to know about producer gas plant. This producer gas plant can be used for producing coal gas which can be used in the furnace instead of furnace oil 7|Page
as fuel. The top management thinks that the coal gas will ultimately reduce the cost of production by 25 % atleast. 2.3 VALUES The Group’s core value of interaction, commitment and innovation formed their past, present and will guide in future. Core values represent a competitive advantage to the group and help to maintain the leadership position even in changing environment. (1)INTERACTION A significant attribute of Samarth Chemicals is ability to listen to and understand the diverse needs of customers and other stakeholders, coupled with capacity to create new and better solutions based on what learn from this interactive process. This approach requires knowledge, presence, flexibility and involvement in their processes. It means making customer relations and service a priority. And it also entails taking responsibility for the environment. (2)COMMITMENT Samarth Chemicals is fully engaged in finding the best solution which can possibly deliver & are fully committed to people and to adding value to their customers' business, as well as to targets and goals.Whether entering a new geographical market or a new segment of a well-established industry, or embarking on an entirely new application of any of existing products, company is there to stay. Samarth Chemicals believes in lasting relationships. That is one of the reasons why company attach importance to consistently delivering high-quality products and keeping promises. And that is why customers feel confident about establishing close and long-term relationships with company and group. (3)INNOVATION The company believes that there is always a better way of doing things. That innovative spirit is a vital part of company’s identity, a vital part of way of conducting business. It is also the driving force, which has made them a leader in this industry. Innovation is the ultimate driver for long-term profitability and growth. 2.4 CORE COMPETITORS Core competitors of the company are 1). Harish Industries, Nagpur 2). Ganesh Silicates, Pune 3). Shantisagar Industries, Ahmadnagar 4). Mars Glass, Dhulia Based at corporate office in Mumbai, each of the business areas specializes in a particular range of product, to best serve customers’ needs. The combined businesses now see Samarth Group in Maharashtra (India) as the market leader in all of its core product areas 8|Page
of sodium silicates, potassium silicates, sodium metasilicate and M.S wires, nails & jbolts. 2.5 MAJOR CUSTOMERS Some major customers of the company are :1. Hindustan Unilever Limited, Khamgaon 2. Jayaswals Neco Limited, Nagpur 3. Nepa Ltd., Nepanagar 4. Metaflux Company Private Limited, Bhillai 5. Jalaram Soap Factory, Ahmadnagar 6. Lippert Unipol India Ltd, Aurangabad 7. Welmet Technologies Pvt. Ltd., Nagpur 8. Zincolab Ltd, Nasik 9. Darbar Soap Factory, Aurangabad 10.Bajarang Soaps & Detergents, Yavatmal 2.6 INDUSTRYWISE TOTAL SALES BREAK-UP
Pulp & Paper 7% Steel & Alloy 9% Others 6%
Soap & Detergents 78%
The break-up of total sales volume in percentage is as shown in the above graph. This company supplies sodium silicate to industries like soap & detergent, steel & alloy industries, pulp & paper industries and others. Of all the sales volume 78 % of sodium silicate is supplied to soap and detergent industries, steel and alloy industries consume 9 % , 7 % is supplied to pulp and paper industries , and 6 % is consumed by other industries. If we observe the graph, we can see that the major part of sodium silicate is consumed by soap and detergent industries. The lowest part is consumed by other industries and pulp and paper industries. Therefore the company needs to focus on these industries carefully so that they can increase the total sales. 9|Page
2.7 GRADEWISE TOTAL SALES IN PERCENTAGE
Neutral Silicate 12%
Alkaline Silicate 88%
The company manufactures two grades (types) of sodium silicate. Alkaline sodium silicate and Neutral sodium silicate in bulk quantity. Of the two grades, it can be seen from the graph that alkaline grade of silicate is sold and consumed more as compare to neutral silicate. Alkaline silicate is consumed by soap & detergent industries, steel and alloy industries and etc. Neutral silicate is mainly consumed by pulp and paper industries and industries making foundary fluxes.
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1.1 ABOUT SODIUM SILICATE Sodium silicate is the generic name for a series of compounds derived from soluble sodium silicate glasses. Soluble Sodium Silicates (water glass) are liquids containing dissolved glass which have some water like properties in various ratios. Varying the proportions of SiO2 to Na2O and the solids content results in solutions with differing properties and have many diversified industrial applications. Standard commercial grades of liquid sodium silicates range in weight ratio of SiO2 to Na2O from 1.6 to 3.3. In addition to liquid sodium silicates, company produces sodium silicate glass , potassium as well as metasilicates in granular forms. The sodium metasilicates are primarily used in cleaning compounds. Soluble sodium silicates (or water glass) are manufactured from varied proportions of Na2CO3 and SiO2 . Sodium silicate glass is made by fusing high purity silica sand and soda ash in open hearth furnaces at 1300oC/2400oF. The molten glass is cooled, fractured, and charged into vessels where it is dissolved under pressure by hot water and steam. The various grades of liquid sodium silicate are produced by varying the alkali/silica ratio and the solids content. They are widely used in industry as sealants, binders, deflocculants, emulsifiers & buffers. There most common applications are in pulp and paper industry and detergent industry. In pulp and paper industry they improve the brightness and efficiency of peroxide bleaching. In the bleaching process of the pulp and paper industry sodium silicate functions as stabilizer, surface active agent, and corrosion control agent. These properties help to improve the brightness of the pulp and reduce the bleaching costs. In detergent industry they improve the action of the detergent and lower the viscosity of liquid soaps. Sodium silicates are produced in two or three step process, depending on desired end products of the waterglass. In the detergent industry sodium silicate provides the following functional properties as dispersion and suspension of particulate matter, providing alkalin environment conductive to efficient cleaning and etc. Sodium Silicates contain three components : Silica - Primary Constituent Alkali - Sodium oxide Water - Hydrous and unhydrous properties These components provide the end user with varied uses and applications associated with one or more of these elements. One of the important determinants of the properties and functional activity of a particular type of sodium silicate is its “SiO2/Na2O” ratio usually expressed as ratio by weight. The ratio determines the physical properties of the product as well as its chemistry. Varying it allows for many different uses for sodium silicate. 11 | P a g e
Two major consumers of sodium silicate as stated above are pulp and paper industry & detergent industry.
