AL UALR E !ifs MARI'MANUFAC 1 RR RRO by SAREL FREDERICK CERONIO Thesis submitted in fulfilment of all the requirements for the degree DOCTOR COMMERCII in BUSINESS MANAGEMENT in the FACULTY OF ECONOMIC AND PS ANAGEtifiENT SCIENCES at the ND AFRIKAANS UNIVERSITY j01-1ANNES URG PROMOTER: PROF. N. LESSING APRIL 1996
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AL UALR
E !ifs
MARI'MANUFAC1 RR RRO
by
SAREL FREDERICK CERONIO
Thesis submitted in fulfilment of all the requirements for the degree
DOCTOR COMMERCII
in
BUSINESS MANAGEMENT
in the
FACULTY OF ECONOMIC AND PS ANAGEtifiENT SCIENCES
at the
ND AFRIKAANS UNIVERSITY
j01-1ANNES URG PROMOTER: PROF. N. LESSING APRIL 1996
TABLE OF CONTENTS
Page
SYNOPSIS ii
SINOPSIS iv
LIST OF ACRONYMS vi
LIST OF FIGURES, GRAPHS AND TABLES vii
Chapter 1 ORIENTATION 1-1
Chapter 2 THE EVOLUTION AND DIMENSIONS OF TOTAL QUALITY MANAGEMENT 2-11
Chapter 3 GURUS OF TOTAL QUALITY MANAGEMENT 3-45
Chapter 4 REQUIREMENTS FOR TOTAL QUALITY MANAGEMENT 4-127
Chapter 5 IMPLEMENTING TOTAL QUALITY MANAGEMENT 5-189
Chapter 6 TOTAL QUALITY MANAGEMENT AT EMSA (PTY) LTD 6-265
Chapter 7 TOTAL QUALITY MANAGEMENT FOR THE YEAR 2000 7-305
BIBLIOGRAPHY Bib-351
(i)
YNI PSIS
NAME
CERONIO, SF
DEGREE
D Corn (Business Management)
TITLE
Achieving Total Quality Management in a South African manufacturing environment
UNIVERSITY Rand Afrikaans University
PROMOTER Prof. N Lessing
DATE April 1996
In recent years, the criticality of increased productivity and competitiveness has accelerated in step with global trends towards privatisation, marketisation, and democratisation, coupled with a more highly educated, more vocal and more demanding consumer market. At a time when the technological gap between South Africa, North America, Europe, and the Pacific Rim is shrinking, competitive boundaries are expanding and, as a consequence, consumers have a growing range of products from which to choose. Quality increasingly guides produce selection. Consumer spending patterns have also changed to reflect increased concern for durability, partially as a response to environmental concerns.
Increasing recognition of the inadequacies of traditional quality control functions to address the demand for higher quality products and services has launched a seminal transition to a more comprehensive, integrated approach to quality management. Total Quality Management (TQM) refers to the implementation of a "continuous improvement" process to address inefficiencies at all levels of the organisation.
There is no single theoretical formulation of the TQM approach nor any definitive short list of practices that are associated with it. It is the product of the work of such quality experts as Crosby, Deming, Juran, and Ishikawa. The writings of these Gurus, as well as characteristics typical of most successful TQM processes.
TQM is best viewed as a management philosophy which combines the teaching of Deming and Juran on statistical process control and group problem-solving processes with values concerned with quality and continuous improvement.
TQM is endorsed as a powerful vehicle in the transition from the traditional price focus to quality strategies driven by customer expectations. Improving quality and adopting a customer focused orientation are so fundamental that they must take root in the very essence of the organisation. To achieve ambitious quality goals, the TQM philosophy must permeate all aspects of organisational functioning, underscoring the criticality of human resource excellence to total quality processes.
The TQM approach is frequently endorsed by the impressive results attributable to it. Marked improvements in productivity and efficiency, profits, customer satisfaction, management-employee relations, job satisfaction, morale, and reductions in costs, inventory, defects and inspection requirements are among an array of reported benefits to be derived from TQM initiatives.
The positive relationship between quality and productivity may be largely rooted in the involvement of all employees to execute quality agendas. The benefits of employee involvement from increased productivity, job satisfaction and performance to reduced absenteeism and turnover are well documented.
Great emphasis is placed on including all employees in the TQM culture. Employees are expected to take responsibility for quality in two important respects. They are expected to call attention to quality problems as they do their normal work. Perhaps more important, they are expected to accept the continuous improvement culture and look for ways to do their work better. They are also expected to look for ways in which the overall operation of the organisation can be improved to enhance customer service.
The most important overall focus of employee involvement concerns locating decisions at the lowest level possible in the organisation. This approach consistently advocates a bottom-up approach to management. Jobs or work at the lowest level are thought of as designed best when individuals or teams do a whole and complete part of an organisation's work process. In addition, it is argued that the individuals or teams should be given the power, information, and knowledge they need to work autonomously or independently of management control. The task of management is seen as one of enabling and empowering individuals or teams to function in an autonomous manner. Management is an enabler, culture setter, and supporter rather than a direction of employee action.
This study focuses on the development of the TQM philosophy, and the development of a TQM model to be used as reference in the design of a TQM process in a manufacturing environment. It also endeavours to formulate an implementation process that can be used as guideline for implementing TQM in an organisation.
Research has been based on literature studies, extensive experience in the workplace, and interaction with a wide variety of practitioners in the TQM environment.
The study concludes that South African organisations can address the issues prohibiting real economic growth by continuously improving every product and service produced through the involvement of an empowered workforce, operating in teams, with the objective of achieving optimum customer satisfaction in the long-term.
Pail
CERONIO, SF
G D D Corn (Ondernemingsbestuur) A A
Verwesenliking van Totalegehaltebestuur in 'n Suid MEL Afrikaanse vervaardigings omgewing (uit Engels vertaal)
UNOVERSDTE1T Randse Afrikaanse Universiteit
PROMOTOR Prof. N Lessing
DATUM April 1996
NAA
In die jongste jare het die noodsaaklikheid van verhoogde produktiwiteit en mededingendheid teen dieselfde pas versnel as wereldtendense teenoor privatisering, markgerigtheid, en demokratisering. Hiermee gepaargaande is daar `n meer ontwikkelde, meer hoorbare verbruikersmark met verhoogde vereistes. Op `n tydstip wanneer die tegnologiese gaping tussen Suid-Afrika, Noord-Amerika, Europa, en die Stille Oseaan Randgebied besig is om te vernou, brei die grense van mededinging uit en as gevoig daarvan het verbruikers 'n toenemende verskeidenheid produkte om van te kies. Gehalte rig en beInvloed toenemend die keuse van produkte. Die bestedingspatrone van verbruikers het ook verander om die toenemende kiem op duursaamheid te weerspieel, gedeeltelik as 'n reaksie op omgewingsentimente.
Toenemende bewuswording van die tekortkominge in tradisionele gehaltebeheer-funksies om die vraag na beter gehalte produkte en dienste aan te spreek, het in oorgang na 'n meer omvattende, geIntegreerde benadering tot gehaltebestuur van stapel gestuur. Totalegehaltebestuur (hiema afgekort as TQM) volgens die internasionale gebruik) verwys na 'n proses van deurlopende verbetering om doeltreffendheid op alle vlakke van die organisasie aan te spreek.
Daar is geen enkele teoretiese forrnulering van die TQM-benadering of enige bondige lys van praktyke wat daarmee geassosieer kan word nie. TQM is die produk van die werk van kundiges van gehalte soos Crosby, Deming, Juran, en Ishikawa. Die werke van hierdie kenners, asook die toepassing van hul denkrigtings in baie organisasies wOreldwyd, maak dit moontlik om eienskappe kenmerkend van die meer suksesvolle TQM-prosesse te identifiseer.
TQM kan die beste beskryf word as 'n bestuursfilosofie wat die leerstellings van Deming en. Juran oor statistiese prosesbeheer en groep probleemoplossings-prosesse integreer met die waardes van gehalte en deurlopende verbetering.
TQM is beproef as 'n kragtige voertuig in die oorgang vanaf die tradisionele fokus op prys-na gehaltestrategiee aangegryp deur verbruikersverwagtinge. Verhoogde gehalte en die vestiging van 'n ingesteidheid wat op die verbruiker fokus is so fundamenteel dat dit in die wese van die organisasie inslag moet vind. Ten einde gehaltedoelwitte te bereik, moet die TQM-filosofie alle aspekte van organisatoriese fUnksionering deurdring, met nadruk op die belangrikheid van menslike hulpbronne by die totalegehaltebestuurproses.
(iv)
Die TQM-benadering word dikwels beklemtoon deur die indrukwekkende resultate wat daaraan toegeskryf word. Merkbare verbeterings, enersyds ten opsigte van produktiwiteit en doeltreffendheid, winste, verbruikerstevredenheid, werkgewer-werknemer verhoudinge, werksbevrediging en moraal, en andersyds ten opsigte van vermindering in koste, voorraad, foute en inspeksievereistes is van die voordele wat uit die TQM-proses vooruitspruit.
Die positiewe verband tussen gehalte en produktiwiteit word grootliks gebaseer op die betrokkenheid van alle werknemers by die TQM-proses. Voordele wat werknemerbetrokkenheid teweegbring strek vanaf verhoogde produktiwiteit, werksbevrediging en werksprestasie tot die vermindering in afwesigheid en personeelomset, en is at volledig gedokumenteer.
Groot nadruk word daarop geplaas om alle werknemers by die TQM-kultuur in te sluit. Daar word van werknemers verwag om verantwoordelikheid vir gehalte op twee belangrike gebiede te aanvaar. Eerstens moet daar gelet word op probleme met gehalte tydens die normale verrigting van hul pligte. Moontlik van groter belang is dat daar van alle werknemers verwag word om deel te wees van die kultuur van deurlopende verbetering. Tweedens word daar van werknemers verwag om voortdurend op hoogte van nuwe neigings te wees ten einde die algehele funksionering van die organisasie te verbeter om sodoende klientebevrediging te verhoog.
Die belangrikste fokus van werknemerbetrokkenheid is om werknemers op die laagste hierargiese vlak te Iaat deelneem aan die besluitnemingsproses. Hierdie benadering vereis 'n onder-na-bo benadering tot die bestuursproses. Werk wat op die laagste viak verrig word, word slegs as sinvol beskou indien die individue of spanne betrokke is by 'n volledige deel van die werksproses. Die vereiste is dat die individue of spanne die bevoegdheid, kennis en inligting wat benodig word moet ontvang om die werk so selfstandig en onafhanklik moontlik van die beheer van topbestuur te verrig. Die taak van topbestuur is om werknemers in staat te stet en toe te rus om op 'n selfstandige wyse die werk te verrig. Topbestuur behoort 'n geleentheidskepper en ondersteuner te wees eerder as om die optrede van werkers in 'n spesifieke rigting te probeer dwing.
Hierdie studie sentreer in die ontwikkeling van die TQM-filosofie, asook op die fomiulering van 'n TQM-model wat gebruik kan word as raamwerk in die ontwerp van `n TQM-proses in 'n vervaardigingsomgewing. Dit streef ook na die formulering van `n implementeringsproses wat as riglyn gebruik kan word ten einde TQM in 'n organisasie te vestig.
Navorsing is gegrond op Iiteratuurstudies, uitgebreide ondervinding van die werksomgewing, asook wisselwerking met 'n wye verskeidenheid kenners op die gebied van TQM.
Met die studie is bevind dat Suid Afrikaanse organisasies knelpunte, wat ekonomiese groei negatief kan beInvloed, kan aanspreek deur die voortdurende verbetering van elke produk en diens deur die betrokkenheid van 'n behoorlik toegeruste werksmag, wat in 'n spanverband funksioneer, met die einddoel om optimale kliente-tevredenheid in die langtermyn te bewerkstellig.
(v)
F ONG ENVO ENT
LOST OF ACRONYMS
BS British Standards
CEO Chief Executive Officer
CQA Continuous Quality Advancement
CTE Coefficient of Thermal Expansion
HS&EP Health, Safety and Environmental Protection
ISO International Standards Organisation
JIT Just-in-Time
JUSE Japanese Union of Scientists and Engineers
LWC Lost Workday Case
MLL Minimum Level of Living
NACA National Association of Clean Air
NOSA National Occupational Safety Association
01P Operational Improvement Programme
PCA Philip Crosby Associates
PMR Professional Marketing Review
QFD Quality Function Development
R & D Research and Development
RDP Reconstruction and Development Programme
SABS South African Bureau of Standards
SDE Statistical Design of Experiments
SES Statistical Experimental Strategy
SPC Statistical Process Control
SQC Statistical Quality Control
TQ Total Quality
TQM Total Quality Management
UHP Ultra High Powered
(vi)
LIST OF FIGURES, G PHS, AND TABLES
CH PTER 2
Figure 2.1 The evolution of Total Quality Management 2-19
Figure 2.2 Total Quality Management: Its components 2-23
Figure 2.3 Leadership styles 2-40
CHAPTER 3
Figure 3.1 The quality improvement process 3-55
Table 3.2 The four absolutes of quality management 3-56
Table 3.3 The quality improvement process 3-60
Table 3.4 Salient characteristics of Crosby's approach to TQM 3-71, 72
Table 3.5 Deming's fourteen points 3-76
Table 3.6 Salient characteristics of Deming's approach to TQM 3-101
Table 3.7 Salient characteristics of Ishikawa's approach to TQM 3-111, 112
Table 3.8 Interrelation among Juran's quality parameters 3-116
Figure 3.9 Juran's spiral of quality 3-117
Table 3.10 Salient characteristics of Juran's approach to TQM 3-124
CHAPTER 4
Figure 4.1 Total Quality Management model 4-132
Figure 4.2 Quality management 4-136
Figure 4.3 An operational definition of quality for products 4-149
Figure 4.4 Customer satisfaction framework 4-150
Figure 4.5 Levels of customers' expectations 4-152
Figure 4.6 Work process model 4-159
Figure 4.7 Six step process improvement model 4-165
Figure 4.8 Deming's PDCA wheel 4-167
Figure 4.9 Continuous improvement: The only way out
4-173
Table 4.10 Benefits of quality circles to management
4-180
Table 4.11 Benefits of quality circles to members
4-181
Figure 4.12 Breakthrough improvement in performance
4-183
CH A PTER 5
Figure 5.1 Eight critical factors for TQM implementation
5-195
Table 5.2 Leadership styles and team maturity
5-198
CH PIER 6
Table 6.1
Table 6.2
Graph 6.3
Table 6.4
Table 6.5
Table 6.6
Table 6.7
Table 6.8
Table 6.9
EMSA RDP policy
6-276
EMSA health, safety and environmental protection policy
6-278
Lost time injury frequency
6-278
Agenda for monthly HS&EP meetings
6-279
EMSA quality circle policy
6-285, 286
EMSA vision
6-290
EMSA vision practices
6-291
EMSA values and practices
6-292
EMSA Total quality management policy
6-293
6-294 Figure 6.10 EMSA team structure
CHAPTER 7
Figure 7.1 STAR system
7-332
Figure 7.2 Team development continuum
7-337
Figure 7.3 Progression of empowerment and responsibilities
7-337
rry
RON ENT
CHAPTER 1
1.1 CKGROUND TO THE STUDY 1-2
1.2 ST TEMENT OF PROBLEM 1 -4
1.3 RESEARCH OBJECTIVE 1 -5
1.4 RESEARCH METHODOLOGY 1 -7
1.5 CONSTRAINTS TO THE STUDY 1-8
1.6 STRUCTURE OF THE STUDY 1 -9
1 - 1
NEM
ON U
CHAPTER 1
0 RISC
1.1 B CKGROUND TO THE STUDY
Total Quality Management is a key strategy of many of the world's leading
companies. These companies have selected it as a vehicle of change:
changing the company culture, operating style and attitudes during the
period of transition from where a company is now towards its vision of
where it wants to be. It enables a company to improve its relative market
share by a radical but co-ordinated approach to satisfying customer
expectations.
Total Quality Management is seen as an enabling philosophy, ie. creating
the right environment and correcting attitudes to enable a good company
to become a world class company. It is not a programme but a process of
continuous improvement (Neeson 1989: 34-35) which rolls quality,
productivity and cost reduction together to achieve quality products and
services at the lowest cost.
The whole Total Quality Management action comes down to an enormous
effort for total mobilisation in renewing the company's philosophy, eliminate
all imperfections and keep striving for improvement (Beheydt 1989: 354).
The process comprises a comprehensive set of management philosophies,
management tools and improvement methods, including the following:
customer orientation, the empowerment of employees, participative
management, data-based decisions, continuous improvement, a "process"
orientation, and a set of quantitative tools for process improvement. It is a
1 - 2
most important tool for achieving in-depth competitiveness and company
wide cost control and it works because it benefits the employers, the
employees and the external customers of the organisation.
To achieve Total Quality Management, the process must meet five goals
(Klein 1991: 83-84):
Customer focus - the voice of the customer is clearly heard
throughout the organisation - everyone knows what is required to
satisfy internal and external customer needs.
Focused resources - all significant processes and systems are in
control and all resources are targeted to satisfy all customer needs.
Rewards system - real rewards and incentives are structured so that
achieving process control and customer satisfaction result in benefits
for all the employees of the organisation.
Continuous improvement - a system is in place to continuously
improve all processes in the direction of further meeting customers'
present and future needs.
CEO commitment - the CEO is visibly committed to the Total Quality
Management process and his/her leadership creates an environment
conducive to continuous improvement.
Masaaki Imai (1986) quotes Michael Halay, a professor at Vanderbilt
University's Owen Graduate School of Management, that Total Quality
Management is applied in Japan as the key corporate strategy:
'To be implemented, the strategy must become concrete to everyone in the organisation. Therefore, long term strategies must be translated into short term plans and objectives which are clear and actionable.
"The principles of Total Quality Management provide the necessary
1 - 3
structural framework to help both the employees and management communicate and decide how to improve the quality and productivity of their work.
'Thus, Total Quality Management as a corporate strategy inevitably involves such areas as improving communication and labour relations, as well as revitalizing organisational structures.
"But above all, most importantly, Total Quality Management as a corporate strategy must deal with people. Its net results are more productive workers, more efficient managers, improved communication, and a more effective organization. Better and more competitive products are the result of better people and better management, and not vice versa" (Imai 1986: 74-76).
South Africa's output per capita is judged to be about one sixth of
Switzerland's, one fifth of the USA's, a quarter of Japan's and a third of the
UK's. Productivity must be increased not just to give us a bigger "economic
cake", but also to make South Africa a world class competitor.
Productivity is not the only area that demands attention. It goes hand-in-
hand with quality - an equally critical weapon in the global business war,
and one that will become increasingly important as companies make the
constant improvement of everything they do a way of life.
One way of achieving the required growth in productivity in all its
consequences is by adopting the Total Quality Management principles as
a management policy. Regardless of what the process is called, eg.
Kaizen, Sasol Quality Improvement Process, Integrated Quality or Strategic
Quality Management, it must have a focused goal to constantly improve the
quality of products or services, to increase productivity and to improve the
quality and application of human and material resources. In short, to take
the path towards excellence and perfection for the benefit of the company,
its employees and owners and its clients or customers.
1.2 STATEMENT OF PROBLEM
Many South African companies have wasted untold amounts of money in
the past years on programmes with themes of excellence, customer care,
productivity or quality. Typically these projects are launched with key
1 - 4
people being sent off for training or indoctrination; badges, buttons and
posters appear all over the work-place; the CEO makes a video to explain
the company vision; the "shared values" are printed on laminated pocket
cards, but all too soon, managers' attention drifts, people get busy with "real
work" - and the project is dead.
The reason for failure is twofold:
. the attempt to change the old, inherited ways is treated by
management as a programme, a "theme-for-the-month" and not as a
process of continuous, never ending improvement aimed at new levels
of performance;
° the lack of a set of clear, generic guidelines for implementation of the
improvement process.
Participative management is one of the cornerstones of the Total Quality
Management philosophy. The active involvement and participation of all
employees in problem solving, cost reduction efforts and operational
efficiency improvements are considered essential elements for the
achievement of continuous improvement.
The Total Quality Management process may serve as an example to
organisations endeavouring to improve their performance in their quest
towards delighting their customers. A detailed analysis of this process is
thus called for in order to provide the necessary guidelines for
organisations to gain a competitive edge over their competitors in the global
market during this historic decade of the 1990's.
1.3 RESE RCH OBJECTIVE
The overall objective of this study is to research the implementation and
advantages of the Total Quality Management process to contribute to
1 - 5
knowledge on Total Quality Management in the South African
manufacturing environment.
Secondary objectives are:
Objective 1: To research the evolution and dimensions of the Total
Quality Management Philosophy.
Objective 2: To do research on the philosophies of the Gurus of Total
Quality Management
Objective 3: To do research on the requirements for the successful
implementation of a Total Quality Management process.
Objective 4: To investigate the Total Quality Management implementation
process.
Objective 5: To research the Total Quality Management process practised
at EMSA (Pty) Ltd.
Objective 6: To research the requirements of Total Quality Management
in manufacturing organisations in South Africa, approaching
the year 2000.
This study provides a guideline to organisations contemplating the
implementation of a Total Quality Management process. It may also
motivate further extended research on the subject of continuous
improvement towards organisational excellence. Other researchers will be
able to make use of this study due to the exploratory and reconnoitre nature
of the study. It will in particular form a valuable basis for further empirical
studies, concerning the concepts of Total Quality Management within the
strategic management process. In addition, the findings, conclusions and
recommendations within the study may serve as a guide to practitioners, for
1 - 6
achieving congruency between the desired excellence and strategy of their
organisations.
1.4 RESEARCH METHODOLOGY
Courses and seminars, local and international, which were attended during
a period of 10 years have added theoretical knowledge to practical on-the-
job experience in the Total Quality Management area.
Contact was also made with colleagues in other companies and through the
exchange of ideas, knowledge and experience, an in-depth insight in the
application of the theory at different organisations was gained.
Numerous books, articles and programmes were studied in order to develop
a data base of available relevant information. This literature survey was
done using the following information systems:
The library and library data base of the RAU;
The library and library data base of UNISA;
The computer based information system at the CSIR, called "Infotech";
The EMSA Quality Management Systems library.
The literature study forms a major component of this study and plays an
important role in the achievement of the objectives (objectives 1, 2, 3,4, 5
& 6) of the study. The literature on Total Quality Management is not
confined to a single field or discipline, but covers a wide spectrum of
research conducted within the various fields and related disciplines.
The literature study provides an orientation to the research already
conducted within the field of study, as well as a perspective on the most
1 - 7
current research results and findings applicable to Total Quality
Management, within the context of strategic management.
A cross pollination of ideas and perceptions takes place during the
literature study, in that the ideas, views and perceptions held by various
researchers and writers are compared, evaluated and applied, with regard
to the concepts concerned.
A qualitative study of the Total Quality Management process at EMSA was
conducted to gain an empirical basis for the practical application of the
relevant theories and philosophies.
A comparison between the information obtained from the literature study
and the Total Quality Management process at EMSA was undertaken. The
objectives previously formulated for this study provided an unifying
framework for the syste-matic evaluation and analysis of the information
collected. The information tends to be descriptive and not statistical in
nature and therefore an interpretive-deductive approach is used for
analysing the relevant information obtained.
1.5 CONSTRANTS TO THE STUDY
Perspicacious observers of the growth of literature on Total Quality
Management in South African context will have noticed that the majority of
relevant literature concentrates on either quality or management. The
literature on the concepts as individual entities is extensive in extent, but
the literature integrating the two concepts into a synergistic entity is limited.
This acted as a constraint on the literature research and extensive use of
international publications was required to achieve the objectives defined
previously.
Although the extent of the study is limited to the manufacturing environment
and excludes all services as well as all non-profit making organisations, its
1 - 8
generic concept may be applied by any type of organisation.
Proof of advantages experienced by practising Total Quality Management
principles is limited to one organisation, EMSA (Pty) Ltd, due to the
availability of confidential information.
1.6 STRUCTURE OF THE STUDY
The structure of the study is related to the objectives to be achieved and the
method of study. The underlying structure of the study follows a movement
from gaining a clear understanding of the concepts and terminology, to the
requirements for the successful implementation of a Total Quality
Management process, the implementation process and the advantages of
a Total Quality Management process as illustrated by the achievements of
EMSA.
The structure of the study follows the following format:
Chapter 2: The descriptions and termincAogy of key concepts
and terms used in this study are analysed and defined.
This provides a common frame of reference for the rest
of the study.
Chapter 3: A discussion of the views of four accredited Total
Quality Management "Gurus": Crosby, Deming,
Ishikawa and Juran.
Chapter 4:
The requirements for the successika iuvvp p ementation
of a Total Quality Management process are described.
Chapter 5: A framework for the Total Quality Management imp5e-
mentation process is described.
1 - 9
Chapter 6: This chapter deals with the Total Quality Management
process at EMSA and illustrates the advantages of
practicing this philosophy.
. Chapter 7: The study is concluded with specific recommendations
to its practical implication for the managements of
organisations striving towards customer satisfaction
and organisational success in the South African
environment, approaching the year 2000.
1-10
CH PIER 2
DOM fENSION.
SYNOPSIS
LOST OF FIGURES, GRAPHS ND TABLES
2.1 INTRODUCTION
2.2 DEFINITION OF QUALITY
2.3 TOTAL QUALITY MANAGEMENT EVOLUTION
2.3.1 Operator Quality Control
2-12
2-13
2-14
2-14
2-17
2-17
2.3.2 Foreman Quality Control 2-17
2.3.3 Inspection Quality Control
2-18
2.3.4 Statistical Quality Control
2-18
2.3.5 Total Quality Control
2-18
2.3.6 Total Quality Management
2-19
2.4 DIMENSIONS OF TOTAL QUALITY MANAGEMENT 2-20
2.4.1 The tools for continuous improvement
2-24
2.4.2 The philosophy of customer focus
2-29
2.4.3 The leadership styles for TQM
2-36
2.4.3.1 One-dimensional leadership model 2-37
2.4.3.2 Two-dimensional leadership model 2-39
2.4.3.3 Leadership styles 2-40
2.4 : 4 Conclusion 2-44
2.5 SUMMARY 2-44
2-11
TUNING
COMMENT
CHAPTER 2
LENT
SYNOPSOS
Defining Total Quality Management (TQM) is something like defining love. Most people fall back on gut feelings, reasoning that they know when it is there and when it is not. As in matters of the heart, there is no quality definition that satisfies everyone. Misconceptions about TQM abound throughout the organisation. What is really needed is a definition of TQM that can be used as a common form of communication throughout the organisation.
A major misconception about TQM is that it is confined to the product, and therefore to the manufacturing process. Nothing could be further from the truth. The customer's perception of TQM in an organisation includes more than the satisfaction obtained from the primary product or service. Their view of the organisation that provides the basic need will include how their original inquiry was handled on the telephone, the method and timing of delivery, up to the timeliness and accuracy of the invoice. Clearly, to delight the customer, TQM must be extended to all administrative areas.
Management has the tendency to believe that increased productivity, efficiency or quality, will be achieved mainly through investment in technology. The reality is quite the contrary. Quality is achieved through people. People work in processes and people manage processes. To effectively manage TQM, the organisation has to work through the chain of people who work in or on processes. "People", therefore, is not just a polite term for the workers in the organisation. The people chain, and therefore TQM, both start and eventually finish with the CEO. He determines the direction, personality, and leadership style of the organisation. A culture, conducive for TQM implementation, cannot be achieved without the commitment and visible leadership of the CEO.
It is important to realise that variation is a natural part of life. It is often quoted that between 85 to 95 percent of all the causes of variation are random variations built into processes, and only a small minority are attributable to unusual occurrences. Continuous improvement means working at reducing variation levels where customer delight can be achieved.
To summarise the above, and to that extent the contents of this chapter, an evolved definition for TQM is proposed:
"Total Quality Management is a management philosophy that seeks continuous improvement in all processes, products and services of an organisation. It requires a solid customer focus, a preventative approach to quality, a profound understanding of variation, decisions based on measurement, and the creative involvement of employees at all levels".
2-12
ENT
ENT
CH PIER 2
ENSIO
EH ENT
FIGURES, G PHS AND TABLES
Figure 2.1 The evolution of Total Quality Management 2-19
Figure 2.2 Total Quality Management: Its components 2-23
Figure 2.3 Leadership styles 2-40
2-13
N A
CHAPTER 2
TH PIM ENSIGN
2.1 INTRODUCTION
Good business, which in turn means general prosperity and employment, is not
something which comes about by chance. It is a result of the skill with which
business in general is managed - and business in general is the sum of the quality
of the business units.
Total Quality Management (TOM) challenges all forms of performance and
industrial relationships. It is an unique concept in as much as it is not a technique
or a tool, it is not simply a mechanistic approach, nor is it a behavioural concept
or a purely philosophical approach to life. It is all of these combined. Total
Quality Management represents a totally new approach to industrial
understanding of quality and to the work ethic. Total Quality Management
represents an approach that is dramatically opposed to the turgid, hierarchical,
blame-led, conflict ridden industrial cultures of the past and present. It represents
both a social revolution in the workplace and a rigorously effective approach to
professionalism and success.
2.2 DEFINITION OF MI LITY
To really understand the philosophy behind the concept of Total Quality
Management, it is necessary to define the term 'Quality'.
To many people, quality means goodness, or luxury, or glossiness, or weight, or
price, or conformance to specifications, or fitness for use. In addition, quality is
often used to signify the relative worth of things in phrases such as "good quality"
2-14
or "bad quality" (Crosby 1979:14-18).
Quality is a subjective term which means different things to different people in
different situations. The Webster's Dictionary and the Oxford Dictionary both
define quality as "degree of excellence". In addition to this definition,
industrialists, academics and consultants have created a myriad of alternatives.
According to Feigenbaum (1983:7), quality is based upon the customer's actual
experience with the product or service, measured against his or her requirements -
stated or unstated, conscious or merely sensed, technically operational or entirely
subjective. He continues to define product and service quality as being the total
composite product and service characteristics of marketing, engineering,
manufacturing and maintenance through which the product and service in use will
meet the expectations of the customer (Feigenbaum 1983:7).
Crosby (1979:14), in his definition on quality, expands on the above definition by
defining quality as conformance to requirements. These requirements are
determined through the interaction of a number of parties. The final user of the
product or service has certain needs and expectations which must be satisfied.
The design and production departments within the organisation are responsible
for designing and producing a product or service which meets the agreed to
requirements of the final user. To achieve this, all set production and design
requirements will need to be constantly met, and even exceeded, to ensure
complete customer satisfaction.
In a similar manner to Crosby, Ishikawa (1985:45-46) proposes that customer
requirements are the point of departure when defining quality. Customer
requirements, once accurately recorded, are translated into important final product
control characteristics that are to be deployed through the product design,
development, processing and production control system. He refers to these two
processes as "quality of design" and "quality of conformance", while Deming
(1982:264) refers to them as "quality of design" and "quality of production"
respectively. Any discrepancy between quality of design and quality of
conformance results in defects and/or rework, which results in cost increases and
3.2.2.1 Philip B. Crosby 3-54 3.2.2.1.1 Brief biography 3-54 3.2.2.1.2 Crosby's approach to TQM 3-54 3.2.2.1.3 Summary 3-70
3.2.2.2 W. Edwards Deming 3-72 3.2.2.2.1 Brief biography 3-72 3.2.2.2.2 Deming's approach to TQM 3-73 3.2.2.2.3 Summary 3-100
3.2.2.3 Kaoru Ishikawa 3-102 3.2.2.3.1 Brief biography 3-102 3.2.2.3.2 Ishikawa's approach to TOM 3-102 3.2.2.3.3 Summary 3-110
3.2.2.4 Joseph M. Juran 3-112 3.2.2.4.1 Brief biography 3-112 3.2.2.4.2 Juran's approach to TOM 3-113 3.2.2.4.3 Summary 3-123
3.2.3 Comparing the Gurus 3-125
3.3 SUM RY 3-126
3-45
ENT
CHAPTER 3
OUft lit"'
ENT
SYN I PSIS
Quality is an important competitive factor and in most markets a prerequisite of survival. This is why more and more organisations are implementing Total Quality Management. The 1990's looks set to see the quality revolution of the 1980's spreading beyond manufacturing organisations to both private and public services.
Many organisations base their quality approach on the work of one of the "quality gurus". This is a term coined to reflect their influence on:
the organisation and practice of quality management; and
modem management thinking.
Written hisotry provides a grand procession of characters and legends to emulate, starting as early as 500 BC. Some would seem to presage TQM principles, and a brief visit will be paid to Sun-Tzu (a Chinese warrior), Aesop (a Greek slave), and Socrates (a Greek stone-mason and philosopher).
In this chapter the focus will, however, be on the key features of the methods of Crosby, Deming, Ishikawa and Juran. Arguably, this list is not exhaustive and there are others who have influenced the development of quality management issues.
The purpose of this chapter is:
to examine the salient features of each guru's method; and
to compare their approach using a comparison framework.
This will enable managers and other readers to appreciate the common ground and differences between each guru's thinking and approach. To compare the approaches of the various guru's systematically, a matrix of key features was developed. Six key factors were selected. These are:
general approach;
external interface;
organisational context;
organisational requirements;
means and techniques; and
pace and nature of change.
