ArticleTQM Based BEMs001

8/7/2019 ArticleTQM Based BEMs001

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TQM BASED BUSINESS EXCELLENCE

MODELS

0.ABSTRACT

In this era of Competition & Uncertainty only Excellent Organisations can survive. To be

an Excellent Organisation one has to Continuously Innovate, Improve and Balance the Needs &

Expectations of All the Stakeholders. This is what Total Quality Management (TQM) aims at.

TQM started during Sixties and based on TQM philosophy the Business Excellence Models

started in Eighties. These models are Comprehensive and talks of every aspect of an

Organisation from Leadership to Strategy, People, Partnerships, Resources, Processes and

results related to all stakeholders. Today, many countries view business excellence models as a

key mechanism for improving the performance of organisations, as well as national

competitiveness

During nineteen fifties Japan had a reputation for inferior quality goods .Japanesewelcomed input from foreign companies and lectures from different Quality Gurus, including twoAmerican quality experts. As a result, during nineteen seventies Japan was able to producehigher-quality exports at lower prices, benefiting consumers throughout the world. Americansstarted calling this style of Management as Japanese Style of Management and also as TotalQuality Management.

This article covers different definitions of TQM as given by different Quality Gurus andworking definitions used by industry. Also it briefly discusses the Popular Business Excellence

Models like The Malcolm Baldrige National Quality Award (MBNQA) of USA , EuropeanFoundation for Quality Management (EFQM) model of Europe and Deming Award of Japan. Itdiscusses the Indian models like Tata Business Excellence Model (TBEM) which is based onMBNQA model, CII-EXIM Bank Award model which is based on EFQM model , Rajiv GandhiNational Quality Award , IMC Ramkrishna Bajaj National Quality Award and Golden PeacockNational Quality Award are also referred in this article. These Awards are based on MBNQA &EFQM Models.

Most popular award among these in India is CII-EXIM Award which was started in 1994and in this last 16 years only 7 organisations could get Award. We discuss more about CII-EXIMAward Model here. It has 9 criteria, each criteria has sub-criteria (32) and every sub-criteriahas Areas to Address (304). As it is not possible to explain about the total criteria and its

interpretation, the paper gives a small example of 2 areas to address out of 304 Areas toaddress

Also the paper gives the benefits by adopting these models and winning the awards.Also findings of some International researches are given in this paper.


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1.0 - INTRODUCTION

1.1 Birth of TQM:

During nineteen fifties Japan had a reputation for inferior quality goods and were

shunned by international markets. This led Japanese organizations to explore new ways ofthinking about quality. Then Japanese welcomed input from foreign companies and lecturesfrom different Quality Gurus, including two American quality experts W Edwards Deming andJoseph M Juran. Japans strategies represented the new total quality approach. Rather thanrelying purely on product inspection, Japanese manufacturers focused on improving allorganizational processes through the people who used them. As a result, during nineteenseventies Japan was able to produce higher-quality exports at lower prices, benefitingconsumers throughout the world. Americans started calling this style of Management asJapanese Style of Management and also as Total Quality Management.

TQM is a management approach/ philosophy/ process adopted by many organizations inthe world for achieving excellence. Different Quality Gurus and TQM implementers defined it in

different ways. Some definitions as defined by Quality Gurus are discussed here: As defined by Dr.W.E Deming is "TQM is a theory of management for improvement of

Quality, productivity and competitive position."

Dr.Kaoru Ishikawa of Japan in his book, Introduction to Quality Control, has stated "TQC isnot a fast acting drug like penicillin, but a slow acting herbal remedy that will graduallyimprove a company'sconstitution if takenover a long period".

The famous JuranInstitute USA of JosephJuran, a contemporaryof Deming states " TQM

is the set of managementprocesses and systemsthat create delightedcustomers throughempowered employees,leading to higher revenue and lowercost"

Another exponent of quality, Hutchins, in his book, Achieve Total Quality, says " Theobjective of TQM is to make use of the brain power, creativity and work experience of theentire work force to create an unbeatable organisation in the market place."

Otherworking definitions used in industry are:

Doing the right things, right, the first time and every time..

TQM focus on processes and product together, the big Q approach (unlike old traditionof focus on product quality only, the small q approach).

TQM aims at balancing the needs and expectations of all the stakeholders.


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Many companies add assets, manpower, and new machinery to increase profits, whichcalls for additional finances. But, TQM helps in generating profits even without additionalinvestments.