1.2 TYPICAL INDUSTRIES USING SODIUM SILICATE Industry Liquid soaps and detergents Peroxide bleaching of pulp Foundry moulds and core binder Porous casting for metals Hardening concrete Slip casting for ceramics Compounding special cleaners & detergents Function Spray dryable, lowers viscosity Conserves peroxide, Produces whiter pulp Fast set Seals leaks Oil & dust proof,Acid resistant High solid Increased detergence,agglomeration aid Method Binder chemical reaction Chemical reaction Deflocculant,binder Impregnation, binder Chemical reaction,sealant Deflocculant Buffer, deflocculant
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1. Define Total Quality? TQM is an enhancement to the traditional way of doing business. It is the art of managing the whole to achieve excellence. It is defined both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It is the application of quantitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in the future. It integrates fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach. 2. Define Quality? Quality = Performance x Expectations 3. What are the Dimensions of Quality? • Features • Conformance • Reliability • Durability • Service • Response • Aesthetics • Reputation 4. Give the Basic Concepts of TQM? • A committed and involved management to provide long-term top-to-bottom organizational support. • An unwavering focuses on the customer, both internally and externally. • Effective involvement and utilization of the entire work force. • Continuous improvement of the business and production process. • Treating suppliers as partners. • Establish performance measures for the processes. 5. Give the Principles of TQM? _ Constancy of purpose: short range and long range objectives aligned _ Identify the customer(s); Customer orientation _ Identification of internal and external customers _ Continuous improvement 13 | P a g e
_ Workflow as customer transactions _ Empower front-line worker as leader _ Quality is everybody’s business _ For a service industry, some elements of quality are: - empathy - trust; i.e. expertise, integrity, courtesy - responsiveness - tangible product attractiveness (curb appeal) - reliability, on time, no interruptions • Customer orientation to child care services, a marketing perspective • Barriers that exist to a customer orientation 6. Give the Obstacles associated with TQM Implementation? • Lack of management commitment • Inability to change organizational culture • Improper planning • Lack of continuous training and education • Incompatible organizational structure and isolated individuals and departments • Ineffective measurement techniques and lack of access to data and results. • Paying inadequate attention to internal and external customers. • Inadequate use of empowerment and teamwork . 7. Give the Analysis Techniques for Quality Costs? i. Trend Analysis ii. Pareto Analysis 8. Define Quality Costs? Quality Costs are defined as those costs associated with the nonachievement of product or service quality as defined by the requirements established by the organization and its contracts with customers and society. 9. Give the primary categories of Quality cost? • Preventive cost category • Appraisal cost category • Internal failure cost category • External failure cost category 10. Give the typical cost bases? • Labor • Production • Unit • Sales 11. How will you determine the optimum cost? 14 | P a g e
• Make comparison with other organizations • Optimize the individual categories • Analyze the relationships among the cost categories 12. State the Quality Improvement Strategy? • Reduce failure costs by problem solving • Invest in the “right” prevention activities • Reduce appraisal costs where appropriate and in a statistically sound manner • Continuously evaluate and redirect the prevention effort to gain further quality improvement. 13. Define Quality Planning? A quality plan sets out the desired product qualities and how these are assessed and define the most significant quality attributes. It should define the quality assessment process. It should set out which organizational standards should be applied and, if necessary, define new standards. 14. Give the Objectives of TQM? To develop a conceptual understanding of the basic principles and methods associated with TQM; • To develop an understanding of how these principles and methods have been put into effect in a variety of organizations; • To develop an understanding of the relationship between TQM principles and the theories and models studied in traditional management; • To do the right things, right the first time, every time. 15. What is needed for a leader to be effective? To be effective, a leader needs to know and understand the following: • People, paradoxically, need security and independence at the same time. • People are sensitive to external rewards and punishments and yet are also strongly selfmotivated. • People like to hear a kind word of praise. • People can process only a few facts at a time; thus, a leader needs to keep things simple. • People trust their gut reaction more than statistical data. • People distrust a leader’s rhetoric if the words are inconsistent with the leader’s actions. 16. What is the important role of senior management? § Listening to internal and external customers and suppliers through visits, focus groups and surveys. § Communication. § To drive fear out of the organization, break down barriers, remove system roadblocks, anticipate and minimize resistance to change and in general, change the culture. 15 | P a g e
17. What are the general duties of a quality council? (i)Develop, with input from all personnel, the core values, vision statement, mission statement, and quality policy statement. (ii)Develop the strategic long-term plan with goals and the annual quality improvement program with objectives. (iii)Create the total education and training plan. (iv)Determine and continually monitor the cost of poor quality. (v)Determine the performance measures for the organization, approve those for the functional areas, and monitor them. (vi)Continually, determine those projects that improve the processes, particularly those that affect external and internal customer satisfaction. (vii)Establish multifunctional project and departmental or work group teams and monitor their progress. (viii)Establish or revise the recognition and reward system to account for the new way of doing business. 18. What does a typical meeting agenda contain after establishing the TQM? § Progress report on teams § Customer satisfaction report § Progress on meeting goals § New project teams § Recognition dinner § Benchmarking report 19. What are the various quality statements? o Vision Statement o Mission Statement o Quality Policy Statement 20. Give the basic steps to strategic quality planning? • Customer needs • Customer positioning • Predict the future • Gap analysis • Closing the gap • Alignment • Implementation
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21. What is a quality policy? The Quality Policy is a guide for everyone in the organization as to how they should provide products and service to the customers. The common characteristics are • Quality is first among equals. • Meet the needs of the internal and external customers. • Equal or exceed the competition. • Continually improve the quality. • Include business and production practices. • Utilize the entire work force.
THE EIGHT ELEMENTS OF TQM:
Total Quality Management is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done right the first time and defects and waste eradicated from operations. To be successful implementing TQM, an organization must concentrate on the eight key elements: Ethics Integrity Trust Training Teamwork Leadership Recognition Communication This paper is meant to describe the eight elements comprising TQM. Key Elements TQM has been coined to describe a philosophy that makes quality the driving force behind leadership, design, planning, and improvement initiatives. For this, TQM requires the help of those eight key elements. These elements can be divided into four groups according to their function. The groups are: I. Foundation - It includes: Ethics, Integrity and Trust. II. Building Bricks - It includes: Training, Teamwork and Leadership. III. Binding Mortar - It includes: Communication. IV. Roof - It includes: Recognition. I. Foundation TQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness and sincerity and allows involvement by everyone. This is the key to unlocking the ultimate potential of TQM. These three elements move together, however, each element offers something different to the TQM concept. 1. Ethics - Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational 17 | P a g e
ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs. 2. Integrity - Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity. 3. Trust - Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built. Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risktaking for continuous improvement and helps to ensure that measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM. II.Bricks Basing on the strong foundation of trust, ethics and integrity, bricks are placed to reach the roof of recognition. It includes: 4. Training - Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company. 5. Teamwork - To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place. There are mainly three types of teams that TQM organizations adopt: A. Quality Improvement Teams or Excellence Teams (QITS) - These are temporary teams with the purpose of dealing with specific problems that often re-occur. These teams are set up for period of three to twelve months. B. Problem Solving Teams (PSTs) - These are temporary teams to solve certain problems and also to identify and overcome causes of problems. They generally last from one week to three months. C. Natural Work Teams (NWTs) - These teams consist of small groups of skilled workers who share tasks and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and quality circles. These teams generally work for one to two hours a week. 6. Leadership - It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed 18 | P a g e
in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals. III.BindingMortar 7. Communication - It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended. There are different ways of communication such as: A. Downward communication - This is the dominant form of communication in an organization. Presentations and discussions basically do it. By this the supervisors are able to make the employees clear about TQM. B. Upward communication - By this the lower level of employees are able to provide suggestions to upper management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust between supervisors and employees. This is also similar to empowering communication, where supervisors keep open ears and listen to others. C. Sideways communication - This type of communication is important because it breaks down barriers between departments. It also allows dealing with customers and suppliers in a more professional manner. IV.Roof 8. Recognition - Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an action that an employee has performed. Recognition comes in different ways, places and time such as, Ways - It can be by way of personal letter from top management. Also by award banquets, plaques, trophies etc. 19 | P a g e
Places - Good performers can be recognized in front of departments, on performance boards and also in front of top management. Time - Recognition can given at any time like in staff meeting, annual award banquets, etc. We can conclude that these eight elements are key in ensuring the success of TQM in an organization and that the supervisor is a huge part in developing these elements in the work place. Without these elements, the business entities cannot be successful TQM implementers. It is very clear from the above discussion that TQM without involving integrity, ethics and trust would be a great remiss, in fact it would be incomplete. Training is the key by which the organization creates a TQM environment. Leadership and teamwork go hand in hand. Lack of communication between departments, supervisors and employees create a burden on the whole TQM process. Last but not the least, recognition should be given to people who contributed to the overall completed task. Hence, lead by example, train employees to provide a quality product, create an environment where there is no fear to share knowledge, and give credit where credit is due is the motto of a successful TQM organization THE TQM MODEL: At the century close, the creation of the global market, international orientation of management that sweeps national boundaries, introduction of new technologies, and shift towards customer focused strategies, make the competition stronger than ever. The criteria for success in this global, internationally oriented market have been changing rapidly. In order to expand business, enter new markets, and set realistic, competitive long-term objectives, excellence became an imperative. Management's effort has been directed towards discovering what makes a company excellent. To achieve excellence, companies must develop a corporate culture of treating people as their most important asset and provide a consistent level of high quality products and services in every market in which they operate. Such an environment has supported the wide acceptance of Total Quality Management (TQM) which emerged recently as a new, challenging, marketable philosophy. It involves three spheres of changes in an organization -- people, technology and structure. There is also a need for a systematic approach so that each element of TQMEX can be bonded together smoothly. Oakland  originated the idea of a 3-cornerstone model. The proposed 4-pillar model (Figure 3.1) brings the customer's requirement into the system. This makes the approach to TQM more complete. The additional pillar -satisfying customers -- is vital because it explicitly addresses customers requirements. Without it TQM would have no objective.
