Total Quality Management Project Main

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“Total Quality Management” A Project Report Submitted by Name : Harsh Pandey Roll No : 0431061705 In Partial Fulfillment Of BBA Semester – III Syllabus At Ansal Institute of Technology (GGS Indraprastha University)

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ACKNOWLEDGEMENT I would like to thank Mrs. Manisha Anand for her support and cooperation in completion of the project report within the stipulated time period.

Harsh Pandey (Name of Student)

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INDEX

1. CHAPTER ONE 2. CHAPTER TWO

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3. CHAPTER THREE 4. CHAPTER FOUR

INTRODUCTION CONCEPTS AND PHILOSOPHIES OF TQM

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THE ACCEPTABILITY OF TQM THE ESSENTIALS OF TQM

5. CHAPTER FIVE

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THE EFFECTS OF TQM

6. CHAPTER SIX

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IMPLEMENTATION OF TQM

7. CHAPTER SEVEN

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TQM TOOLS

 CASE STUDY ON IBM (TIVOLI SOFTWARE).

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GLOSSARY 1. IBM

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International Business Machine Corporation

2. TQM

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Total Quality Management

3. ISO

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International Standard Organization

4. TPM

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Total Productive Maintenance

5. QCCs

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Quality Control Circles

6. BPR

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Business Process Re-Engineering

7. TQC

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Total Quality Circles

8. ATM

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Automated Teller Machines

9. CPC

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Control Processing Centre

10.CAD

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Computer Aided Design

11.INCL.

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Including

12.PDCA

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Plan-Do-Check-Act

13.QMS

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Quality Management System

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SUMMARY

Every nation has its own independent historical and cultural background. The quality sce-nario , therefore, differs from one national setting to the other. The nations are orienting their quality management strategies and systems to meet the requirements of the opera-ing environment though the primary focus remains the same, that is, Total Customer Satisfication .Many of the present techniques of quality management were developed in Japan. However, U.S.A., European nations and developing nations have also contributed significantly to this development. The studies carried out by researchers in different national settings reveal that the concept and philosophies of TQM are not understood by the managers and others.An all out effort , therefore is required to promote the understan-ding by launching massive educational and management development programs at all levels so as to create a cultural consciousness towards quality. TQM is not undimensional approach but is multifaceted in nature.Understanding these facets is essential to promote a successful quality improvement program. An integrated approach on all vital components of TQM is required to achieve the desired goal. So, the summarization is being done in the following points. 1. TQM has been accepted by both service and manufacturing organizations,globally as a systematic management approach to meet the competitive challenges.

6 2. TQM redefines the quality with emphasis on top management commitment and custo-mer satisfaction. 3. The benefits of TQM are numerous and are increasingly realized by organizations. 4. TQM provides a linkage between productivity and quality. 5. The application of TQM tools increases a company’s efficiency. 6. The focus of TQM is on: (a) (b) (c) (d)

Involvement of everyone in organization in continuous improvement. Commitment to satisfy customers. Participation through teamwork. Commitment and Leadership of top management.

CHAPTER ONE INTRODUCTION

 DEFINITION As defined by ISO: "TQM is a management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society." In Japanese, TQM comprises four process steps, namely: 1. Kaizen – Focuses on Continuous Process Improvement, to make processes visible, repeatable and measureable.

7 2. Atarimae Hinshitsu – Focuses on intangible effects on processes and ways to optimize and reduce their effects. 3. Kansei – Examining the way the user applies the product leads to improvement in the product itself. 4. Miryokuteki Hinshitsu – Broadens management concern beyond the immediate product. TQM requires that the company maintain this quality standard in all aspects of its business. This requires ensuring that things are done right the first time and that defects and waste are eliminated from operations. Total Quality Management (TQM) is a management strategy aimed at embedding awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, government, and service industries, as well as NASA space and science programs.  ORIGINS Although W. Edwards Deming is largely credited with igniting the quality revolution in Japan starting in 1946 and trying to bring it to the United States in the 1980s, Armand V. Feigenbaum was developing a similar set of principles at General Electric in the United States at around the same time. "Total Quality Control" was the key concept of Feigenbaum's 1951 book, Quality Control: Principles, Practice, and Administration, a book that was subsequently released in 1961 under the title, Total Quality Control (ISBN 0070203539). Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa also contributed to the body of knowledge now known as TQM. The American Society for Quality says that the term Total Quality Management was first used by the U.S. Naval Air Systems Command "to describe its Japanese-style management approach to quality improvement."[1] This is consistent with the story that the United States Department of the Navy Personnel Research and Development Center began researching the use of statistical process control (SPC); the work of Juran, Crosby, and Ishikawa; and the philosophy of Deming to make performance improvements in 1984. This approach was first tested at the North Island Naval Aviation Depot.