3-46
Mei"
EitliENT
CHAPTER 3
LIST OF IFOGURES, GRAPHS AND T;LIES
Figure 3.1
Table 3.2
Table 3.3
Table 3.4
Table 3.7
Figure 3.8
Figure 3.9
Table 3.10
The quality improvement process
The four absolutes of quality management
The quality improvement process
Salient characteristics of Crosby's approach to TQM
Deming's fourteen points
Salient characteristics of Deming's approach to TOM
Salient characteristics of Ishikawa's approach to TOM
Interrelation among Juran's quality parameters
Juran's spiral of quality
Salient characteristics of Juran's approach to TQM
Table 3.5
Table 3.6
3-55
3-56
3-60
3-71, 72
3-76
3-101
3-111, 112
3-116
3-117
3-124
3-47
CH
G
PIER 3
HAGEN
3.1 INTRODUCTION
The 1990's look set to see the quality revolution of the 1980's spreading to more
and more organisations. Moreover, in this decade the quality revolution will
spread beyond manufacturing organisations to both private and public services.
This is because quality is considered to be an important competitive strategy
(Shetty 1987:46).
Many organisations base their quality approach on the work of one of the so-
called quality gurus. This is a term coined to reflect their influence on:
the organisation and practice of quality management; and
modern management thinking.
The list of gurus generally includes Crosby, Deming, Feigenbaum, Groocock,
Ishikawa, Juran, Taguchi and Townsend. Arguably, this list is not exhaustive and
there are others who have influenced the development of quality issues.
Surely, the first quality engineer was some unknown chariot maker in Sumeria who
observed that the smoother the wheel, the faster the chariot, or some swordsmith
farther north in the land of the Hittites who scrutinised his work in order to free it
of all blemishes, thereby increasing its cutting power. Or was it a Neanderthal,
who plied his craft with flint knapping tools, being attentive and conscientious in
shaping a tool for a precise use? Modern archaeologists have demonstrated that
3-48
these skills are difficult to acquire. Yet we know that the skills were practised by
Neanderthals and were passed on through generations. So perhaps quality
control predates Homo Sapiens, and originated with Homo Sapiens
Neanderthalenses.
While this thought experiment is entertaining, there are no written records to to
use as guidance. Written history, however, provides a grand procession of
characters and legends to emulate. Some would seem to presage TQM
principles. While others can undoubtedly be found (Clemens & Mayer 1987) from
nearly every era and arena, the spotlight here will be on:
Historical masters: Sun-Tzu, Aesop and Socrates;
20th Century masters: Crosby, Deming, Ishikawa and Juran.
3.2 THE TEACHINGS OF THE GURUS
Charismatic pacesetters such as Crosby, Demin or Juran are often identified (or
even equated) with the TQM movement. Their magnetism has resulted in
passionate devotees, each proclaiming their pundit to have revealed the one true
path to quality enlightenment. The squabbling that occasionally occurs between
each guru's camp sometimes resembles religious "heresy" disputes, where much
arguing proceeds over differences without distinction. Because the writings of all
the masters - historical and present day hero's - are motivational, it is important
to read and reflect upon more than one of them prior to embarking on a TOM
implementation process. While all of their platforms may agree to within 95
percent, that last five percent may represent the appealing difference.
3.2.1 Historical masters
3.2.1.1 Sun-Tzu
Sun-Tzu lived sometime during the warring states period (480-221 BC) in China
(Sun-Tzu, translated by Griffith 1963:iv). During this time, the entire world, as the
3- 49
Chinese knew it, was in constant war. Sun-Tzu observed the political and
leadership struggles and attempted to codify how best to approach these
disciplines.
Wing (1988) casts Sun-Tzu's terminology into business and strategic terms rather
than martial terms and the 13 sections are summarised below.
1 Calculations. Is the goal reasonable and worthwhile? If so then the time
to act is now. If not, wait and build strength until it is reasonable. Self-
reflection (e.g., benchmarking and audits) are necessary to understand
one's own strength as well as that of the opponent. Both the self and the
opponent must be understood.
Estimating the cost. Contingencies and alternatives must be weighed.
Once the costs have been estimated, then commit to an unrelenting
forward momentum. There must be unbelievably swift and decisive action,
with no looking back.
Plan of attack. Is the objective isolated or integral? If the objective is
isolated, then a forward attack is appropriate. If it is integral, then a
broader, less obvious attack route may be necessary.
Positioning. Remove elements around you that allow backsliding. One
must have a supportive environment. You cannot cross a river by going
across halfway and then returning to shore to rest for the next half.
Directing - Positioning your foe. Isolate your opponent, make plans that
do not include it; enlist the help of others. Act spontaneously.
illusion and reality. The opponent must not be allowed to rest and
recover. When weak, feign strength and when strong, feign weakness.
7 Manoeuvres and tactics. Indirect tactics such as logistics are essential
3-50
to success. Indirect actions which lead to direct effect are the best.
Competition within your own forces is dangerous. The focus must be on
the enemy. Give your opponents the ability to flee. Damage the overtaken
as little as possible because they are tomorrow's customers.
Spontaneity in the field. Sun-Tzu warns against being overly cautious,
reckless, angry, fastidious, and attached to the organisation or the states
quo.
Moving the force - confrontation. Self-control and discipline will grow
from a determined challenge.
Situational positioning. Challenge only when certain. Put yourself
between your foe and his support system, as disorder brings defeat.
Situational awareness. Awareness of the situation is.vital. Contradictory
situations call for contradictory action.
The fiery attack. Do not prolong the confrontation. Enlist help from the
outside and make every action count.
The use of intelligence. Information is the essence of success or defeat.
An analogy can be made between Sun-Tzu's process and those of the immune
system: it wards off disease and attackers without damaging the underlying
support system. Like the immune system, which can enter an autoimmune phase
and destroy the very body it was protecting, so too can TQM consume its own as
it metamorphoses a company via continuous change and quality improvement,
making the new business very different from the old one. In this respect Sun-
Tzu's philosophy embodies principles of TQM: survival, growth and continuous
improvement in a chaotic world.
3-51
3.2.1.2 Aesop
Aesop was a Greek slave who lived in the 5th century B.C. (Handford 1954:xiv).
While not providing the integrated framework of Sun-Tzu, Aesop's simple fables
or parables provide profound insight into the nature of people's conduct in society.
A small sample of TQM related morals is presented:
United we stand, divided we fa. The four oxen and the lion (Handford
1954:171). A direct appeal to the use of self-managing teams, quality
circles and other uses of teamwork and shared vision.
Please all and you Please none. The man, the boy and the donkey
(Handford 1954:73). A vision that has been defined in scope and is
attainable is essential. Serving only some segments of customers may
mean ignoring others.
A loam w500 not be believed), even when he speaks the truth. The shepard
boy (Handford 1954:200). Credibility in management is regained every
day, and when lost, it may be lost until that management is replaced, and
quite likely even longer. Trust is not bought by salary, or enforced by
memos. Without trust, it is difficult to achieve the union required to
succeed.
We often despise what is most useful to us. The hare and the hunter
(Handford 1954:134). Hourly, shopfloor, unskilled, ... the list is long that is
used to demean the workers on whom the organisation relies. There is
dignity in all work. Failure to understand this leads to strikes, lock-outs and
boycotts, and management by fear.
You may share the labour of the great, but not the spas. The lion's
share (Handford 1954:23). Rewards must be given out on a fair and
regular basis, and it must be understood how one can achieve these
rewards.
3- 52
0
Perseverance wins the race. The hare and the tortoise (Handford
1954:70). Aesop agrees with Sun-Tzu regarding careful calculations,
plotting and provisioning. Ambition and excitable energy are no substitute
for wisdom and careful planning.
0
it us quaHty not quantity that counts. The vixen and the lioness
(Handford 1954:19). A vixen sneered at a lioness because she never
bares more than one cub. "Only one," she replied, "but a lion."
What is so instructive about Aesop's fabels is that little has changed in human
nature since the beginnings of civilisation. Aesop has permeated Western
literature for some 500 years, as browsing through a quotation dictionary will
readily confirm.
3.2.1.3 Socrates
Socrates, the philosophising stonemason, lived from 470 B.C. to 399 B.C. in
Athens, during the Golden Age of Pericles (Lindsay 1906: Introduction). He is
known from the works of Plato as one of the great philosophers. A number of TOM
concepts can be found in the various Socratic dialogues.
0
Fif oot cause analysis. Socrates was always asking Why?, and even when
told why, would keep probing until he reached the bottommost cause. This
rumination was meant to sweep away preconceptions and prejudices to
reach the real reasons or truths of what ever subject was before him.
0
Empowering the worker. Democracy lends voice to all. Coupled with
critical self-examination, this leads to an empowering force of continuous
self-improvement.
0 Vision and ethics. Constantly examining organisational beliefs and
motives requires building a solid framework of morals and ethics.
3-53
Socratic dialogue refers to the method of instruction by question and answer used
by Socrates in order to elicit from his pupils truths he considered to be implicitly
known by all rational beings (Collins English Dictionary 1994:1467). By using this
method, a leader goads others into thinking about their actions and beliefs when
making decisions and solving problems.
3.2.2 20th Century quaty masters
3.2.2.1
Philip B. Crosby
3.2.2.1.1
Brief biography
Philip B. Crosby was born in 1926 in Wheeling, West Virginia. Crosley obtained
a degree in podiatry (his father's profession) but decided he didn't like the
profession. In 1952 he became a reliability engineer for Crosby Corporation in
Richmond, Indiana. He later worked for the Martin Corporation from 1957 to 1965.
Crosby was in charge of quality on the Perching missile project. From 1965 to
1979 he was the vice president of quality for ITT. In 1979, he founded Philip
Crosby Associates (PCA) in Winter Park, Florida from where he retired in 1991 to
begin Career IV, Inc. to help grow executives.
3.2.2.1.2 Crosby's approach to TQM
Crosby's aim is to change the perceptions and attitudes of top management about
quality. He defines quality as "conformance to requirements" (Crosby 1979:14),
a supply-led definition, thus making quality tangible, manageable and measurable.
The requirements of a product need to be defined and specified clearly so that
they are properly understood. These requirements are determined through the
interaction of a number of parties. The final user of the product or service has
certain needs and expectations which must be satisfied. The design department
within the organisation is responsible for designing a product or service which
meets all the requirements of the customer in a cost effective way. Thereafter, the
manufacturing department must ensure that the product or service which it
3-54
CONCEPTS
ABSOLUTES OF QUALM!
0 M M
T M E N T
T E A M
w 0 R K
S
S T E M S
TOOLS
produces conforms to the requirements determined in the design process.
An error in any of the above processes will result in the production of a product or
service which does not conform to specification initially determined by the end
user. According to Crosby's definition, conformance to requirements is the only
measurement of quality. Poor or high quality has no meaning, only
nonconformance or conformance. The cost of quality is measured by the cost of
nonconformance. Crosby estimates that in most companies these costs run at
about 20 to 40 percent of sales (Crosby 1979:101-108).
Thus, according to Crosby (1984:7), all nonconformances are caused, and
anything that is caused, can be prevented. As he describes it, the organisation
can be "vaccinated" against nonconformance. Some of these "antibodies" are
managerial actions, while others are procedural common sense. The preparation
of this vaccine is discussed with the aid of figure 3.1.
Figure 3.1 The quality improvement process
Source: Crosby & Associates 1989:39
3-55
CONCEPTS
Crosby (1984:59-86) builds his quality process on the "four absolutes of quality",
where the performance standard is "zero defects", the measurement of quality is
the cost of quality, the system is prevention and the definition of quality is
"conformance to requirements". The four absolutes are the concepts which are
needed to transform the culture of the organisation to one which enhances and
supports TONI.
Table 3.2 The four absolutes of quality management
(SOLUTES OF Q1U LITY
Definition of quality:
Conformance to requirements
Systems:
Prevention
Performance standard:
Zero defects
Measurement:
Cost of quality
Source: Crosby & Associates 1989:11
The First Absoiute: The definition of quaiity is conformance to requirements
According to Crosby (1984:59) quality improvement is built on getting everyone
to do it right the first time. In this regard, management essentially has three basic
tasks to perform:
1) establish the requirements that employees are to meet;
3- 56
supply the where with all that the employees need in order to meet those
requirements; and
spend much of its time in encouraging and helping the employees meet
those requirements.
Management should display their commitment to prevent nonconformance by
adopting a quality vaccine consisting of determination, education and
implementation. Quality improvement is a process, not a program and it should
be designed to be permanent and lasting.
The Second Absoiute: The system of quaiity is prevent i n
The foundation of Crosby's approach is that defective work must be prevented
before it appears, rather than dealing with it once it has occurred. Appraisal is
very expensive and is always conducted after the fact, which means that the cause
of the defect will not be addressed. The system of prevention allows for the
identification and eradication of the factors giving rise to the defective output.
Prevention comes from proper design of equipment and requirements, continual
training of the workforce, discipline, example, and leadership focused on quality.
Since Crosby equates quality management with prevention, inspection, testing,
checking and other nonpreventive techniques have no place.
The Third Absoiute: The perfonrnance standard is zero defects
Crosby (1979:1) states that quality is free, but it is not a gift. What costs money
are the unquality things - all the actions that involve not doing the job right the first
time, and the sorting and inspection following the production of a defective
product.
What Crosby is emphasising is that quality will not evolve naturally. Successful
quality improvement requires active steps to make quality a standard way of life.
Managers of any operation or function in the organisation must take active, visible
steps to improve quality in every process and task under their leadership.
3-57
The first of these steps is the setting of performance standards. These
performance standards are the device for ensuring that the organisation meets its
quality requirements. For Crosby, the only acceptable performance standard is
zero defects.
Zero defects is a performance standard which needs to be understood and
attainable by all individuals within the organisation. It means that requirements
must be met first time, every time and that errors are not acceptable. Where the
zero defect standard is not met, the reason for this failure must be identified and
the cause rectified.
Zero defects is an attitude of defect prevention. Zero defects is not a slogan, it is
a management performance standard. Demotivating employees by constant
exhortation is not the answer. Crosby believes that in the 1960's various
Japanese companies properly applied the zero defects standard by using it as an
engineering tool with the responsibility of proper implementation left to
management. By contrast, the zero defects standard was used as a motivational
tool in the United States, with responsibility left to the worker, where it failed.
The Fourth Absoiute: The measurement of quality us the price of non
conformance
A major downfall of most quality control practices is that, although most quality
failures are discovered in the factory instead of after shipment, the techniques for
finding them are often excessively costly and wasteful (Feigenbaum 1983:5; Juran
1988 b:17-24). The costs of poor quality, including customer complaints, product
liability lawsuits, redoing defective work, and products scrapped after inspection
and testing are often huge. Crosby (1979:101-108) and Juran (1988 b:1) estimate
that in most companies these costs run at about 20 to 40 percent of sales. This
suggests that management should be investing a proportionally higher amount of
money and effort on defect prevention, as opposed to quality testing and
appraisal. The phenomenon is explained as follows. The more defects or
nonconformities produced in an organisation, the higher the failure costs. The
3-58
traditional answer to higher failure costs has been more inspection and testing,
which of course increases appraisal costs. According to Feigenbaum (1983:13)
and McMillan (1982:33) this tighter inspection has little effect with regard to the
elimination of defects, as opposed to prevention. Some of the defective products
are going to leave the plant and end up in the hands of unsatisfied customers.
Appraisal costs thus stay high as long as failure costs remains high.
Feigenbaum (1983:113) and Kane (1986:29) suggest that the manner whereby
this spiralling cost cycle could be reduced is by concentrating on preventive
measures. An increase in prevention costs results in defect reductions, which in
turn have positive effect on appraisal costs because defect reduction means a
reduced need for routine inspection and testing activities.
The cost of quality can then be measured by calculating the total costs of doing
things wrong, or the price of nonconformance.
Crosby advocates that the absolutes of quality are realised through paying
attention to the areas of commitment, teamwork and systems. These three areas
in turn are addressed by Crosby's fourteen steps to the quality improvement
process (Crosby 1984:97-104). These steps are illustrated in table 3.3.
Crosby's 14 steps are a specific action plan for the improvement of quality and can
be seen as reinforcing Deming's 14 points of quality management philosophy.
3-59
Table 3.3 The quality improvement process
Steps kb the improvement process Commitment Teams ems
Management commitment
Quality improvement teams
Measurement
Cost of quality
Quality awareness
Corrective action
Zero Defects planning
Employee education
Zero Defects day
Goal setting
Error causes removal
Recognition
Quality councils
Do it all over again
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Source: Crosby 1984:99
The fourteen steps in table 3.3 are clustered and classified further into three
areas: commitment, teamwork and systems.
Under commitment fall: management commitment
zero defects planning
zero defects day
do it all over again
Contained in teamwork are: quality improvement teams
quality awareness
employee education
goal setting
quality councils
3 - 60
Under systems fall: measurement
cost of quality
corrective action
error causes removal
recognition
Step One: Management commitment
Management commitment at all levels of the organisation is vital to the success
of a total quality improvement process. Management are responsible for a number
of actions. First, they must decide that they want a zero defects strategy, and
must develop and announce a clear, specific quality policy to this effect. Second,
their commitment to the zero defects concept and the quality improvement process
must be displayed through action. In order for this to happen, management must:
develop and communicate a quality policy;
develop a comprehensive zero defects strategy to provide determination,
education and implementation of quality improvement;
establish an organisation to carry out the quality improvement process;
ensure that every manager, and eventually every employee, understands
and practices the absolutes of quality;
provide the resources needed to ensure that quality is built into every
function of the organisation;
ensure that all management communication contains a message denoting
their commitment to the zero defects policy, and explaining the policy;
put quality at the top of the agenda.
3-61
Step Two: Quality improvement team
The early establishment of a quality improvement team is vital to the success of
the quality improvement process (Crosby 1979:152). This team will promote,
supervise and coordinate the planning and implementation of the quality
improvement process throughout the organisation. Team members will need to
be formally trained to run the quality improvement process.
The quality improvement team is cross-functional, comprising of an administrative
representative from each department or major area of operation in the
organisation, and an administrator or coordinator. The members of the team
would be nominated by department managers and approved by the senior
executives of the organisation. The chairperson would be selected by the team
members. The quality improvement team will report to, and receive, its overall
direction from a senior management steering committee.
The objectives of the quality improvement team are (Crosby 1979:152-162):
to provide the framework for the overall coordination of the quality
improvement process;
to provide a vehicle which can remove the roadblocks to quality
improvement;
to provide a formal communications medium to ensure that the quality
improvement efforts are coordinated throughout the organisation;
to ensure continuity of the quality improvement process.
The responsibilities of the quality improvement team are (Crosby 1979:152-162):
to develop key quality related issues and a detailed strategy;
3- 62
to set a timetable for all quality improvement process activities;
to establish the need for resources such as administrators, training
programs;
to monitor results, and make adjustments where necessary;
to assign each member the responsibility of over-seeing one or more of the
14 steps;
to develop a complete 14-step implementation plan, and to meet regularly
to administer the plan and review progress.
The responsibilities of each individual member of the team include (Crosby
1979:153);
representing his/her department on the team;
ensuring that the decisions of the team are executed in the department.
Step Three: Measurement
The purpose of the measurement step is to provide a display of the current and
potential nonconformance problems in a manner that permits objective evaluation
and corrective action (Crosby 1979:169).
The objectives of the measurement step are (Crosby 1979:169-178):
to communicate openly where nonconformances exist;
to establish an atmosphere that allows the honest reporting of errors;
to ensure that all employees understand the purpose of measurement and
3-63
the system used to provide for it;
to help all departments understand their responsibilities to quality through
the display of nonconformances;
to document actual quality improvement as it occurs.
An important source of measurement data is provided by observations of actual
rejections and the results of inspection. A more general form of measurement is
provided by Crosby's Quality Management Maturity Grid (Crosby 1979:32-34).
This grid is a measure which enables management to identify the organisation's
present status or maturity level regarding the quality improvement process. It
does this by measuring management and subordinate attitudes to quality. These
results can then be compared with those that existed on a previous occasion. The
grid breaks down the continuum of maturity levels (attitudes to quality) into five
categories and lists the categories by which each can be measured. The maturity
grid emphasises the change in attitude toward meeting product requirements or
quality that takes place in the progression through the stages of a quality
improvement process. Perceptions are the instrument used to identify the
organisation's position on the grid. The data used in the measurement process
is collected by means of an attitude survey (Sargent 1986:30). With this
information, management can identify where their organisation is placed on the
maturity grid and what their next course of action ought to be. A possible
constraint of the maturity grid is that it does not provide an explanation of why the
organisation is at that specific position on the grid (Sargent 1986:30).
Step Four: Cost of quaOity
The cost of quality is a management tool which is used to measure quality
improvement. This facilitates the identification of which areas in the organisation
need corrective action. The reduction of the concepts of quality to a cost figure
renders it intelligible to all. Crosby (1979:105-107) provides the following
categories of costs:
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1 Prevention costs
These are the costs of all activities undertaken to prevent defects in design
and development, purchasing, labour and other aspects of creating and
initiating a product or service.
Appraisal costs
These are costs incurred while conducting inspections, tests and other
planned evaluations used to determine whether hardware, software or
services conform to requirements.
Failure costs
These are the costs associated with output which does not conform or
perform to requirements. Included are the evaluation, disposal, and
consumer-affairs aspects of such failures.
Crosby (1979:104), Juran (1988 b:4.10-4.13) and Kume (1985 b:16-17) stress,
however, that management should not be totally pre-occupied with attempting to
obtain an exact cost figure for quality as this is likely to be a time consuming and
subjective excercise All that is required is a consistent, reasonable accurate
estimate of the cost of quality. After all, the purpose of calculating the cost of
quality is essentially to draw the attention of the organisation to the cost of poor
quality, to identify high cost centres and to provide a measurement base for seeing
how quality improvement is progressing (Aubrey & Eldridge 1981:17).
Step Five: Quality awareness
The purpose of this step is to raise the level of personal concern felt by all
employees toward the production of quality products and services.• An awareness
of the importance of the quality reputation of the organisation needs to be
engendered in the workforce. Employees will be made aware of the need, the
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status of the process and the continuous commitment of management to quality
and quality improvement.
The objectives of the quality awareness step are (Crosby 1979:181-191):
to develop a plan to share information about quality, including need, status
and success;
to establish a mechanism to encourage departmental meetings on a regular
basis.
The quality awareness activity has two essential ingredients (Crosby 1979:182):
Regular meetings must be held between management and employees to
discuss specific nonconformance problems and to design actions which
need to be taken to solve these problems. These meetings should not only
be between workers and their supervisors but also between the supervisors
and their management team. The meetings should take place on a regular
basis to discuss quality improvement actions as part of the drive to
eliminate all nonconformances.
Information about the quality process must be communicated through well
designed communication channels throughout the organisation. The
purpose of good communication is to provide reassurance that the
company is serious and committed to quality and quality improvement and
to convey this message constantly to all the people.
Step Six: Corrective action
Crosby (1979:65) argues that the measurement of quality alone is insufficient.
The results of the measurement process must be used to identify and resolve the
causes of nonconformance.
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The purpose of corrective action is to provide a systematic method of permanently
resolving the problems that are identified through the previous action steps.
Corrective action should operate on the Pareto Principle, which states that
problems should be addressed in descending order of importance (Schonberger
1985:483). Thorough analysis of the various processes in the organisation are
essential to corrective action.
Corrective action systems have to be based on data that show what the problems
are, and an analysis that shows the causes of the problems. Once the root cause
of a nonconformance has been identified, it can be addressed by, for example,
redesigning of the process or equipment, and the retraining of operators, in order
to prevent the recurrence of the problem. This process involves all employees
and external suppliers involved in the area or process under investigation.
Crosby (1979:67) also suggests that one of the most effective ways of identifying
the causes of defective output is the quality audit. The quality audit is a well
designed and planned examination of a process or function, carried out by
determining conformance to procedures and specifications in a process or by
critical analysis of the product or service that is a result of the process. All
nonconformances to procedures or standards have to be analysed and corrected
through the corrective action process.
Step Seven: Zero defects planning
The purpose of planning for zero defects is to examine the various activities that
must be conducted in preparation for formally launching zero defect day (see
step 9 for a discussion of zero defects day).
A quality improvement task team, which reports to the quality improvement team,
should be established to do the planning for zero defects day. At least one
representative of each department will be included in the task team.
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Step Eight: Education
The purpose of this step is to provide training to all employees within the
organisation as well as the organisation's external suppliers. This education will
provide individuals with the tools and techniques to support the quality
improvement process. Other objectives of the education process include (Crosby
1979:68):
the provision of a common understanding, throughout the organisation, of
all the absolutes of quality management;
ensuring that all employees are properly educated so they can effectively
carry out their roles in the quality improvement process.
The education process is a continuous one, starting with top level management
and working down through the entire organisation. Due to the central role played
by management and team leaders in the quality improvement process, special,
intensive education must be designed and provided to them, since they will drive
the entire improvement process.
The majority of authors on the subject of TOM identify the importance of education
to the success of the quality improvement process (Cashbourne 1987:109; Crosby
Reduce total costs Essential - especially training on the job for all to reskill Achieve in both positive way (eg. teamwork) and negative way (eg drive out fear, eliminate exhortations) Statistical process control Increased job satisfaction through quality and pride in workmanship. Performance appraisal irrelevant. End mass inspection, which accept errors/defects. Obtain statistical evidence of built in quality.
F Change Pace of change
Nature of change .
Implicit gradual in implementing the 14 points Continuous improvement philosphy
Source: Own compilation
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3.2.2.3 Kaoru Ishikawa
3.2.2.3.1 Brief biography
Kaoru Ishikawa was born in 1915, and earned a degree in applied chemistry from
the Engineering Department of the University of Tokyo in 1939. After World War
II he became involved in Japan's efforts to promote quality. In 1947, he was
appointed as assistant professor at the University of Tokyo, and, after obtaining
a doctorate of engineering, he was promoted to the position of full professor in
1960. He became president of the Musashi Institute of Technology and, until his
death in 1989, was the foremost figure in Japan regarding quality management.
He was the first to use the term "total quality control" and developed the "Seven
Tools" that he thought any worker could use (Ishikawa 1985:44). He received
many awards during his life, including the Deming Prize, the Second Order of the
Sacred Treasure, the Nikon Keizai Press Prize, and the Grant Award from the
American Society for Quality Control for his educational programme on quality
control.
3.2.2.3.2 Ishikawa's approach to TQM
Ishikawa defines quality as the development, design, production and service of a
product that is most economical, most useful, and always satisfactory to the
customer (Ishikawa 1985:44). He argues that quality control goes beyond the
product and encompasses after-sales service, quality of management, quality of
individuals and the company itself. Ishikawa (1985:44) also advocates that, since
ensuring the production of a quality product or service is impacted on by the entire
organisation, and since the essence of TQM is the prevention of defects, everyone
in the organisation must participate in and promote quality control, including top
executives, all divisions within the organisation, and all employees.
Ishikawa (1985:172-84) states that TQM is a revolutionary management
philosophy characterised by five strategic goals.
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1. Seek quality before profits
This requires a fundamental change that ideally starts at the top and
gradually permeates the entire organisational belief system. Communi-
cating the importance of quality requires that top management:
establish long-term quality objectives as key elements in corporate
strategy;
maintain support of quality when significant trade-off decisions are
made;
maintain performance standards and conformance to requirements;
avoid giving double messages to employees;
encourage behaviour that seeks to improve rather than maintain the
existing business.
By recognising the interrelationship between customer satisfaction,
quality, and market share, managers will be able to realise their
traditional bottom line profit goals as the returns from paying for high
quality exceeds the incremental costs of achieving it. If an overly
inflated price is not charged for the increased quality, the firm can gain
a disproportionately higher market share with its quality investment.
2. Develop employees° it human potential through education,
training, delegation, and positive reinforcement
For TQM to take hold and permeate the organisation, companywide
employee participation is essential. In order to accomplish quality
improvement, quality of work life strategies must be well developed.
Extensive training is required to expand each employee's knowledge of
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various functions. Managers need to develop the skills of
communication, listening, and clarifying in order to specify clear
requirements, delegate assignments, and enable employees to find the
source of problems rather than continually put out fires. Understanding
motivational theory and the management skills of delegation and
positive reinforcement is necessary for the manager interested in
involving people in the identification and permanent resolution of quality
and productivity problems.
Ishikawa (1985:140-143) recommends that the vehicle whereby
employees can participate in the quality improvement process is through
the establishment of a Quality Circle (QC) programme. The basic philo-
sophy of QC activities carried out as part of company-wide quality
improvement activities are:
contribute to the improvement and development of the enterprise;
respect humanity and build a worthwhile-to-live-in, happy and
productive workarea;
exercise human capabilities fully, and eventually capitalise on these
infinite possibilities.
A QC is defined as (Ishikawa 1985:139):
a small group;
performing quality improvement activities;
voluntarily;
within the same workshop or workarea.
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This small group's activities are:
continuous, with all members participating;
part of the company-wide quality improvement activities;
self-development as well as mutual development;
control and improvement within their workarea;
utilising quality improvement techniques.
The TQM process links employee participation and human resource
development activities directly to the financial goals of the organisation.
Employees' attitudes and behaviours are recognised as the very basis
of quality and productivity gains. Each employee is seen as a creative
innovator and source of ideas to improve the products and services of
the company. The importance of shared high-quality goals cannot be
overstated. People who believe in their product or service and are
committed to what they are doing experience feelings of pride and self-
worth that are the essence of TQM. Successful TQM managers are
skilled at the development of high-quality goals, and work in their
organisations serves as a powerful source of intrinsic employee
motivation.
3. &did iong-term consumer orientation, both outside and inside the
organisation
The TQM process places primary importance on meeting customer
requirements, whether these requirements occur inside or outside the
company (Ishikawa 1985:44). A customer is defined as someone who
receives a product or service. For example, the marketing department
might be the product engineering department's customer or vice versa.
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Meeting customer requirements means that various functions must work
together to establish these requirements and clarify them as never
before. When changes in procedures occur, they are reviewed by
internal customers to determine whether the requirements need to be
changed. No assumptions are made, all requirements are verified and
acted upon. The consequence of this single process is ongoing and
extensive communication and the development of measurements,
documents, and procedures that people can trust. The extent of new
structural policies and reward-system changes required to encourage
this customer orientation is easily under estimated. The full extent to
which corporations need to be market-oriented is also frequently
misunderstood. Firms known for quality products and services establish
quality standards based on their market requirements rather than
engineering requirements or traditional financial considerations.
Companies that are serious about meeting customer requirements are
also serious about developing close working relationships with their
suppliers (Ishikawa 1985:159-160). Suppliers are significant
contributors to any quality improvement process. Internal effectiveness
is dependent upon the quality of external parts received. Company's
with a strong quality focus, typically:
develop strong interdependent relationships with a small number of
vendors;
hold vendors responsible for delivering a defect-free product;
actively involve vendors in product development and knowledge of
product use.
The result of this shared interest in quality improvement is an informal
network of companies that are bound together by their commitment to
TQM and their ability to meet the time and quality standards it
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necessitates.
4. Communicate throughout the organisation with facts and statistical
data and use measurement as motivation
For a quality management system to be effective, communication of
problems and issues must take place across functional boundaries and
up and down the entire organisation. To accomplish this goal, it is
essential that there be a common language in place that deals factually
with problems. Measurement and statistical data provide this type of
language (Ishikawa 1986:1). In many companies, the tools of
measurement are not used to their full capacity but as an employee
control that can impede productivity.
Statistical quality control tools have traditionally been used quite
differently than is the case in a TQM approach.
Traditionally, statistical quality control is:
found primarily in manufacturing areas;
related to acceptable quality levels and the process of rejecting
parts;
seen primarily as a management tool to control workers'
nonconformance.
On the other hand, the TQM approach to statistics:
emphasises the existence of measurements in all functions;
uses measurements to monitor progress toward shared goals, with
the emphasis on tracking prevention and improvement rather than
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making accept/reject decisions;
uses measurements to communicate across departmental
boundaries with data;
uses measurements to make decisions at both the management and
operations level;
uses measurements to generate shared goals and to reinforce
achievement.
Measurement and statistics become the language used by management
and employees to discuss common problems and to communicate
effectively across departmental boundaries. Accurate measurements
and data go a long way toward resolving conflicts that result from
opinions and hip-shooting decision styles and provide solid data on
which to base management decisions. Measurement and statistics
become the essen-tial link between people and productivity. With jointly
established quality and productivity standards and continuous
measurement the employee, every employee, becomes a manager. The
supervisor in turn becomes more of a facilitator and provides positive
reinforcement when there is measurable improvement.
5. Develop a companywide T itfi process focusing ail employees on
the quality-related) implications of every decision and action at all
stages of the product or service-development continuum from
design to sales
Extensive communication and an effective problem solving system
characterise the TQM process (Ishikawa 1985:196). In an environment
that supports quality improvement, every employee understands what
he or she is expected to do, recognises the costs that result from
nonconformance of product or service, and feels responsible and able
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to do it right the first time. To accomplish this goal, extensive
communication is necessary and procedures are in place that ensure
early communication of the requirements between the various functions.
This communication greatly increases the chances of a successful
outcome.