1.2 Birth of Business Excellence Models:

Over time, the term Business Excellence started to replace the terms Quality andTQM, partly as a result of the considerable confusion as to the meaning of TQM, since alltypes of business improvement programmes were being called TQM. The first businessexcellence models were developed in the mid-1980s and came about as a result of the qualitymovement in the West. Today, many countries view business excellence models as a keymechanism for improving the performance of organisations, as well as national competitiveness.Popular Models are MBNQA,EFQM and Deming.

2.0 - BRIEF ABOUT MBNQA

Initiated by the then-President Reagan after recognizing the declining productivity andquality standards in USA.

Law passed in August 1987. Named after the then-Secretary-of-Commerce. Baldrige Award was designed to raise awareness of quality management and recognize

U.S. companies that have implemented successful quality-management systems.

The Malcolm Baldrige National Quality Award (MBNQA) is presented annually by the Presidentof the United States to organizations that demonstrate quality and performance excellence. TheU.S. Commerce Department's National Institute of Standards and Technology manages theaward and ASQ administers it.

Organizations that apply for the Baldrige Award are judged by an independent board ofexaminers. Recipients are selected based on achievement and improvement in seven areas,known as the Baldrige Criteria for Performance Excellence:

1. Leadership: How upper management leads the organization, and how the organizationleads within the community.

2. Strategic planning: How the organization establishes and plans to implement strategicdirections.

3. Customer and market focus: How the organization builds and maintains strong, lastingrelationships with customers.

4. Measurement, analysis, and knowledge management: How the organization usesdata to support key processes and manage performance.

5. Human resource focus: How the organization empowers and involves its workforce.6. Process management: How the organization designs, manages and improves key

processes.7. Business/organizational performance results: How the organization performs in

terms of customer satisfaction, finances, human resources, supplier and partnerperformance, operations, governance and social responsibility, and how the organizationcompares to its competitors
http://www.nist.gov/http://www.nist.gov/


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3.0 - BRIEF ABOUT EFQM

During 1988 The Presidents of 14 European companies came together to create the 'EuropeanFoundation for Quality Management' - later to be renamed simply 'EFQM'. EFQM was formallyestablished on 15 September 1988 in Brussels. During 1991 The EFQM Excellence Model wasborn. The first European Quality Award was presented by the King of Spain at the EFQM Forumin Madrid in 1992.

The EFQM Excellence Model is the most widely used organisational framework in Europe and itis the basis for the majority of national and regional Quality Awards. Used as a tool forassessment, it delivers a picture of how well the organisation compares to similar or verydifferent kinds of organisation. Used as a management model it can be used to defineaspirations for the organisations capability and performance.

The EFQM Excellence Model: Is a structure for the organisation's management system Can be used as part of a self-assessment Provides a framework for comparison with other organisations Helps to identify areas for Improvement

The EFQM Excellence Model is a non-prescriptive framework based on 9 criteria. Five of theseare 'Enablers' and four are 'Results'. The 'Enabler' criteria cover what an organisation does andhow it does it. The 'Results' criteria cover what an organisation achieves. 'Results' are causedby 'Enablers' and 'Enablers' are improved using feedback from 'Results'.

The Model, which recognises there are many approaches to achieving sustainability, is basedon the premise that: Excellent Key Results, Customer Results, People Results and SocietyResults are achieved through Leadership driving the Strategy, that is delivered through People,Partnerships and Resources, and Processes, Products and Services.

The EFQM Model is presented in the diagram form below. The arrows emphasise the dynamicnature of the Model. They show innovation and learning helping to improve enablers that in turnlead to improved results.


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4.0 - BRIEF ABOUT DEMING PRIZE

The Deming Application Prize: An annual award is presented to an organisation that has

achieved distinctive performance improvements through the application of TQM. The prize isopen to organisations in all sectors - public or private, large or small, or domestic or overseas.

Unlike the previous two models, the Deming Prize does not specify set criteria for examinationduring the award process, and therefore is not used for self-assessment. The applicantorganisation is expected to show an understanding of its current situation, establish its ownthemes and objectives, and improve and transform itself company-wide. The award processexamines not only the current results that have been achieved, but also the effectiveness that isexpected in the future. The examiners assess whether the themes established by theorganisation were commensurate to its situation, whether its activities were suitable to itscircumstances, and whether or not its activities are likely to lead it to achieving its futureobjectives. The Prize Committee views the examination process as an opportunity for mutual-

development rather than examination.