8 In his paper, "The Making of TQM: History and Margins of the Hi(gh)-Story" from 1994, Xu claims that "Total Quality Control" is translated incorrectly from Japanese since there is no difference between the words "control" and "management" in Japanese. William Golimski refers to Koji Kobayashi, former CEO of NEC, being the first to use TQM, which he did during a speech when he got the Deming prize in 1974.

 TQM :- “A QUALITY ORIENTED APPROACH” Total Quality Management (TQM) is one of quality-oriented approaches that many organisations adopt. It is generally acknowledged that manufacturing companies need to be quality oriented in conducting their business to survive the business world. TQM is an integrated management philosophy and a set of practices that emphasise top management commitment, customer focus, supplier relationship, benchmarking, quality-oriented training, employee focus, zerodefects, process improvement, and quality measurement. This paper investigates the structural linkages between TQM, product quality performance and business performance in the electronics industry in Malaysia. Given the nature of this study, the statistical analysis technique called Structural Equation Modelling was used. This preliminary result suggests that there is insufficient statistical evidence to conclude significant simple relationships between TQM, product quality performance, and business performance. This implies that the electronics industry cannot assume direct causal linkages between these three constructs, which might also suggest that there is a more complex relationship between TQM, product quality performance, and business performance. However, the results reveal that top management commitment, supplier relations and training in particular appear to be of primary importance for TQM practices in Malaysian electronics companies.

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 CHARACTERISTICS OF TQM: The characteristics of TQM, as revealed from above definition are as follows: 1. TQM is customer oriented. 2. TQM requires a long term commitment for continuous improvement of all processes. 3. The success of TQM demands the leadership of top management and continuous involvement. 4. Responsibility for establishments and improvement of systems lies with the management of an organisation. 5. TQM is a strategy for continuously improving performance at all levels and in all areas of responsibility.

 POTENTIAL BENEFITS OF TQM: The advantages of adopting TQM system compared to conventional quality system are numerous and are outlined below.

10 1. TQM helps to focus clearly on the needs of the market. The traditional approach of quality control focusses on the technical details of a product so as to satisfy the customer. However, the customer longs for different satisfaction perspectives which are generally overlooked in the traditional approach.The needs change from person to person and also from place to place. As TQM focuses on the concept of university, it tries to abstract the satisfaction perceptions of the market and thus helps the organisation to identify and meet the requirements of the market in a better way.

2. TQM facilitates to aspire for a top quality performer in every sphere of activity. It is a well accepted fact that the negative attitudes of employees and nonparticipative culture of the organization pose the greatest hurdle to organisation’s success, growth and prosperity. TQM emphasis, on bringing about attitudinal and cultural change through promotion of participative work culture and effective team-work. This serves to satisfy the higher human needs of recognition and self-development and enhances employee’s interest in the job. The employee’s performance, thus, is not restricted to the product or service areas but reflects in other spheres as well. 3. It channelises the procedures necessary to achieve quality performance. Quality in its true sense can not be achieved instantly. It requires a systematic and a long-term planning and strategic approach. By focusing on defining the quality policies, goals and objectives, and communicating these properly to one and all in the organization, adopting SQC and SPC techniques and developing and using a system of evaluation , the organization can channelize their efforts to achieve the desired and objectivated quality performance. 4. It helps examine critically and continuously all processes to remove nonproductive activities and waste. The organizations always aim at improving productivity as it leads to reduction in cost resulting in increase in profitability. The efforts in this direction are