Early intervention and involvement of employees result in better
decisions and in employees who are knowledgeable about all phases of
the development cycle. In addition to early employee involvement in
product development, a TOM process will have an effective problem
solving structure, able to resolve problems across departmental
boundaries. Quality circles are supported by higher level management
teams that can resolve interdepartmental issues. Overlapping groups
are an effective concept used to increase quality and productivity:
problem-solving teams with high-performance goals are linked
together by persons who occupy overlapping memberships in
several groups;
problem solving teams exist at all levels in the organisation;
identified problems are resolved at the lowest possible level;
problems that cannot be solved are sent to the next level of
management;
higher level teams represent more than one function.
Ishikawa classifies statistical quality control techniques into two groups
of increasing complexity. The first group is the classic Seven Tools and
require minimal statistical knowledge. The Seven Tools are:
i) Pareto diagram (Ishikawa 1986:42-49)
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Cause-and-effect diagram (Ishikawa 1986:18-29)
Histograms (Ishikawa 1986:5-17)
Check sheets (Ishikawa 1986:30-41)
Scatter diagrams (Ishikawa 1986:86-95)
Graphs (Ishikawa 1986:50-60)
Control charts (Ishikawa 1986:61-85)
Ishikawa believed that these seven tools should be known and applied
widely, if not by everyone, in the company. They should certainly not be
the preserve of experts, and are simple enough for everyone to use for
ongoing improvement. More specifically they should be used by quality
circle members in analysing problems and devising improvements.
Used together, they form a powerful set of statistical tools for everyday
use.
The second group of statistical methods are for use by quality
specialists and also by managers who have responsibility for quality in
their sections. These methods include, but are not limited to:
Sampling (Ishikawa 1986:108-116)
Hypothesis testing (Ishikawa 1986:96-107)
Sampling inspection (Ishikawa 1986:117-137)
3.2.2.3.3 Summary
It is evident that Ishikawa considers TQM to be a participative form of quality
improvement, whereby quality responsibility is decentralised.
The decentralisation of quality responsibility means that responsibility for quality
is not being left with a central quality department. It assumes that all individuals
and functions within the organisation are responsible for their own quality and thus
for the quality of the organisation as a whole. Ishikawa (1985:50-88) stresses that
this process of decentralising quality responsibility needs to be promoted and
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directed by management.
A number of deliberate actions on the part of management are required to ensure
that it is supported and encouraged. First, in order to facilitate the decentrali-
sation of quality responsibility, management must adopt a management style
which will allow intervention in decision making by subordinates. Where they do
not, the workforce will not participate in the quality improvement ,process.
Second, training aimed specifically at quality improvement must be provided.
This education needs to be provided to all levels within the organisation and must
be given on a continuous basis. Third, management are responsible for
establishing and distributing a quality policy throughout the organisation. This
policy should make clear the intentions of management regarding the importance
of quality and the decentralisation of quality responsibility.
The salient characteristics of Ishikawa's approach to TQM are summarised in
Table 3.7.
Table 3.7 Salient characteristics of Ishikawa's approach to TQM
Definition of quality Main emphasis Dominant factor Scope of application Applicability-sector
Value led Individual quality Perceived consumer value Holistic Manufacturing emphasis, but also supplies to services
B External interface
Customer focus
Market focus (environment) •
Vendor/buyer relationship
Integral to quality definition and management Quality - an important source of empetitive advantage Selected suppliers in partnership for quality
C Organisational context
- •
Primary change agent Top management role
Management style
Organisation culture
Top management To promote quality, to improve the system Participative Quality as an organisational culture Integrated-need to break down "barriers"
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D Organisational requirements
Top management commitment Employee involvement/participation Education and training Inventment in non-human resources
Essential Essential Essential for all employees As part of overall quality drive
E Means/ Cost of quality (appreciated) Improvement - quality reduces techniques other costs etc. Training programmes Essential. All employees
should be competent in statistical process control and problem solving
Participation feedback Advocate of quality circles, as (eg. communication, quality a means for participation and circles) problem solving. Statistical methods Statistical process control Recognition/rewards system Quality behaviour and
performance to be rewarded Inspection procedures Inspection part of oepratives
role, essential in manufa.cturing
F Change Pace of change Gradual Nature of change Continuous improvement
Source: Own compilation
3.2.2.4 Joseph M. Juran
3.2.2.4.1 Brief biography
Joseph M. Juran was born in 1904 in Rumania, and went to the United States in
1912. A holder of degrees in engineering and law, he advanced to the positions
of quality manager at Westerh Electric company, government administrator and
professor of engineering at New York University before embarking on a consulting
career in 1950. Juran is regarded as one of the architects of the quality revolution
in Japan, where he lectured and consulted frequently, starting in 1954. However,
he feels that the people mainly responsible for the Japanese quality revolution
have been the Japanese operating managers and quality specialists (Juran
1994:31). In 1979, he founded the Juran Institute, which conducts quality training
seminars and publishes quality-related work.
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3.2.2.4.2 Juran's approach to TQM
Juran's approach to quality improvement focuses on management leadership and
organisation, as opposed to statistical tools and techniques (Lodge .1989:118).
According to Juran (1988 b:2.6), managing for quality improvement is done by
means of a quality trilogy consisting of three managerial processes: planning,
control and improvement.
Quality planning is the process of developing products and processes required to
meet customers' needs. It involves a series of universal steps (Juran 1988 b:2.6):
Determine who are the customers.
Determine the needs of the customers.
Develop product features which respond to customer's needs.
Develop processes which are able to produce those product features.
Transfer the resulting plan to the operating forces.
Quality control is a process used by the operating forces as an aid to meeting
product and process goals. It is based on the feedback loop, and consists of the
following steps (Juran 1988 b:2.6):
Evaluate actual operating performance.
Compare actual performance to goals.
0 Act on the difference.
The quality improvement process aims to attain levels of performance which are
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significantly better than any past levels of performance. When such levels of
performance are reached, Juran (1988 b:5.20) refers to the process as a
"breakthrough". The quality improvement process is composed of a sequence of
activities (Juran 1988 b:22.6-22.12):
Awareness: this is the phase of convincing managers that there is a
need to do something different with respect to quality.
Setting goals: goals for the quality improvement process must be set at
both the organisation and department levels, and should provide the
basis against which the quality improvement process can be measured.
Organising the overall process: this involves a number of activities, all
of which are dependent on top management support and involvement.
Juran defines quality as "fitness for use" (Juran 1988 b:24). Fitness for use is the
extent to which a product or service successfully serves the needs of the user,
internal or external, during usage. He proposes that two elements of any product
or service have a large impact on quality. The first is product performance. The
extent to which products and services perform and, therefore, meet the needs of
customers will influence the degree of product satisfaction. The primary goal of
product perfortance is to be equal, or superior, to the quality of competing
products. The second element is freedom from deficiencies. Deficiencies result
in complaints, claims, returns and rework. They collectively are forms of product
dissatisfaction. Some deficiencies impact on external customers and hence are
a threat to future sales as well as a source of higher costs. Other deficiencies
impact on internal customers only and hence are mainly a source of increased
costs (Juran 1988 a:5).
Fitness for use is determined by those features of the product or service which the
user can recognise as being beneficial to him, and is judged by the user and not
by the manufacturer. Juran classifies quality characteristics into categories known
as parameters of fitness for use. The major parameters are (Juran 1988 b:2.9-
2.11):
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Quality of design;
Quality of conformance;
The "Abilities";
Field service.
Quality of design is a technical term and can be regarded as a composite of three
separate steps in a common progression of activities:
Identification of what constitutes fitness for use to the user;
Choice of a concept of product or service to be responsive to the
identified needs of the user;
Translation of the chosen product concept into a detailed set of
.specifications which, if faithfully executed, will meet the user's needs.
The extent to which a product conforms to the design specifications is called
quality of conformance.
The "abilities" of a product are its availability, reliability and maintainability and are
mainly required for long-life products. Short-life products (food, fuel) have their
fitness for use determined mainly by quality of design and quality of conformance.
The abilities are closely interrelated and are vital for fitness for use.
The final parameter is field service. The usual determining features of this
parameter are:
It relates to activities that are carried out after the sale rather than before
the sale.
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Fitness for use
NTERRELATIOITAMOKIG:JURAWS.QUALITY
Quality of De.sign Quality of market research Quality of concept Quality of specification
Quality of Conformance Technology Manpower Management Reliability
Availability Maintainability Logistical support Promptness
Field Service
Competence Integrity
It is performed by organisations or departments regarded as service
industries or departments rather than manufacturers.
It includes extensive contractual and informal contact directly with the
user.
The above four parameters are depicted in the form of a diagram, as shown in
figure 3.8.
Figure 3.8 Interrelation among Juran's quality parameters
Source: Own compilation
Due to the central role occupied by the satisfaction of customer needs in defining
quality, Juran (1988 b:2.4) believes that quality is not a static term. He believes
that it evolves and changes as the customer's needs and requirements change
over time. This means that quality standards need to be continually reviewed,
revised and improved.
The entire cluster of activities through which fitness for use is achieved,
irrespective of where these activities are performed, are contained in Juran's
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Product Development
Marketing
Further Product Development
Customer
Operations
U Customers
quality spiral (Juran 1988 b:2.5) and is depicted in figure 3.9.
Figure 3.9 Juran's spiral of quality
Source: Juran 1988 b:2.5
The spiral shows the typical sequence of activities for putting a product or service
in the market. The first turn of the spiral of progress starts with the definition of
customer needs to enable proper product development. At the end of that turn the
experience of use creates new ideas which start a new turn of the spiral for further
improvement. The intermediate stages of the spiral will now be discussed for
clarification.
1 illiarket research
Market research for the quality parameter is needed
for the development of new products, and
for monitoring the performance of current products (Juran 1988 b:12.2).
The main purpose of this step is to identify user needs, to asses if they are
being met, and if not, to determine the cause. The information gathered
during this stage amounts to the identification of customer requirements,
and is used in the next step of the spiral : product development.
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Product deveDoprnent
Product development relates to the process of translating the needs of the
user (learned through market research), into a set of product design
requirements for manufacturing (Juran 1988 b:13.2). This activity is also
known as research and development, product engineering or design, and
its role is to develop a product which meets all the customer's
requirements. According to Juran (1988 b:13.3) there is increasing
evidence that many fitness-for-use problems can be traced to the design
stage of product development.
Supplier relations
The q-Ciality of items purchased for use in the production process is very
important as it will directly impact on the quality of the final product. Where
the quality of purchased materials is poor, either inspection costs or after
sales failure rates will be unacceptably high (Juran 1988 b:15.2).
The overall objective is the creation of a partnership with a supplier that
guarantees the quality of purchased goods to ensure that a minimum of
incoming inspection or corrective action is required.
Rflaroufacturiing pinning
Manufacturing planning refers to the accumulation of activities which place
a factory in a state of readiness to meet quality and processing standards
(Juran 1988 b:16.2). A major objective of these activities is the prevention
of defects. The process begins with the examination of the design concept
to identify alternative approaches to manufacture the product, and is
concluded when the production process is prepared and set-up for the
production personnel to commence production (Juran 1988 b:16.3).
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5. Production
Production is the activity of running the processes, machines and tools, and
of performing the associated mental and manual operations to produce final
products from basic raw materials and other components (Juran 1988
b:17.2).
Juran (1988 b:17.4-17.5) emphasises the importance of having all
decisions and actions related to product quality under the control of the
production workers themselves. However, the creation of such a state of
self-control requires that certain essential criteria must be met (Juran 1988
b:17.4-17.5). Employees must be provided with all the means to:
know and relate to the objective;
measure their performance;
regulate the process.
The three basic criteria for self-control make possible a separation of
defects into categories of controllability. If all three criteria for self-control
have been met, a defect or nonconformity is the responsibility of the
worker. A defect or nonconformance is considered management's
responsibility if one or more of the criteria for self-control have been
omitted.
The theory behind these categories is that only management can provide
the means for meeting the criteria for self-control. Hence, any failure to
meet these criteria is a failure of management, and the resulting defects
are, therefore, beyond the control of the workers.
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6. inspection and testing
By inspection and testing is understood the evaluation of quality of some
product characteristic in relation to a prescribed standard (Juran 1988
b:18.4). Inspection cannot ensure quality, it can only determine whether
or not products conform to specification, and where variation occurs, to
identify the cause. Juran (1988 b:18.109) considers inspection as part of
the preventative approach in the quality improvement process, rather than
the sole means to ensure quality. As the causes of defects are identified
and removed, through, amongst others inspection, inspection costs can be
reduced with a resulting positive effect on the cost of quality.
7 Marketing phase
This phase of the spiral is concerned with the process of persuading
customers to buy products for reasons related to product quality (Juran
1988 b:19.1), and forms part of the broader marketing activity which affects
all steps of the spiral.
8. Customer service
This section is concerned with post-production activities. These activities
may be classified into "pre-use" and "use" phases (Juran .1988 b:20.2).
After production and prior to customer use of the product, is defined as the
pre-use phase, which includes activities such as packing, shipping,
receiving and storage. The use phase includes activities such as
installation, checkout, operation and maintenance.
Juran (1988 b:20.18-20.34) recommends the establishment of a corrective
action system to identify and correct the actual cause of product failures,
either in the pre-use or use stage. The main steps of this system involves
first, information gathering through the use of field and in-company reports
(on failures and complaints), second, information processing (designed to
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identify the actual cause of the complaint or failure), and lastly, corrective
action focused on prevention of re-occurrence.
9. Administrative and support operations
According to Juran (1988 b:21.2), activities which only have an indirect
influence on quality, such as those carried out by administrative
departments, must be included in the quality improvement process. In
large organisations, these activities are very often departmentalised. As
a result, each department carries out an operating process, produces a
product, and supplies that product to other departments (their internal
customers) or the end user (external customers). The result is that each
department within an organisation will be both a client and a supplier.
A company-wide quality function arises from the fact that product quality is
the work of all departments (Juran 1988 b:2.4). Each department not only
has a responsibility to carry out its special function but also has the
responsibility for quality.
An important element of the quality spiral is that it is a process, indicating the
continuous nature of quality improvement, as opposed to the static nature of
quality control. Juran (1988 b:5.2) refers to the continual improvement of quality
in terms of a "breakthrough", as opposed to mere control.
Control to Juran's theory is the principle of prevention as opposed to inspection
(Juran 1988 b:Chapter 9). The mechanism whereby this is ensured is quality
assurance. Quality assurance is intended to provide protection against quality
problems through early warnings of trouble ahead. These early warnings take two
major forms (Juran 1988 a:264):
quality audits;
managerial reports.
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A quality audit refers to a review of performance. This review is conducted
independently by persons who bear no close responsibility for the performance
under review. A managerial report consist of periodic, structured summaries by
management on the status of quality in the various departments within the
organisation.
The trend to decentralise quality responsibility does not result in the redundancy
of the quality department. In the absence of some recognised organisation
mechanism for assuring coordination, it may be easy, for departments to
emphasise departmental results to the detriment of company results. The prime
responsibility of the quality department is to pass on the responsibility for certain
aspects of quality once it perceives that the line department is able to take charge
of this responsibility. It, therefore, has an important role to play as regards
developing new quality improvement techniques, handing these over to the line
departments, and then withdrawing to the role of providing a consulting service.
A vital element of this process is that all responsibility for operations rests with line
management, not staff management (Juran 1988 b:7.32).
In addition to the quality department, Juran (1988 a:250) recommends the
establishment of a company-wide quality committee. The main purpose of this
committee is to give the quality improvement process direction and guidance. The
roles of the committee are fivefold, namely:
to coordinate the establishment of quality goals in the organisation;
to coordinate the preparation of strategies to reach the goals;
to review actual progress against these goals;
to coordinate the administration of the reward system for goal achievement;
g, to create the infrastructure required to run the above system.
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A further element of TOM given . considerable attention by Juran (1988
b:Chapter 7) is the identification of quality responsibility for every aspect of the
organisation. Juran (1988 b:7.25-7.28) recommends the use of a responsibilities
matrix as a means to summarise quality responsibilities within the organisation.
The minimum information required in order to adhere to quality assurance systems
is to know who must do what. This information is provided by the responsibilities
matrix. This matrix will inform the individual at a glance what he/she is responsible
for doing and will guide him/her in locating supplementary information on how,
when and why.
As regarding the tools required for quality improvement, Juran (1988 b:23.1-24.40)
acknowledges the importance of statistical methods, particularly in process
improvement and process control. He stresses that statistical methods are not a
cure-all, and need to be regarded as part of an integrated approach to quality
improvement.
3.2.2.4.3 Summary
Three major concepts emerge from the work of Juran. The first is the quality
spiral, which indicates the TOM concept. The second is that of a management
breakthrough & new levels of quality management. The third is that of self-control,
based on the role of management in attaining the breakthrough.
The quality spiral conveys two messages. • The first is that quality is a total
management approach. There are specific steps which have to be executed in
striving to produce a quality product. The quality of output can only be as good
as the weakest link in this chain of steps. One could have the best quality of
design, but with a poor quality of manufacture, quality of the final product will be
poor.
The second message is that quality is a continual process. The organisation has
to move continuously through the spiral of progress to ensure fitness for use.
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According to Juran, the prime objective of TOM is the production of quality
products and services through the decentralisation of quality responsibility. The
successful decentralisation of quality responsibility relies on the workforce being
placed in a state of self-control. Only when employees are in a state of self-
control will management be able to hold them entirely responsible for the quality
of their output. The salient features of Juran's approach to TOM are depicted in
table 3.10.
Table 3.10 Salient characteristics of Juran's approach to TOM
CATEG , - ELEMENTS 0 CIJALOTY CUSPOINTS
A General Definition of quality Main emphasis Dominant factor Scope of application
Applicability-sector
Customer led People Fitness for purpose Comprehensive programme for product life span Manufacturing and services
B External Customer focus Market focus (environment) Vendor/buyer relationship
Integral to quality definition Not specific Multiple suppliers selected on quality
Objective is to obtain optimal quality Teamwork approach on breakthrough projects; annual programmes Emphasis on participation and teamwork Reference to; not intergral to approach Emphasis on recognition Eliminate inspection depart-ments
F Change Pace of change
Nature of change
Gradual Step by step, eg. break-through projects
Source: Own compilation
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3.2.3 Comparing the Gurus
The approach to TQM of various 20th century gurus was reviewed in the previous
sections. In this section, the similarity between their approaches will be
highlighted and summarised. While each of the gurus on quality has his own
distinctive approach, there is much common ground in what they say and propose.
These points are discussed below.
The importance of controlling the process and not the product.
The importance of not forgetting the human process. This is as vital, if
not more so, than the control of the technical process.
Top management is responsible for quality, and not the workforce. It is
management's responsibility to provide commitment, leadership, and the
appropriate support to technical and human processes. Thus, it is
imperative that management has a clear understanding of the process.
Management determines the climate and framework of operations within
the organisation. It is imperative that management fosters the partici-
pation of the workforce (and others such as vendors and buyers) in
quality improvement, and develops a quality culture by changing
perception of, and attitudes towards, quality.
The importance of education and training is emphasised in changing
employees' beliefs and attitudes and enhancing their competencies in
carrying out their duties.
The emphasis is on prevention of product defects, not inspection after
the event, and on the reduction of the costs of quality to improve
competitive-ness.
Quality improvement is emphasised, producing benefits over time,
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whether developed continuously or project by project. TOM is not a
programme but a process, and not an instant cure.
There is a broad agreement that all aspects of activities should be
looked at for quality improvement, as these all contribute towards
quality. Functional integration is considered as an important ingredient
of TQM.
9) Quality is a company-wide activity.
3.3 SURAM RY
In this chapter, a comprehensive overview of accredited quality management
gurus' - current and hystorical - approaches to TQM was conducted. A
comparison of these approaches concluded the chapter.
Chapter 4 defines the term Total Quality Management by means of a TOM model
which is used to discuss the requirements for implementation of a TOM process.
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ENT
CHAPTER 4
mgcoliggij
SYNOPSIS
UST OF FIGURES, GRAPHS ND TABLES
4.1 INTRODUCTION
4.2 A TOTAL QUALITY MANAGEMENT MODEL
4.2.1 Input
4.2.2 Process
4.2.3 Output
4.3 REQUIREMENTS FOR Titilfi
ENT
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4.3.1 Leadership for TOM 4-135
4.3.2 Customer focus 4-145
4.3.3 Continuous improvement 4-157
4.3.4 Employee involvement 4-174
4.3.4.1 Quality Circles 4-177
4.3.4.2 Breakthrough Teams 4-182
4.3.4.3 Control Teams 4-183
4.3.4.4 Steering Committee 4-184
4.4 SUMMARY 4-187
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CHAPTER 4
REQUMEMENTS
SYNOPSES
Total Quality Management is seen as an enabling philosophy, ie. creating the right environment and correcting attitudes to enable a good company to become a world class company. It is not a programme but a process of continuous improvement which rolls quality, productivity and cost reduction together to achieve quality products and services at the lowest cost.
The whole Total Quality Management action comes down to an enormous effort for total mobilisation in renewing the company's culture, eliminating all imperfections and continuously striving for improvement.
A customer focused organisational culture, based on the process of continuous improvement through the involvement and participation of all employees, provides the competitive advantage required for survival and growth of an organisation.
Successful organisations have some common indicators of success. These include, but are not limited to, the following:
increased productivity; increased profitability; increased market share; reduced costs and waste; empowered and enabled employees.
These indicators of success are also the outputs of the theoretical model of the Total Quality Management System described in this chapter. The parallel between these outputs and the success indicators implies that the practising of the Total Quality Management principles will be beneficial to the organisation.
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4pivyttAgni
CHAPTER 4
ENT EAR ENT
UST OF FIGURES, GRAPHS AND TABLES
Figure 4.1
Figure 4.2
Figure 4.3
Figure 4.4
Figure 4.5
Figure 4.6
Figure 4.7
Figure 4.8
Figure 4.9
Table 4.10
Table 4.11
Figure 4.12
Total Quality Management model
Quality management
An operational definition of quality for products
Customer satisfaction framework
Levels of customers' expectations
Work process model
Six step process improvement model
Deming's PDCA wheel
Continuous improvement: The only way out
Benefits of quality circles to management
Benefits of quality circles to members
Breakthrough improvement in performance
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CHAPTER 4
REQUIREN CAP
4.1 INTRODUCTION
After consideration of the theories advanced by Crosby (1979), Deming (1986),
Juran (1988) and Ishikawa (1985), it is evident that while each theory possesses
certain unique characteristics, a number of elements are common to most of the
theories, irrespective of their point of origin. The objective of this chapter is to
develop a framework for Total Quality Management which will serve as the basis
for defining the requirements for TQM implementation.
There is almost universal agreement that there are a number of areas within the
organisation which require alignment when determining the requirements for TQM
i) First, the chief executive must be intimately involved in developing the
desired culture. A CEO must not be deluded into thinking that a change
in culture can be delegated to trusted subordinates to develop and
implement. CEO's themselves are responsible for providing the vision
and direction for their organisations. Ultimately, the CEO must be the
key change agent. Top managers must be consistent in both words and
actions. The signals they send out determine how the rest of the
organisation will follow through on the intended change in culture.
The organisation of the future will be a learning organisation that strives
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for continual improvement and flexibility (Senge et a/. 1994: 12). The
vision and direction that come from the CEO will provide the key
integrative mechanism in a flatter, more decentralised organisational
structure. Therefore, customer-driven orientation must be embraced as
a way of life and as a basic business philosophy - not as a discreet set
of activities and techniques. Ultimately, business must be designed
around the goal of maximising customer satisfaction. If "six sigma" is a
reasonable goal for TQM in production processes (Gill 1990: 42-46),
the same concept can be applied to customer satisfaction (Fontenot,
Behara & Gresham 1994: 73-76).
Second, changing to a customer-driven orientation should be viewed as
a long-term evolutionary process. It takes years to implement TQM
successfully, and it will also take years to fully achieve a customer-
driven orientation. However, key target areas for improvement need to
be identified if customer orientation is to be successful. Whatever the
areas identified, subsequent expansion of customer focus efforts must
be based on successes, not failures. The initial efforts must be
"doable", leading to identifiable results, and must be aimed where
opportunities for success are easiest to achieve.
Third, developing a customer-driven orientation must involve all
organisational levels and areas, from receptionists to production
workers. When all levels are involved, the importance of customer-
driven focus will be unmistakable. Change efforts are executed by
employees who actually contribute to customer satisfaction. This means
moving beyond simple participative management. Real delegation must
occur so that employees have a stake in the company's long-term
success. An innovative culture that thrives on change and improvement,
and rewards all employees for their contributions must be established.
Fourth, developing a customer-driven orientation requires extensive
training and development of the workforce. Everyone must understand
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how his or her job contributes to customer satisfaction. Employees must
not only know their roles; they must also recognise that their jobs can
be changed to enhance customer satisfaction.
v) Finally, a customer-driven orientation must be evaluated, monitored, and
reinforced. This means conducting complaint analysis, or regularly
monitoring customer attitudes by using surveys. While these efforts are
a start, they must also be translated into performance evaluation,
compensation, and promotion systems. Customer retention rates and
customer profitability analysis must be calculated and rewarded.
Behavioral change must be rewarded at all organisational levels, either
intrinsically or extrinsically.
Customers tend to perceive the quality of products or services by
comparing the actual level experienced to their expectations. The
process of satisfying customers therefore begins by fully understanding
their expectations. This process can be referred to as listening to the
voice of the customer and requires learning what features and
characteristics customers want, the performance level they expect, the
importance they attach to each characteristic, and how satisfied they are
with the performance of the current level. Building an understanding of
customer satisfaction and the relative importance customers attach to
each quality characteristic is a complex and difficult task. Once
understood, customers' expectations must then be translated into
product and service specifications to ensure the production or providing
of the expected products or services.
4.3.3 Continuous improvement
According to Flott (1994: 50) process management is TOM in working clothes.
Process management is a continuous undertaking, which recognises that the work
being done is accomplished through a series of processes. Everything an
organisation does, from first contact with a potential customer until the product or
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service has fulfilled the purpose for which it was created, is part of a process.
The aim of process management is to increase the efficacy of every process. The
desired outcome is greater customer satisfaction and all the benefits that accrue
along with that accomplishment. By identifying potential problems, process
management helps to guarantee defect-free results.
A process can be defined as the sequential integration of people, materials,
methods, and machines in an environment to produce value-added outputs for
customers (Sherkenbach 1987 : 36). A process converts measurable inputs into
measurable outputs through an organised sequence of steps. Four groups of
people are involved in the operation and improvement process, as shown in figure
4.6.
Customers: the people (or person) for whom the output (product or
service) is being produced. Customers are the people who will use the
output directly or who will take it as an input into their own work process.
Work groups: the people (or person) who work in the process to
produce and deliver the desired output.
Supplier: The people (or person) who provide input to the work
process. The people in the process are in fact the customers of the
supplier.
wner: the person who is responsible for the operation of the process
and for its improvement.
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Figure 4.6 Work process model
Source: Adapted from Sherkenbach 1987:36
Pall (1987: 31-32) identifies six ingredients that are essential for quality process
management:
Ownership: Assign responsibility for the design, operation, and
improvement of the process.
Planning: Establish a structured and disciplined approach to
understand, define, and document all major components in the process
and their inter-relationships.
Control: Assure effectiveness: all outputs are predictable and
consistent with the customers' expectations.
Measurement: Map performance attributes to customers' requirements
and establish criteria for the accuracy, precision, and frequency of data
acquisition.
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improvement: Increase effectiveness of the process by permanently
embedding identified improvements.
Optimisation: Increase efficiency and productivity by permanently
embedding identified improvements.
These six ingredients are fundamental to the successful management of the
quality improvement process. These ingredients are needed for the work
processes that produce and deliver products and services to customers, for the
processes that clarify requirements and satisfaction along the customer-supplier
chain, and for the processes that support employees in their jobs.
Deming has stated repeatedly, "There is no such thing as instant pudding"
(Deming 1988 : 19-22). Continuous improvement of key business processes
cannot be expected to be an exception. The application of an improvement
process requires discipline and a long-term approach by top management.
By linking Sherkenbach's four groups of people involved in the improvement
process (Sherkenbach 1987 : 36) with Pall's six ingredients that are essential for
process management (Pall 1987: 31-32), it is now possible to propose a six step
process improvement model. This six step process improvement model introduces
a systematic approach for applying quality management to any type of process.
It can be applied to any operation: information systems, marketing, finance,
administration, research and development, engineering, service, or manufacturing.
It can be applied to any system: those that exchange information with the
customer, those used to produce and deliver products and services, and those
that create the work environment.
Universal application is possible because the approach helps build a fundamental
understanding of the business processes before attempting to improve them.
Continuous improvement requires knowing what these processes are, measuring
how well they are performing and understanding why they are performing the way
they are. This profound knowledge is built through application of the first four
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steps of the process. Application of this knowledge is fundamental in the
continuous improvement process and is the basis of steps five and six of the
process improVement model.
Each of the six steps (figure 4.7) is explained and described in a straightforward,
linear fashion for clarity. Actual application, however, will often be complicated by
the need to recycle back to earlier steps as new information is gained and earlier
hypothesis are found to be incomplete or incorrect.
Step 1: Define the problem in the context of the process
The process improvement model begins by clarifying which systems are involved,
so that efforts can focus on processes, not outputs. Specific activities within this
first step are:
1.1 Identify the output.
1.2 Identify the customers
1.3 Define the customers' requirements.
1.4 Identify the processes producing these outputs.
1.5 Identify the owner(s) of the processes.
When customers' needs and expectations are not well understood, special effort
must be made to define them clearly and objectively. This lack of understanding
is often encountered when output properties are difficult to measure, as is
commonly the case when the outputs are intangible.
The owners of the processes involved should also be identified in this first step.
This task is often taken for granted because of how clear ownership is in most
manufacturing operations. For example, in manufacturing, responsibility is usually
defined clearly and documented for daily operations, preventive maintenance, and
individual manufacturing blocks of process units. On the other hand, this clarity
it often lacking in service processes. Understanding who the owners are is an
essential step in assuming that appropriate resources are applied and that
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identified improvements can be authorised and acknowledged.
Step 2: Identify and document the process
This second step in process improvement demands that the process be described
in clear, understandable terms, which is usually accomplished with a picture or
model, not merely through written or verbal description.
The process flowchart is a commonly used tool for describing processes
(Schmenner 1981 : 18). Creating a flowchart assists in performing the following
four improvement activities:
2.1 Identify the participants in the process, either by name, by position, or
by work group.
2.2 Provide all participants in the process with a common understanding
both of all steps in the process and of their individual roles.
2.3 Identify inefficient, wasteful, and redundant steps.
2.4 Offer a framework for defining process measurements.
Step 3: Measure performance
In the absence of documented performance standards, remedial work is needed
to quantify how well (or poorly) the system is performing. Further, these measures
must be defined and evaluated in the context of customer expectations. This step
is of double importance in situations where neither output requirements nor
processes have been defined previously.
Performance can be measured at three levels: process, outputs and outcomes.
Process measures define activities, variables, and operations of the work process
itself. Output measures define specific features, values, and attributes of each
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product or service and can be examined from two sides. One side represents the
output characteristics desired by the customer (requirements), and the other side
represents output characteristics actually delivered by the process (capability).
The former is referred to as the voice of the customer and the latter as the voice
of the process. Outcome measures define the ultimate impact of the process and
are dependent on what the customer does with the product or service. Customer
satisfaction represents the key measure of outcome. Flott (1994: 51) proposes
four factors that determine the health and competitiveness of a process,
irrespective of whether it is a manufacturing, service or business process. These
four qualities of a good process are:
0 Effective: A process is considered effective if it meets the requirements
of the customer; in other words, if it does what the customer expects it
to do.
0
Efficient: A process is efficient if it produces what it is supposed to
produce at the lowest possible cost; that is, if it expends a minimum
amount of time and resources. A process' non-monetary cost, its effect
on morale, public relations, and other factors must also be considered.
0
Under control!: A process is under control if the various activities are
documented and well defined, and if data control points are established,
monitored regularly and met constantly.
0
Adaptable: A process is considered adaptable if it has built-in
mechanisms - such as measurements and reviews - that allow those
responsible for the process to determine its capability to meet all
customer requirements.
Step 4: Understand why
Lack of data increases the difficulty of understanding why a system is performing
the way it is. This problem is compounded when the outputs do not appear to be
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produced by a repetitive system, as is the case for long-term processes, such as
research, development, and engineering. The six step process improvement
model is designed to bridge this gap to assure identification of the specific factors
limiting the systems capability.
By defining the problems in the context of their process (Step 1), identifying all the
steps in the process (step 2), and measuring performance in objective terms
(step 3), the classic tools of statistical analysis and quality can be applied to
understand the root causes of the performance gap. Four tools stand out for
accomplishing this step: Pareto analysis, cause-and-effect analysis, histograms,
and control charts (Ishikawa 1986: 5-85).
Deming explains that experience alone teaches nothing and must be applied to
knowledge of fundamental principles in order for learning to take place (Deming
1986: 52-53). Steps 2 and 3 of the process improvement model were designed
to provide the base of fundamental principles. This is accomplished through
flowcharting, modelling and measuring. Step 4 offers methods to acquire the next
level of knowledge and to gain a profound understanding of the process.
Answering three basic questions can help build a fundamental understanding of
the process in order to take effective and efficient steps toward permanent
improvement.
4.1 Have the vital few been distinguished from the trivial many? Juran
believes that a fundamental law of nature dictates that 80 percent of the
problems are the result of 20 percent of the causes. One key to
improvement is to identify those crucial 20 percent and focus attention
on them. The pareto analysis is a method for categorising and
recategorising causes until the vital few are found (Burr 1990: 50).