In recent years in Japan, the Japan Quality Award has become more popular than the DemingPrize . The Japan Quality Award was established in 1995 and is based on the Baldrige Criteriafor Performance Excellence.

5.0 - INDIAN AWARD MODELS

TISCO adopted MBNQAmodel as JN Tata QualityAward in 1993 and waslimited to the Divisions &

Departments of TISCO.The Tata Sons adoptedsame model as JRDQVAward in 1994. At thesame time CII adoptedEFQM model as CII-EXIMAward. BIS started RajivGandhi National Quality

MBNQA

TBEM/JRDQV

EFQM

CII -EXIM

Deming

Deming

(JUSE)

SIMILARINDIANBUSINESSEXCELLENCE

AWARDMODELS

RGNQA -BIS

ICM -BNQA

GPNQAFigure:3 Indian Popular Models


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Award in 1991. IMC Ramkrishna Bajaj National Quality Award was started by Indian MerchantsChamber in 1996. Institute of Directors has started Golden Peacock National Quality Award.These Awards are based on MBNQA & EFQM Models. Most popular award among these inIndia is CII-EXIM Award. We discuss more about CII-EXIM Award Model here.

6.0 - CII-EXIM AWARD FOR BUSINESS EXCELLENCE6.1 Introduction :

In 1994, CII and the EXIMBank of India joined hands toinstitute this Award toenhance the competitivenessof India Inc. The Awardrecognizes companies whichhave achieved exemplarylevels of business excellenceand can be considered to berole models for othercorporate.The Award isbased on the EuropeanFoundation for QualityManagement (EFQM)modelThe award is being administered by CII with the technical support from EuropeanFoundation for Quality management.

The Award was established to promote the awareness of business excellence as anincreasingly important element in competitiveness. Award also increases the understanding ofthe elements critical for business excellence. To accomplish this, the Award promotesinformation sharing of successful performance strategies and the benefits derived from pursuingthese strategies. The Assessment Process is shown in Fig.4

6.2 Levels of recognition: Commendation for Strong Commitment to Excel Commendation for Significant Achievement Prizes (in each category) The Award (Best of prize winners)

6.3 Winners so far - Award & Prize

Bosch, Bangalore - Diesel Systems business 2009The Tinplate Company of India Limited(Prize) 2008Tata Consulting Services Ltd (TCS) 2006BHEL Haridwar (Prize) 2006Commercial Vehicles Business Unit Tata Motors Ltd. 2005Infosys Technologies Limited 2002Tata Iron & Steel Co. Limited 2000Maruti Udyog Limited 1998Hewlett Packard (India) Limited 1997


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6.4 Fundamental Concepts:

This Model is based upon the Fundamental Concepts of Excellence as detailed below:1. Achieving Balanced Results2. Adding Value for Customers3. Leading with Vison, Inspiration and Integrity

4. Managing by Processes5. Succeeding through People6. Nurturing Creativity and Innovation7. Building Partnerships8. Taking Responsibility for Sustainable Future

The Model Structure: It has 9 criteria, each criteria has sub-criteria (32) and every sub-criteriahas Areas to Address (304) as shown in Fig.5.For Sample we see one Criteria.

6.5 Criteria 1:LEADERSHIP

Definition

Excellent organisations have leaders who shape the future andmake it happen, acting as role models for its values and ethicsand inspiring trust at all times. They are flexible, enabling theorganisation to anticipate and react in a timely manner to ensurethe ongoing success of the organisation.

Sub-Criteria

1a. Leaders develop the mission, vision, values and ethics and ac as role models1b. Leaders define, monitor, review and drive the improvement o the organisationsmanagement system and performance.1c. Leaders engage with customers, partners and representatives of society1d. Leaders reinforce a culture of excellence with the organisationpeople1e. Leaders ensure that the organisation is flexible and manage change effectively

Areas to address under 1a.:


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Distribution ofvalue

Handbook

Print &

Audio-

visual

media

ABC

Reward

Scheme

Worksho

p on

Value

Actualisa

tion

Periodic

communication meeting& reviews

Values audit and

ESS Surveys

Visual impact-

Screen Saver

Display Boards

Value

component

in

performance

Appraisals

Disseminating

Mission, Vision and

Core Values

Exhibit-1a-1

Communication

D

e

p

l

o

y

m

e

n

t

Review

1. Developing the organizations mission vision and culture;

2. Developing and role modelling values, ethics and Public responsibilities that support the

culture;