11 contributed because of the formation of quality improvement teams which meet regularly and through a systematic approach which tries to remove nonproductive activity. A continuous effort to identify the problems and resolve them helps to reduce the waste. The culture of well being thus improves housekeeping, cost-effectiveness and safety. 5. It gears organizations to fully understand the competition and develop an effective combating strategy. The dynamic changes in the global market and the open market policies adopted by a large number of organizations has resulted in increased competition and for many organizations the survival has become a key issue. For this cause it is essential for the organistions to understand the competition and develop and adopt suitable strategies to meet the challenges. As TQM helps to understand the pulse of customer and thus the market, it gives an edge to the organizations of variable nature to meet the competition. 6. It helps to develop good procedures for communication and acknowledging good work. Improper procedures and inadequate communication are yet another bane of many organizations, which result in misunderstanding, confusion, low productivity, duplication of efforts, poor quality, low morale and so on. TQM brings together members of various related sections, departments and different levels of management thereby providing an effective vehicle of communication and interaction. 7. It helps to review the process needed to develop the strategy of never ending improvement. Quality improvement efforts cannot be restricted to any time period. They need to be continuous to meet the dynamic challenges. TQM emphasizes on a continuous and periodic review so as to make the required changes. The benefits derived by the organizations, therefore, are many and multifaceted. Many of these can be measured in quantitative terms. However, the intangible benefits, which includes enrichment of the quality of the worklife and many more are not quantifiable. At the same time, it has to be established whether they do occur or not in order to prove or disapprove the efficacy of the concept. This can be assessed by a well-planned research

12 project or by carrying out an opinion survey periodically. The tangible and intangible benefits of TQM are variable in nature.

CHAPTER TWO CONCEPTS AND PHILOSOPHIES OF TQM

 INTRODUCTION: Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed and resurrected on a number of occasions. The concept and principles, though simple seem to be creeping back into existence by "bits and pieces" through the evolution of the ISO9001 Management Quality System standard. Companies who have implemented TQM include Ford Motor Company, Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company. The latest changes coming up for the ISO 9001:2000 standard’s "Process Model" seem to complete the embodiment. TQM is the concept that quality can be managed and that it is a process. The following information is provided to give an understanding of the key elements of this process.

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 TOTAL QUALITY MANAGEMENT(TQM) : Total = Quality involves everyone and all activities in the company. Quality = Conformance to Requirements (Meeting Customer Requirements). Management = Quality can and must be managed. TQM = A process for managing quality; it must be a continuous way of life; a philosophy of perpetual improvement in everything we do.

 TQM Compared to ISO 9001 : ISO 9000 is a Quality System Management Standard. TQM is a philosophy of perpetual improvement. The ISO Quality Standard sets in place a system to deploy policy and verifiable objectives. An ISO implementation is a basis for a Total Quality Management implementation. Where there is an ISO system, about 75 percent of the steps are in place for TQM. The requirements for TQM can be considered ISO plus. Another aspect relating to the ISO Standard is that the proposed changes for the next revision (1999) will contain customer satisfaction and measurement requirements. In short, implementing TQM is being proactive concerning quality rather than reactive.

 TQM as a Foundation : TQM is the foundation for activities which include; • • • • • •

Meeting Customer Requirements Reducing Development Cycle Times Just In Time/Demand Flow Manufacturing Improvement Teams Reducing Product and Service Costs Improving Administrative Systems Training

 Ten Steps to Total Quality Management (TQM):

14 The Ten Steps to TQM are as follows: 1. Pursue New Strategic Thinking 2. Know your Customers 3. Set True Customer Requirements 4. Concentrate on Prevention, Not Correction 5. Reduce Chronic Waste 6. Pursue a Continuous Improvement Strategy 7. Use Structured Methodology for Process Improvement 8. Reduce Variation 9. Use a Balanced Approach 10. Apply to All Functions

 Principles of TQM : The Principles of TQM are as follows: 1. Quality can and must be managed. 2. Everyone has a customer and is a supplier. 3. Processes, not people are the problem. 4. Every employee is responsible for quality. 5. Problems must be prevented, not just fixed. 6. Quality must be measured. 7. Quality improvements must be continuous. 8. The quality standard is defect free. 9. Goals are based on requirements, not negotiated. 10. Life cycle costs, not front end costs. 11. Management must be involved and lead.

