Quality management

Abstract

According to the guidelines given in our continuous assignment we prepared a report for

Operation Management subject by applying any of the theories we learnt into a real world

market situation.

For this project, we chose the concept of “Total Quality Management” & selected Rathnayaka

Tea Factory which is located in Deniyaya, as the sample company to introduce this new

quality improvement tools. The main objective of this project is to introduce new quality

improvement techniques to Rathnayaka Tea Factory to enhance the quality of their way of

businesses, organizational structure & manufacturing process in a practical way.

Rathnayaka Tea Factory is one of tea manufacturing factories in Sri Lanka which produce &

export black tea for global market. It is a medium scale factory with 285 employees working

in it. Russia is one of their main customers.

One of the best things in the factory is that, “5S” concept is used in it when handling their

daily operations. And also the location selected to construct the facility is very appropriate for

tea plantation.

When referring to the weaknesses found in Rathnayaka tea factory, following issues could be

identified.

Lack of Training & Development programs to enhance the quality of work life &

productivity of human resources.

Lack of a standard quality measuring system

Lack of Research & Development Activities

Less consideration on HR practices

Not having a well organized management

Maintenance issues regarding the capital equipment

Minimum effort on workers’ health & safety enhancement

II

Following recommendations are suggested, to address the above mentioned weaknesses of the

factory.

Changing the plucking method appropriately to match environmental conditions

Replacing machinery with latest equipment

Continuous maintenance of the equipment

Using a belt system to transfer tea leaves among the processes

Optimization of the tea manufacturing process through an integrated computer system

Conducting training programs

Research & development

Setting standards

The above mentioned, will be elaborated hence-forth in this report.

III

Table of Content

Page No.

Abstract III

Acknowledgement V

Table of Content VI

01 Introduction 1

02 Rathnayaka Tea Factory (PVT) Ltd. 2

03 Total Quality Management 3 - 8

04 Tea Manufacturing process in Rathnayaka Tea Factory 9 - 16

05 Main Drawbacks in Tea Manufacturing Process 17 - 18

06 Recommendations 19 - 20

07 Conclusion 21

08 References 22

Appendixes 23 - 24

IV

01. Introduction

According to the guidelines of our continuous assignment in Operation Management we have

chosen Rathnayaka Tea Factory & introduced Total Quality Management (TQM) concept for

the whole tea manufacturing process. Through this project we mainly focus on developing

quality of overall process & giving solutions to its weaknesses. Not only that but also we hope

to provide some basic knowledge about the Principals of TQM.

Total quality Management means,

“A way of life an organization as a whole, committed to total customer satisfaction through a

continuous process of improvement and contribution and involvement of people”

It is very important function for every type of organizations (both goods and services) because

most of the time demand of production depends on the quality of the production. Therefore lots

of companies pay their consideration to increase the Quality of their production.

Main objectives of project

Clearly identify what is the Quality and Total Quality Management.

Identify the current situation, strengths and weaknesses of overall process of tea

manufacturing in Rathnayaka tea factory.

Introduce appropriate quality improvement techniques to the overall tea manufacturing

process.

Propose suitable recommendations to increase the quality of tea manufacturing process

while considering the cost of “TQM”.

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02. Rathnayaka Tea Factory (Pvt) Ltd.

Vision

“To be the best black tea manufacturer.”

Mission

To be a leading tea manufacturer within “Southern Province” by adapting to the new

technologies and quality improvement methods to enhance the productivity and efficiency

while paying more attention to their loyal customers by providing friendly service.

Rathnayaka Tea Factory (PVT) Ltd is located in Southern province, Galle district,

Deniyaya area.

It is a family business of Rathnayaka Family & Mr. A. A. A. Muhamdiram Rathnayaka

established the Rathnayaka Tea Factory in 1919.

In present Mr. S U W Rathnayaka runs the business as a chairman with good staff

members.

It is a medium scale tea factory with 285 employees.

Normally they work from 7.30am to 4.30pm in week days & 7.30am to 12.30pm on

Saturdays.

They get their salaries based on work performed by them.

Mainly they produce Black Tea & target the Global Market.

Russia is one of their main customers & normally they export more than 20,000 tea

bags per month.

Due to the applying of 5S’ concept within their factory they have been awarded as

“One Star Tea Rating Factory”.

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03. Total Quality Management

What is Total Quality Management (TQM)?

Total Quality Management (TQM) is a quality improvement body of methodologies that are

customer-based and service oriented. It involves everyone in the organization in a continuous

effort to achieve customer satisfaction & improve quality.