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The Four Pillars of TQM The role of top management in implementation of total quality is crucial and its input on people far-reaching. TQM, therefore, should be understood as management of the system through systems thinking, which means understanding all the elements in the company and putting them to work together towards the common goal. The TQMEX Model advocates an integrated approach in order to support the transition to systems management which is an ongoing process of continuous improvement that begins when the company commits itself to managing by quality. The Model illuminates the elements that form a base to the understanding of TQM philosophy and implementation of the process company-wide. The Structure of TQMEX:
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The Logic of TQMEX:
In order to have a systematic approach to TQM, it is necessary to develop a conceptual model. Generally, a model is a sequence of steps arranged logically to serve as a guideline for implementation of a process in order to achieve the ultimate goal. The model should be simple, logical and yet comprehensive enough for TQM implementation. It also has to sustain the changes in business environment of the new era. The Model also reflects teachings of the contemporary quality gurus. The idea was to develop a universally applicable step-by-step guideline by including recognized practices in TQM:
• • • • •
Japanese 5-S Practice (5-S) Business Process Re-engineering (BPR) Quality Control Circles (QCCs) ISO 9001/2 Quality Management System (ISO) Total Productive Maintenance (TPM)
As Osada pointed out, 5-S is the key to total quality environment. Therefore, it should be the first step. BPR is concerned with re-defining and designing your business process in order to meet the needs of your customers effectively. It is more concerned with the business objectives and systems, and should follow as Step 2. QCCs are concerned with encouraging the employees to participate in continuous improvement and guide them through. They improve human resources capability to achieve the business objectives. Therefore, this should be Step 3. ISO 9000 is to develop a quality management system based on the good practices in the previous three steps. TPM is a result of applying 5-S to equipment based on a sound quality management system. In fact ISO 9001 requires procedures for process control and inspection and testing equipment which are part of TPM. Therefore TPM should be implemented in Step 5.
If the above five steps have been implemented successfully, the organization is already very close towards achieving TQM. TQMEX is a sequential model which is easy to remember and simple to implement. This is in line with the quality principle of Keep It Short and Simple (KISS), although it is not simple to make a model simple!
Companies starting to implement TQM should follow TQMEX step-by-step. Companies which have already gone through some degree of improvement using some of the steps should review what have not been done and do it as their next step of improvement. In order to maximize your benefits from TQMEX, you have to start early too.
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THE ACCEPTABILITY OF TQM
JAPANESE TQM MODEL:
At first, few but the Japanese took Deming seriously. Known for his legendary attacks on executives and compassion for the worker, the Japanese sense of responsibility to one's superiors and subordinates made it easier to accept Deming's message that management's role was to provide the optimal conditions for the workers to do the best job. The Japanese then extended Deming's teaching to many dimensions of management. Here are TQM models from the Japanese Society of Quality and the Japan Standards Association that show how extensive their definition of TQM is. The Japanese identify three major dimensions of TQM: Daily Management, Hoshin/Policy Management, and Cross Function Management. We will study these in detail in the course. They can be visualized with the following picture.
TQM IN USA:
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As regards quality, USA is at crossroads today.Inspite of the fact that USA developed the techniques and concepts of SQC and TQC and the japenese imported these techniques, the further orientation and development in philoshophy, concept and techniques in terms of Q.C. circles and company wide quality control took place in Japan more rapidly and successfully. While the American companies remained concerned about detecting and segregating defective parts from good ones, the Japanese companies devised systems to reduce defects and produce good quality products.This resulted in America losing its position of dominance not only in the American market but also in the world. Much of the quality movement in USA is based on tools and techniques developed by the japenese. Adoption of these techniques requires complete re-development in both methods and emphasis.The most critical challenge facing U.S quality movement is the development and implementation of quality focused corporate management systems that achieve the coherence, integration and comprehensiveness of quality management in japan. The American companies are characterized by: 1. A high concentration of industry on relatively few companies. 2. Stress on promoting share-holders, and 3. Running the company by professional managers. These features of autonomous organisations and professional management have a considerable impact on the conduct of quality function. Each organisation determines independently what it will produce and what quality policies it will adopt. Marguardt divides the evolution of quality movement in USA in three periods: 1. Advocates for SQC- Emphasis on technical tools of control charts, lot inspection and sampling schemes. 2. Administrators for system of quality control- Emphasis on the cost of quality and managerial aspects of organizing the quality. 3. Advertising and selling quality consciousness-Emphasis on changing organizational culture and providing an environment that will enable people to activate and sustain in their own work and in products and services produced by the organistions with the focus on needs of customers. TQM in Service Industry TQM in Service Industry Introduction 24 | P a g e
Today’s customer has before him the possibility of a wider choice of products & Services than ever before .He is going to be demanding & keen on having the best services in the shortest possible time & at the minimum cost .He will look for solutions that are more specific to his needs thus creating opportunity of many niche market. -Today customers avail ATM services 24 hrs -Book airline tickets & check-in over phone -Self-service at fast food restaurant. -And many more What is different ? -Service is also a product of different kind . -No time delay between the production & delivery of service -A defective product can be replaced but a defective service may create a permanent damage. Growth of Service sector Service sector is growing rapidly due to -Change in environment , life style etc -Demand for new kind of services -Advent of new technologies -Fast development of information technology & computerisation -Lean manufacturing . (contracting out most activities) Challenge of Service sector Delight customers -In a dynamic environment which is changing fast -In growing competitive market -With relatively shorter product life cycle -Requiring more customisation Service Quality Dimensions Quality of Services differs from manufactured products -Special characteristics including intangibility. -Simultaneity ( promptness ) -Heterogeneity -Unique dimensions of some services (e.g. Banking)
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THE ESSENTIALS OF TQM
Introduction TQM is the way of managing for the future, and is far wider in its application than just assuring product or service quality – it is a way of managing people and business processes to ensure complete customer satisfaction at every stage, internally and externally. TQM, combined with effective leadership, results in an organization doing the right things right, first time.