12. Management Commitment 1. Plan (drive, direct) 2. Do (deploy, support, participate) 3. Check (review) 4. Act (recognize, communicate, revise)

13. Employee Empowerment 1. Training 2. Suggestion scheme 3. Measurement and recognition 4. Excellence teams

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14. Fact Based Decision Making 1. SPC (statistical process control) 2. DOE, FMEA 3. The 7 statistical tools 4. TOPS (FORD 8D - Team Oriented Problem Solving)

15. Continuous Improvement 1. Systematic measurement and focus on CONQ 2. Excellence teams 3. Cross-functional process management 4. Attain, maintain, improve standards

16. Customer Focus 1. Supplier partnership 2. Service relationship with internal customers 3. Never compromise quality 4. Customer driven standards

Plan and organize for quality improvement.

 Processes must be Managed and Improved: Processes must be managed and improved! This involves: • • • • • • •

Defining the process Measuring process performance (metrics) Reviewing process performance Identifying process shortcomings Analyzing process problems Making a process change Measuring the effects of the process change

Communicating both ways between supervisor and user

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 Key to Quality: The key to improving quality is to improve processes that define, produce and support our products. All people work in processes. People • •

Get processes "in control" Work with other employees and managers to identify process problems and eliminate them

Managers and/or Supervisors Work on Processes • • •

Provide training and tool resources Measure and review process performance (metrics) Improve process performance with the help of those who use the process

 Planning a Change:

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 TQM PROBLEM SOLVING SEQUENCE:

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TQM Process Improvement and Problem Solving Sequence DO

CHECK

(IMPLEMENT THE CHANGE)

(OBSERVE THE EFFECTS)

ACTION (EMBED THE FIX INTO THE PROCESS FOR GOOD)

MAKE A CHANGE

TEST THE CHANGE

TAKE PERMANENT ACTION

PLAN (PLAN A CHANGE) DEFINE THE PROBLEM 1. Recognize that what you are doing is a "PROCESS"

IDENTIFY POSSIBLE CAUSES

EVALUATE POSSIBLE CAUSES

6. "BRAINSTORM" what is causing the problem.

8. Determine the 10. Determine what 11. Determine what relationship change would help change worked between cause (confirmation). and effect • Your o Scatter knowledge • Histograms 2. Identify the 7. Determine what diagrams of the • Control charts commodity past data shows. o Regression process - sampling analysis being o Frequency • Scatter processed. distribution diagrams • Scatter - Process o Pareto charts 9. Determine • Control diagrams Inference o Control charts what the Charts - sampling process is doing - sampling 3. Define some now • Pareto measurable o Control charts analysis characteristics - sampling of value to the ****Then make commodity. the change. 4. Describe the "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

 THE EIGHT ELEMENTS OF TQM:

12. Ensure the fix is embedded in the process and that the resulting process is used. Continue to monitor the process to ensure: A. The problem is fixed for good. and B. The process is good enough o Control charts - sampling ****To ensure continuous improvement, return to step 5.

19 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: 1. 2. 3. 4. 5. 6. 7. 8.

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 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

20 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 risk-taking 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.

21 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 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,

22 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. •

Places - Good performers can be recognized in front of departments, on performance boards and also in front of top management.

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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

23 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 [1989] 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.

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

25 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.

CHAPTER THREE

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.

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 TQM IN USA: 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 redevelopment 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

27 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 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

28 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)

CHAPTER FOUR

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,

29 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. 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?

30 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:

Customers (internal and external) • Who are my customers? • What are their true needs and expectations?

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• 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. 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

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• 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. A fundamental requirement is a sound quality policy, supported by plans and facilities to implement it.

33 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 • Recognise that improvement of the systems must be managed

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• 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.

36

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

37 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.

CHAPTER FIVE

THE EFFECTS OF TQM

 Improving Financial Services through TQM

38 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:

39

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.

40 "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. 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

41 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. 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 self-sustaining 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.

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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. 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.

43 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 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

44 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. A quality improvement story was compiled by the project Leader for training and motivating all employees.

Future Actions

45 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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CHAPTER SIX

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

47 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.  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 all-staff 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.

48 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 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

49 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 PokaYoke). 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 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.

50  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.

51 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

52 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 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

53 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 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

54 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 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.

55 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.

56 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 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).

CHAPTER SEVEN

TQM TOOLS

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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 · staff duties and work flow analysis · statement of purpose

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· 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

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· 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

 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,

64 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. CONCLUSION

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.

CASE STUDY

 IBM Tivoli Development Labs to reap more than $2 million savings with release management initiative.