TQM was first developed in Japan, and then spread in popularity. It has two fundamental

operational goals namely,

Careful design of the product or service

Ensuring the organization’s systems can consistently produce the design.

Principles of TQM

Customer-oriented– Customer defines quality and customer satisfaction is the top

priority

Leadership– Top management must provide the leadership for quality

Strategic planning– Quality is a strategic issue and requires a strategic plan.

Employee responsibility- Quality is the responsibility of all the employees

Continuous improvement- All functions of the organization must focus on continuous

quality improvement to achieve the strategic goals.

Cooperation– Quality problems are solved through cooperation among employees

and management

Statistical methods- Use of statistical quality control methods

Training and education– Training and education of all employees are the basis for

continuous quality improvement

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Quality, cost classification

1. Prevention cost

These are the cost incurred to prevent quality problems before producing the product.

Training & development cost of employees

Maintenance cost of machinery

Cost incurred in purchasing better equipment or machinery

Cost incurred to build better relationship with suppliers to ensure high

quality of raw material

Salaries paid to employees to ensure high quality raw material inputs

& supervision

2. Appraisal cost. (while & after producing the product)

Objective is to ensure the expected quality. These are the cost incurred to

continuously appraise the quality of the finished goods & the working progress.

Salaries paid to working progresses involving quality checking

Costs incurred with regard to machinery & equipment & OHs

3. Internal failure cost.

If a difference product is identified within the organization & any cost amount

which can be attributable to the defective product are known as internal failure

product.

Cost of reproduction,

Cost of disposal,

Cost of investigation & rectification.

4. External failure cost

If a product is identified as defective by the customers any cost attributable are

known as external failure cost.

Cost of delivery (call back the product)

Loss of sales & reputation

Any compensation pays to the customer

Cost of reproduction

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When talking about the TQM there are several different theories at work guiding TQM

practices.

Deming's Theory

Deming's theory of Total Quality Management rests upon fourteen points of management he

identified, the system of profound knowledge, and the Shewart Cycle (Plan-Do-Check-Act).

He is known for his ratio - Quality is equal to the result of work efforts over the total costs.

Deming's system of profound knowledge consists of the following four points:

System Appreciation - an understanding of the way that the company's processes and

systems work

Variation Knowledge - an understanding of the variation occurring and the causes of

the variation

Knowledge Theory - the understanding of what can be known

Psychology Knowledge - the understanding of human nature

By being aware of the different types of knowledge associated with an organization, then

quality can be broached as a topic. Quality involves modifying processes using knowledge.

The fourteen points of Deming's theory of total quality management are as follows:

Create constancy of purpose

Adopt the new philosophy

Stop dependencies on mass inspections

Don't award business based upon the price

Aim for continuous production and service improvement

Bring in cutting-edge on the job training

Implement cutting-edge methods for leadership

Abolish fear from the company

Deconstruct departmental barriers

Get rid of quantity-based work goals

Get rid of quotas and standards

Support pride of crafts man ship

Ensure everyone is trained and educated

Make sure the top management structure supports the previous thirteen points.

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Plan-Do-Check-Act (PDCA) –

Is a cycle created for continuous improvement? In the planning phase, objectives and actions

are outlined. Then, you do your actions and implement the process improvements. Next, you

check to ensure quality against the original. Finally acting requires that you determine where

changes need to occur for continued improvement before returning to the plan phase.

Crosby's Theory

Philip Crosby is another person credited with starting the TQM movement. He made the point,

much like Deming, that if you spend money on quality, it is money that is well spent. Crosby

based on four absolutes of quality management and his own list of fourteen steps to quality

improvement.

Crosby's four absolutes are:

We define quality as adherence to requirements Prevention is the best way to ensure quality Zero Defects (mistakes) is the performance standard for quality Quality is measured by the price of nonconformity

The fourteen steps to continuous quality improvement, for Crosby, are:

Attain total commitment from management

Form a quality improvement team

Create metrics for each quality improvement activity

Determine cost of quality and show how improvement will contribute to gains

Train supervisors appropriately

Encourage employees to fix defects and keep issues logs

Create a zero-defects committee

Ensure that employees and supervisors understand the steps to quality

Demonstrate your company's commitment by holding a zero defects day

Goals are set on 30, 60, or 90 day schedule

Determine root causes of errors, remove them from processes

Create incentives programs for employees

Create a quality council and hold regular meetings

Repeat from step one

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Joseph Juran's Theory

Joseph Juran is responsible for what has become known as the "Quality Trilogy." The quality

trilogy is made up of quality planning, quality improvement, and quality control. If a quality

improvement project is to be successful, then all quality improvement actions must be carefully

planned out and controlled. Juran believed there were ten steps to quality improvement.