The core of TQM is the customer-supplier interfaces, both externally and internally, and at each interface lie a number of processes. This core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organisation to create total quality. These are the foundations of TQM, and they are supported by the key management functions of people, processes and systems in the organisation. 26 | P a g e
This section discusses each of these elements that, together, can make a total quality organisation. Other sections explain people, processes and systems in greater detail, all having the essential themes of commitment, culture and communication running through them. What is quality? A frequently used definition of quality is “Delighting the customer by fully meeting their needs and expectations”. These may include performance, appearance, availability, delivery, reliability, maintainability,cost effectiveness and price. It is, therefore, imperative that the organisation knows what these needs and expectations are. In addition, having identified them, the organisation must understand them, and measure its own ability to meet them. Quality starts with market research – to establish the true requirements for the product or service and the true needs of the customers. However, for an organisation to be really effective, quality must span all functions, all people, all departments and all activities and be a common language for improvement. The cooperation of everyone at every interface is necessary to achieve a total quality organization, in the same way that the Japanese achieve this with company wide quality control. Customers and suppliers There exists in each department, each office, each home, a series of customers, suppliers and customer supplier interfaces. These are “the quality chains”, and they can be broken at any point by one person or one piece of equipment not meeting the requirements of the customer, internal or external. The failure usually finds its way to the interface between the organization and its external customer, or in the worst case, actually to the external customer. Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere, leading to yet more failure and problems, and so the situation is exacerbated. The ability to meet customers’ (external and internal) requirements is vital. To achieve quality throughout an organization, every person in the quality chain must be trained to ask the following questions about every customer-supplier interface:
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Customers (internal and external) • Who are my customers? • What are their true needs and expectations? • How do, or can, I find out what these are? • How can I measure my ability to meet their needs and expectations? • Do I have the capability to meet their needs and expectations? (If not, what must I do to improve this capability?) • Do I continually meet their needs and expectations? (If not, what prevents this from happening when the capability exists?) • How do I monitor changes in their needs and expectations? Suppliers (internal and external) • Who are my internal suppliers? • What are my true needs and expectations? • How do I communicate my needs and expectations to my suppliers? • Do my suppliers have the capability to measure and meet these needs and expectations? • How do I inform them of changes in my needs and expectations? As well as being fully aware of customers’ needs and expectations, each person must respect the needs and expectations of their suppliers. The ideal situation is an open partnership style relationship, where both parties share and benefit.
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Poor practices To be able to become a total quality organization, some of the bad practices must be recognized and corrected. These may include: • Leaders not giving clear direction • Not understanding, or ignoring competitive positioning • Each department working only for itself • Trying to control people through systems • Confusing quality with grade • Accepting that a level of defects or errors is inevitable • Firefighting, reactive behaviour • The “It’s not my problem” attitude How many of these behaviours do you recognize in your organization? The essential components of TQM – commitment & leadership TQM is an approach to improving the competitiveness, effectiveness and flexibility of an organization for the benefit of all stakeholders. It is a way of planning, organizing and understanding each activity, and of removing all the wasted effort and energy that is routinely spent in organizations. It ensures the leaders adopt a strategic overview of quality and focus on prevention not detection of problems. Whilst it must involve everyone, to be successful, it must start at the top with the leaders of the organization. All senior managers must demonstrate their seriousness and commitment to quality, and middle managers must, as well as demonstrating their commitment, ensure they communicate the principles, strategies and benefits to the people for whom they have responsibility. Only then will the right attitudes spread throughout the organization.
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A fundamental requirement is a sound quality policy, supported by plans and facilities to implement it. Leaders must take responsibility for preparing, reviewing and monitoring the policy, plus take part in regular improvements of it and ensure it is understood at all levels of the organization. Effective leadership starts with the development of a mission statement, followed by a strategy, which is translated into action plans down through the organization. These, combined with a TQM approach, should result in a quality organization, with satisfied customers and good business results. The 5 requirements for effective leadership are: • Developing and publishing corporate beliefs, values and objectives, often as a mission statement • Personal involvement and acting as role models for a culture of total quality • Developing clear and effective strategies and supporting plans for achieving the mission and objectives • Reviewing and improving the management system • Communicating, motivating and supporting people and encouraging effective employee participation The task of implementing TQM can be daunting. The following is a list of points that leaders should consider; they are a distillation of the various beliefs of some of the quality gurus: • The organisation needs a long-term commitment to continuous improvement. • Adopt the philosophy of zero errors/defects to change the culture to right first time • Train people to understand the customer/supplier relationships • Do not buy products or services on price alone – look at the total cost
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• Recognise that improvement of the systems must be managed • Adopt modern methods of supervising and training – eliminate fear • Eliminate barriers between departments by managing the process – improve communications and teamwork • Eliminate goals without methods, standards based only on numbers, barriers to pride of workmanship and fiction – get facts by studying processes • Constantly educate and retrain – develop experts in the organisation • Develop a systematic approach to manage the implementation of TQM Culture change The failure to address the culture of an organisation is frequently the reason for many management initiatives either having limited success or failing altogether. Understanding the culture of an organisation, and using that knowledge to successfully map the steps needed to accomplish a successful change, is an important part of the quality journey. The culture in any organisation is formed by the beliefs, behaviours, norms, dominant values, rules and the “climate”. A culture change, e.g, from one of acceptance of a certain level of errors or defects to one of right first time, every time, needs two key elements: • Commitment from the leaders • Involvement of all of the organisation’s people There is widespread recognition that major change initiatives will not be successful without a culture of good teamwork and cooperation at all levels in an organisation, as discussed in the section on People.
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The building blocks of TQM: processes, people, management systems and performance measurement Everything we do is a Process, which is the transformation of a set of inputs, which can include action, methods and operations, into the desired outputs, which satisfy the customers’ needs and expectations. In each area or function within an organisation there will be many processes taking place, and each can be analysed by an examination of the inputs and outputs to determine the action necessary to improve quality. In every organisation there are some very large processes, which are groups of smaller processes, called key or core business processes. These must be carried out well if an organisation is to achieve its mission and objectives. The section on Processes discusses processes and how to improve them, and Implementation covers how to prioritise and select the right process for improvement.
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The only point at which true responsibility for performance and quality can lie is with the People who actually do the job or carry out the process, each of which has one or several suppliers and customers. An efficient and effective way to tackle process or quality improvement is through teamwork. However, people will not engage in improvement activities without commitment and recognition from the organisation’s leaders, a climate for improvement and a strategy that is implemented thoughtfully and effectively. The section on People expands on these issues, covering roles within teams, team selection and development and models for successful teamwork. An appropriate documented Quality Management System will help an organisation not only achieve the objectives set out in its policy and strategy, but also, and equally importantly, sustain and build upon them. It is imperative that the leaders take responsibility for the adoption and documentation of an appropriate management system in their organisation if they are serious about the quality journey. The Systems section discusses the benefits of having such a system, how to set one up and successfully implement it. Once the strategic direction for the organisation’s quality journey has been set, it needs Performance Measures to monitor and control the journey, and to ensure the desired level of performance is being achieved and sustained. They can, and should be, established at all levels in the organisation, ideally being cascaded down and most effectively undertaken as team activities and this is discussed in the section on Performance.
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THE EFFECTS OF TQM
Improving Financial Services through TQM
The work described in this case study was undertaken in a young, rapidly expanding company in the financial services sector with no previous experience with Total Quality Management (TQM). The quality project began with a two-day introductory awareness program covering concepts, cases, implementation strategies and imperatives of TQM. The program was conducted for the senior management team of the company. This program used interactive exercises and real life case studies to explain the concepts of TQM and to interest them in committing resources for a demonstration project. The demonstration project, which used the Seven Steps of Problem Solving (similar to DMAIC), was to show them how TQM concepts worked in practice before they committed resources for a company-wide program.