3. Reviewing and improving the effectiveness of personal leadership behaviors;

4. Being actively involved in improvement activities;

5. Stimulating and encouraging empowerment, creativity and innovation, e.g. by changingthe organization's structure, funding learning and improvement activities;

6. Encouraging, supporting and acting upon the findings of learning activities;

7. Prioritizing improvement activities;

8. Stimulating and encouraging collaboration within the organization.

6.6 A sample case showing how an organization addresses 1a.1&2:

Mission, Vision and Values are

developed by ABC Corporate

Leadership after wide consultation

within the organization and also

with stakeholders. The GM, ABC

participated in formulation of

Vision, mission and core values

along with ABC Corporate

Leadership, Regional EDs and

Other BUHs. ABC first revisited

Core Values in 2000 taking into

account the changing business

scenario. Then in Nov 2005

revisited and revised Core Valuesas detailed in Exhibit 1a-3. Major

addition was Business Ethics Value

and modification of Organisational

pride as Organizational and

Professional Pride and addition of

for Excellence to Total Quality

Value. Organisational Mission was

revisited again in 2004 at ABC level

with the learnings drawn from

reviews conducted across the

organisation, external consultants

advice external environment and

Corporate Vision.

Vision, Mission and Values are given

in Exhibit-O.1. The Mission, Vision and Core values are communicated, deployed and

evaluated as indicated in Exhibit-1a-1 and 1a-2

ABC Vision, Mission & ValuesVision:

"A world class integrated power major, powering

Indias growth, with increasing global presence"Mission:

Develop and provide reliable power, related products

and services at competitive prices, integrating

multiple energy sources with innovative and eco

friendly technologies and contribute to society"Core Values

Business Ethics

Customer Focus

Organisational. & Professional Pride

Mutual Respect & Trust

Initiative & Speed

Total Quality for Excellence

Exhibit O-1


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Business

Ethics

Customer Focus Organization

al and

Professional

Pride

Mutual

Respect and

Trust

Innovation and

Speed

Total Quality

for Excellence

D

e

f

n

High level of

Morality &

Fairness in all

the actions.

Transperency in

dealings.

Compliance to all

guidelines

relating to

disclosures

under various

acts and rules

Conviction that

the Customer

(External &

Internal) is

centre of all

activity

Courteous,

Sincere, Patient

and Sensitive to

the Customer.

Honouring the

Commitments on

time

Holding the

company in

high esteem

and a sense

of ownership

with it,;

holding the

profssion in

high esteem

and taking

pride in

belonging to

it.

High regard

for and faith

in the fellow

organization

al members;

beleiving in

collaboration

and

openness

and good

team spirit

Thinking new

and ahead and

being swift

without

compromising on

quality; creative

and innovative

and willingness

to experiment

and taking risk.

Believing in

pursuing

excellence in

all spheres of

activity;

making

continuous

efforts in

improving

standards of

performance,

systems and

processesB

e

ha

v

i

o

u

r

Courteous,

responsive to

stakeholderneeds, sharing

Best Practices

Honorcommitm

ents Fulfilling

customer-needslikeservice,promptness,Qualityandvalue

Achieve

customer delight

Sense of

belongingnes

sProjecting

positive

image of ABC

Loyality and

commitment

to

organization

Acknowledgi

ng dignity

andindividuality

of All

Having

Regard and

faith in

fellow

members

Cherish

virtues of

team

Believe in action

and ready to

take first stepSelf driven and

self motivated

Willingness to

experiment and

take risks

Pursuing

Excellence in

all spheres ofacitivity

-Bringing

highest Quality

involving

stakeholders

-Continuously

improving

performance,

systems and

processes

P

r

a

ct

i

c

e

Transparency inaccounti

ng/financialreporting.

PIEgroupformation toimproveperformance ofSEBs.

DDGs

Dailycommunication

StartedExternalcustomerperceptionsurveys

Waival ofintereston longstandingdues

InternalCustomer Meets

ABC flag,ABC logo

Starting

the daywithrenditionof ABCGeet.

Representation inLocalprofessional bodies

Conductsopen housesessions

andDialoguemeetings

Sharing ofinformationon intranet.

Increase inDelegationof Powersin 2003.

NOCET, KOCET

First Station toimplement 5S

in Camp,Shops, Banksand Schools.

First to startQuality Circlesin Schools andnearby villages

Implementation of CII Exc.Model

QCs, PCs,Suggestionscheme etc.