65 Company : IBM Corporation Deployment Country : New York – USA Industry : Solution

Computer Services, Professional Services :

IT Optimization, On Demand Business, On Demand Workplace, Workload Management

Business need : Improve the quality and efficiency of software testing processes Solution

: An automated provisioning process that standardizes release management, reduces manual operations and optimizes resource utilization

Benefits : 94 percent reduction in attended time to provision software; $2 million per year expected savings following roll out to more labs; improved test quality; increased platform coverage; better utilization of valuable skills

"By employing IBM IT Service Management software, we’ve been able to align our testing processes with business goals and significantly improve operational efficiency." - Phil Buckellew, Program Director, IBM Tivoli Development Labs.

 Overview : Automating information technology and business processes is helping organizations worldwide realize enormous savings. Consider, for example, Tivoli® Development Labs, the IBM team responsible for testing Tivoli software prior to its release. Tivoli Development Labs develops enterprise-class software that supports numerous

66 heterogeneous operating system platforms. Each product undergoes extensive, mandatory testing across the supported platforms. Why Become an On Demand Business? Streamlining the building and repurposing of test systems helps lower costs, improve quality and reduce time to market for new products. Automating information technology and business processes is helping organizations worldwide realize enormous savings. Consider, for example, Tivoli® Development Labs, the IBM team responsible for testing Tivoli software prior to its release. Tivoli Development Labs develops enterprise-class software that supports numerous heterogeneous operating system platforms. Each product undergoes extensive, mandatory testing across the supported platforms. “We have to test every software product in a multiplicity of environments to mitigate the risk of problems for our customers,” explains Phil Buckellew, program director, IBM Tivoli Development Labs. In 2004, the organization launched an initiative to improve the quality and efficiency of its software release management process. Of greatest concern was the time and skill required to build each test environment, from bare metal to full installation. With more than 5,500 heterogeneous servers spread across the lab in Austin, Texas, there are times when some teams are not using servers and other teams are scrambling to meet deadlines and could be aided by more resources. However, optimizing resource utilization was difficult given the time and effort required to set up a test environment. Each time operating system and middleware software were installed, a tester often had to sit at a workstation or server, inserting CDs and answering installation questions. A typical operating system deployment required between 1.5 to 2.5 hours. And because this process was manual, the quality and consistency of systems could vary depending on how closely each tester followed the installation instructions. Manual processes also made it necessary for each tester to be familiar with the particular operating system being installed. This meant that specialized domain experts were often reduced to menial tasks to ensure that systems were installed and configured properly. And given the tedious nature of this process, staff often didn’t have the time to remove all software from each server every time a new test was

67 required. This increased the risk that configuration variations might contribute to problems in the environment. “Manually configuring test environments resulted in testing delays and an inefficient use of both our staff and our system resources,” says Buckellew. “We needed to find a way to shrink the timeframe for testing so that our product groups could go to market faster with high-quality software.” Automating provisioning processes using best practices To help the business meet increasingly aggressive software delivery schedules, Tivoli Development Labs had to standardize release management processes, automate routine and manual tasks and more efficiently use its resources. This would help testers ensure consistency in the test environment and enable them to spend more time testing the software to improve product quality. To achieve this goal, the organization implemented IBM Tivoli Provisioning Manager software, an IBM IT Operational Management Product that is an integral part of IBM IT Service Management. Tivoli Provisioning Manager software is installed on the IBM System x platform running Red Hat Linux, chosen because it offers a cost-effective platform with proven flexibility, scalability and security. Through the use of Automation Packages, Tivoli Provisioning Manager software provided the dynamic workflows the team required to automatically drive provisioning operations based on best practices and procedures. Due to the software’s flexibility, lab staff was able to integrate Tivoli Provisioning Manager software with several homegrown test environment tools. This integration enables the organization to effectively and efficiently install the vast number of operating system environments each software product must be tested on. “The openness of Tivoli Provisioning Manager makes it ideal for companies that have a finite list of technologies in their environments, as well as software development firms that may not know what they’ll need to install next,” says Buckellew. Additionally, Tivoli Provisioning Manager software provided the security-rich features the organization needed to ensure that changes to servers were made by only authorized users. “We didn’t want test teams provisioning servers that were in use by other teams,” adds Buckellew. “Tivoli Provisioning Manager helped us