4.2 Have the root causes been diagnosed? Ishikawa suggests that the first
signs of a problem are its symptoms, not its causes (Ishikawa 1982: 18-
29). Actions taken on symptoms cannot be permanently effective. It is
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necessary to understand and act on the underlying root causes. Cause-
and-effect diagrams, fishbone charts and Ishikawa diagrams are
synonyms for a basic tool that can be used to help differentiate among
symptoms, causes, and root causes (Ishikawa 1982: 18-29).
4.3 Are the sources of variation understood? Deming explains that all
variation is caused and that the causes can be classified (Deming 1986 :
309-370). Common causes are inherent within the system and yield
random variation within predictable boundaries. Special causes are
assignable to specific reasons or events and result in sporadic variation
that defies prediction.
Taking corrective action to control variation requires knowing its type,
since appropriate actions differ according to the type of variation.
Common causes can only be solved by addressing the underlying
system. On the other hand, special causes are addressed by
eliminating their specific, identifiable source. Control charts help to
distinguish between common and special causes of variation.
Figure 4.7 Six step process improvement model
DEFINE PROBLEM
2 IDENTIFY ANDPROCESS DOC UMENT
3 MEASURE PERFORMANCE
UNDERSTAND WHY
, DEVELOP AND TEST IDEAS
u9 6 1-10CEIVOilMJECITIONS
• AND EVALUATE
Source: Own compilation
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Step 5: Develop and test ideas
The first four steps built the foundation for understanding the critical dimensions
of the process. The assured knowing what the processes are, measuring how well
they are performing, and understanding why they are performing the way they are.
These steps led to identifying the underlying causes of the principal problem.
Developing ideas for improvement begins with Step 5.
Ideas for improvement must address the root causes of the problem. Step 5 is the
point at which development of new ideas and potential solutions should be
encouraged.
Step 6: Implement solutions and evaluate
The sixth step beings by planning and implementing the improvements identified
and verified in step 5. Step 6 continues to measure : and evaluate the
effectiveness of the improved process. Step 6 also serves to evaluate the process
itself and to acknowledge and celebrate the contributions of those who
participated in this increment of process improvement. It makes no difference
whether this was the work of a individual or, as is more likely, a team effort.
Reward the contributors for the results achieved as well as for their discipline in
applying the six step model.
Finally, return to step 1 to begin the next increment in the ongoing process of
continuous improvement. A continuous improvement methodology proposed by
Deming is called the Deming (or Shewart) Wheel (Deming 1986: 88; Shewart
1986: 45). This wheel, or cycle, consists of four elements that, when performed
in sequence, provide a process for continuous improvement. These elements are
plan, do, check and act, and are shown in figure 4.8.
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CONTINUOUS IMPROVEMENT
Figure 4.8 Deming's PDCA wheel
Source: Adapted from Deming 1986: 88
Saylor (1992: 163) explains the PDCA wheel, as applied by the United States
Navy Personnel Research and Development Centre, to improve the quality and
productivity of the Navy's logistics organisations. In this model, the following
actions are accomplished during the improvement cycle:
Plan
State the goal (mission).
Define the process through a flowchart.
Determine the desired outcomes.
Do
Identify potential causes of quality.
develop baseline for process outputs.
construct an as-is process flowchart.
perform cause-and-effect analysis.
Identify process measures.
Establish data collection procedures.
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what data will be collected.
how will the data be collected.
who will collect the data.
where will the data be collected.
when will the data be collected.
perform Pareto analysis.
. Check
Collect and analyze data
histograms.
scatter diagrams.
run charts.
control charts.
Determine types of process variation causes.
special causes. * common causes.
Act
Select causes to change.
Take action on special causes.
Develop changes for common causes.
Implement common cause changes on a trial basis.
Evaluate effects of changes.
Standardise and document process improvements.
Monitor process.
Continue improvement cycle.
In the quest for continuous improvement, Deming argues that three sets of guiding
ideas are critical (Deming 1993: 111). The first concerns constancy of purpose
for the enterprise as a whole. The second has to do with complete understanding
of the nature of variation. Lastly, there is a set of guiding ideas that concern
human motivation. All human beings, according to Deming, are born with "intrinsic
motivation", an inner drive to learn, to take pride in their work, to experiment, and
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to improve. These three ideas are linked together by the common need for
everybody in the organisation to understand the causes of variation. Due to the
importance of the need to understand variation, the two types of variation are
summarised as follows:
O
Common causes of variation on a production process are causes of
variation that are inherent to the manufacturing system, or the way that
system is managed. They arise out of the process, or out of the way the
process is organised and operated. Because they are part of the
system, they are the responsibility of those who control the system: the
managers, and specifically, the top level of management. Common
causes of variation can only be reduced or removed through action by
management.
O
Special (assignable) causes of variation are causes that are localised in
nature. They are not part of the overall system, and should be
considered as abnormalities. Often they will be specific to a certain
operator, a certain machine, or a certain batch of material. Special
causes are assignable causes of variation. Thus, they are exceptions
to the system and deserve exceptional treatment. Normally, the workers
or the local supervisors can take action to identify and remove a special
cause of variation and top management action is not required.
If continuous improvement is the goal, how is progress to be measured?
Wheeler and Chambers (1994 : 12-21) identify four possibilities that
apply to every production process. These four categories are useful
ways to summarise the status of a process.
THE IDEAL STATE
The first of these four possibilities is the ideal state. A process in this state is in
statistical control and is producing 100 percent confirming products. This
complete conformity to specifications implies that all of the product is suitable for
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its intended purpose. Being in statistical control means that the variation present
in the product stream is consistent over time. Such a process will continue to
produce nothing but good product hour after hour, day after day, week after week,
as long as it remains in control. Clearly this would be an ideal state for any
process.
A process gets to be in the ideal state by satisfying four conditions:
The process must be inherently stable over time.
The manufacturer must operate the process in a stable and consistent
manner. The operating conditions cannot be selected or changed
arbitrarily.
The process average must be set and maintained at the proper level.
The natural tolerance of the process must be less than the specified
tolerance for the product.
When a process satisfies those four conditions, the manufacturer can be confident
that nothing but conforming product is being shipped. Whenever one of these
conditions is not satisfied, the possibility of shipping non-conforming product
exists. The only way a manufacturer can know that these four conditions apply to
his process, and the only way that these conditions can be maintained day after
day, is by the use of process control charts.
Therefore, if a manufacturer has a process that is operating in the ideal state, and
wants it to continue to operate in this state, he will be using control charts to
become aware of problems before they are severe enough to result in non-
conforming product. Moreover, once a process is in the ideal state, the continued
use of control charts will facilitate continuing process improvement. This will lead
to ever more uniform product, which will yield lower costs and greater productivity.
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THE THRESHOLD STATE
The second category is the threshold state. A process in this state will be in
statistical control, but it will be producing some non-conforming product. As
before, the fact that the process is in statistical control means that the variation in
the product stream is consistent over time. When consistency is seen in a
process that is producing some non-conforming product, the producer can count
on producing the same amount of non-conforming product consistently until either
the process is changed or the specifications are lowered.
The traditional solution of 100 percent inspection is not satisfactory because it can
not be perfect. As long as some non-conforming product is produced, some will
be shipped. Screening through inspection only reduces the amount of non-
conforming product shipped. The real solution is to stop making non-conforming
product. To do this with a process that is in the threshold state, the producer will
have to modify the process. If the non-conformity occurs because the natural
variation in the process exceeds the specified tolerance, the producer has to
either change the specifidations or change the process variation. Specifications
may only be changed with customer agreement. Most customers are reluctant to
agree to such a change unless they can be convinced that the producer does
indeed have a stable and consistent process. Once again, control charts are the
key to any success in getting the specifications relaxed.
If the producer decides to try to reduce the process variation, some of the common
causes of variation from the process will have to be removed. This means that the
process itself will have to be modified. Moreover, different modifications will have
different effects and the producer will have to evaluate each effect.
THE RINK OF CHAOS
The third state is the brink of chaos. Processes in this state are out of statistical
Control even though they are producing 100 percent conforming product.
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Many people find this combination hard to imagine because they are accustomed
to thinking that any process which produces 100 percent conforming product is in
control. In one sense they are right. As long as the process is producing 100
percent conforming product there will be no problem with rejected shipments. But
this happy circumstance is not likely to last indefinitely for the fact that the process
is out of control means that the pattern of variation in the product stream is
inconsistent over time. The process is unstable, and this instability will continually
change the product characteristics.
The problem with any process that is out of control is that it is subject to the effects
of assignable causes. These effects can best be thought of as changes in either
the process average or the process dispersion that apparently occur at random
intervals. So, while the conformity to specifications may bull the producer into
thinking his process is predictable, the assignable causes will continue to change
the process until it will eventually produce some non-conforming product. The
assignable causes "control" what the process will produce by determining when
the process average or dispersion will change.
THE ST TE OF CHAOS
The state of chaos exists when a process is out of control and is producing some
non-conforming product. The lack of control means that the producer is
confronted with a changing level of non-conformity in the product stream. Efforts
to correct this problem are ultimately frustrated by the random changes in the
process, which result from the presence of the assignable causes. When a
modification is made to the process the effect will be short lived because the
assignable causes continue to change the process.
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IDEAL STATE - PROCESS IN CONTROL
100% CONFORMING PRODUCT - CONTROL CHARTS
MAINTAIN PROCESS IN CONTROL GIVE TIMELY WARNING OF ANY TROUBLES
THRESHOLD STATE - PROCESS IN CONTROL - SOME NONCONFORMING PRODUCT
MUST EITHER CHANGE PROCESS OR CHANGE SPECIFICATIONS
- SORTING IS ONLY A TEMPORARY FIX CONTROL CHARTS
MAINTAIN PROCESS IN CONTROL EVALUATE EFFORTS AT IMPROVEMENT
BRINK OF CHAOS PROCESS OUT OF CONTROL
- 100% CONFORMING PRODUCT ALL MAY SEEM OKAY, BUT
- SPECIAL CAUSES DETERMINE WHAT IS PRODUCED BY THE PROCESS! QUALITY AND CONFORMANCE CAN CHANGE AT RANDOM LEADING TO CHAOS
CHAOS - PROCESS OUT OF CONTROL
100% NONCONFORMING PRODUCT - SPECIAL CAUSES STILL DOMINATE
RANDOM FLUCTUATIONS DUE TO SPECIAL CAUSES WILL EVENTUALLY FRUSTRATE ANY EFFORTS AT PROCESS IMPROVEMENT
- THE ONLY WAY OUT OF CHAOS IS TO FIRST ELIMINATE THE SPECIAL CAUSES
Figure 4.9 Continuous improvement: The only way out
Source: Wheeler & Chambers 1994: 21
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The only way to make any progress in moving a process out of either the state of
chaos or the brink of chaos is to first identify and then eliminate all assignable
causes.
All processes belong to one of these four states. Processes, however, do not
always remain in one state. It is possible for a process to move from one state to
another. In fact, there is an universal force acting on every process that will cause
it to move in a downward direction of performance. That force is entropy. It
continually acts upon all processes to cause deterioration and decay, wear and
tear, breakdowns and failures.
Entropy is relentless. Every process will naturally and inevitably migrate toward
the state of chaos. The only way this migration can be overcome is by continually
repairing the effects of entropy. A dual problem confronts every manufacturer.
The manufacturer must be able to identify both the effects of entropy and the
presence of assignable causes of variation. While entropy forces a process
toward the state of chaos, the presence of assignable causes creates a barrier to
process improvement, as shown in figure 4.9.
TQM achieves continuous quality improvement through prevention and the
systematic improvement of key processes. Systematic process improvement
relies on building a fundamental understanding of customers' requirements,
process capability, and the causes of the gaps between them through a thorough
understanding of the causes of variation.
4.3.4 Employee involvement
One of the main responsibilities of top management is the creation of an
environment which will be conducive to the development and survival of
participative forums for the continuous improvement of quality (Gregerman 1979 :
160). This view is supported by Garvin (1983: 63); Hagan (1984: 22); Ishikawa
(1985: 5-11) and McMillan (1980: 26). According to Oakland (1989: 20-26)
TQM, the new way of management, is the third revolutionary wave after the
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industrial and computing revolutions. Oakland (1989: 26) states that:
"TQM is concerned with moving the focus of control from outside the individual to within; the objective being to make everyone accountable for their own performance, and to get them committed to attaining quality in a highly motivated fashion."
Organisations must provide effective responses to the increasing quality
expectations for goods and services, changing demographics of the workforce,
competition, and dramatic shifts in the national and international market places
(Carnevale 1991 : 15-38). Employee involvement is a vital component of any
effort to develop organisations as pro-active, change responsive systems because
innovation is directly tied to the use of effective communication through employee
14-45; Townsend 1986 : 44-45). There are many types and forms of quality
improvement teams, the more common being quality circles, breakthrough teams
and control teams. Due to the fact that most participative teams are based on
similar principles, these will only be addressed in the discussion on quality circles.
The coverage given to the other forms of participative teams will be limited to the
extent in which they differ from the other teams.
4.3.4.1 Quality circles
Barnard (1993: 8) defines quality circles as:
"... small groups of workers, usually between three and twelve, who perform similar work and meet regularly for about an hour a week. The meeting is chaired by a supervisor or even a self-elected leader, to identify communal problems that they themselves can solve; to analyze the causes of problems and to make motivated proposals to management for their solution."
McGraw and Dunford (1987: 151) define quality circles as :
"... voluntary groups of workers who meet regularly in paid time to identify, analyze and make recommendations to management on problems in their immediate workplace ..."
Baird (1982 : 25) regards a quality circle as:
"... an organizational tool which is used to increase employee participation in the running of the organization."
Although numerous writers have advanced different definitions of quality circles,
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their definitions have many similarities. This discussion on quality circles focuses
on the application of quality circles for employee involvement in the quality
improvement process.
Quality circles may be formed anywhere in an organisation where people work
together and experience similar problems (Dale 1984a : 56). For this reason,
members of quality circles are normally from the same work area (Barnard 1993 :
9; Daniel & Huss 1987: 9) and the same hierarchical level (McMillan 1982: 35).
Membership of quality circles is usually voluntary and no pressure is exerted on
The reason for this high level involvement is that one of the prime responsibilities
of the steering committee members is to represent and be able to commit their
departments to action (Crosby 1984: 105-107).
Other responsibilities of the members of the steering committee include (Crosby
1984: 106):
to lay out the quality improvement programme;
to cause the decisions of the committee to be executed in their
department; 0
to contribute creatively to the implementation of the improvement
activities.
The overall steering committee serves as (Klein 1981: 19; Ishikawa 1985: 113-
119):
0 a forum for consideration of operational improvements which are likely
to affect more than one department, and which may exceed a certain
sum of money to implement;
cr a court of appeal for ideas or suggestions not accepted by the area
management;
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. a forum whereby management can raise improvement issues which it
wishes to communicate to all employees.
More specifically, the major functions of the steering committee are to (Juran
1988b: 22.7-22.8):
0
formulate the quality policy; 0 estimate the major dimensions, eg. cost of quality, return on investments
from prior improvements, etc;
establish a project system, choose breakthrough projects and assign
teams to them;
identify needs for training; 0
plan the training; 0
establish support for the quality improvement teams; 0 provide co-ordination of the quality improvement process; 0 revise merit rating for managers to reflect quality of operations and
improvement in quality; 0
design the quality recognition programme.
According to Lawler (1994 : 70) the most important overall focus of employee
involvement concerns locating decisions at the lowest level in the organisation.
This approach consistently advocates a bottom-up approach to management.
Jobs or work at the lowest level are thought of as designed best when individuals
or teams do a whole and complete part of an organisation's work process. In
addition, it is argued that the individuals or teams should be given the power,
information and knowledge they need to work autonomously or independently of
management control. The job of management is seen as one of preparing the
individuals or teams to function in an autonomous manner. Management is an
enabler, culture setter, and supporter rather than a controller or director or
employee action.
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4.4 SUM RY
The TQM system consists of an input, a process and an output, and utilises the
feedback communication, which originates at the output, to re-energise the system
into perpetual, ever improving motion.
The input that activates the process consists of a change in the organisation's
culture. The need for such a change results from feedback regarding productivity,
profitability, customer satisfaction, costs and market share. New objectives and
key success factors are identified and the change process is led by a visibly
committed chief executive and his top management team.
The three main elements of the process are inter-active and consist of:
Customer focus: customer is defined as being an internal or external
user/buyer of any product/service provided by the organisation, and also
as the owner or shareholder of the company who is directly affected by
the success (or failure) of the organisation.
Continuous improvement the continuous improvement of productivity,
knowledge, processes, etc. are essential in the advent of competing in
the global market.
Employee involvement the active involvement and participation of all
employees, in a multi-functional capacity, in all improvement actions are
considered to be an essential element for the achievement of continuous
improvement.
The outputs of the process is the measure of performance of the organisation and
includes, but is not limited to the following (Zairi et al. 1994: 40):
increased productivity;
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increased profitability;
increased customer satisfaction;
reduced waste and costs;
empowered and enabled employees;
increased market share.
In the next chapter, the implementation of a Total Quality Management process
is described.
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Sc
A
CHAPTER 5
0
NAG EMI EN
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5-191
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5-192
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5-203
5-206
5-212
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5-240
5-250
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5-264
SYNOPSOS
LOST OF FIGURES, GRAPHS ND T IBLES
5.1 ONTF ODUCTION
5.2 C ITOC L F
5.2.1 Management behaviour
5.2.2 Policy management
5.2.3 Organisation for TQM
5.2.4 Employee involvement
5.2.5 Communication for TQM
5.2.6 Training and education
5.2.7 Quality technologies
5.2.8 Process management systems
5.3 CONCLUSOON
5.4 SUMMARY
r2A, CIO S FOR T ililliPLEMENT TOON
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SYNOPSIS
There is no one correct way to implement TQM just as there is no one way to run an organisation. However, there are accepted practices that have been proven to work, and incorrect ways of doing things that can lead to trouble. Between these two extremes lies the gray area that also must be used. Such will be the case of any TQM implementation process.
Reasons abound why there are so many variables in the TQM process. First, TQM fits all organisations from giant industries to small education systems. The needs vary greatly with the type and size of the organisation. The framework and ultimate goals will remain the same, but the training format, the quality manual, and so forth may be different.
The second, major reason TQM processes may vary is because TQM's main ingredient is employee involvement. People are different. The needs of people on an assembly line and in an accounting office are different. The work they do, their education backgrounds and their customers are different.
A third reason each TQM implementation effort varies is because of the organisation's current status. Some organisations have a long history of quality performance with a significant training programme. Others are just embarking on the quality journey, and may not have a training programme at all.
Regardless of where the organisation is in its struggle for quality, the basic concepts are identical. The base of the process is employee involvement; the focus is on the customer, both internal and external; and certain quality tools and technologies are required to implement and maintain the TQM process.
TQM is a long term transformation process evolutionary in character. This mandates change throughout the organisation. Different planning requirements, new systems and procedures, different leadership and management styles, new work habits, and new employee relations skills will all be part of the change required.
The TQM implementation process requires patience. It is a long-term process that takes time. It also requires continuous change. These changes are best implemented in small steps. Organisational leadership must show evidence of change before change will be accepted by other members of the organisation.
TQM builds on the strengths of the organisation and creates plans to overcome weaknesses or quality-deficient areas. This requires organisation assessments based on a well documented quality management system.
TQM implementation is not a temporary change in how things are done in the organisation. There is no agreed time frame to know when the implementation process is over and when one can begin the normal maintenance of the TQM process. It depends on the organisation, and the effectiveness of the design and action plan. Under most circumstances, a well executed innovation approach for TQM implementation should be providing measurable results within one year to eighteen months.
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CHAPTE FT 5
PILE
ERENT
LOST OF FOGURES, GRAPHS AND TA LES
Figure 5.1 Eight critical factors for TQM implementation 5-195
Table 5.2 Leadership styles and team maturity 5-198
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NG ENVORONM ENT
CHAPTER 5
GEM
5.1 DNTRODLOCTBON
The level of awareness of Total Quality Management has increased considerably
over the last few years. There is widespread consensus that TQM is a way of
managing organisations to improve their overall effectiveness. There is less
agreement as to what are the key elements of TQM and what are the critical
factors that influence the TQM implementation process. Organisations differ in
their approach to TQM. Some focus on specific areas such as quality
management systems or statistical process control, whereas others take a holistic
approach and attempt to implement TQM covering all the key areas.
This chapter examines the TQM implementation process and identifies the critical
factors that determine the success of this process.
5.2 CRilTilCAL FACTORS FOR TOM OitfiPLEMENT TOON
An extensive literature survey was carried out to identify the critical factors
necessary for the successful implementation of TQM. The writings of the quality
& Parker 1989). The organisations reviewed as the case studies were clearly
influenced by the ideas of Crosby, Deming, Feigenbaum, Ishikawa and Juran.
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From these writings and the case studies, it is possible to identify eight critical
factors in the TQM implementation process that are common to successful TQM
implementation.
1 Management behaviour: Clear leadership and vision is required and
senior management must demonstrate a clear commitment to TQM and
be actively involved in the TQM process. Management should set an
example by managing quality as a key strategic issue and supporting
continuous improvement.
Policy management: Policy management is a system in which top
management establishes a corporate vision of quality and a results
oriented company policy.
Organisation for TQM: TQM requires an organisational structure which
demands and harnesses the full potential of the workforce. A team
structure provides the means of involvement and the power for quality
improvement. The hierarchical structure with a facilitation role provides
a clean line of authority for setting goals and reviewing progress.
Employee involvement: Involvement in the TQM process is a key
determinant of a successful programme. Until everyone is involved in the
process of quality improvement, there is a major cost of lost opportunity
being carried by the organisation.
Communication for TQM: Communication provides the means of raising
quality awareness and involvement and reinforcing the message. It is
also critical as a means of publicising achievements and recognising
contributions to quality improvements.
Training and education: Training and education should cover all
employees as part of an ongoing process, with the scope and depth
tailored to suit each group's needs.
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7 Quality technologies: Quality technologies, such as measurement, quality
costing and benchmarking provide the techniques to identify opportunities
and solve problems. They enable continuous improvements and
reductions in variation to be achieved.
8. Process management and systems: A key part of any TQM strategy is the
management of processes. A documented quality system, as part of the
total quality strategy, contributes to this by managing the organisation's
processes in a consistent manner.
The eight critical factors (Figure 5.1) identified above can be compared with two
other assessments of the critical factors of successful TQM implementation.
Saraph et al. (1989: 810-829) have attempted to determine the important factors
for quality management using a questionnaire technique and factor analysis. The
following eight critical factors were identified:
0
The role of management leadership and quality policy; 0
The role of the quality department; 0
Training of employees; 0
Product/service design; 0
Supplier quality management; 0
Process management; 0
Quality data recording; 0
Employee relations.
The Malcolm Baldridge National Quality Award (1995) identifies a similar list of
critical factors. As part of the award procedures, examiners assess the
performance of the organisation against seven criteria:
Leadership;
Information and analysis;
Strategic quality planning;
Human resource development and management;
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Management of process quality;
Quality and operational results;
Customer focus and satisfaction.
The similarity of these three sets of critical factors for TQM is evident. There are,
however, a few major differences. Quality results are a measure of the success
of the TQM process and not a critical implementation factor. Customer
satisfaction is an implicit goal of the TQM process. Similarly, product/service
design, identified by Saraph et al. is implicitly accepted by all organisations on the
TQM route.
Figure 5.1 Eight critical factors for TQM implementation
Source: Own compilation
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5.2.1 Management behaviour
Top management must play an active role in implementing the systems approach
to Total Quality Management. They must discourage the work force from cutting
corners when it comes to the quality of what they do on a daily basis. The idea
of producing products quicker and cheaper should not supersede the idea of
making them better. While producing products quicker and cheaper in a major
determinant of short term competitive edge, better products and services are
invariably the determinant for long term survival. When the systems view is
implemented effectively, faster and cheaper production cycles can very well exist
with better and more profitable products.
Pulat (1994:44) argues that strong management leadership is the most important
element of the TQM implementation process. Strong management leadership is
however, not only required of the top person in an organisation, but also of all
direct reports of that person. As core members of the corporate team, they must
regularly meet with the customers and the suppliers of the organisation. Their
personal involvement and visibility in developing and maintaining an environment
that is conducive to quality excellence is needed for TQM to succeed. Lower level
leaders may help in this process through scheduled and unscheduled talks and
active engagement in goal setting, planning and performance reviews.
In the current industrial and financial environment the implementation of the TQM
process is one of the most complex projects that an organisation can undertake,
because of the need for all employees, including top management, to accept the
cultural change. It is well accepted that changing things is much easier than
changing people; nevertheless, the management structure has to take the visible
leadership from the top, involving everybody in the organisation in achieving good
quality. It is also advisable for top management to concentrate on the approach
of effective problem-solving at the early stages of a TQM process in order to
understand the organisation's strengths and weaknesses (Badiru 1990:36). In
many ways the problem-solving approach is the easiest and cultural change is by
far the most difficult aspect of the TQM process.
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Often during the problem-solving analysis stage it is usual to discover that many
of the problems which have affected company operations over a long period are
not specific to the point of emergence, but in fact have originated from basic
company-wide difficulties. As a result, the major problem-solving resource has to
be redirected at the basic problem area of the organisation's activity.
Furthermore, it can be obvious that many of the problems experienced can be
traced through the management structure of the organisation to board-level
activities (Kanji & Asher 1993:103). In general, the TOM process helps to prevent
problems occurring in the organisation and therefore the problem-solving phase
provides a beneficial insight into the TQM process.
A problem in larger organisations is that top management cannot always get to
everybody. Things get passed down from level to level and can be misunderstood
(Vasilash 1989:51). TQM is always led from the top of any organisation, and it is
therefore important to avoid a situation where it simply stays at the top. It should
be each individual leader's responsibility to propagate TQM within his/her
jurisdiction, and this must be achieved satisfactorily. If it is not achieved, there is
a risk of the process degenerating into yet another "flavour of the month".
The success of an organisation often depends on the top managers' single-
minded approach to dealing with company problems. Obviously, for some
organisations TOM means a major change in management practice, and it is
invariably difficult to implement over a short period. However, to make a
significant change in management practice it is necessary to educate managers
in their understanding and approach to TQM. Once they have mastered the
principle and practise of TOM, they can demonstrate their total commitment and
take the lead in the TOM implementation process.
According to Robson (1989:71) and Hardes (1992:46-47), demonstrations of
commitment from the top management are essential, but they are not altogether
enough. Certainly the whole of the management training and development
process in the organisation will need to be reviewed, and probably redesigned
around the principles and practices of TOM. The prevailing management style in
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TEAM TU RIMY APPROPRIATE CHARACTEROSTOCS 46)
LEADERSHIP- STYL lEAIDERSHIPiiSTYLE
Unable and unwilling Telling High task, low relationship
Unable but willing Selling High task, high relationship
Able but unwilling Participating Low task, high relationship
Able and willing Delegating Low task, low relationship
many organisations is still, at best, consultative and is often still autocratic
(Perigord 1990:xi-xiii). TQM calls for the progressive development of truly
participative and delegative management styles, in line with the increase in
personal responsibility for meeting the agreed to requirements of customers now
and in the future.
Literature on TQM seldom addresses issues of organisational change
management or situational leadership. Conventionally, TQM processes start with
the assumption that employees will participate and take on extra responsibilities,
if the appropriate environment and stimuli are provided. This simplistic
assumption fails to recognise that teams vary in maturity and need to be
approached differently. Hersey & Blanchard (1982:149-155) propose four basic
team groups, and suggest different styles of leadership for each group (Table 5.2).
Also refer Chapter 2.4.3 for more detailed discussion on situational leadership.
Table 5.2 Leadership styles and team maturity
Source: Adapted from Hersey & Blanchard 1982:149-155
This model has implications for the degree of success that an organisation will
experience in TQM implementation. According to the model, leaders need to
adapt their leadership style to suit the maturity of the team. A relationship-
orientated leadership style would not be effective in managing a team of unwilling
and incapable employees, who need to be directed in the initial stages.
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It is imperative to ensure that quality is given the correct status within the
organisation, that the main board of directors see quality as an important and
integral aspect of the company mission statement; that forward organisation
strategies embrace quality objectives; that quality, in fact, becomes the only way
of life within the organisation (Kanji & Asher 1993:108-109).
The required management style must be one which embraces the following seven
attributes (Kanji & Asher 1993:109).
hands on, value driven;
where values are set by the highest management level;
where management show that they mean what they say;
where management clearly state beliefs and values;
where management have an obsession with and feeling for product and
service quality;
where management do not ever walk by poor quality and ignore it;
where management live by a set of values.
The whole organisation must be prepared to receive this important management
message before the subsequent stages of the correct quality system and process
management can realise the benefits which can be attributable to them. The
constancy of purpose to achieve quality must not only be exhibited by the main
board of directors. It is essential that the same constancy of purpose flows down
to all those in management roles.
Payne (1991:28) has proposed that there are two key processes in the
management of a TOM culture. These are:
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O
leading; O communicating.
For leaders to influence the behaviour of others they must have clear beliefs and
values of their own. Thus an important aspect of leadership in the creation or
adaptation of a culture is the communication of a strongly-held vision and
modelling of values and behaviour espoused in the vision. Following this initial
phase of cultural development, the leader's role is more concerned with identifying
and setting goals consistently with the vision and modelling how these goals are
to be achieved.
The management of a TQM culture can be viewed as an attempt by management
to control how employees feel as well as how they behave in the workplace. It can
be seen as a form of emotional discipline. However, as Van Maanen & Kunda
(1989:43-103) observe, although managers may define what is given, the
managed define what is taken. Thus, key aspects of TQM, such as recognising
the importance of the customer, must be successfully communicated by senior
managers in their daily interaction and communication with employees.
Payne (1991:26) believes that a programme aimed at improving customer
satisfaction and total quality may well succeed in changing attitudes and
behaviour. For organisations adopting TQM it is important to understand that the
term "customer" refers to the internal as well as external environment.
Changes in the external environment, while impacting on the internal culture of an
organisation, may be dampened owing to the stability of the organisation's culture.
Thus, where rapid change occurs in the external environment, the requisite
change within the enterprise may not be forthcoming. If service to customers is
important to an organisation, beliefs about the rewards and costs associated with
providing customer service need to be addressed. In addition, employee
behaviour needs to be addressed by a change in work practices and the technical
system used to deliver service to customers. This cultural change needs to be
engineered, given strong leadership and managed carefully (Williams, Dobson &
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Walters 1989:39).
While TQM promotes the notion of internal and external customers and the value
of employees as a resource, many organisations adopting TQM appear to have
some difficulty in translating this to employee equity. Employees seek equity for
their involvement in and commitment to a TQM process in a similar way to external
customers expecting equity in the exchange of money for products and services.
While some progress has been made at a supervisory level and TOM facilitation
has been recognised as a valid role for supervisors, with shopfloor employees as
internal customers, the same cannot be claimed for mid-level managers. Thus for
many TOM processes, incongruence between espoused values and values in
operation is a problem. In particular, modification to the reward system, to include
recognition and praise when appropriate, seems to be a major issue for
employees.
Employee commitment to the objectives of the organisation and employee
satisfaction with the TOM approach are considered essential to the successful
implementation of TOM. Therefore, the requisite climate for a top management
led culture change is necessary before implementing a full-scale TOM process.
The concept of corporate culture appeared during the late 1970's. It was a
response to a fundamental concern for companies: how to mobilise all personnel,
and, in particular, create an organisational framework based on an unique
"identity" to which each person could relate. In other words, construct an ideal
image with which everyone could easily identify, and then mobilise the entire
company on the basis of new values.
Every company, and every geographic unit within the same company, has a
culture of its own - a set of values, beliefs, myths, symbols, rituals and images that
are described by employees in their own unique terminology. The company's
past, its habitual behaviour, its personnel policy, and often its product, each exert
an influence. Likewise, logos, the aesthetic characteristics of the product, its
"nobility", the decor, advertising messages, the speeches of top managers,
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internal memoranda, booklets, introductory brochures, and annual reports are all
symbols that create an "atmosphere", a "tone". The term culture is considered to
mean the governing processes, the process for relationships and interactions, and
the other transactions between the members of a particular organisation.
Corporate culture can be defined as being a coherent set of attitudes common to
all fulltime employees within a working environment. It is therefore the sum of all
the constants that are accepted by everyone. These constants may be values,
beliefs, or rituals.
Corporate culture can be studied in a manner that includes the following steps:
base the study on the experience of fulltime employees;
eliminate the influence of external constraints;
take into account the history of the company;
convey the reality rather than intentions or desires;
obtain top management's encouragement;
obtain acceptance by employees.
The purpose of the study may be to select avenues of communication that are
consistent with overall policy and respond to expectations of personnel.
However, one must bear in mind that, in an organisational entity and living system
as complex as a company, a process for improvements must be set in place. A
new logo, new decor in offices or factories, a new aesthetic design for products,
an internal publicity campaign - each of these occurrences demonstrates to
employees that top management intends to change and develop the company.