Step 1. Define the Problem
1.1) Selecting the theme: A meeting of the senior management of the company was held. Brainstorming produced a list of more than 20 problems. The list was prioritized using the weighted average table, followed by a structured discussion to arrive at a consensus on the two most important themes -- customer service and sales productivity. Under the customer service theme, "Reducing the Turnaround Time from an Insurance Proposal to Policy" was selected as the most obvious and urgent problem. The company was young, and therefore had few claims to process so far. The proposal-to-policy process therefore impacted the greatest number of customers. An appropriate cross functional group was set up to tackle this problem. 1.2) Problem = customer desire – current status: Current status: What did the individual group members think the turnaround is currently? As each member began thinking questions came up. "What type of policies do we address?" Medical policies or non-medical? The latter are take longer because of the medical examination of the client required. "Between what stages do we consider turnaround?" Perceptions varied, with each person thinking about the turnaround within their department. The key process stages were mapped:
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Several sales branches in different parts of the country sent proposals into the Central Processing Center. After considerable debate it was agreed at first to consider turnaround between entry into the computer system at the Company Sales Branch and dispatch to the customer from the Central Processing Center (CPC). Later the entire cycle could be included. The perception of the length of turnaround by different members of the team was recorded. It averaged: Non-Medical Policies Medical Policies 17 days 35 days
Invoking the slogan from the awareness program "In God we trust, the rest of us bring data" the group was asked to collect data and establish reality. Armed with a suitably designed check sheet they set about the task. Customer desire: What was the turnaround desired by the customer? Since a customer survey was not available, individual group members were asked to think as customers -- imagine they had just given a completed proposal form to a sales agent. When would they expect the policy in hand? From the customer's point of view they realized that they did not differentiate between medical and non-medical policies. Their perception averaged out six days for the required turnaround. "Is this the average time or maximum time that you expect?" they were asked. "Maximum," they responded. It was clear therefore that the average must be less than six days. The importance of "variability" had struck home. The concept of sigma was explained and was rapidly internalized. For 99.7 percent delivery within the customer limit the metric was defined.
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Customer desire: Average+3 Sigma turnaround = less than 6 days Current status: Non-medical policies (Average 19/Sigma 15) Average+3 sigma= 64 days Medical (Average 37/Sigma 27) Average+3 sigma= 118 days
The Problem was therefore defined: Reduce Average+3 sigma of turnaround for:
Non-Medical Policies From 64 to 6 days Medical Policies From 118 to 6 days The performance requirement appeared daunting. Therefore the initial target taken in the Mission Sheet (project charter) was to reduce the turnaround by 50 percent -- to 32 and 59 days respectively.
Step 2. Analysis of the Problem
In a session the factors causing large turnaround times from the principles of JIT were explained. These were:Input arrival patterns
• • • •
Waiting times in process - Batching of work - Imbalanced processing line - Too many handovers - Non-value added activities, etc. Processing times Scheduling Transport times Deployment of manpower
Typically it was found that waiting times constitute the bulk of processing turnaround times. Process Mapping (Value Stream Mapping in Lean) was undertaken. The aggregate results are summarized below: Number of operations 84 Number of handovers 13 In-house processing time (estimated) 126 man-mins. Range of individual stage time 2 to 13 mins.
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Could this be true? Could the turnaround be 126 minutes for internal processing without waiting? The group started to question of the status quo. The change process had begun. To check this estimate it was decided to collect data -- run two policies without waiting and record the time at each stage. The trial results amazed everyone: Policy No. 1 took 100 minutes and Policy No. 2 took 97 minutes. Almost instantly the mindset changed from doubt to desire: "Why can't we process every proposal in this way?"
Step 3. Generating Ideas
In the introductory program of TQM during the JIT session the advantages of flow versus batch processing had been dramatically demonstrated using a simple exercise. Using that background a balanced flow line was designed as follows: 1. Determine the station with the maximum time cycle which cannot be split up by reallocation -- 8 minutes. 2. Balance the line to make the time taken at each stage equal 8 minutes as far as possible. 3. Reduce the stages and handovers -- 13 to 8. 4. Eliminate non-value added activities -- transport -- make personnel sit next to each other. 5. Agree processing to be done in batch of one proposal. Changing the mindset of the employees so they will accept and welcome change is critical to building a selfsustaining culture of improvement. In this case, the line personnel were involved in a Quality Mindset Program so that they understood the reasons for change and the concepts behind them and are keen to experiment with new methods of working. The line was ready for a test run.
Step 4. Testing the Idea
Testing in stages is a critical stage. It allows modification of ideas based upon practical experience and equally importantly ensures acceptance of the new methods gradually by the operating personnel. Stage 1: Run five proposals flowing through the system and confirm results. The test produced the following results: Average turnaround time: < 1 day In-house processing time: 76 mins. There was jubilation in the team. The productivity had increased by 24 percent. The head of the CPC summarized: "I gave five files for processing, and went for a meeting. Emerging from the meeting about 30 minutes later I was greeted by the dispatch clerk jubilantly reporting, "'Madam, the TQM files are ready for dispatch.'" The mindset was dramatically changed and line personnel were now keen to push the implementation.
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Stage 2: It was agreed to run the new system for five days -- and compute the average and sigma of the turnaround to measure the improvement. It was agreed that only in-house processing was covered at this stage and that the test would involve all policies at the CPC but only one branch as a model. This model, once proved, could be replicated at other branches. The test results showed a significant reduction in turnaround: 1. For all non-medical policies From 64 to 42 days or 34% 2. For policies of the model branch From 64 to 27 days of 60% The Mission Sheet goal of 50 percent reduction had been bettered for the combined model branch and CPC. Further analysis of the data revealed other measures which could reduce the turnaround further. Overall reduction reached an amazing 75 percent. Turnaround, which had been pegged at 64 days, was now happening at 99.7 percent on-time delivery in 15 days.
Step 5. Implementing the Ideas
Regular operations with the new system was planned to commence. However, two weeks later it was still not implemented. One of the personnel on the line in CPC had been released by his department for the five-day trial to sit on the line but was not released on a regular basis. The departmental head had not attended the TQM awareness program and therefore did not understand why this change was required. There were two options -- mandate the change or change the mindset to accept the change. Since the latter option produces a robust implementation that will not break down under pressures it was agreed that the group would summarize TQM, the journey and the results obtained in the project so far and also simulate the process with a simple exercise in front of the department head. This session was highly successful and led to the release of the person concerned on a regular basis.
Step 6. Check the Result
The process was run for one month with regular checks. The results obtained were marginally better than the trials conducted in Step 5: Average 11 days Sigma 9 days Average+3 sigma 38 days
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Step 7. Standardize Control/Document the Improvement Story
Essentially the in-house processes in two centers of processing -- the CPC and one sales branch -- had been impacted so far. To make sure that the gains were held, control charts were introduced in both locations. Sample x-bar and sigma-control charts for the CPC are shown below:
A special "Grind It In" session was conducted for line personnel to ensure that the control chart was updated every day, and any deterioration was dealt with by finding and killing the root causes of the problems. Customer reaction: Sales management and sales agents (internal customers) clearly noticed the difference. For instance one sales manager reported that a customer had received a policy within a week of giving a proposal and was so amazed that he said, "If you give such service I will give you the next policy also!" Adoption of a similar process at the CPC and the model branch for medical policies has already reduced the average+3 sigma of turnaround time by 70 percent -- from 118 days to 37 days. The corresponding all-India reduction was from 118 days to 71 days -- a 60 percent reduction. The project objective of 50 percent in the first stage has been achieved.