68 control who had access to which servers.” Consistent, cost-effective software deployment Using Tivoli Provisioning Manager software, Tivoli Development Labs has automated more than 800 tasks that were once performed manually across 415 systems. This includes tasks for allocating and removing servers from the test environment; configuring servers; installing and uninstalling software and patches; and performing bare-metal builds. Doing so has helped the team minimize human errors, such as incorrectly setting a registry value or forgetting to remove an old file that may cause a software conflict, and increase the accuracy of the testing environment. As a result, lab staff can rapidly identify the source of code defects and retest with confidence. And because the solution enables the organization to automate the set up of new test environments during non business hours, lab staff spend their time testing each software product more quickly and more often for greater test coverage. “By employing IBM IT Service Management software, we’ve been able to easily implement best practices for software provisioning,” says Buckellew. “This, in turn, is helping us better align our testing processes with business goals and significantly improve operational efficiency.” Savings to reach several million dollars The benefits realized through automation of provisioning testing processes and use of Tivoli Provisioning Manager software have been enormous. The Tivoli Development Labs team reports that Phase 1 of the project resulted in a 94 percent reduction in attended time to provision software, with more than 1,200 person-hours saved over the first seven months of the project. Tasks that once required several hours to perform under constant supervision can now be completed in just five minutes. And by freeing up resources from mundane tasks, testers have more time to focus on product innovation and code quality. Ultimately, the organization estimates that the savings associated with maintaining the test infrastructure will reach more than $2 million a year as it expands use of the solution to more labs.

69 “Faster, unattended installs allow our existing test teams to complete more tests in less time,” says Buckellew. “We can better utilize our resources and cost-effectively deliver high-quality solutions to our customers as a result”

Key Components Software •

IBM Tivoli Provisioning Manager

Server •

IBM System x™ running Red Hat Linux®

On Demand Business Benefits • • • •

Automating manual processes improves operational efficiency, driving expected savings of more than $2 million a year Leveraging best practices drives greater consistency to help minimize human errors and speed the execution and accuracy of the testing process Improving the reliability of the testing environment helps testers identify the source of code defects more quickly and retest with confidence Enabling testers to focus on testing, rather than preparing environments, enables better utilization of staff skills

Quality through standards What is quality? Quality is defined by the customer. A quality product or service is one that meets customer requirements. Not all customers have the same requirements so two contrasting products may both be seen as quality products by their users. For example, one house-owner may be happy with a standard light bulb - they would see this as a quality product. Another customer may want an energy efficient light bulb with a longer life expectancy - this would be their view of quality. Quality can therefore be defined as being fit for the customer's purpose.

70 There are three main ways in which a business can create quality:

Market research involves a business in finding out what its customers want and expect. It can be carried out with a small group of customers, asking them to provide detailed information about products and services. The research should reveal what the customer' view of quality is and whether they are getting it. Obtaining lots of information from a small panel of customers is called qualitative research. Market research can also be carried out with large numbers of customers through questionnaires. This is called quantitative research. Working to best practice standards is another way an organization can create quality. IBM works with industry specialists to create these standards. For example, it delivers the confidence of customers in a business through BS 7799. This is the standard for a company's management of information security. IBM developed this standard in 1995 to establish best practice for capturing, storing and handling data. This British Standard became the basis for the International Standard ISO/IEC17799. Today companies worldwide are seeking certification for their security management systems. Why is quality important? The most successful organizations are those that give customers what they want. Satisfied customers are loyal to those suppliers they feel best understand their requirements. As a result they will make repeat purchases and will recommend a business to their friends.

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There are two main types of customers for a business: •

end customers - people like you and me, looking to buy an iPod or plasma screen television

•

organizational customers - for example, a company recording audio CDs would buy in blank CDs, record music to them and sell them on as a finished product.

When you buy a piece of electrical equipment, you will want to know a lot of information about its specification. Obvious information that you will be looking for include: •

Is it safe?

•

Does it do what I want?

•

Does it meet the required standards?

As a customer you will have a lot more confidence in products you know have been tested and meet British, European and International Standards. In the same way, your school will want to purchase gym and science lab equipment that meets the specifications of the safety standards. Businesses therefore benefit from working with IBM to meet standards, because: •

Standards protect consumers' fundamental right to safety, the right to be informed and the right to choose. These rights relate to products, services, processes and materials.