However if there is no alternation in behaviour - particularly in management style -
apart from developing new symbols, the operational reality of work life quickly
becomes inconsistent with the image desired by top management. Even more
seriously, employees feel deceived and consider this "cultural" initiative an
extravagance on the part of top management, which simply wishes to improve its
image with the general public, or be seen to be the bandwagon of change towards
TQM.
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The change in culture required for successful TQM implementation, can only come
by example and through action by top management and managerial staff.
5.2.2 Policy management
Policy management is a system in which top management establishes a corporate
vision of quality and a results-orientated company policy. The vision and policy
are then translated into specific goals, and those goals are disseminated
horizontally and vertically throughout the organisation for further appropriate
modification and eventually full acceptance. All the organisation's resources are
then made available to achieve those goals.
Policy management translates top management's vision into process-oriented,
manageable, and monitorable approaches. There are nine steps in the policy
management system.
1 Determine policy and direction
To determine the organisation's policy and direction, top management has to
consider the company's needs, problems, and prevailing business environment.
The identified needs of the organisation may be to increase sales, increase
profits, and provide quality products or services to be viewed favourably by
customers and society. External customer needs may be on time delivery of
products that perform to their expectations at a reasonable price. Internal
customers may experience the need to be satisfied with their jobs, enhanced self-
esteem and a feeling of belonging in the organisation.
The business environment issues may be determined to be a growing number of
competitors, technological improvements in the industry, adaptability to new
materials, and export opportunities available by ISO 9002 accreditation.
2. Select objectives and fix targets
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Bearing in mind the company's needs, resources, and technical constraints, top
management has to identify the objectives of the organisation. The objectives may
include:
meeting the needs and expectations of customers;
developing and implementing a quality management system;
continuous improvement;
managing quality effectively and efficiently;
sharing and gaining of knowledge.
Performance indexes have to be developed for quantifying the progress in
achieving each objective. Using these indexes, top management will be able to
compare monthly and yearly achievements against goals set under company
policy and direction.
Develop and select items
Since objectives can be met using many different means, top management has to
determine which means to use. In this process, each objective can be developed
into several implementation items (measures). Since it is often impossible to
implement all of these items, it is necessary to evaluate the importance of all the
items and to select a manageable number for implementation.
Deploy organisation's objectives
Departmental managers have to discuss the company policy with their staff
members and with all the employees in each department. During this process, the
policy is made more sound and awareness of it will grow, which will help to
achieve a higher acceptance rate. Departmental objectives and means have to
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be developed in relation to the organisation's objectives.
Schedule items
Department wide lists of implementation items are to be prepared and the steps
needed to achieve these objectives have to be developed. The time needed to
perform the tasks in each step has to be determined and used to compile a
schedule for timely completion of selected items.
Plan monthly activities
Since it is difficult to set up a precise, detailed plan for an entire year, the selected
items can initially be scheduled on a monthly basis. Where necessary, activities
can be scheduled on a weekly or daily basis to help reduce the gap between plan
and results.
7 Conduct monthly evaluations
At this point, the organisation proceeds from planning to execution and control.
To achieve a high success rate in policy implementation, progress in implementing
the plan has to be evaluated at regular intervals to compare current status with the
interim target. These evaluations, called the "forward-looking, action-oriented
evaluations", are performed to determine the level of achievement and the next
steps to take.
8. Conduct top management reviews
Reviews are conducted at two levels: the departmental level and the
organisational level. During these reviews performance of each department is
assessed and reports are prepared and reviewed in departmental meetings.
Measures are then developed for those areas in which the targets were not met.
This top management review may cover:
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how extensive the gap is between the plan and the results;
what activities need to be implemented in the next month, and how to
implement them;
revisions in policies and implementation items necessitated by changing
market conditions.
9. Conduct a year-end evaluation
At the end of the year, a list of accomplishments, unfinished tasks and outstanding
issues are prepared. The reasons for gaps between the plan and results have to
be identified. The year's experience can also be used to improve the quality of the
policy management system itself.
A well designed policy management system will assist top management to focus
and direct the management behaviours required for the TQM process.
5.2.3
rganisation for TC)illi
To successfully implement TQM, the existing organisational hierarchy must be
transformed into the team that will make TQM a reality.
Assess need for consultant
The first step is to address a widely debated topic in the TQM arena: to hire, or
not to hire, a consultant. The answer to this question depends on a number of
factors including an organisation's size, intrinsic talent, culture and tempo, to
name a few.
Larger organisations frequently hire consultants to design and debug a process
before a major "roll-out", due to basic economics. If it takes one to two years to
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deploy a major new initiative throughout an organisation, it is important to "get it
right the first time". Changes in direction and focus confuse management and the
workforce, and arm personnel with sufficient ammunition to forestall the program.
If the organisation has a cadre of internal consultants and trainers who feel
comfortable at the front of a classroom, it can save a lot of money. The challenge
for these internal people is to create the focus and discipline to proceed on a
given course. A consultant can accomplish this by charging exorbitant rates!
When word gets around that "the consultant" will be on site on the first of each
month, people within the organisation scurry to meet these milestones. With
exceptions, it is very difficult for an insider within an organisation to create this
discipline. The exceptional cases eluded to stem from an organisation's culture.
If the prevailing attitude is one of get the job done or we can do it, and top
management are used to creating a certain tempo and focussing on other major
corporate initiatives, they will be able to implement TQM - assuming the correct
skills base is brought to bear.
Consultants are specialists. The benefits from the application of their expertise
to a specific situation . usually exceed the cost. Their credibility and direct hands-
on experience provide a faster and smoother transition toward TOM. Experienced
consultants have encountered and overcome the barriers and pitfalls of
implementation; they possess detailed knowledge to minimise problems. For
these reasons corporations routinely hire consultants.
Until a few years ago, many organisations sought consultants to provide extensive
introductory training on TQM. This is no longer the case. Today most
organisations do extensive preliminary research on their own. Furthermore, when
they do hire a consultant, they seek either a well-defined specialist or a generalist.
• Companies planning to implement TOM, or larger companies dealing with specific
problems (eg. ISO 9002 implementation), hire specialists to fill a specific need, a
niche. Smaller companies seek generalists who can do everything from
developing a strategic plan and facilitating team sessions, to conducting customer
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surveys, and so forth. They cannot afford the cost of the specialist, nor can they
afford to bring in a steady flow of consultants to address the details of their
operation.
A consultant, whether a specialist or a generalist, should be able to assist in
forming expectations of results. A popular response to the question, "When
should I see results?" is, "It depends!". As it turns out, experiencing results does
depend on many things. But, after spending time within the company, consultants
should be able to suggest what kinds of results the company should expect to see
and when.
It is important to reemphasise this point because management does have
expectations, and without a satisfactory answer from the consultant, they will
maintain their own expectations as the standard. If it takes too long, or if the
magnitude of the first success is inconsistent with these expectations, bad things
can happen. Typically, these bad things take the form of a breakdown in
confidence between the top management team and the consultant. Worse yet, it
can result in a change-over from one consultant to another. In this case, everyone
loses. Changing consultants part way into the TQM implementation process is a
big decision, resulting in a substantial cost in both time and money for the
organisation. More important, this action will be viewed as a discontinuity by the
workforce and managers looking for a reason to circumvent the initiative. If top
management loses credibility in this area, the costs can be immeasurable.
Steering committee
A steering mechanism is required to guide and provide the various quality
improvement teams with direction and assistance where necessary. This
mechanism is referred to as the TQM steering committee and typically consists of:
. the CEO;
0 the organisation's functional managers;
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selected line and staff managers;
union representatives;
the TOM facilitator.
The steering committee is charged with the responsibility to oversee, direct and
review the entire quality improvement process - from design, through the
implementation period and until TOM becomes the way of life in the organisation.
The steering committee has the responsibility to implement policy, to develop and
implement the TOM plan, and to create, empower and support the departmental
TOM teams. The steering committee also reviews, analyses and improves
processes within the organisation with the aid of the departmental teams and the
TOM co-ordinator. The greatest responsibility of the steering committee is to
remove barriers between functional entities within the organisation and facilitate
communication to show support and overcome any resistance to the change that
will inevitably be encountered.
More specifically, the major functions of the steering committee are to:
be a cross-functional forum for consideration of operational improvements
which are likely to affect more than one department;
formulate the quality policy;
0 establish a project system, choose breakthrough projects and assign
teams to them;
identify needs for training and plan the training;
be, and be seen as, the champions for the principles of TOM.
The steering committee is a formal team with a team charter detailing its:
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purpose;
boundaries within which it will operate;
members;
frequency of meeting;
measures of performance.
During the implementation phase, the steering committee should meet at least
two-weekly to review progress and to address any difficulties relevant to the
implementation process. If a consultant is involved with the implementation, the
consultant will be a member of the steering committee for the duration of his/her
assignment with the company.
TQM facilitator
Facilitators are commonly used in TQM implementation as trainers and guides to
help the quality teams and the managers to adapt to the new system. It is also
possible that the facilitator may initially be a consultant, but it is recommended that
a senior member of the organisation fills this chair as early as possible during the
implementation process. As long as an outside person acts as facilitator, the
whole change process may be regarded as belonging to the outside party and the
workforce may find it difficult to accept ownership of the TOM process.
Facilitators must be exceptional people. They must understand the TOM process
very well so that they can help develop the departmental quality team leaders.
They must have the respect and trust of all the traditional functions - unions,
employees and management. Some guidance on the traits or characteristics
desirable in this person, adapted from Jablonski (1995:96), are:
credibility;
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a track record of successfully introducing innovation and achieving
organisational commitment;
known to be team players and have the leadership capacity to bring
together the thinking of the group;
good interpersonal and communication skills;
a strong personal belief in the participative ethic;
capability to constructively confront the status quo and still work
effectively with those in position of authority;
self-secure and able to maintain clear thinking in conflict situations;
a long term commitment towards the company.
Facilitators have two key roles within successful TQM implementations:
providing support and direction to improvement groups;
training personnel who are involved in the improvement process.
Successful companies do not assume that improvement groups can deal with any
implementation problem that may arise without special training. Instead they have
prepared facilitators in the skills required to support these groups in a structured
manner.
Facilitators must be capable of recognising how to support such groups at
different stages in the process. Facilitators providing support to improvement
groups can be counter-productive by providing either too little or too much
facilitation. Too little facilitation generally results from inadequate support within
the management structure, whilst too much often results from inadequate training
provided to the facilitator.
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Hand-in-hand with achieving the love of change is the training of managers,
supervisors, project leaders and team members at every level. They will need
help in understanding TOM and how to lead the transformation. They need to
understand their new roles as defined within the new vision of the company. New
skills, such as group and meeting management, the problem-solving process and
problem-solving techniques, and project planning and control are required. These
requirements are often overlooked by senior management. The TOM facilitator
has the responsibility to identify these needs as and when they occur, and to
arrange the necessary training and coaching to satisfy these needs timeously.
Implementing TOM requires a committed team, focussed on a managed change
in the organisation, to achieve measurable results within a specified period -
normally 12 - 18 months.
5.2.4 EmpOoyee invoOvernent
Employee involvement refers to the degree to which employees in a given
organisation or department stay informed and make decisions about their work.
Employee involvement is influenced by an organisation's (or group's) culture,
management style, and employee preferences. Employee involvement levels
range from very little to almost total involvement with self-directed work teams
calling for a very high level of involvement. Although to some extent descriptions
of this sort are arbitrary, they can provide a baseline to compare with employee
involvement in individual organisations. With this understanding, determination
of what must be done to increase this level to assist and benefit TOM
implementation can begin.
The TOM steering committee should be involved in initial explorations. If it
decides to address this issue in a feasibility study, it may want to ask a
representative sample of employees to estimate the level of involvement in their
department. In some cases, someone from outside these groups may need to be
brought in to provide perspective and facilitate discussions.
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The following six levels of employee involvement begin at the minimum level seen
in organisations today, and stop just short of the level at which self-directed teams
operate. These are not development stages that an organisation must go through
in sequence during the TQM implementation process. Nor are higher levels
automatically better. It is up to each organisation to find the level that works best
for a given situation, department or phase during the implementation process.
Level 1: Managers make decision on their own, announce them, and then
respond to any questions employees may have
At this level, employee involvement is defined as listening and asking questions;
employees are involved neither in making nor approving decisions. Typical
activities include:
the regular scheduled meeting in which managers bring employees up to
date on regular operations;
the special meeting in which managers announce new development, like
the introduction of a TQM strategy for improved company performance;
the "press conference" meeting in which employees can voice their
concerns and/or request information about events.
Management expectations. Managers expect that this level involvement will
produce conformance to decisions made by them.
Employee needs. This level of involvement only meets employees' need for
information concerning their work.
Advantages. This level is a fairly speedy and efficient way to disseminate
information, and it keeps employees from wasting energy ferreting out rumours.
Also, if employees believe managers are being honest and open, it develops a
sense of trust between the two groups.
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Pitfalls. It can fail to uncover- and can often cause - employee alienation and even
rebellion, and it places the entire burden of decision making on managers, without
any input from employees.
Level 2. Managers usually make the decisions, but only after seeking the
views of employees
If level 1 is typified by a press conference type of meeting, a typical level 2 activity
is a round-table discussion. The key difference is that managers seek the views
of employees on problems and issues before making a decision, although they do
not necessarily agree to act on these views.
Management expectations. Managers expect that this level of involvement will
give them information they can use in making management decisions, and will
reassure them that employees accept these decisions.
Employee needs. This level of involvement satisfies employees' needs for a
limited degree of interaction with the decision makers in the organisation (versus
involvement in the decision-making process itself).
Advantages. The advantages are:
0 managers have access to the opinions and views of employees (including
technical experts with special expertise) and therefore can make better
decisions;
0 employees tend to feel more involved in the decision-making process than
they do in level 1, and they are therefore more likely to accept and
endorse management decisions wholeheartedly without having to take
responsibility for them when they don't work out;
. decisions can still be made quickly since employees have no vote in the
decision-making process.
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Pitfalls. Because at this level of involvement there is no specific purpose beyond
getting employees' concerns and ideas on the table, the dialogue can turn into
time-wasting gripe sessions. Employees may also resent having their ideas taken
over and carried out by others. This level of limited, two-way communication can
also be misconstrued as "total employee involvement", guaranteeing that no
further levels will be explored.
Level 3. Managers create temporary employee groups to recommend
solutions to particular problems.
Level 3 represents an increase over level 2 with selected employees (often from
more than one department) formally assigned to come up with solutions to
particular predefined problems, rather than simply offering their ideas. Task
forces are typical of level 3. The key elements of this level are:
. the problem has been predefined;
employees carry out this assignment in addition to their regular work; and
° once the group makes its recommendations, it is disbanded.
Management expectations. Managers expect real commitment - in the form of
expert and effective contributions towards the solution of a specific problem - from
the employees in these special groups.
Employee needs. This level of involvement provides employees with opportunities
to receive recognition for their efforts.
Advantages. The advantages of this level are that managers can use the
expertise of their own employees and avoid having to pay for outside help, and
that management can bring just the right combination of expertise to solve a
problem.
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Pitfalls. Employees can be squeezed between the demands of their jobs and
those of problem-solving groups. Appointing a special group can become a
substitute for taking action, because the group itself has no authority to act upon
its recommendations. When their assignment is finished, employees can feel
disappointed and let down.
Leve0 4. Managers meet with groups of employees on a regular basis to
identify problems and recommend solutions
Level 4 is like level 3, with two important exceptions: groups are permanent, and
they identify problems as well as recommend solutions. Quality circles typify this
kind of involvement. Groups operating at this level are usually led by the
employees' supervisor; employee participation is, for the most part, voluntary and
is perceived as an add-on to regular work. While this type of involvement is still
outside the regular management structure, the organisation often appoints
facilitators to train these groups and to serve as a link between work groups and
managers with the authority to implement employee recommendations.
Management expectations. Managers expect real employee commitment to seek
out and solve productivity, quality, safety and quality-of-work-life problems.
Employee needs. The primary employee need met by this level of involvement is
the opportunity to play a real part in identifying and solving problems of concern
to them.
Advantages. Employee creativity unleashed by this greater level of involvement
can result in supervisor problem-solving efforts during the TQM implementation
process.
Pitfalls. Because groups at this level are outside the traditional management
system, they may not have enough power to make much of an impact. Also, to
remain in existence, they constantly need to find new problems. If the problems
disappear, they have nothing left to do but disband.
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Level 5. Managers establish and participate in cross-functional problem-
solving teams.
This level combines the cross-functional aspect of level 3 (typified by the task
force) and the permanence of level 4 (typified by the quality circle). Often
members will be "peak performers" from several departmental quality circles.
They form a permanent, cross-functional group that typically meets less frequently
but for longer sessions than a quality circle. The group may have enough people
from different departments to be able to break into subgroups to work on specific
problems.
Management expectations. At this level, management expects to see
interdepartmental cooperation throughout the organisation and improved
coordination and productivity organisation-wide as a result.
Employee needs. This level of involvement meets employees' need to have some
influence on policies and procedures that go beyond their own departments.
Advantages. Managers and employees can begin to understand the issues and
concerns of other departments, and of the organisation as a whole.
Pitfalls. As more people from different parts of the organisation work together,
group issues can flare up, strengthening barriers between departments instead of
eliminating them.
Level 6. Ongoing work groups assume expanded responsibility for a
particular issue, like cost reduction, quality impr•vement and
employee participation processes.
At this level, problem solving is integrated with employees' daily job
responsibilities, or rather, one aspect of them, such as service quality or job
safety. The traditional management structure hasn't changed, but within it
employees have more responsibility to find ways to improve how they do their
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jobs. The rationale is that when it comes to their jobs, employees are the experts,
and given a specific focus for their improvement efforts, can come up with the best
solutions.
Management expectations. Managers expect that a top priority issue or problem
will receive concentrated attention. Managers expect employees to take the
initiative for this process, leaving managers to function as coaches.
Employee needs. Whereas in level 5 employees had a measure of influence over
organisation wide policies and procedures, in level 6 they have the opportunity to
exert total control in the smaller arena of their jobs.
Advantages. With control, employees have the chance to make small but critical
improvements in their work that can pay off in productivity increases and real
quality improvements. Furthermore, being held responsible for their efforts tends
to increase their commitment and level of contribution. Finally, this level offers
organisations an opportunity to get a flavour of what self-direction feels like
without having to make extensive changes in their existing management
structures.
Pitfalls. This approach can seriously threaten those supervisors and middle
managers who are not equipped by either temperament or training to take a less
directive, more facilitative approach with their employees.
Once the steering committee has reached agreement on the present level of
employee involvement, and the level it thinks it would like to move to, to facilitate
TOM implementation, it needs to consider the steps to make this shift possible.
These could involve new procedures, training, and other less direct efforts to
create a more supportive organisational environment.
A TOM-based approach to increasing organisational effectiveness sets into
motion many complex organisational and personal changes that have to be
considered while planning the change. Such an approach changes the roles
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traditionally assumed by management, union and employees. It requires a
different union stance and different employee attitudes toward the company and
their work. These attitudes do not change so much by talking about them but
come from the experience of working together in a different, more collaborative
way.
In unionised organisations, the support, commitment, and active involvement of
the union are important for success. In any unionised company, the employees
have "hired" the union to represent them. If the union tells employees not to
cooperate, many will not.
Experience has shown that it is difficult to maintain an effective change effort if the
union resists participation. The best efforts tend to arise from joint
union/management commitment. This is best exemplified through joint planning
and implementation.
Historically, unions have reacted to management plans and decisions, and their
constituents have seen them as their defenders when management decisions are
viewed unfavourably. This stance has allowed unions to be highly visible and
active advocates for their constituents. The emerging union role has been to work
with management as co-planners, decision makers, and implementers.
As a co-planner of change, unions become involved in decisions and plans as
these are being developed. The unions predetermine the impact on their
constituents and work with management to develop the best approach. This role
establishes the union along with management as an advocate of a decision or of
a point of view. This can be a very uncomfortable position for unions, especially
on controversial issues.
Increasing employee understanding of and input into decisions that affect them
greatly reduces the union's risk of being seen as in collusion with management.
As employees become more involved in decisions that affect their work, it
becomes more obvious that union and management are working together to
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benefit everyone.
The surfacing of concerns of all parties and the development of ground rules and
safeguards can be the key in the union reaching an agreement on TQM
implementation. The focus on the win/win goals of product quality and employee
job satisfaction are rallying points that all should be able to support.
Union support for TQM implementation may vary, depending on its earlier
experiences. In most organisations, previous successes lead to strong support
by unions. However, some organisations have had "false starts" - this is, efforts
not living beyond one year. This causes union leadership to view any attempt to
change as just another management gimmick that will not work. It is of real
importance that the benefits related to the TOM process are well communicated
to all union shop stewards and officials to preempt any negative feelings prior to
implementation.
Unions may actively oppose participative efforts if it views them as management
efforts to alienate employees from the union. Unions must be satisfied that the
converse is true, and management can demonstrate this attitude by involving the
union in the goal setting, planning and implementation process.
Both management and union must be educated about the benefits to the company,
to the employees, and to the union. Management and union leaders must be
committed to using every employee's talents to the fullest extent possible and to
making the organisation a better place to work. The union cannot be committed
only to the human outcomes, nor can management seek only economic outcomes.
If managers and employees do not have the opportunity to influence the changes,
they may be limited or encapsulated by those who see little opportunity to shape
the future direction. Participation by a broad spectrum of stakeholders in
identifying issues and planning for their resolution is paramount to building the
widespread commitment and support needed for successful implementation of the
TQM process.
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5.2.5 Communication for TOM
Organisations implementing TOM require improved communications to support the
improvement process. Traditional "through the proper channels" types of
communication are inadequate because they are slow, cumbersome, and
sometimes inaccurate.
In a TQM environment people need to communicate across organisational levels,
functions, product lines and locations to solve current problems, avoid new ones
and implement change. Though threatening to some managers, this type of cross-
organisational communication must be encouraged.
Well developed communication channels are characterised by the following three
factors (Porter & Parker 1993:19):
regular communication with staff using a variety of media;
communication viewed as a two-way process, with channels for feedback
available;
communication viewed as an ongoing process, with consideration given
to ways of reinforcing the concepts in the future.
When an organisation plans to implement TQM, it is necessary to plan how the
employees will be informed about the change event and how it will impact them.
The communication plan provides a structured framework for the effective and
efficient delivery of messages that:
inform;
influence;
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O
direct;
O resolve; and
O provide feedback
for individuals and groups who are directly and indirectly impacted by the
introduction of the new improvement process into the business.
The communication plan supports the change event by:
decreasing uncertainty and increasing acceptance of the change event;
facilitating ownership of the change event;
increasing the probability of cooperation when change in implemented;
enhancing morale before, during and after change occurs;
reducing misinformation caused by rumours and lack of understanding;
assisting in reaching new performance levels in a shorter period of time.
These benefits will increase change acceptance and decrease unnecessary costs
incurred by the organisation while it is adapting to the change, eg. decreased
productivity and morale.
Publicity contributes to ensuring the success of the TQM implementation process.
Publicity in this context refers to the use of posters, pamphlets and newsletters.
This communication channel lends itself to creating the correct atmosphere for
culture change, so that improvements can then follow. Highly publicised change
campaigns are often very successful in increasing awareness, but also run the risk
of damaging the organisation's credibility should the campaign prove
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unsuccessful. On the other hand, the reverse is often true for less publicised
campaigns.
An effective communication plan can accomplish the communication goal of the
change process by providing accurate, useful and timely information. Specifically,
it should:
exploit existing communication channels in the organisation;
convey accurate and useful information to targeted receivers;
O present information in a timely fashion relative to key change events, eg.
conversion, project start and milestone dates, and improvement goals to
be achieved;
provide feedback channels to evaluate the success of the change
process;
provide a means for evaluating communication success;
.
foster commitment to the change event by creating an informed
organisation.
Everyone in the organisation must participate in the change and improvement
efforts. Crucial but important techniques that can be used to encourage
participation include:
recognise and publicise team and individual accomplishments contributing
to the improvement process;
share success stories and disseminate good ideas applicable to other
parts of the organisation;
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implement a suggestion systeth that acts rapidly, provides feedback and
rewards implemented suggestions;
encourage the formation of quality circles, problem "hit squads" and other
improvement teams.
Work is a form of theatre. Structures and props help people enact it and
understand it. They are part of the process of creating meaning.
Quality circles and teams are structures commonly used in participative
management processes. They focus group attention and make for good
communication.
Quality circles and teams atomise organisations. They recognise people's need
to belong (for "affiliation") and they focus on clear tasks. There are many ways to
build powerful communications around them: special uniforms, badges, emblems,
mottos, or mascots; social events such as golf days, darts contests or picnics;
tailor made reward systems and training courses.
Quality circles and teams are communication media. They should be leveraged
in every possible way. It is worth remembering that the most important objective
of any communications programme is to encourage innovation, learning and
growth. Flexibility and cooperation must be encouraged, imagination must be
fostered, and networks must be allowed to form and reform in the most organic
way possible. Communication must take place not just within circles or teams, but
between them too.
A communication strategy is often very helpful to provide structure to the
communication plan. An 18 point strategy is proposed.
1 Determine available budget and resources for communication strategy.
o Consult TQM facilitator to establish budgetary parameters
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Confirm allocated resources with TOM facilitator
Establish project deadlines.
2. Develop communication objectives which will:
decrease uncertainty and increase understanding of the change event
- INFORM;
promote agreement on the need to change - INFLUENCE;
facilitate ownership of the new process - RESOLVE/FEEDBACK;
increase cooperation and support during the implementation -
DIRECT.
Identify the audience to whom the communication will be directed.
Define specific high level information requirements, per audience, that
support predefined communication objectives.
Identify specific key messages to be sent, per identified audience, which
are consistent with the high level requirements:
- Messages that INFORM, include:
what the change is, including mission, goals, and objectives;
why the change is being implemented;
who will be responsible for implementing the change;
o how the change will happen.
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Messages that INFLUENCE, include:
direct, anticipated business benefits;
how the change will support the business mission and vision;
success stories;
direct benefits, eg. increased skills, participation, job
satisfaction and customer satisfaction.
Messages that RESOLVE objections:
level of management commitment, approval, support and
allocation of resources.
Messages that DIRECT, include:
implementation approach and deadlines;
exact responsibilities and deadlines for each audience;
training arrangements;
support activities.
6. Identify available formal and informal communication media/channels
which will enhance communication to the intended audience.
Written media may include:
0 memos;
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0 newsletters;
0 personal letters;
0 notices on bulletin boards.
Audio-visual media may include:
0 videos;
audio cassettes.
Face-to-face communication may include:
0 one-on-one interviews/meetings;
0
group meetings or presentations;
0 site visits.
Communication channels may include:
0 regular department meetings;
0 green areas;
0
briefing groups;
0 management briefings;
0
TQ-hours;
0 quality circle meetings.
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7 Evaluate effectiveness of available media currently in use in the
organisation.
evaluate media coverage of identified audience;
evaluate audience attitudes to the use of media;
evaluate previous experience with media;
evaluate cost of media against contribution of message to project
success;
evaluate overall estimated media cost in terms of available
communications budget.
8. Select media based upon evaluation, ensuring that the selected media
target the identified audience effectively with due regard to cost efficiency.
Select media which support the:
objectives of the communication;
time frame and milestones;
intended audience;
probability of acceptance of the message;
complexity of the message.
9. Develop feedback mechanisms to facilitate two-way communication.
develop reply slip attachments to printed communications.
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develop feedback response forms for audio visual media.
10. Develop evaluation mechanism/strategies to evaluate effectiveness of
communications.
develop evaluation response forms for all communications;
develop telephone evaluation surveys;
determine frequency and timing of evaluations;
allocate responsibility for conducting evaluations;
ensure that the results of the evaluations are used as input for
adjusting the communication strategy;
11. Identify developers for the actual communication of individual
communications.
Identify potential developers with required skills in:
0 printed media;
0 audio visual media;
0 presentations;
0 group facilitation.
Determine the availability of identified developers.
Identify available subject matter experts from within the project team.
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Allocate responsibility for the development of specific messages to
developers and/or subject matter experts.
12. Identify senders of messages.
Identify individuals who have:
credibility in the eyes of the users;
influence over users;
reasonable grasp of the subject matter;
good presentation skills.
Allocate responsibility for the sending of specific communications.
13. Determine strategy for quality assessment and final appraisal of all
communications prior to communication strategy implementation.
Obtain approval in terms of:
content and accuracy;
organisation's values and protocol;
organisational standards;
audience literacy.
Allocate responsibility of eliciting approval to one individual.
14. Determine exact timing for specific communication for the duration of the
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implementation process.
- Time messages to coincide with:
o process launch;
start and end process phases;
anticipated periods of low morale;
o key milestones;
logistical imperatives (training, support phases);
high incidence of rumours;
o high incidence of objectors;
high incidence of uncertainty;
anticipated achievements.
15. Consolidate activities from previous tasks (1 to 14) in the form of a
communication plain matrix.
Arrange the plan by objective.
Arrange messages per objective in chronological order.
Indicate the following information on the communication plan:
objectives;
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O
target audiences;
O messages;
O media;
O
feedback mechanisms
O
developers;
O senders;
O
timing (dates).
Submit communication plan, together with a detailed cost breakdown, to
CEO for final approval.
Manage implementation process communications in terms of the approved
communication plan.
Develop messages.
Distribute/communicate messages.
Review feedback.
Review evaluations.
Incorporate results of feedback and evaluations into the
communication plan.
18. Review communication plan effectiveness and efficiency and update the
plan where necessary on'an ongoing basis.
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Review actual vs planned budget.
Evaluate success with which objectives are met.
This communication strategy structures the method of communication but not the
content. It is designed to open up communication channels, while at the same
time controlling the flow of information and protecting the participants. Managers
cannot manage and the implementation process cannot succeed if all the people
concerned do not have access to accurate information. This communication
strategy is not a panacea, but it will direct the flow of necessary information to
enhance the whole implementation effort. Although there will always be some
difficulties that will need a different and more situation-specific approach, most of
the problems and fears related to interpersonal communications can be solved
using this strategy.
Communication is of central importance to the development and maintenance of
cultural and corporate identity. This is because language provides the "vehicle"
for the creation of meaning and common understanding. In addition, although
individuals who have internalised the values of the organisation are likely to
engage in cooperative and spontaneous behaviour in support of the stated aims
and objectives of the TQM process, it is still necessary that they be given positive
reinforcement (eg. recognition) for their efforts. A lack of recognition and praise
for a job well done is often of serious concern to employees. Effective
communication is of vital importance to the reinforcement of organisational values
and goals during the TQM implementation process.
5.2.6 Training and education
Through the life of manufacturing management, technical matters have
overshadowed human issues. Human issues, in general, are perceived as too
complex and erratic to be analysed methodically. Reflecting this bias, operations
textbooks discuss technical topics such as facilities planning and line balancing
extensively, while many leave out or scantily address the importance of human
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resources to the production systems. It is no surprise, then, that technological
advancements in manufacturing have evolved around elimination of labour from
the factory floor. Although cost justification appears to exist in replacing workers
with machinery the cost-benefit analysis does not incorporate the many cerebral
contributions that committed employees can make. By limiting attention to the
physical capabilities of the work force, it is commonly concluded that automation
extirpates many headaches related to the vagaries of human behaviour, labour
unions, and government regulations. Furthermore, automation is supported on the
ground that it bring about speed and consistency in performance, causing
improvements in both quality and productivity.
Against such a background, it is rather ironic that the application of artificial
intelligence to manufacturing is becoming a popular topic. If intelligence is so
helpful to manufacturing in its artificial form, then why are the benefits of the real
intelligence so often overlooked or ignored?
TOM, a process of continuous improvement through the involvement of all
employees, is designed to engage workers' minds with the managerial aspects of
their jobs. To be competitive, manufacturers should count on the ideas and
judgement of production workers, as well as their physical efforts. Intense
international competition along new dimensions - eg. rapid product introductions,
flexibility, and reduced lead time, coupled with technological advancements,
reduced inventories and the blurring of lines between functional areas and
between types of manufacturing processes - are some of the trends that are
forcing a reassessment of workforce issues and the topic of education and training
of all employees on a company wide basis.
Effective functioning of a flexible manufacturing system requires workers who are
better educated and more sophisticated than those they replace. In fact, the
required skills and job characteristics would resemble those of white-collar
workers. Flexible automation calls for skilled workers who can frequently change
its parameters and adapt to it. Flexibility means that many jobs entail more than
a set of activities to be continuously repeated. Therefore, managers and industrial
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engineers can no longer prescribe the work procedures. As a result, collaboration
and team work would replace traditional supervisory responsibilities.
Aside from personality traits that influence a worker's willingness to become an
enthusiastic member of a continuously improving organisation, workers' technical
knowledge and training play important roles in the success of the TOM process.
Work groups are most effective when team members are multi-skilled and have
a good understanding of more than one job. Such requirements place special
emphasis on the degree and nature of on-the-job training that workers receive.
Specifically, training programmes tailored to the technical, administrative, and
psychological needs of workers must be designed. Although the new TQM-breed
of workers are likely to show the desire and willingness to take charge of broader
jobs, South African manufacturing firms cannot assume that formal academic
education has adequately catered to the worker's technical and managerial skills.
The TQM philosophy strongly urges the use of on-the-job training for inculcating
in all workers organisation-specific skills and an understanding of the whole
operation.
Training and education in the TOM implementation process can be based on
experience and peer role models. An effective approach is to train the leaders of
an organisation first and then let them train the managers who report to them.