These steps are:

An awareness of the opportunities and needs for improvement must be created

Improvement goals must be determined

Organization is required for reaching the goals

Training needs to be provided

Initialize projects

Monitor progress

Recognize performance

Report on results

Track achievement of improvements

Repeat

The EFQM Framework

The European Foundation for Quality Management (EFQM) Model is based upon nine criteria

for quality management. There are five enablers (criteria covering the basis of what a company

does) and four results (criteria covering what a company achieves). The result is a model that

refrains from prescribing any one methodology, but rather recognizes the diversity in quality

management methodologies. The nine criteria as defined by the EFQM Model are:

1. Focus on Results - pleasing company stakeholders with results achieved by

stakeholders is a primary focus.

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2. Focus on Customers - it is vital that a company's quality management leads to

customer satisfaction.

3. Constancy of Purpose and Consistent, Visionary Leadership

4. Process and Facts form the Management Focus - Management breaks down

everything into systems, processes and facts for easy monitoring.

5. Training and Involving Employees - Employees should receive professional

development opportunities and be encouraged to remain involved in the company

6. Continuous Learning - everyone should be provided with opportunities for learning

on the job

7. Developing Partnerships - It is important to encourage partnerships that add value to

the company's improvement process

8. Social Responsibility of the Corporation - The Company should always act in a way

where it is responsible towards the environment and society at large.

Ishikawa's Theory

Creator of the last theory, Dr. Kaoru Isikawa is often known for his name sake diagram, but he

also developed a theory of how companies should handle their quality improvement projects.

Ishikawa takes a look at quality from a human standpoint. He points out that there are seven

basic tools for quality improvement. These tools are:

Pareto Analysis - Pareto analysis helps to identify the big problems in a process.

Cause and Effect Diagrams -help to get to the root cause of problems.

Stratification - Stratification analyzes how the information that has been collected fits

together.

Check Sheets - Check sheets look at how often a problem occurs.

Histograms- Histograms monitor variation.

Scatter Charts - Scatter charts demonstrate relationships between varieties of factors.

Process Control Charts - A control chart helps to determine what variations to focus

upon.

04. Tea Manufacturing Process of Rathnayaka Tea Factory

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Tea is secondly most widely consumed beverage in the world after the water. Therefore, there

is a huge demand for the tea which is grown in Asian Countries like Sri Lanka. As a result of

that Sri Lanka has also become one of major countries which exports various types of tea

flavors to the global market.

Likewise other tea factories in Sri Lanka Rathnayaka Tea Factory also follow the same process

when manufacturing tea. It mainly includes following stages:

Plucking

Withering

Rolling

Fermentation

Drying

Sorting & Grading

Packaging& Storage

4.1 Withering

Definition:

There are two types of withering.

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1. Chemical Wither: Desirable biochemical changes from plucking to initiation of

processing (manufacturing), normally 14-20 hrs.

2. Physical wither: Moisture loss, leaf becomes flaccid. Physical withering reduces the

moisture content in the leaf and correct withering is essential for quality, although, it

has always been a difficult task to determine the end-point of withers. The same

reduction in moisture percentage and increase of flaccidity of leaf to the desired level

can be achieved in a shorter period; a longer period is necessary for chemical wither.

Therefore, physical wither is regulated at a slower rate, so as to reach the desired

physical withering in the same interval as required for the chemical wither. The

objectives are achieved by passing air through the leaves.

Current Situation:

WITHERING is the first and foremost step involved in tea manufacturing. Even

though there are different methods are used in Sri Lanka for withering, “Withering Trough”

is used in our visited factory. There are 2 troughs can be seen in the upstairs of factory

building. The width of those troughs is 6 feet & the deep is 1 feet.

The evaporation of moisture in the green leaf is brought about by blowing or moving

air over the leaf in the withering trough. The current of air performs two functions,conveying

heat from the leaf as well as carrying away the water vapor through a bed of green leaves to

achieve physical withering. Whenever the hygrometric difference is below 3° C, hot air is

mixed in suitable proportion or heat energy is supplied to increase the hygrometric difference

with the concomitant rise in the dry bulb temperature of air. But the dry bulb temperature of air

after mixing should not exceed 35° C.