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A quality improvement story was compiled by the project Leader for training and motivating all employees.
Non-medical policies: Goal to reduce turnaround from 42 days to about 15 days. 1. Roll out process to branches to achieve 24 days throughout the country. 2. Minimize rework by analyzing, prioritizing and training sales branches to avoid the causes of rework. 3. Working with the bank to improve the turnaround time of banking checks. 4. Considering processing proposals while check clearance is in progress. Medical policies: Goal to reduce turnaround from 71 days to about 24 days.
1. Roll out process to branches to reduce turnaround from 71 to 37 days. 2. Streamline the process of medical exam of the client from 37 to 24 days.
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IMPLEMENTATION OF TQM
Implementation Principles and Processes
A preliminary step in TQM implementation is to assess the organization's current reality. Relevant preconditions have to do with the organization's history, its current needs, precipitating events leading to TQM, and the existing employee quality of working life. If the current reality does not include important preconditions, TQM implementation should be delayed until the organization is in a state in which TQM is likely to succeed. If an organization has a track record of effective responsiveness to the environment, and if it has been able to successfully change the way it operates when needed, TQM will be easier to implement. If an organization has been historically reactive and has no skill at improving its operating systems, there will be both employee skepticism and a lack of skilled change agents. If this condition prevails, a comprehensive program of management and leadership development may be instituted. A management audit is a good assessment tool to identify current levels of organizational functioning and areas in need of change. An organization should be basically healthy before beginning TQM. If it has significant problems such as a very unstable funding base, weak administrative systems, lack of managerial skill, or poor employee morale, TQM would not be appropriate. However, a certain level of stress is probably desirable to initiate TQM. People need to feel a need for a change. Kanter (1983) addresses this phenomenon be describing building blocks which are present in effective organizational change. These forces include departures from tradition, a crisis or galvanizing event, strategic decisions, individual "prime movers," and action vehicles. Departures from tradition are activities, usually at lower levels of the organization, which occur when entrepreneurs move outside the normal ways of operating to solve a problem. A crisis, if it is not too disabling, can also help create a sense of urgency which can mobilize people to act. In the case of TQM, this may be a funding cut or threat, or demands from consumers or other stakeholders for improved quality of service. After a crisis, a leader may intervene strategically by articulating a new vision of the future to help the organization deal with it. A plan to implement TQM may be such a strategic decision. Such a leader may then become a prime mover, who takes charge in championing the new idea and showing others how it will help them get where they want to go. Finally, action vehicles are needed and mechanisms or structures to enable the change to occur and become institutionalized.
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Steps in Managing the Transition Beckhard and Pritchard (1992) have outlined the basic steps in managing a transition to a new system such as TQM: identifying tasks to be done, creating necessary management structures, developing strategies for building commitment, designing mechanisms to communicate the change, and assigning resources.
Task identification would include a study of present conditions (assessing current reality, as described above); assessing readiness, such as through a force field analysis; creating a model of the desired state, in this case, implementation of TQM; announcing the change goals to the organization; and assigning responsibilities and resources. This final step would include securing outside consultation and training and assigning someone within the organization to oversee the effort. This should be a responsibility of top management. In fact, the next step, designing transition management structures, is also a responsibility of top management. In fact, Cohen and Brand (1993) and Hyde (1992) assert that management must be heavily involved as leaders rather than relying on a separate staff person or function to shepherd the effort. An organization wide steering committee to oversee the effort may be appropriate. Developing commitment strategies was discussed above in the sections on resistance and on visionary leadership. To communicate the change, mechanisms beyond existing processes will need to be developed. Special allstaff meetings attended by executives, sometimes designed as input or dialog sessions, may be used to kick off the process, and TQM newsletters may be an effective ongoing communication tool to keep employees aware of activities and accomplishments. Management of resources for the change effort is important with TQM because outside consultants will almost always be required. Choose consultants based on their prior relevant experience and their commitment to adapting the process to fit unique organizational needs. While consultants will be invaluable with initial training of staff and TQM system design, employees (management and others) should be actively involved in TQM implementation, perhaps after receiving training in change management which they can then pass on to other employees. A collaborative relationship with consultants and clear role definitions and specification of activities must be established. In summary, first assess preconditions and the current state of the organization to make sure the need for change is clear and that TQM is an appropriate strategy. Leadership styles and organizational culture must be congruent with TQM. If they are not, this should be worked on or TQM implementation should be avoided or delayed until favorable conditions exist. Remember that this will be a difficult, comprehensive, and long-term process. Leaders will need to maintain their commitment, keep the process visible, provide necessary support, and hold people accountable for
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results. Use input from stakeholder (clients, referring agencies, funding sources, etc.) as possible; and, of course, maximize employee involvement in design of the system. Always keep in mind that TQM should be purpose driven. Be clear on the organization's vision for the future and stay focused on it. TQM can be a powerful technique for unleashing employee creativity and potential, reducing bureaucracy and costs, and improving service to clients and the community.
The Concept of Continuous Improvement by TQM
TQM is mainly concerned with continuous improvement in all work, from high level strategic planning and decision-making, to detailed execution of work elements on the shop floor. It stems from the belief that mistakes can be avoided and defects can be prevented. It leads to continuously improving results, in all aspects of work, as a result of continuously improving capabilities, people, processes, technology and machine capabilities. Continuous improvement must deal not only with improving results, but more importantly with improving capabilities to produce better results in the future. The five major areas of focus for capability improvement are demand generation, supply generation, technology, operations and people capability. A central principle of TQM is that mistakes may be made by people, but most of them are caused, or at least permitted, by faulty systems and processes. This means that the root cause of such mistakes can be identified and eliminated, and repetition can be prevented by changing the process. There are three major mechanisms of prevention:
1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-Yoke). 2. Where mistakes can't be absolutely prevented, detecting them early to prevent them being passed down the value added chain (Inspection at source or by the next operation). 3. Where mistakes recur, stopping production until the process can be corrected, to prevent the production of more defects. (Stop in time).
. TQM is the foundation for activities, which include:
• • • • • •
Commitment by senior management and all employees Meeting customer requirements Reducing development cycle times Just In Time/Demand Flow Manufacturing Improvement teams Reducing product and service costs 43 | P a g e
• • • • • • •
Systems to facilitate improvement Line Management ownership Employee involvement and empowerment Recognition and celebration Challenging quantified goals and benchmarking Focus on processes / improvement plans Specific incorporation in strategic planning
This shows that TQM must be practiced in all activities, by all personnel, in Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.
TQM in manufacturing Quality assurance through statistical methods is a key component in a manufacturing organization, where TQM generally starts by sampling a random selection of the product. The sample can then be tested for things that matter most to the end users. The causes of any failures are isolated, secondary measures of the production process are designed, and then the causes of the failure are corrected. The statistical distributions of important measurements are tracked. When parts' measures drift into a defined "error band", the process is fixed. The error band is usually a tighter distribution than the "failure band", so that the production process is fixed before failing parts can be produced. It is important to record not just the measurement ranges, but what failures caused them to be chosen. In that way, cheaper fixes can be substituted later (say, when the product is redesigned) with no loss of quality. After TQM has been in use, it's very common for parts to be redesigned so that critical measurements either cease to exist, or become much wider. It took people a while to develop tests to find emergent problems. One popular test is a "life test" in which the sample product is operated until a part fails. Another popular test is called "shake and bake", in which the product is mounted on a vibrator in an environmental oven, and operated at progressively more extreme vibration and temperatures until something fails. The failure is then isolated and engineers design an improvement. A commonly-discovered failure is for the product to disintegrate. If fasteners fail, the improvements might be to use measured-tension nutdrivers to ensure that screws don't come off, or improved adhesives to ensure that parts remain glued. If a gearbox wears out first, a typical engineering design improvement might be to substitute a brushless stepper motor for a DC motor with a gearbox. The improvement is that a stepper motor has no brushes or gears to wear out, so it lasts ten or more times as long. The stepper motor is more expensive than a DC motor, but cheaper than a DC motor combined with a gearbox. The electronics are radically different, but equally expensive. One disadvantage might be that a stepper motor can hum or whine, and usually needs noise-isolating mounts.