-PerformanceImprovement Projects

Best PracticesBooklets

Assesment and Review through Value Audit, Employees Satisfaction Survey and as a part of Executives PMS.

Exhibit 1a-2

7.0 - WHAT DOES A COMPANY RECEIVE FOR APPLYING

7.1 Benefits: Get external perspective on organisation. More than 1000 man hours go into each application before the final decision is made.

CORE

VALUES

DEPLOYME

NT


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Every applicant gets a detailed feedback report based on the findings of the assessmentteam,

Feedback report covers Strengths, Opportunities for improvement (OFIs) and Scoring profile of the applicant organization.

Feedback reports become input for Strategy Planning Feedback reports can guide the organisational Improvement programmes Award winning Companies can use logos of CII-EXIM Bank Award in corporate literature

7.2 United States ResearchA study of 600 worldwide quality award-winning organisations (using the Baldrige Criteria forPerformance Excellence) was conducted over five years and published in 1999 by Singhal andHendricks [26]. The results were compared to a control group of companies (of similar size andindustrial sectors) and revealed a marked positive difference for the award-winning companiesin every key measure against the control companies (see Figure 6).

7.3 European ResearchResearch published in 2005 by the Centre of Quality Excellence, the University of Leicester,and jointly sponsored by the European Foundation for Quality Management (EFQM) and theBritish Quality Foundation, provides evidence that the effective implementation of the principlesof the EFQM Excellence Model impacts bottom-line business results.After extensive study of award winners, the team compared the financial performance of 120award-winning companies that met specific criteria against comparison companies similar insize and operating in the same industries. The financial performance of the companies wastracked over an 11-year period.

The study found that compared to the comparison companies, award-winning companiesexperienced higher increases in share values, sales, capital expenditure over assets and capitalexpenditure over sales, higher growth in assets, and further reduction in costs over sales withina short period of time (one year) after having received their first award (see Figure 7 below)


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Figure:7

8.0 - CONCLUSION

For longer term survival of any organization they have to adopt TQM philosophy for continualimprovement of their products & processes by utilizing the full potential of their employees. Alsothey have to do self assessment based on these Business Excellence Models. They can alsoparticipate in the Awards where they get external perspective on their Strengths & OFIs. It isconsidered that participating in the Award Assessment is the cheapest Consultancy available tothe industry. By this they can Benchmark their practices with Best in Industry also.

9.0 REFERENCES/ SOURCES:

1. http://www.bpir.com/business-excellence-bpir.com/menu-id-71/expert-opinion.html2. Baldrige Criteria for Performance Excellence. Visit NIST at http://www.quality.nist.gov/ .3. EFQM Excellence Model. Visit EFQM at http://www.efqm.org/.4. Deming Prize. Visit http://www.deming.org/.5. CII-EXIM Award visit http://cii-iq.in6. Goasdou, J. (2001), Is Quality Taken for Granted? The British Journal of

Administrative Management. Vol. 23. pp. 107. Mann, R.S and S. Nishide (2001), Impressions from a Quality Tour in Japan: Deming

to Knowledge Management. NZ Q-Newz Official Newsletter of the New ZealandOrganisation for Quality, August.

8. Centre for Quality Excellence (2005). Report on EFQM and BQF Funded Study intothe Impact of the Effective Implementation of Organisational Excellence Strategies

on Key Performance Results, University of Leicester.9. Hendricks, K.B. and Singhal, V.R. (1999). Dont count TQM out. Quality Progress. Vol.32, Iss. 4; pg. 35, 8 pgs

10. Authors Personal experience with TISCO, Tata Projects and NTPC.

Author:
http://www.bpir.com/business-excellence-bpir.com/menu-id-71/expert-opinion.htmlhttp://www.quality.nist.gov/http://www.efqm.org/http://www.deming.org/http://www.bpir.com/business-excellence-bpir.com/menu-id-71/expert-opinion.htmlhttp://www.quality.nist.gov/http://www.efqm.org/http://www.deming.org/


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A.Ajaya Shankar Gupta, B.E (Mining) from Osmania University passed outin1981, in First Division with Distinction.MBA (Technology Management) fromOsmania University during 2005-2007.

Presently Research Scholar (part time) in SMS,HCU under the guidance of Dr. V Sita

Contact details:[email protected], Mobile: +919440826763
mailto:[email protected]:[email protected]:[email protected]

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