Those managers then explain the TOM process to their staff and train the quality
teams. This technique can have many positive results. It puts the responsibility
for learning about TQM squarely on the shoulders of leaders and managers. Also,
it is important that the TQM message comes from the most senior manager, the
CEO, and not from an outsider/consultant who may be in the organisation for only
a brief time during the initial phases of the implementation process.
Quality teams and team leaders will require a large amount of initial training, and
the coaching process becomes very critical. Employees are not normally
experienced at conducting meetings, brain-storming problem causes and
solutions, or implementing actions to solutions. They will need close support and
coaching without domination or intimidation as the quality teams begin to operate.
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It may also be effective to use some of the better team leaders to train others. It
may also be helpful for members of one team to visit other teams as guests.
Consultants, when used, should be in the background after the early stages of the
implementation process. If consultants are used in the training process, a co-
trainer - either the TOM facilitator or another manager - should assist with the
ongoing training and coaching process.
All organisations learn, but some do not learn fast enough to survive. In today's
world in which knowledge workers and managers are becoming a key ingredient
of success for organisations, the ability of an organisation to keep up to date by
learning is more important than ever. Rapid changes affects more and more
aspects of business: development cycles in products ranging from computer chips
to potato chips are being compressed, control over intellectual resources is
becoming more important than control over raw materials, and the nurturing of
knowledge - not able to "learn" - are in great danger of failure. The rate at which
individuals and organisations learn may become the only sustainable competitive
advantage, especially in knowledge-intensive industries.
Transforming organisations in ways that favour learning, responsiveness and
innovation is becoming a major aspect of corporate purpose all around the globe.
Organisations are adopting features that favour learning out of economic
necessity, as a by-product of installing information technology, or in response to
demands from restive employees for challenge in their work. Often, some
organisations do not connect the surge in performance they experience with the
features they have introduced. This is unfortunate, because as such
organisations consciously adopt such features, in a planned fashion, the full
benefits of the learning organisation can be captured.
A TOM focussed learning organisation is conceived as one able to sustain
consistent internal innovation or "learning", with the immediate goals of improving
quality, enhancing customer or supplier relationships, or more effectively
executing business strategy through the involvement of all employees, and the
ultimate objective of sustaining profitability.
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Successful TOM implementation is characterised by three organisational
characteristics which equip it for the learning requirements of the TQM process.
First it must make a commitment to knowledge. A very important aspect of this
commitment involves the selection of people. Very often organisations hire people
expecting to train them in all they need to know. The organisation acquires no
learning at all in this transaction. It may also suggest to people hired in this way
that nothing worth knowing exists outside the organisation. This is the antithesis
of the learning organisation; it teaches, it does not learn.
Another aspect of commitment to learning involves the development of learning
internally through a variety of means. Research is one such mechanism; others
include discussions or seminars intended to discover what individuals have
learned and to record it for use by others. An organisation committed to learning
will systematise what it has learned by codifying it and making it accessible to
others, by embodying it in TQM practices and procedures, and by publishing much
so that others outside the firm can critique its accuracy and value.
Second, a TOM learning organisation must have a mechanism for renewal within
itself. Departments and other units of organisations continually fall into
bureaucratic rigidity. They cease to adapt; to learn. They become impediments
to the success of the organisation. It is not just a matter of leadership or even of
a few individuals within them, it is the whole organisation that is at fault. In many
instances, the individuals continue to have great potential - it is the system in
which they are imbedded which is at fault. In looking at organisations like this,
one is sometimes driven to wonder, "How can the whole be so much less than the
sum of the parts?" The TQM process enables the learning organisation to
intervene in such situations to renew and revitalise itself.
Such a mechanism includes the power to abolish or transform (which ordinarily
exists - at least formally - in a business organisation), a systematic method of
identifying when the need exists (which often does not exist in an organisation),
and an established procedure for taking large-scale action (for example, adding
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or transferring many new people at once to the department so that a new critical
mass is created).
Third, successful TQM implementation requires an openness to the outside world
so that it may be responsive to what is occurring out there. This may be
accomplished in various ways because there are many different kinds of
knowledge a TOM organisation has to acquire. For scientists and engineers,
access to new developments in their field are crucial. Managers require
knowledge of how the business environment is changing from periodicals,
briefings and periods of formal education; the rank and file needs training in new
technology and processes. For the organisation's staff as a whole, an openness
to the changing needs of customers and suppliers is required.
Every individual in the organisation, from the newest entry level employee to the
CEO, needs to be involved in TQM training. The fundamental philosophy
underlying TQM and a particular organisation's implementation of it must be
shared and discussed with all members of the organisation if a common
understanding of TQM goals and objectives and the means of attaining them are
to be achieved.
Training should not be viewed as a "one shot" effort. Like TOM itself, training in
the form of refresher and advanced courses must be viewed as a continuing
improvement process.
Besides the fundamentals of TOM, individuals must be given the opportunity to
pursue additional, specialised training that will provide them with the tools and
skills they require.
Depending on the group - and the individual - the training might range from soft
topics (communication skills, interpersonal dynamics, team building) to hard topics
(statistics, accounting, engineering). Most individuals will require and want a
combination of topics.
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Everyone must participate in the improvement efforts. The person in any
organisation that best understands his or her job, and how it can be improved, is
the one performing it. Several techniques that can be used to encourage
participation include:
recognise team and individual accomplishments contributing to the
improvement process;
share success stories and disseminate good ideas applicable to other
parts of the organisation;
encourage risk taking by removing the fear of failure (easy to say, tough
to do!);
encourage the formation of quality circles, problem "hit squads" and other
quality improvement teams;
implement a suggestion system that acts rapidly, provides feedback and
rewards implemented suggestions;
Organisations implementing TQM need ongoing training and educational
programmes which share four characteristic features.
Training has to be viewed as a continuous process for the organisation,
offering an opportunity for reinforcement of the TQM concept.
Training has to be focussed so that employees receive appropriate
courses at the appropriate level of detail for their need.
Training must be planned for the future to include the development of
further TQM skills and techniques.
Training materials customised to suit the particular organisation enable
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employees to relate the course examples to the particular activities of the
organisation.
The timing of training and educational courses for managers and their
subordinates emerges as an important issue. For managers to be able to give the
necessary support and reinforcement to their subordinates, their training must be
correctly phased. The training of managers with their subordinates promotes
teamwork and can avoid giving TOM the label of "for management only".
The most successful TOM implementation processes are those which require
management to train their own staff eventually. There are several advantages in
using this method of teaching:
. managers and supervisors themselves become leaders in quality;
. respect is gained from subordinates;
the reliance on external expertise is reduced.
Just as TOM is a continuous journey, so is education about quality and continuous
improvement. Everyone needs to learn about TOM. The questions management
must deal with include: who must learn what, how and by when. Although there
may be a wealth of knowledge about quality, there is still probably more written
about it than is known. There is now an endless supply of alternatives for
educating anyone willing to listen and pay the price. The organisation's steering
team will need to establish criteria in deciding which approach best fits the
organisation's needs. One axiom of quality is that "it is learned best by example".
A powerful message is sent when top management can really teach the principles,
answer the hard questions, and demonstrate the desired behaviours.
5.2.7 QuaOity technoDogies
There is a very simple, fast way to establish the personality of an organisation -
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any organisation. All one has to do is look at the way it measures itself and the
priorities that are set on each measurement. A financially driven organisation will
have measures that focus on things like production costs versus target, after sales
service costs, profit and compliance to budget. An organisation that is quality
driven will focus on measurements like customer satisfaction level, poor quality
costs, first time yields and customer complaints per unit sold. A resource oriented
organisation will measure things like inventory turns, value-added per employee,
inventory costs and cycle times.
A healthy, TQM focussed organisation has a balanced measurement system.
Within this balanced system, priorities are placed upon measurements that relate
to the customer. For example, market share, customer satisfaction index,
competitive price and reliability. The second priority measurements focus on the
organisation's performance. For example, productivity, poor-quality costs, percent
successful new products, value-added per employee and return on investment.
Measurements are helpful tools to guide an organisation. They can never replace
good judgement, but they can greatly improve the decision to be made.
Essentially, measurements can be divided into three categories:
1. Performance measurements:
return on assets;
profits;
percent product purchased;
costs;
inventory turns;
cycle times;
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after sales service costs.
2. Process improvement:
percent defective parts;
poor quality costs;
process capability;
first-time yields;
competitor comparisons.
3. Forecasting:
market trend analysis;
product costs;
customer expectations;
new product requirements;
budgeting.
Each of these three categories have unique requirements associated with them,
each of which must be considered when designing a measurement system. The
measurement system must be robust enough to provide guidance in all three
categories and for any level in the organisation.
As important as measurement is, by itself it is worthless. Unless an effective
feedback system exists, measurement is a waste of time, effort and money.
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Specific feedback enables an individual to react to the data, and correct or prevent
any problems.
A major problem with most processes is that performance is measured only at the
end. In most cases, this provides little relative feedback about individual activities
within the process or, when it does, it is too late.
The organisation should establish measurement points close to each activity so
that the people performing each separate activity receive direct, immediate, and
relevant feedback. Delaying measurement only allows additional errors to be
made.
During the TQM implementation process, management is responsible for providing
sound measurement systems, and appropriate feedback, to assist everyone in the
organisation to do their jobs better - during the implementation as well as in the
future. Management signals what is important by measuring its results. Many
people figure that if it is not measured, why do it? Consequently, every important
job can and should be measured. Although, theoretically, each task should be
measured and reported to the individual performing the task, this is not always
practical. The best way to start the measurement system is to examine each of
the organisation's stakeholders' expectations and be sure that those key needs
are being measured and reported. Typical stakeholder measurements are:
customer satisfaction - external customers;
value added per employee - management,
Job security - employees;
return on investment - investors;
increased tax base - community.
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The second priority is to examine the critical process flowcharts, and identify those
activities that significantly impact total process effectiveness, efficiency and
adaptability. Relevant measurements for these critical activities, as well as for the
total process, can then be established.
Reviewing the internal customer satisfaction level will identify a third set of
measurement priorities, focussing on activities that are not meeting internal
customer expectations.
Fourth priority is given to activities that require significant resources. Performance
should be measured in terms of effectiveness and efficiency and expressed in
physical terms (eg. time to perform a task, cycle time), or in monetary value,
allowing a number of resources to be combined (eg. value-added costs, labour
costs).
The fifth priority is to measure the performance of each individual and provide
personal, confidential feedback to each employee. This data is essential to
individual excellence.
The best person to do the measuring is the person performing the activity. There
is immediate feedback, and he or she should have the best understanding of the
job. In cases where the self-inspection error rate is too high, the people
performing the activity can check each other's work. This is also a good way to
exchange ideas and to begin standardising.
The organisation should never rely on the external customer to be its last
inspector, but if the internal process fails, a data system that collects this
information and reports it back, so that the internal process and measurement
system can be corrected, must exist as final feedback.
When establishing a measuring system, the organisation will be working with two
types of data: attributes data and variables data.
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❑ Attributes data
This kind of data is counted, not measured. Generally, attributes data requires
large sample sizes to be useful. It is collected when all that is required to know
is "yes" or "no", "go" or "no-go", or "accept" or "reject". Examples of attributes data
include:
Did an employee arrive at work on time?
Was the letter typed with no errors?
Is a department operating below budget?
Did the meeting start on schedule?
In general, attributes data are considered separately from measurement data
because they have a certain irreducible discreetness that measurement data do
not possess. With measurement data, the discreteness of the values is basically
a matter of choice. It can be manipulated by, for example, choosing a smaller unit
of measurement. This is not the case with attributes (or count) data, which are
based on the occurrence of discrete events, and so consist of integral values.
This discreteness is, therefore, a characteristic of the data, and must be taken into
account when establishing statistical control charts.
Statistical control charts of attributes data include:
the ;7-chart for individual values and a moving range, used when the
average count is large enough to prevent the discreteness of the counts
from significantly affecting the control chart limits;
the np-chart for data based on binomial counts;
the p-chart for data based on binomial counts;
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the c-chart for data based on Poisson counts;
The 0-chart for non conformities per unit area of opportunity.
❑ Variables data
Variables data is used to provide a much more accurate measurement than
attributes data provides. This involves collecting numeric values that quantify a
measurement and therefore requires smaller samples. Examples of variables data
include:
Number of times a phone rings before it is answered.
Cost of courier mail.
Number of hours to process an engineering change request.
Monetary value of inventory.
Number of sick days per employee per year.
Statistical control charts are powerful tools for detecting uncontrolled variation.
The most effective control chart for variables data is the X - and R-chart. The
premises of the )7:- and R-chart is that while the measurements, averages and
ranges of collected data have different distributions, these different distributions
are related in certain ways when the measurements originated from a process that
is stable. Any variation outside the calculated control limits indicates an undesired
out-of-control event for the process being measured, and calls for an intervention
from an authorised operator.
The various applications of statistical quality control (SQC) and the closely related
statistical process control (SPC) can be extremely beneficial to a wide range of
businesses. Both involve ways to measure deviations or variability in the
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processes used in manufacturing materials, parts, and products. They involve a
family of different means of determining the variation from a specified quality norm
based on a statistical analysis of the process - and then using techniques such as
probability theory to redefine and further improve the process. These techniques
are not as complicated as they may appear, and they can be extremely useful.
One of the primary objectives of implementing TQM is to reduce the losses that
are caused by waste or poor quality. Poor quality costs the organisation money,
while good quality saves the organisation money. Many organisations do not
measure the cost of poor quality; and if it is not measured, it cannot be controlled
or reduced.
The poor-quality cost reporting system is only one of the many tools needed in a
comprehensive, organisation-wide TQM process, but is it an important tool, since
it directs management attention and measures the success of the organisation's
efforts to improve. It also provides management with the necessary tools to
ensure that sub-optimisation does not have a negative effect on the total process.
Poor-quality cost is defined as: all the cost incurred to help the employee do the
job right every time, the cost to determine if the output is acceptable, plus all the
cost incurred by the organisation and the customer because the output did not
meet specifications and/or customer expectations.
Poor-quality cost provides a very useful tool to change the way management and
employees think about errors. Poor-quality cost helps by:
Getting manage ent attention. Talking to management in monetary
terms provides them with information that they relate to. It takes quality
out of the abstract and makes it a reality that can effectively compete with
cost and schedule.
Changing the way the employee thinks about errors. Employees need
to understand the cost of errors they make.
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Providing better return on proble -solving efforts. Poor-quality cost
monetarise problems so that corrective action can be directed at the
solutions that will bring maximum return.
Providing a means to measure the true impact of corrective action
and changes made to improve the process. By focussing on poor-
quality cost of the total process, sub-optimisation can be eliminated.
Providing a simple, understandable method of measuring what effect
poor quality has on the organisation and providing an effective way to
measure the impact of the improvement process.
Providing a single measurement that brings together effectiveness and
efficiency measurements.
Benchmarking is regarded as another very important requirement for successful
TOM implementation. Benchmarking is the process of continually researching for
new ideas and methods, practices and processes, and either adopting the
practices or adapting the good features, and implementing them to obtain the
"best of best". Benchmarking is basically an objective setting process.
Benchmarks, when best practices are translated into operational units of measure,
are a projection of a future state or endpoint. In that regard their achievement may
take a number of years to attain. The benchmarks may most importantly indicate
the direction that must be pursued rather than specific operationally quantifiable
metrics that are immediately achievable. A benchmarking study may indicate that
costs must be reduced and customer satisfaction levels increased or return of
assets increased. In addition, the concentration of best practices supports the
general direction that must be pursued with specific insights into how the
benchmarks can or should be attained. The conversion of benchmarks to
operational targets translates the long-term actions into specifics.
Process benchmarking is a systematic approach or process to drive change into
an organisation. It arrives at change by doing process-to-process comparisons
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and developing data about performance output levels for the process. In other
words, it is the search for those practices that lead to superior performance, and
as such contributes greatly to the success of the TOM implementation process.
The centre of the benchmarking study is an attempt to define the processes that
are critical to competing and/or improving critical performance metrics and then
comparing and analysing processes against other best-in-class organisations on
a worldwide basis. From this analysis should come a definition of
gaps/inadequacies in the process and determination of cause which then should
be corrected so as to drive the TOM process.
Benchmarkers follow a systematic effort to drive change. They are, in fact,
developing the enablers and understanding the obstacles. More important, they
are building a transformation and implementation plan for the organisation, based
on the benchmark data and analysis. In addition, the benchmarking process and
effort will typically generate a wider range of options to improve processes and
capabilities than available with other approaches.
An organisation can benchmark at a number of levels. It can benchmark internally
for a multi-location facility, against other firms in its industry, or competitors in
other industries. Benchmarking can be done regionally, on a global basis, or by
best-in-class. Whatever option is used, however, there has to be a potential
payoff. Benchmarking efforts should generally focus on identifying the best
anywhere.
Many organisations turn benchmarking on itself. They benchmark their
benchmarking. They work from the premise that in a world of continuous change
what they most need is to manage change, shorten the time needed to make
positive change, and bring about change in a direction that will show results with
a minimum of stops and starts and navigational manoeuvres. They need to learn
from the best what others may be doing, while sharing with some of them what
they are doing.
Finally, organisations can take the notion of benchmarking and drive it into their
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suppliers. One of the questions an organisation might ask of its supply base is
have they done a competitive analysis to understand where they stand against
competitors and can they provide evidence of whether they are the best in their
class? Do they have a systematic benchmarking effort that will drive them to
sustained levels of excellence as a long term supplier?
It is also important to realise that benchmarking is not some instant pudding
approach that leads to excellence. Organisations must first cultivate a culture that
allows change and break-through thinking. If an organisation is only beginning
their TOM efforts, it is not advisable to try to copy immediately what the leading
world class firms are doing. At such an early stage the organisation may not be
fully prepared to implement the full power of these approaches to drive bottom line
results.
It takes time for the TOM cultural change process to evolve. Short-term thinking
has to be discouraged. The cost-versus-benefits of TOM implementation is not
a straightforward method of predicting future cash flows. Some outcomes of TOM
are immediately apparent, from the attitude changes of empowered workers to the
improved products being produced. These items are but the tip of the TOM
iceberg. The intangible components of TOM are hard to value and to measure.
How much more is a proud, trained, eager and satisfied worker worth? What is
the value of a worker competent in all quality technologies and able to detect new
problems as they occur - even pro-actively keeping problems from occurring?
Some of these assets are indeed difficult to price. However, the use of quality
technologies such as SPC, quality costing and benchmarking can contribute
significantly to determining relevant measurements to guide the TOM
implementation process.
5.2.8 Process management syste s
TOM rests first and foremost on the fundamental beliefs, values and convictions
of the organisation's leaders. It requires an unflinching pursuit of long-term
customer satisfaction through the systematic improvement of all products,
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services, and processes. TQM relies on soft concepts like leadership, respect,
trust and intrinsic motivation. It also relies on principles that are difficult or
impossible to measure.
With these caveats in mind, it is important to acknowledge the value of quality
management systems during the TQM implementation process. These systems
provide frameworks within which to measure and audit the performance of an
organisation along its endless quest to improve quality. Although these
frameworks can supplement management's commitment to quality improvement,
they cannot replace it.
A quality management system integrates all elements required by an organisation
to continuously improve customer satisfaction through better products, processes
and services. There is no universal prescription but a number of benchmarks are
available that provide operational definitions of TQM. These benchmarks include
recognised standards such as International Standards Organisation Series (ISO
9000/9004), British Standards Institute BS5750 and ANSI/ASQC Q90/94.
ISO 9000 is essentially a code of practice which has been developed by the
International Standards Organisation for the European Community, but has since
become recognised internationally. This code highlights all critical elements which
should be addressed and formalised by companies wanting to institute a quality
management system.
In South Africa the South African Bureau of Standards (SABS) has been
appointed as the representative body with the responsibility of assessing /auditing
the conformance of organisations to the requirements of the code. This is done
through preliminary audits to help organisations to obtain ISO 9000 listing, as well
as compulsory audits to ensure that organisations comply with their written quality
management systems.
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❑ ISO 9000 aernents
Management responsibility
The inherent philosophy of ISO 9000 is that quality improvement starts at the top
and that it is management responsibility to get it implemented and to ensure that
it is maintained. Against this backdrop the code requires that management shall
define and document its policy, objectives and own commitment to quality. They
should also ensure that this policy is understood, implemented, and maintained
at all levels in the organisation. This requires that management provide the
necessary policy and guide-lines under the following headings:
Quality policy
Organisation for quality management
responsibility and authority
verification of resources and personnel
management representative
Management review
Quality system
It is a requirement of ISO 9000 that participating organisations implement and
maintain formal systems for quality management covering all aspects of their
business, not just quality assurance. This quality system should include all
elements which are required for managing quality effectively. In broad terms the
documentation required to describe the quality system can be divided into the
following:
Quality manual
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Documented system procedures
Documented work instructions
Contract review
The overriding factor of ISO 9000 is to ensure that an organisation meets
customer requirements all the time. Contract review reflects on the actions an
organisation will follow to help them provide a quality product/service. It
determines all which needs to be done in order to meet the customer's
requirements, and identifies all important aspects of the customer's needs before,
during and after execution of the customer's order or request; this obviously also
entails determining whether the organisation has the capability to meet all
requirements within a mutually agreed time frame.
Design control
This is a very important section for those organisations which develop products
for themselves or tailor make products by design for customers, research and
development departments, and product engineering departments. This section
does not cover what the drawing office does. Design control entails the checks,
trials, and balances an organisation takes to ensure a quality product from the
conception of an idea, to prototype, to trial production batch in the market, final
specifications, and acceptance of the first production batch or product by the
customer. Protocol management may be necessary to ensure that all those
involved participate and sign acceptance of decisions taken.
1=1 ocument control
ISO 9000 is a documented management system. Document control provides the
guidelines to ensure that the documentation which drives the organisation's
processes are always dealt with in an appropriate way. The organisation has to
establish and maintain procedures to control all documents and data that relate
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to the requirements of this code of practice. These documents have to be
reviewed and approved for adequacy by authorised personnel prior to issue.
Two key elements of this code are:
Document approval and issue control
Document changes and modifications.
The kind of documents which need to be controlled are as follows:
0 Policies
o Drawings
o Blueprints
o Test procedures
Inspection instructions
Work instructions (operating procedures)
o Quality manual
Quality management procedures
Forms that measure quality of inputs and/or outputs.
❑ Purchasing
The code specifies that the organisation has to ensure that purchased products
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conform to specified requirements. The following elements all contribute to quality
purchasing:
Assessment of sub-contractors and suppliers
Purchasing data - clearly specifying what is to be purchased, with
guarantees and receiving checks
Verification of purchased products - ensuring that product received
conforms to the purchase requirements
Monitoring of suppliers' performance and changes.
Customer supplied product
This section of the code specifies that the manufacturer has to establish and
maintain procedures for verification, storage, and maintenance of customer
supplied products.
Product identification and traceability
An important facet of quality management is that an organisation should develop
the ability to trace back material right through the entire process: receipts,
production, delivery, and installation, right back to the supplier of the raw material
or component. Where, and to the extent that, traceability is a specified
requirement, individual product or batches shall have an unique and recorded
identification.
Process control
The code requires that the production process is documented completely, not just
in terms of the broad overall process, but also with regard to detailed work
instructions, the way all aspects of the process should be controlled and measured
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against standards, the criteria for workmanship (standards), as well as how and
when approval should be given for the use and application of processes and
equipment. The purpose of process control is therefore to ensure that the
production process consistently produces acceptable quality products or services.
❑ Inspection and testing
The purpose of inspection and testing is to ensure that a quality product is
provided at the end of the line. It is possible to distinguish three dimensions with
regard to inspection and testing.
Receiving inspection, which requires that critical incoming supplies are
inspected and verified as conforming to specifications defined in purchase
orders or per supplier agreement, before it is used.
In process inspection and testing, which ensures that product in the
process conforms to requirements. Non conformances should be
identified as early as possible. Types of tests which may fall into this
category are:
set up specifications;
first piece inspection;
specific inspections or tests by the operators;
fixed inspection stations at set intervals;
patrol inspections by inspectors.
Final inspection and testing is to finally ensure that the product meets all
specifications.
An important element of this section is that records should be kept to prove that
all elements of inspection and testing, as stipulated in the procedures, are
continuously applied.
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Inspection, measuring and test equipment
The purpose of this element of the code is to ensure that the correct inspection
and measuring equipment is used at all times, that it is maintained in the
appropriate way and that records are kept to show that it is handled in a controlled
manner. A very significant requirement is that calibration of test and measuring
equipment should meet national recognised standards where appropriate.
Inspection and test status
The inspection and test status of product shall be identified by using markings,
authorised stamps, tags, labels, routing cards, inspection records, test software,
physical location, or other suitable means, which indicate the conformance or non
conformance of product with regard to inspection and tests performed. The
identification of inspection and test status shall be maintained, as necessary,
throughout production and installation of the product to ensure that only product
that has passed the required inspection and tests is despatched, used or installed.
Control of non conformaning product
Non conforming product has to be identified and appropriate decisions taken as
to what should happen to it. These decisions should obviously fall in line with
documented procedures which should indicate when non conforming product has
to be:
remarked;
accepted with or without repair by concession;
used for alternative purposes, or;
rejected and scrapped.
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The code does not address quality costs as a measurement tool for controlling
non conformance. This is where an effective integrated TQM process will
compliment ISO 9000 by measuring the cost of non conformance, the cost of
corrective action and the cost savings of improvements.
Corrective action
This element of the code could be seen as the engine for continuous
improvement. It requires that appropriate procedures and practices be
implemented which should identify and resolve non conformance on an on-going
basis, so that errors are permanently fixed to prevent re-occurrence.
Handling, storage, packaging and delivery
With ISO 9000 the focus is not purely on the production process - it stretches
further, and encompasses handling, storage, packaging and delivery. In this
context all four of these aspects may apply not just to outgoing product but also
to incoming product and product moving between departments.
Quality records
Quality records have to be maintained to demonstrate achievement of the required
quality and the effective operation of the quality system. Pertinent sub-contractor
or supplier quality records shall be an element of these data.
All quality records have to be legible and identifiable to the product involved.
Quality records shall be stored and maintained in such a way that they are readily
retrievable in facilities that provide a suitable environment to minimise
deterioration or damage and to prevent loss. Retention times of quality records
shall be established in writing. Where agreed contractually, quality records shall
be made available for evaluation by the manufacturer for an agreed period.
A very important aspect of quality records is that the system in place should
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clearly demonstrate that the required quality is being achieved and that the quality
management system is working effectively. The organisation has to demonstrate
that it reviews the information in order to avoid repeat errors. For this reason the
following types of quality records are normally kept:
O
Inspection data
O
Test data
O
Qualification reports
O
Audit reports
Material review reports, eg. customer supplied product verification
Calibration data/reports/records
Quality cost reports
Non conformance and corrective action reports
Training records and statistics
Statistical records - performance measurement information.
This is an important element of ISO 9000. These records are hard evidence to
prove that the processes are in fact working in all its dimensions.
❑ Internal quality audits
Once the quality management system has been implemented it is a requirement
of the code to have regular internal quality audits to verify that quality activities
comply with planned arrangements and to determine the effectiveness of the
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quality system.
The results of these audits should be brought to the attention of management
personnel having responsibility for the area audited to ensure corrections are
effected. This procedure must be seen as a tool for identifying opportunities for
improvement and not as a policeman action.
Training
Well defined job specifications per job function needs to be drawn up. These will
be the standard to which people are assessed and development plans are made,
executed and evaluated for effectiveness of training. The correct, effective on-the-
job training skills are essential in providing quality products and services.
Statistical techniques
The purpose of this element is to ensure that the organisation measures and
analyses all the critically important elements in the company which effect quality
and performance. Examples are as follows:
Company-wide quality cost analysis reports
Company-wide performance statistics, reviewed monthly by the
operational committee
Customer complaints reviewed to show that the trend is a declining
number of complaints and to highlight improvement opportunities
Projects are prioritised cost effectively to ensure best business
performance
Strategic plans are monitored and reviewed monthly to see that goals are
met.
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Servicing
This section relates to after sales servicing and preplanned maintenance of
equipment which could affect the quality of product. This also refers to customer
service in solving complaints and warranty policies.
After initial assessment and approval by the SABS of the quality management
system of an applicant in accordance with a stated part of ISO 9000, the
applicant's name is included in the SABS list of suppliers whose quality
management systems comply with ISO 9000. A certificate giving the name,
address and the commodity or range of commodities or services is issued to each
listed supplier. The listing does not relate to the relative quality level of the
product(s) or service(s), but merely to the quality management system controlling
the product or service.
Looking at ISO 9000 as a part of the TOM implementation process, it is obvious
that the value of ISO 9000 listing lies in the synergy created by the preparation,
accreditation, and the continuous self-auditing of the whole quality management
system. The reason for this is that these elements, firstly, promote understanding
of the importance of improving quality (as shown by the cost of quality), and
secondly, they provide employees with the opportunity to continuously rectify, or
prevent, quality problems.
5.3 CONCLUSION
Any attempt to implement the TOM process in an organisation is faced with one
of the most complex tasks ever likely to be encountered. As a form of
organisational culture change, TOM requires a variety of skills and methods which
have not been the traditional educational and experiential fare of the typical
leader.
Organisational change is based on changing the mind-sets, or paradigms, of the
people in the organisation. Paradigms explain why employees perceive reality
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according to culturally-determined meanings and guidelines. Armed with
paradigms, employees approach the work environment and interpret what they
see and experience according to their shared understandings. When
organisations begin the process of change necessary to adapt to the conditions,
environments, and markets of this, and the next, decade, it will be necessary to
adopt a paradigm more suitable for the global community. TQM is being heralded
as the paradigm necessary for this organisational transformation.
TQM is a form of organisational change and development, and is one of the
possible ways to prepare any South African organisation for the global competition
and operating environment of the 1990/2000's. If managers can understand the
holistic nature of TQM as a way of conducting business and running operations,
then they have already begun to develop the conceptual foundation necessary for
change. Managers can test their TQM understanding and commitment by asking
four critical questions during the implementation process.
1 is TOM a basic cornerstone of the business plan, operating policies,
and mission/vision of the direction the organisation wishes to take
now and in the future?
If TQM is considered an add-on or a luxury, then it will probably have an
early implementation failure. To be successful, TQM must become a new
way of managing, not a secondary operational strategy.
2. Are the managers in the organisation prepared to empower their
employees?
TOM is based on the transfer of operational decision-making power from
the top of the hierarchy to the bottom. The authority to make decisions is
a domain frequently guarded by many managers.
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Is the CEO prepared to empower the managers who report to
him/her?
Empowerment involves the transfer of decision making and problem
solving concerning work process issues to those people who actually do
the work. Empowerment, as an element of TOM success, is best realised
in quality team activity. Managers who develop effective quality teams
have taken the time and effort to build the trust and support necessary for
their employees to be able to function in this non-traditional organisational
process.
Is the organisation willing to redesign its systems of management
information, accountability and performance evaluation in the
organisation?
TOM is primarily concerned with the quality dimension; therefore, it
requires accounting and information systems that support the generation
of revenue as well as cost containment. Traditional accounting methods
which provide reliable data for decision making and strategy in the areas
of employee and consumer satisfaction are either very elementary or non-
existent except for cost controls in areas such as labour, materials and
overhead expenses. TOM organisations have to establish means to
measure and account for non-traditional areas such as consumer
satisfaction, operational quality and effectiveness, and other TOM goals.
The eight critical factors model for TOM implementation serves as a universal
road map to TOM implementation. It provides a systematic approach to build a
fundamental understanding of customer's requirements, process capabilities and
the causes for gaps between them. A road map differs from a prescription.
People who are unfamiliar with a route use a road map as a guide for getting from
point A to point B. On the other hand, a prescription specifies requirements that
must always be followed in exactly the prescribed way and sequence. The hub
of the model is continuous improvement of all processes, products, and services
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in the organisation. The goal of the model is customer's delight in the
organisation it chose to do business with.
5.4 SUMMARY
This chapter examined the TQM implementation process by means of an eight
critical factor model for TOM implementation. The model is focussed on satisfying
the customer through continual improvement, by providing the employees with the
tools required to develop and implement improvements in everyday activities.
An example of the TOM process in a South African manufacturing environment is
presented in Chapter 6.
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IERIEN
s ENT
CHAPTER 6
ANAGE
SYNOPSIS
LIST OF FIGURES, GRAPHS AND TABLES
6-266
6-267
6.1 INTRODUCTION 6-268
6.2 DISCUSSION 6-269
6.2.1 Background of EMSA 6-269
6.2.2 EMSA cares for its employees 6-272
6.2.2.1 Equality in the workforce 6-272
6.2.2.2 Health, safety and environmental protection (HS&EP) 6-277
6.2.2.3 Training and education 6-281
6.2.3 The TOM process at EMSA 6-284
6.2.3.1 Employee involvement 6-284
6.2.3.2 Continuous improvement 6-297
6.2.3.3 Customer focus 6-300
6.3 CONCLUSION 6-303
6.4 SUMMARY 6-304
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S ENT
CHAPTER 6
AGE
TO
SYNOPSIS
EMSA has made an enormous effort for total mobilisation of its workforce in renewing company culture, eliminating imperfections and striving for continuous improvement. The company has successfully implemented TQM to combine quality, productivity and cost reduction together to achieve quality products and services at the lowest cost. Continuous improvements in product quality and customer focus has resulted in reduced electrode consumption and significant cost savings by its customers.