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Often, a "TQMed" product is cheaper to produce because of efficiency/performance improvements and because there's no need to repair dead-on-arrival products, which represents an immensely more desirable product. TQM and contingency-based research TQM has not been independent of its environment. In the context of management accounting systems (MCSs), Sim and Killough (1998) show that incentive pay enhanced the positive effects of TQM on customer and quality performance. Ittner and Larcker (1995) demonstrated that product focused TQM was linked to timely problem solving information and flexible revisions to reward systems. Chendall (2003) summarizes the findings from contingency-based research concerning management control systems and TQM by noting that “TQM is associated with broadly based MCSs including timely, flexible, externally focused information; close interactions between advanced technologies and strategy; and non-financial performance measurement.” TQM, just another management fad? Abrahamson (1996) argued that fashionable management discourse such as Quality Circles tends to follow a lifecycle in the form of a bell curve. Ponzi and Koenig (2002) showed that the same can be said about TQM, which peaked between 1992 and 1996, while rapidly losing popularity in terms of citations after these years. Dubois (2002) argued that the use of the term TQM in management discourse created a positive utility regardless of what managers meant by it (which showed a large variation), while in the late 1990s the usage of the term TQM in implementation of reforms lost the positive utility attached to the mere fact of using the term and sometimes associations with TQM became even negative. Nevertheless, management concepts such as TQM leave their traces, as their core ideas can be very valuable. For example, Dubois (2002) showed that the core ideas behind the two management fads Reengineering and TQM, without explicit usage of their names, can even work in a synergistic way. Total Quality Management is an approach to the art of management that originated in Japanese industry in the 1950's and has become steadily more popular in the West since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with things being done right first time, and defects and waste eradicated from operations. Many companies have difficulties in implementing TQM. Surveys by consulting firms have found that only 20-36% of companies that have undertaken TQM have achieved either significant or even tangible improvements in quality, productivity, competitiveness or financial return. As a result many people are sceptical about TQM. However, when you look at successful companies you find a much higher percentage of successful TQM implementation. Some useful messages from results of TQM implementations: if you want to be a first-rate company, don't focus on the second-rate companies who can't handle TQM, look at the world-class companies that have adopted it 45 | P a g e
the most effective way to spend TQM introduction funds is by training top management, people involved in new product development, and people involved with customers it's much easier to introduce EDM/PDM in a company with a TQM culture than in one without TQM. People in companies that have implemented TQM are more likely to have the basic understanding necessary for implementing EDM/PDM. For example, they are more likely to view EDM/PDM as an information and workflow management system supporting the entire product life cycle then as a departmental solution for the management of CAD data
Important aspects of TQM include customer-driven quality, top management leadership and commitment, continuous improvement, fast response, actions based on facts, employee participation, and a TQM culture. Customer-driven quality TQM has a customer-first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company's highest priority. The company believes it will only be successful if customers are satisfied. The TQM company is sensitive to customer requirements and responds rapidly to them. In the TQM context, `being sensitive to customer requirements' goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints. The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage. Each part of the company is involved in Total Quality, operating as a customer to some functions and as a supplier to others. The Engineering Department is a supplier to downstream functions such as Manufacturing and Field Service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers. TQM leadership from top management TQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed - instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals. These systems and methods guide all quality activities and 46 | P a g e
encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration. Continuous improvement Continuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. As well as recognizing the link between product quality and customer satisfaction, TQM also recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality, and to an increase in customer satisfaction. Improvement cycles are encouraged for all the company's activities such as product development, use of EDM/PDM, and the way customer relationships are managed. This implies that all activities include measurement and monitoring of cycle time and responsiveness as a basis for seeking opportunities for improvement. Elimination of waste is a major component of the continuous improvement approach. There is also a strong emphasis on prevention rather than detection, and an emphasis on quality at the design stage. The customer-driven approach helps to prevent errors and achieve defect-free production. When problems do occur within the product development process, they are generally discovered and resolved before they can get to the next internalcustomer. Fastresponse To achieve customer satisfaction, the company has to respond rapidly to customer needs. This implies short product and service introduction cycles. These can be achieved with customer-driven and process-oriented product development because the resulting simplicity and efficiency greatly reduce the time involved. Simplicity is gained through concurrent product and process development. Efficiencies are realized from the elimination of non-value-adding effort such as re-design. The result is a dramatic improvement in the elapsed time from product concept to first shipment. Actions based on facts The statistical analysis of engineering and manufacturing facts is an important part of TQM. Facts and analysis provide the basis for planning, review and performance tracking, improvement of operations, and comparison of performance with competitors. The TQM 47 | P a g e
approach is based on the use of objective data, and provides a rational rather than an emotional basis for decision making. The statistical approach to process management in both engineering and manufacturing recognizes that most problems are system-related, and are not caused by particular employees. In practice, data is collected and put in the hands of the people who are in the best position to analyze it and then take the appropriate action to reduce costs and prevent non-conformance. Usually these people are not managers but workers in the process. If the right information is not available, then the analysis, whether it be of shop floor data, or engineering test results, can't take place, errors can't be identified, and so errors can't be corrected. Employee participation A successful TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities. Such participation is reinforced by reward and recognition systems which emphasize the achievement of quality objectives. On-going education and training of all employees supports the drive for quality. Employees are encouraged to take more responsibility, communicate more effectively, act creatively, and innovate. As people behave the way they are measured and remunerated, TQM links remuneration to customer satisfaction metrics. A TQM culture It's not easy to introduce TQM. An open, cooperative culture has to be created by management. Employees have to be made to feel that they are responsible for customer satisfaction. They are not going to feel this if they are excluded from the development of visions, strategies, and plans. It's important they participate in these activities. They are unlikely to behave in a responsible way if they see management behaving irresponsibly saying one thing and doing the opposite. Product development in a TQM environment Product development in a TQM environment is very different to product development in a non-TQM environment. Without a TQM approach, product development is usually carried on in a conflictual atmosphere where each department acts independently. Short-term results drive behavior so scrap, changes, work-arounds, waste, and rework are normal practice. Management focuses on supervising individuals, and fire-fighting is necessary and rewarded. Product development in a TQM environment is customer-driven and focused on quality. Teams are process-oriented, and interact with their internal customers to deliver the 48 | P a g e
required results. Management's focus is on controlling the overall process, and rewarding teamwork. Awards for Quality achievement The Deming Prize has been awarded annually since 1951 by the Japanese Union of Scientists and Engineers in recognition of outstanding achievement in quality strategy, management and execution. Since 1988 a similar award (the Malcolm Baldrige National Quality Award) has been awarded in the US. Early winners of the Baldrige Award include AT&T (1992), IBM (1990), Milliken (1989), Motorola (1988), Texas Instruments (1992) and Xerox (1989).