72 •

Standardization promotes effective research and development, and makes products easier to use.

•

Standardization relies on all sections of society being involved in standards, providing an opportunity for everyone to share knowledge and make their voice heard.

Businesses that do not focus on quality will quickly find that there are costs to be paid. Examples of these costs include waste due to products being badly made and therefore not being able to sell them. The reputation of a business will quickly deteriorate as a result of poor quality work. It is very important for UK businesses to be associated with quality. Today, there is greater competition from abroad. Standards are continually changing so it is important for businesses to keep up. For example, ISO 9001 which is outlined in Section 4, started out originally as a British Standard, BS 5750 in 1979. It was developed as an international standard and became known as ISO 9001 in 1987. Today, the latest edition (2000) has been adopted by more than 400,000 organizations across the globe. Implementing a quality system – internal A system is a group of interrelated parts that make up a whole. A quality system therefore consists of parts (such as policies and processes) designed to ensure quality. A variety of organizations work with IBM to create standards for QMS. The standard specifies requirements for a QMS where an organization: i. needs to show that it can consistently provide products that: a) meet customer requirements b) meet any legal requirements. ii. aims to improve customer satisfaction as a result of applying the system. This includes continually improving the system.

73 ISO 9001 sets out eight quality management principles. These include: •

customer focus

•

leadership - a commitment to quality by the leaders of the organization

•

involvement of people - everyone in the organization having a part to play

•

making sure that those processes which create quality are identified

•

continual improvement of the system.

In practical terms, organizations wishing to apply QMS take the following steps: 1. Read and understand the standard. They read through the literature and discuss any issues with IBM. 2. Use supporting literature and software tools to help understand, develop and implement QMS. 3. Involve top management (heavily) in developing a quality management plan. Typically a Quality Manager will be responsible for the initiative.

74 4. The Quality Manager can be trained in ways of implementing the standard. 5. The QMS is then created and put into practice. 6. When the organization feels confident it is meeting the standard, it informs an assessor, who will assess the effectiveness of the QMS. If it meets the standard a certificate will be awarded. This is subject to regular reviews.

Implementing a quality system – external

Internal systems are ones that are built inside an organization. However, in addition, modern businesses need to build external systems. External systems are those that involve people outside the organization - e.g. suppliers. Today, many businesses have long supply chains in which they source materials, parts and finished goods from across the globe. Take, for example, a modern plasma screen television. Some of the components may come from India, others from China, or Eastern European countries. These separate components will then be assembled into a sub-assembly i.e. part of the finished

75 television. This sub-assembly may take place in India, whilst a number of parts may then be transported and delivered to a final assembly plant in Wales. This has led to a change in attitude. Instead of a company having a 'them' and 'us' attitude - where 'them' are the suppliers, it now makes sense to see the process as a shared one in which everyone relies on each other. This is known as interdependence

Conclusion of Case Study

In world trade, for buyers and sellers to work together there must be trust. Standards can provide the necessary bridge of confidence and understanding that builds mutual trust, helping trade to thrive.

76 Sales are the lifeblood of any business, so the implementation of standards helps sales. This is the case whatever the size of the business or the sector they are operating in. Establishing clear standards creates order in an increasingly complex world. Standards meet changing market needs and are customer driven. Businesses benefit from standards because they establish ground rules that help to guarantee quality. Achieving certification to a standard might add reassurance for its customers and enables a business to boost its sales performance. Consumers benefit because their safety and their satisfaction are both greatly enhanced. Governments benefit because such measures contribute to greater productivity and economic growth, and safer work, leisure and home environments. IBM   was the world's  first national standards  making body. Today it  is the most  prestigious international standards institution. It works with the British government,  manufacturers and other stakeholders to create quality standards. These guarantee  fitness for purpose, and help British manufacturers to gain a competitive edge both  in the UK and internationally. IBM assists British businesses in all markets to grow  and to concentrate on meeting customers' requirements.

TEXT REFERENCES 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

DIAGRAMATIC REFERENCES

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1. WWW.YEADONINC.COM/DIAGRAM.GIF 2. WWW.QAPROJECT.ORG/IMAGES/SCATTERDIAGRAM.GIF