The company has been a NOSA NOSCAR plant since 1988 and has received the highest safety rating awarded by Union Carbide Corporation (USA). This commitment to safety and environmental protection contributed towards the low labour turnover of 4,14 percent in 1995. Employees appreciate the concern for their health and safety demonstrated by the company in providing them with a safe and healthy work environment.
Teamwork, under leadership of the general manager, forms the basis of all daily operational activities and the focus is clearly on continuously improving everything they do.
EMSA's management firmly believes that TQM can only be achieved through people and care of people is considered as an essential element in achieving operational improvements. Employees participate in all efforts to continuously improve productivity, quality, and customer satisfaction.
EMSA believes that there is no "safe" way, no "quality" way and no "productive" way to perform a task, only the "right" way. If the task is performed "right" it will be safe, high quality and productive.
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ENT
CHAPTER 6
TOTAL UTY GE
LIST OF FIGURES, GF. PHS AND TABLES
Table 6.1
Table 6.2
Graph 6.3
Table 6.4
Table 6.5
Table 6.6
Table 6.7
Table 6.8
Table 6.9
Figure 6.10
EMSA RDP policy
EMSA health, safety and environmental protection policy
Lost time injury frequency
Agenda for monthly HS&EP meetings
The EMSA quality circle policy
EMSA vision
EMSA vision practices
EMSA values and practices
EMSA Total quality management policy
EMSA team structure
6-276
6-278
6-278
6-279
6-285, 286
6-290
6-291
6-292
6-293
6-294
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CHAPTER 6
WITIMANAGOVI. CAP
6.1 INTRODUCTION
TOM put EMSA, the only graphite electrode producer in Africa, firmly on the road
to continuous improvement. So much so that the company received, amongst
others, a gold award in the National Productivity Institute's productivity
improvement competition, an ESCOM Effective Energy Design award for
developing a new energy efficient process, NOSA NOSCAR awards for
achievements in health, safety and environmental protection, as well as showing
an increase of 600 percent in net income over the past 10 years.
EMSA, a joint venture between Samancor and UCAR Carbon Company
(International), is located in Meyerton, in the province of Gauteng, and
manufactures artificial graphite electrodes and carburisers for the steel,
metallurgical and chemical industries. The company was founded in 1965 and
has grown from a modest beginning to a progressive company satisfying the total
South African market's demand for graphite electrodes.
This chapter describes the background against which TOM was implemented at
EMSA as well as the benefits resulting from an holistic approach to TOM in a
South African manufacturing environment. All information was sourced from
interviews with key personnel and relevant documents provided by them.
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6.2 DISCUSSION
6.2.1 Background of EMS
As early as the 1950's graphite electrodes started to play an important role in the
South African economy. The management of Samancor (or Amcor as it was then
known) correctly perceived the situation and started to work towards the
establishment of a graphite electrode manufacturing facility in South Africa.
From the very beginning it was realised that the necessary technology would have
to be obtained from an existing graphite electrode producer. Samancor was also
very keen for the proposed facility to be as independent of imported raw materials
as possible and therefore desired that the electrodes be manufactured from pitch
coke which presumably could also be made locally.
In the metals and alloy field Samancor enjoyed very good relationships with the
Union Carbide Corporation who was the leader in the graphite electrode industry.
Samancor invited the Carbon products division of Union Carbide to become a
partner and to provide the technology in a proposed local graphite producer.
For two reasons, Union Carbide declined the offer. At that time, Union Carbide's
policy was that they would only enter into a joint venture if they had both financial
and managerial control. Samancor, however, would not agree to this, as they
wished to control the operation. Furthermore, Union Carbide did not have much
experience in making graphite electrodes using pitch coke.
Union Carbide advised Samancor that during the second World War, a West
German company, Sigri Elektrographit GmbH, successfully produced large
quantities of graphite electrodes using pitch coke and suggested that Samancor
approach Sigri, who were then the second largest graphite electrode producers
in the world, for the technology.
Sigri was indeed interested in supplying the technology and becoming a partner
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in the proposed graphite electrode producing company.
By the time (early sixties) that an agreement in principle had been reached with
Sign, South Africa's total annual usage of graphite electrodes was approximately
equal to the quantity used in one week in South Africa today. This was regarded
to be far too small for the establishment of a viable electrode manufacturing
facility.
In the mid-sixties, the local demand for graphite electrodes had grown sufficiently
to support a small sized manufacturing facility and thus, 30 years ago, EMSA was
established as a joint venture between Samancor and Sigri. The design and
construction work of the plant was started in March 1966 on the farm Kookfontein
in the district of Vereeniging. It is located on the same farm, and north of,
Samancor's existing ferro-alloy and phosphate plants. EMSA began machining
imported electrodes in January 1967, and full manufacturing of graphite
electrodes, from raw materials to finished product, began in April 1968. The
designed capacity for the EMSA plant was 4900 metric tons per year, producing
electrode sizes up to 450 mm in diameter.
During the first few years after start-up, many teething and product quality
problems were experienced. These problems, including the fact that EMSA was
one of the smallest graphite electrode producers in the world, resulted in a poor
financial performance by EMSA.
In the late 1960's !scar, then the mother company of Samancor, adopted a
revolutionary steel melting technique and decided to build a very large, ultra-
modern electric arc furnace steel melt plant at their Vanderbijlpark facilities. Two
150 metric ton "Ultra High Powered" (UHP) furnaces were to be installed, which
would consume approximately the same quantity of graphite electrodes as all the
other South African users together.
It was very important for EMSA to be able to supply this additional electrode
demand required by 'scot -, as it would have enabled EMSA to virtually double its
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output. This would reduce EMSA's high fixed cost per ton of product and thus
hopefully materially improve its financial performance.
Iscor's new UHP furnaces were designed to considerably increase the steel
production per unit time and furnace area. The UHP technique required graphite
electrodes of a considerably higher quality than the ordinary grade electrodes
which had been used until that time in all South African steel furnaces and which
were manufactured and marketed by EMSA.
EMSA's specialist advisors could not supply the necessary technology for the
production of UHP graphite electrodes. Thus, to ensure further growth and to
meet the country's demand, the agreement with Sigri was terminated in March
1971. A new joint undertaking was entered with Union Carbide Corporation in
October 1971. Union Carbide was not only the largest producer of graphite
electrodes in the world, but also developed the UHP melting technique in the USA.
Union Carbide pioneered the development of the first UHP graphite electrodes for
use in modern industrial furnaces. Designed to conduct the enormous amounts
of electricity required for UHP steel making furnaces, graphite electrodes maintain
their strength and shock resistance at temperatures high enough to melt metal.
Modem manufactured graphite is essentially a crystalline form of pure carbon. By
varying such characteristics as the size, number and orientation of carbon-
graphite crystals, it is possible to produce a wide range of products suitable for a
diverse range of applications. When considering the unique properties of
graphite, it is easy to understand why this remarkable substance has so many
practical uses. Graphite does not melt and is stable at 3 000 °.C. In fact, as the
temperature gets higher, graphite actually increases in strength. Also, graphite
can be manufactured in a very pure form, and it is non-reactive with most
chemicals. It has high thermal conductivity and shock resistance, good electrical
conductivity, and is self-lubricating.
The super grade graphite electrode of large diameter (600 mm) required by the
UHP technique also required a special raw material, namely petroleum needle
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coke with a low coefficient of thermal expansion (CTE). Union Carbide had
access to low CTE needle coke and was an ideal partner to take EMSA into the
future. The new partner in the business was responsible for the transfer of
technology and the supply of raw materials to manufacture UHP graphite
electrodes. Between 1971 and 1976 a great deal of management time was spent
on planning new facilities and implementing Union Carbide's technology. In
actuality, until 1977 Union Carbide attended only to the technical expertise of the
undertaking and had no real influence on its management regarding personnel
matters.
Between 1972 and 1981 the capacity of the EMSA plant was raised to the current
30 000 metric tons per year. This included the installation of a new forming
facility, baking furnaces, an impregnation plant, graphitising furnaces and an
extended machining facility. EMSA today is a fully integrated business and
through the dedication of its people and growth in the local market for graphite
electrodes and related products, has become a financially viable and successful
business. Today the company is owned on a 50 : 50 partnership basis by
Samancor and UCAR Carbon Company, previously the carbon products division
of Union Carbide Corporation.
6.2.2 EMSA cares for its employees
EMSA can be regarded as a progressive company that has for many years
provided well for the basic and security needs of its employees. Since 1977 the
creation of a system of equality, a safe and healthy work environment, and the
development of all employees has become a priority.
6.2.2.1 Equality in the workforce
In 1977 EMSA became a signatory to the Sullivan code of conduct (Sullivan 1979 :
67), since one of the share holders, Union Carbide was one of the original
Signatories of the code in that year. The nature and scope of the management of
multinational and international corporations in South Africa entered a new era with
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the implementation of the Sullivan code of conduct. The aim of this code of
conduct, designed by the American civil rights leader Dr Leon H Sullivan, was to
achieve the equality of white and non-white workers in South African corporations
directly or indirectly controlled by American corporations.
The Sullivan code of conduct consists of seven principles which are aimed at
bringing about changes in the organisation in order to achieve equality in the
workplace (Sullivan 1980: 5). Pretorius (1988: 116-117) categorises the seven
principles into two groups:
El "Principles to ensure equal opportunity between whites and non-whites in
and outside the work environment where the two groups are in direct
contact or competition". This includes integrated facilities (principle 1),
training to prepare non-whites for, and promotion of non-whites into
supervisory and management position (principles 4 and 5), and the
elimination of laws and practices that prevent social, political and
economical justice (principle 7).
El "Principles to ensure equal opportunity between whites and non-whites in
and outside the work environment where the two groups are not in direct
contact or competition". Examples are equal and fair employment
practices (principle 2), equal pay for all employees doing equal or
comparable work (principle 3), and the improvement of the quality of non-
white employees' lives outside the work environment (principle 6).
Progress in achieving the requirements of the Sullivan code was measured by an
independent auditing firm, Arthur D Little, Inc (Cambridge, Massachusetts).
Compliance to the code was expressed as Rating 1 (full compliance), Rating 2
(good progress) and Rating 3 (needs improvement). Since 1977 the following
changes have been made to achieve equality for all EMSA employees:
toilet facilities are fully integrated;
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a modern cafeteria and a washroom with integrated facilities were built;
all employees have the same pension and group insurance benefits;
all employees qualify equally for housing subsidies;
non-white and female appointments were made, in technical, clerical,
supervisory, and management positions, on the principle that the
appointed person has the necessary capabilities to meet the demands of
the position;
the right to free association is recognised and employees belong to the
union of their choice;
EMSA has contributed to development of the communities where its
employees live by providing water, schools, and educational opportunities
to children of employees;
all employees receive equal remuneration for the same or comparable
work;
there is no difference between the wage scales for white and non-white
employees.
The implementation of the Sullivan code formed an integral part of the
management function of every manager and supervisor in the company. During
1988 EMSA achieved a Rating 1 for the first time and retained this rating yearly
until 1994. After the abolishment of apartheid and the democratic election of a
new government in April 1994, the statutory requirement for American companies
with operations in South Africa to report annually on the Sullivan code of conduct
is no longer a requirement in terms of the US legislation.
6 - 274
However, EMSA continued with a social responsibility programme aligned with the
Reconstruction and Development Programme (RDP) during 1995, and will
continue to do so in the future. EMSA's commitment to equality and affirmative
action in the workplace is clearly displayed by its Reconstruction and
Development policy, Table 6.1.
A significant portion of the annual expense budget is allocated to projects directed
at providing better education, primary health, and community services to
disadvantaged communities.
South Africa is at the turning point in its history. Private sector involvement is
crucially important in keeping the fabric of its fragile society together. In 1993,
EMSA received the Professional Marketing Review (PMR) Social Upliftment
Corporate Care Award for the company's contribution to social upliftment in South
Africa. The judges were very impressed by EMSA and its employees' quantitative
and qualitative efforts to realise equal opportunities, wealth and justice for all
employees and the wider community. EMSA's programme consists of four main
sections, namely: social justice, education of non-employees, training and
development of employees, and community development.
EMSA's corporate care projects encourage all employees to suggest activities in
which the company can become involved. All managers, heads of departments,
and union representatives are members of a Social Upliftment Steering
Committee, which meets monthly to discuss the progress of current projects and
to evaluate proposed projects. The committee also identifies community specific
projects. Members talk to employees, visit school communities, institutions and
associations, identifying group and individual needs.
EMSA believes that by caring for its people - both in the workplace as well as in
the community where they live - an environment is created where all employees
naturally contribute to the welfare of the company in its quest for continuous
improvement of all its services and projects.
6 - 275
Table 6.1 EMSA reconstruction and development programme policy
PURPOSE STATEMENT
To provide equal opportunities, wealth and justice for all.
poLicySTATEMENT
The EMSA Reconstruction and Development Programme will facilitate sound productive reconstruction and development and will always strive to increase the productivity pool of the country, and to contribute to equal opportunities, wealth and justice for all people. The programme will further facilitate the non-segregation of races in/at all facilities, equal opportunities and equal and fair employment practices for all employees, irrespective of race, colour or sex. All employees will enjoy freedom of association.
The UNISA minimum pay level (MLL) will at least be met for the lowest paid jobs at EMSA.
Preference will be given to the upliftment of EMSA employees and their families.
BOUNDARIES/CONSTRAINTS
Money / Manpower / Time.
sFscpc sTRAT.g.plE.
Equal pay for equal work.
Equal access to benefits within company policies and rules.
Training and advancement
Employees will be trained according to the company's people development and training strategy and policy.
Continue with the advancement and recruitment of disadvantaged people with the ultimate objective to fill at least 60% of all management and staff positions with people from a disadvantaged background.
Recruit and appoint only well qualified and competent people (best applicant) who would need minimum training and assistance to be successful.
Facilitate an environment whereby disadvantaged appointees are assisted and trained by current employees.
Non-employee education
Financial and non-financial support for non-employee education will be in line with the national population demographics.
Community development
The company will strive to increase the percentage purchases from non-white owned businesses.
Financial and non-financial support for community development will be in line with the national population demographics.
Source: EMSA management : 1995 (a)
6 - 276
6.2.2.2 Health, safety and environmental protection (HS&EP)
In 1978 EMSA received a National Occupational Safety Association (NOSA) four
star rating and in 1982 management set the goal of winning a NOSCAR award.
A NOSCAR award is the highest award made for safety by NOSA. The ongoing
improvement in the safety achievements of EMSA includes a five star rating in
1983, regional winner in 1984, national winner in 1987 and the company's first
NOSCAR award in 1988. The communal goal contributed greatly to encouraging
a spirit of team work and achievement. Safe and pleasant work conditions were
created for all employees. Top management is personally involved in six-monthly
self audits, monthly HS&EP meetings, and all enquiries into serious and
potentially serious injuries and incidents. Management's commitment to the
creation of a safe and healthy work environment unquestionably played a decisive
role in creating a positive attitude and safety awareness among employees. This
can be illustrated by E MSA's excellent safety achievements and the large number
of employee HS&EP suggestions (on average 200 per year) that are implemented
annually.
During 1995, performance in HS&EP affairs once again was excellent and EMSA
retained its NOSCAR status for the eighth consecutive year. The company also
featured in the launch issue of NOSA's safety newspaper, "Workers Life", directed
at the hourly paid workforce in South Africa (NOSA 1995: 6-7).
EMSA was the first graphite facility to achieve a Union Carbide HS&EP "Meets"
rating in 1990. This is the highest rating awarded, by independent auditors, when
evaluating a company's HS&EP procedures and practices and comparing them to
the standards prescribed by Union Carbide. This rating was again confirmed
following an audit by UCAR in 1993 during a 3 yearly follow-up audit.
The main objective of EMSA's HS&EP programme is to continuously reduce the
probability for injuries. The EMSA HS&EP policy (Table 6.2) clearly shows the
company's commitment towards achieving this objective. According to this policy,
line management is responsible to ensure continuous improvement in the safety
6 - 277
of all employees.
Table 6.2 EMSA health, safety and environmental protection policy
The success of our business depends upon the prevention of accidents, occupational illnesses, deterioration of the environment and the strict compliance with established HS&EP legal and policy requirements.
Compliance to established laws, UCAR Carbon HS&EP Policies and the NOSA safety system will be accomplished through establishing clear policies, procedures and standards within EMSA with an emphasis on simplicity.
Line management is responsible and accountable for achieving and maintaining HS&EP excellence within their areas of responsibility.
Continuous improvement of our HS&EP program will be promoted to remain competitive and to retain a position of leadership in industry.
Source: EIVISA management : 1995 (b)
A direct measure of the success of the drive towards reducing injuries, is the
number of man-hours worked without a lost workday case (LWC) injury. The
company works approximately 1,2 million man-hours per year. The goal is to work
1 million (or multiples of 1 million) man-hours without a LWC injury. This goal has
been achieved 16 times in EMSAs history! Since 1976, the 2 million consecutive
man-hours without a LWC injury has been achieved on three occasions. The
record for man-hours worked without a LWC injury stands on 5,76 million man-
hours! Continuous improvement in the frequency of lost-time injuries since 1972
is shown in graph 6.3.
Graph 6.3 Lost time injury frequency
Source: EMSA management : 1995 (c)
6 - 278
HS&EP training is provided on an ongoing basis. All managers, heads of
departments and supervisors received in-depth training on the Occupational
Health and Safety Act during 1995. This act differs from the preceding Machinery
and Occupational Safety Act in that the protection of the health of the employees
is included in the new act - something which has been part of the EMSA HS&EP
programme for many years. Ten percent of all employees are trained, on an
annual basis, in NOSA prescribed training courses and first-aid. All employees
belong to departmental HS&EP committees. These committees meet monthly,
using the standard agenda shown in Table 6.4.
Table 6.4 Agenda for monthly HS&EP meetings
AGENDA FOR MONTHLY ,:HSAIE:P.MEETINGS
Approval of previous minutes Matters arising Injury/incident statistics and review Audits Goals progress Housekeeping trophy Plant
Offices Topic of the month Item of the month Annexure II follow-up HS&EP training Review of HS&EP manual Transport Review committee report back Incident recall HS&EP suggestions Off-the-job safety
Source: EMSA management : 1995 (d)
Items 10 and 11 on the agenda are aimed at providing a short training session on
a selected item of the EMSA HS&EP procedures and programmes. These items
are scheduled to cover all the procedures and programmes with all employees
over a three year period.
6 - 279
HS&EP films or videos are shown monthly to all employees. During this one-hour
session, serious incidents and all injuries during the preceding month are also
discussed. Photographs or videos of the incident/injury are shown to create an
awareness of the situation to prevent reoccurrence.
EMSA is dedicated to preventing atmospheric pollution in the community where
it operates. Specifically, EMSA strives in its corporate and personal actions to:
avoid unnecessary contributions to air pollution;
meet or better existing air quality standards in cooperation with the air
pollution control authorities and with the community;
. minimise atmospheric emissions from processes through the use of the
best affordable technology;
. support research and monitoring into atmospheric phenomena so that the
most cost effective pollution prevention strategies can be devised.
In recognition for its contribution towards air pollution prevention, EMSA received
the National Association for Clean Air's (NACA) Corporate Award. NACA, a
comprehensive authority on air quality in South Africa, bestows this prestigious
award for exceptional contribution to the prevention of air pollution on a national
basis to an organisation with a history of commitment to clean air.
This look at EMSA's successful HS&EP programme leaves little doubt that one of
the greatest contributions to the attainment of its high degree of total safety results
from its systematic approach and outlook; all stages of design, manufacture and
operation, the people - equipment - material - environment sub-systems are
considered as interrelated interdependent components of the overall system.
Safety at EMSA has come to mean freedom from the people - equipment - material
- environment interactions that result in injury to personnel, damage to equipment,
time loss or any down grading of the company's objectives.
6 - 280
6.2.2.3 Training and education
The importance placed on education and training is evidenced by the substantial
amount of money spent on this topic during 1995, namely 6 percent of EMSA's
total wage bill.
Until 1979 training was given mainly to top and middle management. This
included training in the Union Carbide management principles and systems, the
Kepner Tregoe problem-solving and decision-making techniques, and negotiating
skills. After a full time training manager was appointed in 1979, training
programmes were implemented for potential supervisors and for the development
of all hourly employees.
At present, employees receive, on average, 10 working days training, in various
subjects, during the calendar year. This training includes:
0
adult basic education and training;
0
total quality management;
quality circles training for leaders and members;
statistical analysis, SPC and experimental design;
justice for all;
0
industrial leadership;
0
labour relations act;
0 occupational safety and health act;
0 first aid;
6 - 281
O
23 NOSA courses;
O
forklift operators course;
O crane operators course;
O slingers training;
. apprenticeship training and education.
All employees are encouraged to improve their education levels by enrolling for
degrees, diplomas and high school certificates. Financial assistance is given to
all employees studying towards recognised qualifications at accredited institutions,
provided that the field of study is relevant to the company and the employee's
future prospects in the company.
The Manpower Training Amendment Act, which came into effect during 1990,
provides for the establishment of industry based training boards to take over the
administration of the apprenticeship system from the Department of Manpower.
The training boards had to formulate conditions of apprenticeship which provide
for a competency-based modular training system as opposed to the time-based
system used in the past.
A system of accreditation was introduced. This involved the evaluation of training
institutions or employers to determine whether they can function as a training body
and produce trained artisans who comply with set standards to the industry.
EMSA was granted accreditation during 1993 to train apprentices in the trades of
electrician, fitter, fitter and turner, and welder. This accreditation was granted to
EMSA by the Metal and Engineering Industrial Education Training Board.
EMSA also supports education and development programmes in the community
and for children of EMSA employees.
6 - 282
0
Junior Achievers: This programme exposes children from all cultures to
an equal opportunity environment. The 10 week educational programme
is presented by EMSA to senior high school children from the community
to teach them how to organise, operate and manage their own business.
Mentorship programme: A resident professor at a local university is
sponsored to mentor post graduate students from the disadvantaged
community.
Adopted schools: Needy schools in the community are assisted by
providing the basic equipment necessary to ensure an acceptable level
of schooling for the attending children. EMSA artisans are also involved
in maintenance activities at these schools.
0 Supplementary classes: These classes are presented by a local
university, and sponsored by EIV1SA, to matriculants from the
disadvantaged communities. The classes are presented to matriculants
in preparation for their final exams.
EMSA believes that a trained and educated workforce is an informed workforce,
and as such are able to make better judgement decisions, as and when required,
in both the workplace and in their private capacity as members of the community.
From this background study of EMSA, the character of the company very clearly
constitutes itself as being one of caring for, and serving of, its employees. It is
obvious that the company recognises the potential greatness of the people in and
around it, and that it wants to serve (or give) in such a way that this potential
greatness may be realised. This perspective is extremely important because it
shows that serving people does not mean being servile; it means doing the things
required to make the other person greater and not the things that will evaluate
only the self. From the company's point of view, this also means not tolerating
mediocrity. Serving the other does not mean to allow him equality with the worst
in himself, but to create the circumstances where he will rise to the best in himself,
6 - 283
in other words, where he will start acting with generosity, courage and care
towards everybody in the immediate environment.
6.2.3 The TOM process at EMSA
In chapter 4, a model to define the elements of the TQM process was proposed.
These elements were defined as:
0 employee involvement: the active involvement and participation of all
employees, in a multi-functional capacity, in all improvement actions are
considered to be a fundamental element for the achievement of
continuous improvement;
0 continuous improvement: the continuous improvement of productivity,
knowledge, and processes are essential in the advent of competing in the
global market;
customer focus: customer is defined as being an internal or external
user/buyer of any product/service provided by the organisation, and also
as the owners/shareholders of the organisation who are directly affected
by the success (or failure) of the organisation.
The TOM model provides the structure for a systematic analysis and evaluation
of the TQM process at EMSA.
6.2.3.1 Employee involvement
EMSA was one of the first companies in South Africa to implement quality circles.
As far as can be established, EMSA was the first organisation to successfully
involve hourly-paid black workers in quality circles (Barnard 1993: 186). The
quality circle programme was implemented slowly and systematically. The
decision to implement quality circles was taken at the end of 1981 and a quality
6 - 284
circle policy (Table 6.5) was formulated and approved by top management even
before management communicated with employees on the proposed
implementation of quality circles. This was done to ensure that top management
reached consensus on the objectives of the programme and to affirm from the
outset management's commitment to quality circles.
Table 6.5 EMSA quality circle policy
EMSA QUALITY: CIRCLE POLICY
Employee input into the day-to-day operation of the job(s) is considered to be an important
element in the successful operation of the company. A quality circle program is one method
of effectively obtaining that input and as such is endorsed and fully supported by
management.
DEFINITION
Quality circles are small groups of employees who meet on a regular basis to discuss their
work problems, analyse causes of these problems and recommend solutions to
management, and in areas within their jurisdiction, to take action to implement solutions
themselves. Normally, a circle will consist of from 4 to 10 individuals from the same or
related work area.
PURPOSE AND SCOPE OF QUALITY CIRCLES
To conduct continuous analyses of operating problems using the proven techniques of a
quality circle program within the company. The principles described herein apply to all
activities (engineering, administrative, manufacturing, etc) in the company.
PRACTICE AND PROCEDURES
Management will support circle activities by:
Allowing company time for regularly scheduled committee and circle meetings.
Providing adequate meeting areas and materials.
Providing effective publicity for the program via the EMSA newsletter, bulletin board notices, etc.
Replying to circle recommendations and requests in a timely manner.
Implementing approved circle recommendations expeditiously.
Respecting the autonomy of circles, eg. not intentionally independently resolving a problem that a circle has undertaken to solve.
Circles will ....
6 - 285
Circles will:
Assure that each member has a voice in the operation of the circle.
Set up schedules for meetings and presentations within the framework of known company workloads.
Not address the following subjects: benefits and salaries employment policies personalities organization-wide policies.
Have the option of accepting or refusing problems submitted from any source.
Have the opportunity to present periodic reviews of selected projects to top management.
Source: EMSA management : 1995 (e)
Information sessions were held with heads of departments, supervisors, artisans
and all hourly employees during which the following topics were discussed:
background of quality circles;
the EMSA quality circle policy;
the implementation plan;
training.
A full time coordinator was appointed to coordinate all quality circle activities and
to provide the relevant training to circle leaders and members.
The first quality circle was formed in September 1982. It consisted of black and
white boilermakers and welders and was known as the Fab circle. During the pilot
phase, September 1982 to February 1983, six quality circles were formed and
management decided to proceed with the quality circle programme. The following
important factors were taken into account in this decision:
six quality circles were formed during the pilot phase, and an additional
6 - 286
four circles were on the brink of being formed;
during the pilot phase, the six circles made eight presentations to
management, who were very impressed with the enthusiasm and creativity
of the members;
two of the eight projects had already been successfully implemented;
the cost of implementing all eight projects would be R6 800 for an annual
saving of R15 000.
The quality circle programme has been functioning effectively ever since. At the
end of 1995, 29 quality circles were active with a membership of 218. Since
1982, 267 quality circle projects were successfully implemented with a resulting
annualised saving of approximately R2,6 million. When the magnitude of savings
is examined, it must be taken into account that 179 of the quality circle members
are hourly paid employees, many of them being semi-literate black employees,
whose lack of advanced problem solving skills makes the achievements of their
quality circles even more significant and applaudable.
The main goal of implementing quality circles was to raise employee morale with
the belief that it would contribute to increased productivity. EMSA's management
is aware of the difficulty of determining what contribution quality circle participation
has made to raising morale, since there are other factors that influence it
simultaneously. One of the most important variables is the influence of external
political pressure brought to bear on black union representatives. Unions in
general are opposed to any programme aimed at increasing productivity, since
they believe that it will lead to a reduction in job opportunities and to strengthening
the capitalist system.
EMSA management, however, reasoned that, although it is difficult to measure the
contribution of quality circle participation to an improvement in morale, there is
sufficient literature and case studies that prove that employees in general have the
6 - 287
need to belong to a group, to use their minds as well as their hands, and to
receive recognition. Quality circles give employees the opportunity to become
part of a group, to use their practical capabilities for problem-solving, and to
receive recognition for their contribution. Quality circle activities thus lead to
employee satisfaction with a consequent improvement in morale. The fact that
participation in EMSA's quality circles is totally voluntary, with no monetary reward
attached to participation or achievement, also means that only those employees
who derive satisfaction from these activities will remain active members. The
growth and continued existence of quality circles could thus be seen as an indirect
indication that quality circles contribute to improving employee morale.
Quality circle participation also leads to improved productivity because members
carry out their routine tasks with more enthusiasm and interest. Members are
continuously trained, learn how to solve problems and make decisions, and
develop a better understanding of the operation and cost structure of the
company. This enables employees to execute their daily tasks more effectively
and with greater understanding. EMSA's management realised that this
improvement in effectiveness with which employees carry out their day-to-day
activities would make the greatest contribution to increasing productivity in the
long term. The implementation of quality circles is still regarded as a long term
investment in EMSA employees.
Additional to the improved productivity that results from quality circle activities,
union representatives, and members, learn what problem-solving and decision-
making techniques comprise, what consensus decision-making means and how
the organisation functions. This could make union negotiations much easier in the
future and lead to more realistic expectations.
EMSA managed to implement quality circles successfully and to involve lower
level employees in the problem-solving and decision-making process. This lead
the way to the implementation of TQM and for a new organisational culture.
A TQM programme based on the Deming philosophy was introduced in 1987.
6 - 288
!mai (1986: xxv) defines TQM as organised, gradual, unending improvement
activities involving everyone in the company - management and workers - in a
totally integrated effort towards improving performance at every level. This
improved performance is directed towards satisfying such cross-functional goals
as quality, cost, scheduling, manpower development and new product
development.
During December 1987, the plant manager wrote a memorandum to the managing
director regarding the implementation of TQM at EMSA:
"We should not encounter any major obstacles in the process of shaping a new
culture in the plant organisation since we have bee practising a more participative
management style and encouraging innovation for the past five years". (Barnard
1993: 182).
The success of the quality circle programme made a great contribution to the
creation of the new culture. Employees were used to participating in problem-
solving and decision-making and have confirmed that management is sincere in
its intention of establishing a participative management culture. This lead to
mutual trust between management, employees, and union representatives. Trust
in the workplace has serious implications for an organisation's ability to compete
effectively in the global economy.
Formal training in the Deming philosophy was presented to all managers, heads
of departments, supervisors and union representatives. Table 3.5 (p 3-73) is a
summary of Deming's 14 points of quality improvement for management. Points
6 and 13 emphasise the necessity of training and development of employees and
point 5 highlights the importance of the principle of never-ending improvement in
everything a company does and produces. All three these points have already
been addressed through participation in the quality circle programme. Employees
were offered the opportunity for training and development and to contribute to
never-ending improvements of EMSA by means of proposals on projects for
improvement and solving work related problems.
6 - 289
During 1988 EMSA management formulated the EMSA vision and introduced it to
all employees. The vision is reviewed regularly to ensure that it remains current
and applicable to the present operating environment, and that it remains fully
aligned with the corporate UCAR vision. The most current revision (Table 6.6)
took place during the second half of 1995 and included a new global approach for
the organisation as a whole.
Table 6.6 EMSA Vision
EMSA VOVON
This Vision statement is an expression of what we strive to be as a global company. For each of us to identify with this Vision requires considerable personal commitment. Realizing the Vision calls for innovation, inspiration, and dedication
We know where we are going and why
Every person is informed, and empowered, enabling us to reach our common goals.
We have pride of ownership in our jobs
Our environment encourages each of us to make our maximum contribution. Participation through team work enables every individual to be involved in, dedicated to, and benefit from the success of the business. We listen to and trust each other.
We continuously improve everything we do
Our dedication to total quality makes EMSA the high-quality, low-cost performer. Adaptability and innovation are vital parts of our continuous improvement effort.
We set the standards
Customers are the key to our success. They recognize us as the industry leader based on the value we deliver with our products and service.
We provide excellent value
We consistently provide attractive growth of shareholder value while meeting our commitment to our communities and employees in matters of health, safety, and the environment.
Source: EMSA management :1995 (f)
6 - 290
EWISA PRACTICES
.. .
Managing people by regularly communicating goals, strategy, changing priorities, and so on.
Helping people to understand how their jobs contribute to the overall effectiveness of your work unit.
Allocating resources in accordance with business priorities.
Being willing to make difficult decisions.
Demonstrating commitment and persistence in attempting to serve customers better.
Knowing the motivation and goals of the customers.
Being innovative and creative in response to business conditions.
Solving problems rather than escalating the problem upwards.
Giving employees a clear-cut decision when they need one.
Responding in a non-defensive manner when others disagree with your views.
Demonstrating high personal standards.
Encouraging innovation and calculated risk taking in others.
Encouraging your subordinates to initiate projects they think are important.
Supporting and reinforcing new ideas and techniques developed by employees.
Treating with an open mind requests to change plans and goals when circumstances seem to warrant change.
Being able to develop new, creative approaches and alternate solutions to problems.
Encouraging employees to take responsibility for actions and results, creating a sense of ownership.
Trusting your subordinates to do things right.
Giving your subordinates feedback on how they are doing their job.