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Total Quality Management (TQM) Tools Total quality management (TQM) tools help organizations to identify, analyze and assess qualitative and quantitative data that is relevant to their business. These tools can identify procedures, ideas, statistics, cause and effect concerns and other issues relevant to their organizations. Each of which can be examined and used to enhance the effectiveness, efficiency, standardization and overall quality of procedures, products or work environment, in accordance with ISO 9000 standards (SQ, 2004). According to Quality America, Inc. (ReVelle, 2003) the number of TQM tools is close to 100 and come in various forms, such as brainstorming, focus groups, check lists, charts and graphs, diagrams and other analysis tools. In a different vein, manuals and standards are TQM tools as well, as they give direction and best practice guidelines to you and/or your staff. TQM tools illustrate and aid in the assimilation of complicated information such as: · identification of your target audience · positive and negative forces affecting business · assessment of customer needs · competition analysis · market analysis · brainstorming ideas · productivity changes · various statistics
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· staff duties and work flow analysis · statement of purpose · financial analysis · model creation · business structure · logistics analysis The list goes on, though essentially TQM tools can be used in any situation, for any number of reasons, and can be extremely effective if used properly. TQM Tools The following are some of the most common TQM tools in use today. Each is used for, and identifies, specific information in a specific manner. It should be noted that tools should be used in conjunction with other tools to understand the full scope of the issue being analyzed or illustrated. Simply using one tool may inhibit your understanding of the data provided, or may close you off to further possibilities. Pie Charts and Bar Graphs · Used to identify and compare data units as they relate to one issue or the whole, such as budgets, vault space available, extent of fonds, etc. Histograms · To illustrate and examine various data element in order to make decisions regarding them. · Effective when comparing statistical, survey, or questionnaire results.
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Run Chart · Follows a process over a specific period of time, such as accrual rates, to track high and low points in its run, and ultimately identify trends, shifts and patterns.
Pareto Charts / Analysis (designed by Vilfredo Pareto) · Rates issues according to importance and frequency by prioritizing specific problems or causes in a manner that facilitates problem solving. · Identify groupings of qualitative data, such as most frequent complaint, most commonly purchased preservation aid, etc. in order to measure which have priority. · Can be scheduled over select periods of time to track changes. They can also be created in retrospect, as a before and after analysis of a process change.
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Force Field Analysis · To identify driving and restraining forces occurring in a chosen process in order to understand why that particular process functions as it does. For example, identifying the driving and restraining forces of catering predominantly to genealogists. · To identify restraining forces that need to be eradicated, or driving forces that need to be improved, in order to function at a higher level of efficiency. Cause and Effect, Ishikawa or Fishbone Diagrams (designed by Kauro Ishikawa) · Illustrates multiple levels of potential causes (inputs), and ultimate effects (outputs), of problems or issues that may arise in the course of business. · May be confusing if too many inputs and outputs are identified. An alternative would be a tree diagram, which is much easier to follow.
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Focus Groups · Useful for marketing or advertising organizations to test products on the general public. · Consist of various people from the general public who use and discuss your product, providing impartial feedback to help you determine whether your product needs improvement or if it should be introduced onto the market. Brainstorming and Affinity Diagrams · Teams using creative thinking to identify various aspects surrounding an issue. · An affinity diagram, which can be created using anything from enabling software to post-it notes organized on a wall, is a tool to organize brainstorming ideas. Tree Diagram · To identify the various tasks involved in, and the full scope of, a project. · To identify hierarchies, whether of personnel, business structure, or priorities. · To identify inputs and outputs of a project, procedure, process, etc.
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Flowcharts and Modelling Diagrams · Assist in the definition and analysis of each step in a process by illustrating it in a clear and comprehensive manner. · Identify areas where workflow may be blocked, or diverted, and where workflow is fluid. · Identify where steps need to be added or removed to improve efficiency and create standardized workflow.
Scatter Diagram · To illustrate and validate hunches · To discover cause and effect relationships, as well as bonds and correlations, between two variables · To chart the positive and negative direction of relationships
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Relations Diagram · To understand the relationships between various factors, issues, events, etc. so as to understand their importance in the overall organizational view. PDCA · The Plan-Do-Check-Act style of management where each project or procedure is planned according to needs and outcome, it is then tested, examined for efficiency and effectiveness, and then acted upon if anything in the process needs to be altered. · This is a cyclical style to be iterated until the process is perfected. All of these TQM tools can be easily created and examined by using various types of computer software (Pollock, 2003) or by simply mapping them out on paper. They can also be easily integrated into team meetings, organizational newsletters, marketing reports, and for various other data analysis needs. Proper integration and use of these tools will ultimately assist in processing data such as identifying collecting policies, enhancing work flow such as mapping acquisition procedures, ensuring client satisfaction by surveying their needs and analyzing them accordingly, and creating an overall high level of quality in all areas of your organization.
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Planning a Change:
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TQM PROBLEM SOLVING SEQUENCE:
TQM Process Improvement and Problem Solving Sequence
PLAN (PLAN A CHANGE) DEFINE THE PROBLEM IDENTIFY POSSIBLE CAUSES EVALUATE POSSIBLE CAUSES ACTION (EMBED THE FIX INTO (IMPLEMENT (OBSERVE THE PROCESS FOR THE THE GOOD) CHANGE) EFFECTS) MAKE A CHANGE TEST THE CHANGE 11. Determine what change worked (confirmation). Histograms TAKE PERMANENT ACTION 12. Ensure the fix is embedded in the process and that the resulting process is used. DO CHECK
1. Recognize 6. 8. Determine the 10. Determine that what you are "BRAINSTORM" relationship what change doing is a what is causing the between cause and effect would help "PROCESS" problem. o Scatter diagrams o Regression analysis Your 2. Identify the 7. Determine knowledge commodity what past data 9. Determine what the of the process being shows. process is doing now processed. o Frequency o Control charts Scatter - Process distribution - sampling diagrams Inference o Pareto charts o Control charts Control Charts 3. Define some - sampling - sampling measurable characteristics Pareto analysis of value to the commodity. ****Then make 4. Describe the the change. "PROCESS" o Process Flow Analysis's o Flow charts o List of steps 5. Identify the "Big”problem o Brainstorming o Checklists o Pareto analysis
Continue to monitor the ensure: Control charts process to - sampling A. The problem is fixed for good. Scatter diagrams and B. The process is good enough o Control charts - sampling ****To ensure continuous improvement, return to step 5.
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This project concludes that Total Quality Management (TQM) has many benefits but implementing TQM is not a bed of roses. It cannot be left to its own fate after the launch and requires constant nurturing and follow-up by the management. Management must keep its fingers on the pulse of TQM efforts as bringing a change in culture, attitudes, and beliefs in a sensitive and delicate matter. Problems in implementation are, therefore, to be expected and are universal in nature. However patience and loyal efforts are required to solve these problems. TQM can lead to a drastic change in the productivity of an org. if implemented properly. In recent years, TQM has been the most focused area of research as compared to other disciplines both in the industrial and academic world. The literature is abundant with theories and applications. Since the benefits of TQM are many therefore it doesn’t pervade only to all the sectors of the business but also to the society.
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1. “HANDBOOK OF TOTAL QUALITY MANAGEMENT”, R.P.MOHANTY 2. WWW.ISIXSIGMA.COM 3. WWW.WIKEPEDIA.COM 4. “TQM TOOLS AND TOOL KITS”, J.ReVelle 5. WWW.360-IBM.COM
1. WWW.YEADONINC.COM/DIAGRAM.GIF 2. WWW.QAPROJECT.ORG/IMAGES/SCATTERDIAGRAM.GIF
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