Communicating your views honestly and directly during discussions with subordinates about performance.
Utilizing recognition and non-monetary rewards as well as financial compensation, to reward excellent performance.
Recognizing the value of bringing together people with different opinions.
Understanding which decisions can be made alone and which decisions need to involve others.
Evaluating the views of others according to their knowledge and competence.
Behaving in a way that leads others to trust you.
Emphasizing co-operation as opposed to competitiveness among members of your work group.
Concurrent to introducing the EMSA vision in 1988, management also introduced
a set of vision practices (Table 6.7). This vision practices are, in essence, a code
of conduct aimed at creating a corporate culture focused on the vision. The vision
practices support and encourage creativity and employee involvement in problem-
solving and decision-making.
Table 6.7 EMSA vision practices
Source: EMSA management : 1988
6 - 291
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During 1996, the vision practices will be replaced by a set of six corporate values
and practises. These values and practices (Table 6.8) were formulated to:
support the vision;
drive the actions required to satisfy the vision;
provide a simplified, more detailed description of the core beliefs which drive
the organisation.
After implementing the EMSA vision in 1988, the TQM policy (Table 6.9) was
formulated to support the vision and to fulfil the requirements of the
SABS ISO 9002 listing and UCAR quality standards.
Table 6.9 EMSA Total Quality Management policy
EMSA TOTAL QUALITY MANAGEMENT POLICY ''''''''''''''''''''''''''''''''
EMSA is committed to continual, never-ending improvement in Total Quality.
It is EMSA's goal to provide our customers with value and service to meet their needs at all times.
By maintaining constancy of purpose, with improvement of competitive position through Total Quality as a primary operating objective, and by using the powerful tools of Statistical Process Change, we shall make quality improvement a way of life and gain the long-term advantage that comes from reliable products.
The company quality policy is thus directed towards achieving the following objectives:
To provide customers with an assurance, that is to say a high level of confidence, that the graphite products supplied to an order will comply with an agreed specification (or will perform satisfactorily).
To minimize the risk of failure or faulty performance of any product under specified or normal service conditions, for a predetermined period of operation.
To contribute to the profit objective of the Company by optimizing the direct costs of quality assurance against:
the cost of potential losses, defects and wastage. the implicit value of perceived goodwill and credibility.
To improve communication between all departments and functions.
To improve managerial and technical skills and to instill the need for self-discipline and attention to detail in all personnel in conducting the activities of the Company.
To increase quality assurance awareness in all Company personnel and to create an environment that will lead to the daily pursuit of better quality on the part of every person in the organisation.
Source: EMSA management : 1996 (b)
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Groups play a particularly significant role in Elk/ISA. The successes of the quality
circle programme guided management into forming formal groups, or teams, at
different levels of management to address specific needs. The EMSA team
structure (Figure 6.10) consists of six main groups.
Figure 6.10 EMSA team structure
Source: EMSA management : 1995 (g)
Business team
The business team consists of the general manager and the eight functional
managers reporting directly to him:
human resources
finance
marketing
production
quality
HS&EP
engineering and maintenance
pipeline (production planning and materials)
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The business team meets once per week to communicate and to formulate
policy and strategy.
Operations team
The operations team consists of the production manager, process managers,
and heads of departments. This team meets weekly to communicate
decisions from the business team and to share problems and opportunities
present in the facility.
TQM steering team
The TQM steering team meets once a month and consists of the business
team, operations team, TOM coordinator, quality circle coordinator, and union
representatives. This team formulates policy about training and all small
group activities. The review of TOM procedures and progress in quality
improvement are standard agenda items for the monthly meetings. The TOM
steering team also appoints breakthrough teams to address specific and
urgent quality issues.
Breakthrough teams
The TOM steering team appoints breakthrough teams on an ad hoc basis.
According to Juran (1964 : 2) a breakthrough is "... change, a dynamic, decisive
movement to new, higher levels of performance". The aim of the breakthrough teams
is thus to permanently improve existing standards. These teams are
appointed to work on complex and often multi-disciplinary projects. In
contrast with quality circles, membership of these teams is not voluntary and
the team is dissolved as soon as the problem has been solved.
Control teams
Control teams are permanent teams and meet at least once per month to
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work on the never-ending improvement in total quality. Every department has
a control team consisting of the head of the department, supervisors,
members of the quality assurance department, maintenance and engineering
department and also representatives from the shop floor. These teams make
extensive use of statistical techniques to gather data and to show progress
in their improvement efforts.
Quality circles
Quality circles consist mainly of hourly and supervisory personnel.
Membership is voluntary and there is no financial reward associated to
suggestions or improvements implemented by the circles. Circles meet two-
weekly in working time to work on the improvement of any work related issue,
relative to their area of interest, selected by the circle's members.
Every Friday there is a "Total Quality Hour" during which a control team is given
one hour to make presentations to management. This weekly session is attended
by all members of the business and operations teams. The control teams are
rotated to give each team the opportunity to make three presentations per year.
Shopfloor workers participate in the presentation of projects in which they are
actively involved.
The objectives of the Total Quality hours are the following:
to prove management's commitment to never-ending improvement in quality.
All employees can see that management is prepared to devote time to listen
and respond to their proposals;
to ensure that control teams are working on projects that are focused on the
goals and vision of the organisation;
to ensure continuous improvement in the activities of each department;
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to give control teams recognition for their contribution to continuous
improvement at EMSA.
The EMSA team structure also makes it possible to deal with the communication
needs of the organisation. The need for two way communication is stressed
during all team meetings and all employee proposals are dealt with in an ordered
fashion.
Communication between all departments and functions has been further improved
by the introduction of a quarterly state-of-the-business meeting where the general
manager addresses all salaried employees. The production manager then
addresses all hourly paid employees to convey the same information to the rest
of the workforce within 24 hours.
It is clear that every employee at EMSA is involved in the problem-solving and
decision-making process, and has the opportunity to participate in group activities.
The benefits of the experience and training that employees gain from group
activities will be illustrated in the discussion on continuous improvement.
6.2.3.2 Continuous improvement
Since 1972 a very active Operations Improvement Programme (01P) has been in
effect. The overall objective of this programme was to look for opportunities to
reduce operating cost and to improve overall operational productivity.
During 1986/1987 production demand approached production capacity in four of
EMSA's five production processes. This situation resulted in excessive overtime
being worked in an effort to meet production schedules. Support functions, eg.
maintenance resources, were also stretched to the limit and the low operating
efficiency in the forming facility had a negative impact on product quality and
uniformity.
EMSA decided to address capacity deficiencies in the forming, baking,
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impregnating and graphitising facilities through efficiency and unit capacity gains.
Multi-disciplined breakthrough teams were established to increase capacity by
investigating potential improvements and to limit capital expenditure as far as
possible. These teams had regular meetings and action plans were formulated
to implement identified improvement projects.
The success of the forming team is reflected by the reduced set-up and change-
over times achieved in the forming process: a die change which had previously
taken about five hours was significantly reduced to only sixteen minutes! Added
to this significant increase in facility capacity was an improvement of 20 percent
in overall facility efficiency.
A electrode length improvement programme achieved advancements in the baking
process by improving the packing methods used in order to avoid end deformities.
Further improvements in the baking process were attained by increasing payloads
and faster furnace turnaround, achieved through the use of cooling bays, to
remove electrodes from the furnace to cool, and thereby reducing furnace
occupancy.
Capacity improvements were made in the impregnation process by double
stacking short electrodes in the autoclaves. After extensive trial work it was found
to be possible to reduce the cycle time of the impregnation cycle by approximately
8 percent.
Until 1987 EMSA had been operating two different graphitising processes. The
one made use of current technology and the other was the original process used
when the plant was erected in the late 1960's. The latter was more time
consuming, required larger loads and greater expenditure on electricity, there was
greater risk associated with the production run, and electrodes produced were of
inferior quality. A decision was taken to remove the old conventional furnaces and
to replace them with smaller furnaces thereby shrinking space requirements and
increasing facility payloads. The shorter firing cycle enabled the process manager
to schedule furnace firing times so as to take advantage of cheaper electricity
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rates. The more uniform firing cycles and the smaller furnaces further enabled
EMSA to produce rush lots more readily.
Production costs were further reduced when it was realised that carbonaceous
waste, which had previously been dumped into landfills, could be sold as a by-
product. The market for dust waste, sold as pellets or bagged dust, extends from
the steel industry to the building industry and the product is used to increase the
carbon quality of manufactured goods.
Significant developments have been made in the use of computer technology.
Prior to 1993 EMSA operated a mainframe computer system. This system has not
been open to the manipulation of data and was thus unfriendly for useful data
retrieval. This resulted in employees using personal computers extensively to
compile reports. During 1993/1994 the whole plant was networked into an AS400
computer system. EMSA has always had a version of MRPII, however, as it was
a mainly manual system, the company has not been able to benefit from the real
advantages of MRPII. Under the new AS400 system the large amounts of paper
floating around have been reduced and data is captured at the source. These
improvements have brought EMSA to the point where it has implemented a fully
integrated production planning and control system - EMSA is currently working
towards reducing in-process buffer inventories through better scheduling and
improved production processing cycles. A large portion of the savings resulting
from reduced in-process inventories will be allocated to building finished goods
inventory to reduce delivery lead times and to assist customers to reduce their
inventory levels with minimal risk of stock-outs.
Many years of direct employee participation in day-to-day operating decisions has
stimulated the leadership qualities, personal initiative and original thinking
required to manage EMSA's operations. Despite a substantially reduced labour
force EMSA has managed to achieve significant labour productivity increases.
Given a production demand of 18 136 metric tons in 1983 compared to 27 973
metric tons in 1996, labour productivity improved from 27,7 metric tons per
employee in 1983 to 58,8 metric tons per employee in 1996.
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Throughout the implementation of TOM at EMSA, management has assured
employees that no retrenchments would be effected as a result of productivity
improvements achieved. General consensus is that this is the reason why the
active trade unions in the plant have not objected to productivity improvement
programmes and have understood that these improvements have contributed
towards employment security. The reduction in labour force has been achieved
by natural attrition and voluntary separation packages.
Over the four year period, from 1987 to 1991, efficiency improvements of
approximately 20 percent were achieved in EMSA's forming and impregnating
facilities, and capacity improvements of just over 20 percent were achieved in the
forming, baking, impregnating, and graphitising facilities. Annual savings
amounted to R4,3 million over the same period. The capacity improvements
enabled EMSA to avoid further capital expenditures on plant and equipment with
resultant cost avoidance of R7,2 million between 1988 and 1990. As a result of
these improvements, EMSA has been able to keep within plant manufacturing
capacity up to 1995. The first additional capacity will be added towards the end
of 1996 as a result of a significant increase in product demand forecast for 1997
onwards.
The success of EMSA's continuous improvement effort is further evidenced by the
savings resulting from the 01P. During 1995 these savings amounted to a
significant 2,9 percent of total plant costs.
The achievements realised through EMSA's continuous improvement of all
aspects of the business, through the involvement of all employees, serves as clear
commitment to the concepts of TOM by EMSA management.
6.2.3.3 Customer focus
EMSA is the sole producer of graphite electrodes in South Africa. The demand
for graphite electrodes is largely dependant on the demand for steel which is
produced via the ultra high powered electric arc furnace process. For this reason
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the company's product is directly dependent on the derived demand of the steel
industry. These factors have a very definite effect on the strategy which EMSA
has formulated to be effective in its environment.
Strategic management requires a balance between environmental opportunities
and the company's resource base. Since both are continuously changing, the
profit growth balance of an organisation also changes continuously. This dynamic
situation challenges the survival of every business, but it can also be a renewing
process for businesses that can identify environmental opportunities within their
As EMSA can do very little to increase sales to customers directly, due to the
derived demand situation of its market, it has opted for a pull marketing strategy.
Rather than attempting to address the problem at the primary level, it has opted
to approach the situation at the secondary level by providing a technical service
to arc furnace operators. This service is directed at the EMSA : customer to reduce
furnace operating cost by more efficient use of graphite electrodes. To enable the
customer to reduce the consumption of graphite per ton of steel produced, EMSA's
technical service engineers, employed by the marketing department, call on the
customer not to sell electrodes but rather to provide a technical service to the
customer to ensure that the furnace is operating efficiently and that graphite
consumption is kept to the minimum. Further, arc furnace specialists from UCAR
visit South Africa regularly to advise EMSA's customers on new furnace
technology and to assist with any operating inefficiencies they may be
experiencing.
These service activities result in the customer reducing the amount of graphite
electrodes consumed per ton of steel produced. It may be argued that this
approach to customer satisfaction causes a reduction of graphite electrodes sold
by EMSA. This is quite correct in the short term, but EMSA's approach has a long
term focus. The long term goal of this strategy is to ensure that the electric arc
furnace process remains more cost efficient with respect to all other processes of
producing steel.
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When analysing the statistics of the steel industry it becomes very clear that this
strategy has resulted in the expected benefits, to both the electric arc furnace
operators as well as for EMSA.
During the period 1990 - 1995:
graphite electrode consumption decreased by 17,2 %;
total steel demand increased by 1,08 %;
electric arc furnace steel demand increased by 22,8 %;
EMSA electrode sales increased by 13,4 %
(Source: EMSA management);
It is clear that the electric arc furnace method of producing steel has gained'
preference over the other methods of steel making. This trend is expected to
continue, and even to increase, as the older steel shops are being replaced with
new, modern ultra high powered electric arc furnaces.
Being the only producer of graphite electrodes in South Africa implies that EMSA's
customers are almost completely reliant on EMSA's ability to supply quality
products on time. EMSA has thus always kept large quantities of inventory. Both
contractual and gentlemen's agreements have been entered into with customers
to the effect that EMSA is committed to reliable supply of product at all times. The
reduction of processing lead times since the introduction of TOM has increased
the confidence of EMSA's customers in its ability to supply products timeously.
EMSA has received various certificates, citations, recognition awards, and letters
of commendation related to customer satisfaction from its customers. Some
customers have gone so far as to submit articles on EMSA's customer focus to
newspapers and magazines. The following is an extract from one such article,
published in 21 publications (Davies 1992 : 1):
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"As more companies tighten reins, Atlantis Diesel Engines and Atlantis Foundries have
been quick to appreciate that one of their suppliers, EMSA (Pty) Ltd, has gone out of its
way to educate them in the most efficient and cost-effective use of its products.
"EMSA has also kept the price increases of its electrodes and recarburisers well below
the inflation rate through its commitment to continuous improvement.
"Since EMSA is the only producer of these products in South Africa, they could be
complacent about their customers", says Mr John Davies, senior general manager of
Atlantis Foundries.
"But this is not so. They are aware of the long-term benefits of good customer relations
and have introduced a [TOM] policy that brings them closer to their customers.
"EMSA's recommendations following the evaluation of our melting practices and
operations, resulted in a reduction in the amount of electrodes in our arc furnaces.
"This was done by reducing the amount of electrodes used per ton of metal from 5,1 kg
to 3,2 kg. Since this is one of the most expensive products used by the foundry, our
savings are great."
Significant improvements in product quality and uniformity resulted in reduced
graphite consumption and major cost savings by EMSA's customers. The fact that
the company has maintained its market share, even in the face of a growing threat
of foreign competitors trying to enter the South African market, is a clear indicator
of very high level of customer satisfaction.
6.3 CONCLUSION
The active involvement and participation of all EMSA's employees in problem-
solving and decision-making is regarded as essential for the achievement and
maintenance of a low cost producer status. Employees are actively participating
in EMSA's voluntary quality circle programme. Currently 48 percent of the work-
force are active members of this programme. A team based system of control and
breakthrough teams is provided as a structure for employees to contribute to TQM
by continuously looking at ways to improve systems, processes, services, and
products supplied to internal and external customers.
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Participative management is one of the cornerstones of the EMSA TQM process.
Management provides leadership and direction and only where necessary is
directly involved in the planning, control and execution of activities. However,
once the strategy is defined, the authority for execution is delegated to the
employees best qualified for the execution of the projects or programmes.
Regular feedback sessions, in the form of Total Quality hours, are scheduled for
communication purposes and to ensure that the overall strategy is maintained.
Continuous improvements in product quality and reliability has resulted in reduced
electrode consumption and great cost savings by EMSA's customers. A clear
indication of customer satisfaction is the fact that EMSA has maintained its market
share, even in the face of increased international competition.
6.4 SIAM RY
In this chapter, a multinational South African company, EMSA, was used to
illustrate the TQM process in a South African manufacturing environment. The
TQM process at EMSA was examined and analysed according to the TQM model
proposed in Chapter 4.
In Chapter 7, the experience gained and lessons learned, in the quest for
continuous improvement, during the past decade will be extrapolated to sketch the
future requirements and challenges of the TQM process.
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CHAPTER 7
TO
MAGI LE
SYNOPSIS 7-306
LIST OF FIGURES, GRAPHS AND TABLES 7-307
7.1 INTRODUCTION 7-308
7.2 E1SIPOWERED TE MS: ELEW, TING TOTAL QUALITY MANAGEMENT TO A NEW LEVEL 7-309
7.2.1 Wealth creation - a prerequisite for growth 7-309
7.2.2 Making the transition to an empowered team-based organisation 7-316
7.2.2.1 Group and team taxonomy 7-319
7.2.2.2 Converting to empowered teams 7-325
7.2.2.3 Continuum of empowerment 7-331
7.2.2.4 New roles for managers 7-340
7.2.2.5 Benefits of empowered teams 7-344
7.3 CONCLUSION 7-348
7.4 SUGGESTIONS FOR FUTURE RESEA F CH 7-350
7.5 SUMMARY 7-350
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ENT
CH PTER 7
TO
SYNOPSIS
South African organisations are facing new and often disturbing challenges. The power of modem production capabilities and the efficiency of global transportation have heightened competition, threatening many organisations and present ways of marketing. Yet the traditional ideas of commitment to serving customers and working together are the keys to meeting new challenges. Fancy slogans and hype will not create productive organisations. Organisations have to review their pledge to work together to serve others.
TQM initiatives have increased organisations' emphasis on and commitment to teamwork and team development by orders of magnitude. Teamwork has been demonstrated to be the single consistent strategy for continuous improvement in quality and for increased competitiveness. The movement towards empowered teams has taken on the proportions of an avalanche roaring through organisations and sweeping most traditional resistances before it. Traditional distinctions between supervisors and employees, management, and labour are being swept away, but where these distinctions still remain, they account for most shortfalls in the performance of organisations.
The challenges that organisations face to remain competitive are enormous. The competitive game is tough, and it will - without question - get tougher. The organisations that will be winning are those that are using team development and empowered teams to make the leaps in innovation, quality, and efficiency that they must make to contribute to wealth creation and growth - both of the organisation and its employees, and the country as a whole.
Empowered teamwork is what leverages the potential of an organisation into superior results. It is the vehicle for integrating information, technology, competence, and resources - starting with the human. TQM is the fundamental requisite for continuous improvement. When further enhanced by empowered teams, it can leverage the potential of any organisation to unimagined levels of sustained superior performance and continuous improvement.
Serving others helps to develop human potential. Co-operative teamwork stimulates spirited controversies, lively support of individuals, and honest discussions of conflicts. Creating this kind of teamwork is possible. Man's capacity to work together distinguishes it from other species and helps account for its dominance.
Management needs to capture traditional team work and put it to work meeting untraditional challenges and conditions. Professionals with diverse training and orientations, people from different countries and cultures, and employees in different cities must work together to solve new, complex problems under the pressures of budgets and time constraints. Expansive knowledge and persistent work are needed to develop procedures, skills, and forums of organisational teamwork suitable for the next century.
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ENT
CHAPTER 7
TO TA
MA GEM
LIST OF FIGURES, G PISS AND TABLES
Figure 7.1 STAR system 7-332
Figure 7.2 Team development continuum 7-337
Figure 7.3 Progression of empowerment and responsibilities 7-337
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CH PIER 7
SAGE
7.1 INTRODUCTION
TQM is sweeping the industrialised world, and with good reason. TQM is helping
to remove unnecessary and costly waste, to locate and eradicate sources of error,
and to provide the consumer with reliable products. It also makes people's jobs
more meaningful. TQM makes common sense.
Serving people is both an obligation and a privilege; it is the foundation for a
humane society. In a world that delivers quality service, parents entrust their
children's development and welfare to teachers and administrators; patients in
hospitals confidently rely on physicians and nurses to help them recover; and
consumers are assured that manufacturers develop effective, safe products.
People who serve well enhance the quality of the lives of others.
For an organisation, serving customers is a moment of truth, an opportunity for the
company to demonstrate its credibility and capability. Delivering value to
customers earns the organisation respect and ensures that customers will return.
It also binds employees together in a meaningful common mission; it is the
essence of a shared vision and the ultimate "bottom line".
This chapter summarises the study and shows how managers and employees, in
the current TQM environment, can work together to elevate TQM to a new level
of magnitude to serve customers well when approaching the year 2000 - a new
century with new demands, challenges, and opportunities. It provides the
rationale for investing in work relationships, stipulates the nature of productive
teamwork, and describes how to develop empowered teams throughout the
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company hierarchy. It shows how developing people and "bottom line" success
go together, and how service within the company is needed for effective service
with customers.
7.2 ERED TEAMS: ELEVATING TOTAL QUALITY MAN GEIVIENT TO NEW LEVEL
7.2.1 Wealth creation - a prerequisite for growth
South Africa is at a very interesting stage of its human resource and economic
development. The perspectives of the 1990's are crystallising into a scenario that
will be fundamentally different from anything yet known, and with such speed that
it leaves one breathless and perhaps a bit perplexed.
O re-1980
Up to the end of the 1970's, South Africa had an enviable record of labour peace.
Many believed this was because it was based on a structure of intimidating,
powerful management who had limitless control of their "subjects" - the workforce.
This was true only to the extent that the workforce was a disorganised, perhaps
voiceless, group. It is also true that it gave expression to and entrenched an
unhealthy and disconcerting "commodity" view of labour which is very difficult to
counter at operational management level, despite its rejection at corporate
executive level.
But it is certainly not true to the extent that it is interpreted as having been based
on a solidly autocratic group of slavedrivers of a chain gang. No-one has such
limitless power of his fellowman. Already, in those what today may seem as
primitive and crude times, there must have been a smattering of sound leadership
which kept the average employee reasonably content, albeit on much lower
expectations that today, and on a kind of perverse paternalism that kept people
small and immature.
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But for it to have been sustainable to any extent, without massive, perhaps even
revolutionary response from the broad employee mass, there must have been at
least an element of legitimate power.
1980 - 1990
This period saw the growth of employee structures in the form of organised unions
and their umbrella bodies. To many, this has represented the panacea of human
resource development because it creates a comfort zone wherein relationships
can be defined according to set parameters. However, the growth and
development of trade unions was a solution sought as much by management as
it was by the growingly frustrated employee.
Without doubt it was also a necessary step in the South African history of labour
relations. But what this period did was to entrench the "structural view": that
sound industrial relations are achieved merely by playing the game according to
certain rules established by people who run those structures. It has also, of
course, promoted centralisation and power group formation, with perhaps the
worst spinoff being that of fuelled expectations.
Those who continue to seek long lasting industrial peace in the structure of our
time, whose focus in on, and preoccupation with, the debate between the high
profile representative bodies at the top, run the risk of missing the next critical and
highly exciting wave that is growing by the moment.
. 1990 and beyond
The decade of the 1990's is witnessing a singular focus on the critical role of
individual relationships in the workplace. It can be seen in the growing emphasis
on reassessing the role of leadership; on empowerment; affirmative action;
participative management; quality circles; TQM, and all the other plethora of
modern management jargon. Unfortunately, many relegate these wonderful
concepts and processes to unauthentic techniques that do little more than
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enhance suspicion and try to entrench the old order of control, but this time
through manipulation rather than strict, narrowly defined procedures and systems.
It has to be realised that emphasis on relationships in the workplace goes far
beyond techniques. It must be genuine, deeply felt, and not merely addressing
behaviour or styles.
The exiting thing about this era is that it will eventually make super structures far
less relevant than they appear to be today. This is something that has always
been implicit in the Japanese management style, but when really considering it,
the true achievement of Thatcher's battles with the unions in the United Kingdom
was not that she strengthened anti-union structures, but indeed that she
weakened the union structures, thereby allowing for greater emphasis on
individual relationships in the workplace.
The other, perhaps most exciting dimension of all of this era, is that it will create
those conditions that will finally allow South Africa to address the economically
critical development of human resources at individual level; and, more
importantly: encourage and empower each individual to give the best of him or
herself.
Clearly there can only be one overriding economic aim: "the creation of maximum
sustainable wealth."
The decade of the 1990's has also dawned with greater consensus about
achieving this. However, it also urgently demands that some popular assumptions
that are often held out as leading to wealth creation be revisited for clarification.
Skills development: only true to the extent that it encourages individual
aspirations. The Soviet Union put the first man into space and East
Germany has had a very skilful workforce.
- Systems: the most misleading assumption is that a system automatically
leads to maximum wealth creation. It is often assumed that a free
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market, or a capitalist system automatically creates those conditions
where individuals aspire to their highest potential, or that a socialist
system automatically discourages people from giving the best of
themselves.
Low government participation or low tax rates
Minimum government intervention
Self interest and competitiveness
The profit motive. A favourite focus for the free market protagonists.
Mineral resources. Japan clearly proved this to be irrelevant.
A quick glance at the performance records, or wealth generating abilities of
various countries shows that all of the popular assumptions about what makes for
maximum, sustainable wealth creation does not hold true on their own.
The key that has been identified, to be a prerequisite for maximum sustainable
wealth creation is the development of human potential with strong values and
commitment (Hammer 1995: 103-105; Harrington 1995 : 269; Wilson & George
1996: 10-13).
In chapter 2, TQM was defined as:
"... a management philosophy that seeks continuous improvement in all processes, products and services of an organisation. It requires a solid customer focus, a preventative approach to quality, a profound understanding of variation, decisions based on measurement, and the creative involvement of employees at all levels".
Many people believe that economies are about things, and not about people. The
most popular misconception is that the whole economic structure revolves around
money. What is missed in these arguments is that markets are made up of
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people, and the transactional base of society is in fact one of people serving
people.
Even in a TQM organisation, it is possible to find the working environment to apply
undue pressure on resources, conflicting ideologies largely about systems, and
societies that are mostly need driven and not value driven. This is the result
mainly of the imbalance between expectations and aspirations. Expectations are
those things people believe to have a right to simply by being born into, or working
in, a specific society or organisation. Aspirations are those things people realise
they have to work for or achieve for themselves. The former translates into a
"take" on the economy and the latter a "give". Clearly, the more given, and the
less taken, the more likely the economy will be to generate surpluses and wealth.
The converse is also true.
South Africa not only has growing expectations that are translating into a "take"
from society and destroying wealth, but it also has a critical gap between
expectations and what the economy can deliver. This has serious implications:
economically, politically, and socially.
There is probably a lot more hope than many may think in bridging the seemingly
endless gulf between management and the employee. If South Africa is to survive
at all as an economic force that can meet the demands placed on it, then it simply
cannot tolerate this gap, let alone that ideological differences widen further and
continue to spill over on the workforce. There is at least one point that all can
agree on: South Africa has to create maximum wealth to ensure a prosperous
future, and that all other issues have to be made subservient to the overall aim of
creating maximum wealth.
A broader focus on wealth creation allows management to recognise its key
contribution towards enriching the employee, shareholder, and community not only
through taxes, but also as a servant to the market and in its response to the needs
and wants of mankind.
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It also puts emphasis on leadership and empowerment because it makes logical
sense to uplift the partners in wealth creation to adulthood and maturity.
Management should care for employees because they are indeed the most
valuable part (as illustrated by any value-added-statement) of wealth creation.
One of the key elements required for this broadened focus is leadership.
Implementing a shift in focus not only implies being more comfortable with
something that brings meaning and spirit to an enterprise, but it is also simply a
question of recognising and communicating the truth.
Popular discontent with the South African establishment, with the leadership at the
workplace and with the state, has made the debate around the legitimacy of the
current status quo the single most important current concern. And rightly so, since
the outcome of this debate will have fundamental implications for the future of the
sub-continent and the well being of its inhabitants. Unfortunately, must of what
goes into the current debate is based on a misunderstanding of the nature of
discontent, and on precisely what is creating a workforce who distrust their
leadership.
Coming to grips with the issues of trust in management has been a major problem.
Misunderstanding, and a lack of broad, worthwhile research, confused by external
forces and facile assumptions that often reflect the vested interests of those
involved, have compounded the problem.
However, extensive and fundamental research concerning the problem of trust in
management was conducted under the auspices of the Chamber of Mines
research organisation and confirmed by ongoing survey work by Schuitema
Associates (Schuitema 1994: 13-15). This research has disproved a number of
popular misconceptions regarding trust. For instance, it was found that factors
such as rates of pay, working conditions and service, and the so-called racial
problem were not the fundamental issues affecting trust at all (Schuitema 1994 :
12). Rather it was found that trust in management was either granted or withheld
on the basis of very simple, absolutely imposed criteria. These criteria were
7 - 314
concerned with whether management was seen to have an interest in employee
welfare, and whether this interest was demonstrated by the quality of
management's attention to employee grievances and problems (Schuitema 1994 :
15-25). Management stood or fell on the basis of these criteria. Where the
manager was seen to have an interest in employee welfare he was entirely
trusted, but where this was not seen to be the case he was entirely distrusted.
To bring meaning and commitment into the workplace and to address
misconceptions and rising expectations, management has to address some critical
elements.
A leadership style that is authentically nurturing, uplifting, and empowering will
accept that this goes hand in hand with information disclosure and enhancement
of this information.
The foundation of understanding should be focused on the key elements of:
market principles, including basic laws of supply and demand;
wealth creation and distribution.
It must be underpinned by an ethical foundation that states:
that economic success comes from economically active individuals
giving more than what they take.
An organisation - wide set of business principles should encompass the following:
serving the market is its overall purpose;
the main goal is to create maximum sustainable wealth;
the employee focus is at all times to enhance their wealth creation
7 - 315
potential;
there should always be a fair return for risk;
reduction of company complexities;
enhancing productivity;
0 enhancing employee awareness of company issues.
Service unites employees, managers, and customers in co-operative relationships.
Many hourly paid workers, for example, do not find it rewarding to work hard to
give shareholders a fair return on their investment, but they can take pride in
producing a high-quality, high-value product or service. Then they proudly
introduce themselves at gatherings and relish the gratitude of satisfied customers.
But when their product is of inferior quality, they hide their employment, suffer the
criticisms of friends and acquaintances, and blame their managers. They stand
divided from managers and customers.
The concept of co-operative, empowered team relationships is the central
organising principle that will give a company credibility and make it consistently
responsive to customers. These relationships provide a unifying thrust that
improves customer satisfaction and will ultimately lead to the desired levels of
wealth creation and growth.
7.2.2 Malking the transition to an empowered team-based organisation
Most employees manage: a house with financial obligations; rearing and
parenting children; founding, managing, and maintaining any number of social,
religious, and activity-centred groups, institutions, and organisations. The fact
that they do not do this on the job is more a statement of management
assumptions than the motivation of workers. What employees do at work was
once an extension of what they do at home. With modern work organisation there
7 - 316
is complete separation of these two spheres. They need not be separated
completely. People can still gain emotional gratification from their work, and the
people they work with, just as they do from their family and neighbours.
Integration of people into meaningful work groups completes the emotional cycle
for many people and gives them the security and gratification that is necessary to
obtain high productivity.
A basic assumption for the next level of TQM, is that the art of managing is in
empowering individuals and groups to do what they already do for themselves in
their private lives.
The need for empowered teams may be the result of several issues that
organisations now face. Market forces may be squeezing employers so hard that
the need for profound change in the way the workplace is managed is seen.
Perhaps reformed regulations, the new labour relations act, or challenging labour
negotiations show the weakness of traditional management structures.
But, even in the current TQM environment, the traditional, century-old system of
managing employees, in which the daily evidence of waste and inefficiency is
ignored, or at best tolerated, is still the norm. Many organisational leaders are
tempted to blame workers for problems. People will be laid off or transferred and
managers reorganised to gain more control over failing enterprises. At times,
contemporary organisations appear remarkably like the old Soviet Union under
Brezhnev rule. The worse things get, the tighter the control - and the less is
actually spoken about the true condition of the company.
The empowerment embraced by the empowered teams concept is in many ways
an organisational Glasnost. Opening up corporate life to all so that workers can
fully participate is, for most people, a wholly new way to work.
This is not the first management technology to suggest solutions to the
management morass. It started with statistical quality control in the 1960's, total
quality control in the 1970's, and quality circles in the late 1970's. The
7 - 317
participative management concepts evolved into TOM during the late 1980's with
a corresponding improvement in productivity, quality, and customer satisfaction.
It is widely accepted that the opportunities for management to increase
productivity, improve morale and company loyalty, and to improve quality, will not
be realised by simple techniques. Rather, what is required is a further extension
to the current TOM technologies and processes.
Like any technology, the whole is greater than the sum of its parts. For example,
the invention of the steam engine was the impetus for developing railroad
technology. The steam engine was simply a technique for moving railroad stock.
That technique has long since disappeared in favour of highly efficient and
powerful diesel electric engines. This new addition to the TQM technology makes
permanent and penetrating change possible.
Implementing empowered teams requires the concurrent development of the
human resource infrastructure which will support team behaviour. Compensation,
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