The extent which tea leaves is packed in trough – 2.5 sq feet to 3.5 sq feet.

The necessity of air – 20° C per kg

The speed of fans – 980 cycles per minute

The motor – 15 horse powers

After tea leaves are packed according to above standards it must be kept around 20-30

minutes. Then evaporated teas must be turned into other side. They use a Hydrometer to check

moisture content in tea leaves.

Factors that must be considered in withering process.

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Tea leaves must not be raw.

Must not be faded than requirement.

It must be checked whether withering speed is similar to the pressure of air.

Tea leaves must be packed without tight.

The places of getting air must not be blocked in trough.

The supply of air must be constant.

Stream of air must be supplied through Plenum Tunnel under a pressure.

The objective of this is to reduce the moisture in tea leaves between 6-10 standard

Hydrometer values. After 8 hours withered leaves are moved to the Rolling process.

4.2 Rolling

Definition:

Rolling is a process where rollers are used to rupture the cell walls of the withered leaves for oxidation of the polyphenols in the presence of oxygen from air.  

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Current Situation:

After withering teas are moved to the process of rolling. There are two methods of

rolling. Traditional method of Orthodox & CTC method. By rolling process produce twisty

leafy tea with higher & more flowery liquor. Withered leaves are subjected to rolling machine

under pressure twisting the leaves, rupturing the cells & releasing the natural juices promoting

oxidization. Teas are rolled, twisted & broken into pieces.

Teas are rolled by four rollers. The time allocation for each rolling is, 20 minutes for

first rolling, another 20 minutes for second & third rolling & 20 minutes for fourth & last

rolling. But this time can be changed according to market demand.

The sizes of rolling machines used in the factory,

47 sq feet - Three roller machines for first rolling

47 sq feet – two roller machines for second rolling

45 sq feet – two rollers for third rolling

47 sq feet – one roller for fourth rolling

These machines must be cleaned by employees every day. There are about 12

employees are involved in rolling process.

Machine call braver is also used to separate rolled tea. There are two types of braver

machines call “Rotory Roll Braver” & “Reciprocators Roll Braver” are used in Sri Lanka.

Rotory roll braver is used in our visited factory.

4.3 Fermentation

Definition:

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Fermentation is the process during which the Polyphones in the tea leaf are oxidized in

presence of the enzymes and subsequently condensed to form Colored compounds contributing

to the quality attributes of tea. Fermentation starts immediately after cell rupture.

Current Situation:

The objective of fermentation is occurring chemical changes of tea that will lead to

increase the tasty of tea.

The result of chemical process involve in fermenting process is getting the taste, smell & color

After the rolling process of tea leaves, tea leaves are forwarded to the fermentation process to

produce different kinds of tea colors such as non-fermented, light-fermented, medium-

fermented and fully-fermented.

In this process, two (2) instruments are used to fulfill fermentation conditions and they are,

1. Humidity Fan – This instrument uses to stable the weight at about 55% of the tea

leaves during the fermentation process.

2. Wet & Dry Hygrometer – This instrument uses to measure the humidity of the

air and it performs its activity for about 2 hours and 30 minutes and it is notes that the

difference between wet & dry should be 3F0.

4.4 Drying

Definition:

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Drying is the process during which the enzyme activities are stopped & moisture content

is brought down to 2% - 3%.

Current Situation:

After fermenting teas are moved through a belt call conveyer belt to the process of

drying. The machine used for this purpose is called drier. There are three types of drying

machines can be seen in Sri Lanka.

1. Endless Chain Pressure

2. Fluid Bed Drier

3. Combination Drier

Among these machines Rathnayaka tea factory has two machines of Endless Chain

Pressure. There are 8 workers are working at a time. These workers are paid an additional

allowance. Old drier machine can dry 215 kg per hour & the new machine can produce 290 kg

per hour.

4.5 Sorting & Grading

Definition:

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Sorting is the operation in which particles of bulk teas are separated into various grades of

different sizes conforming to the trade requirements.

Current Situation:

These are many machines using in Sri Lanka for sorting. Commonly these are named as

“Winnower” machines. There are 13 grades of teas are produced. They use machine called

“Chota” for this purpose.

Sorted teas are mixed to avoid changing from one packing to another. Winnower

machines are used for this purpose. There are 3 winnower machines in Rathnayaka tea factory.

Stems of sorted teas must be removed before packing. The machine used for this purpose is

called “Electronic Color Separator”. Special technician needed for maintenance of the

machine. It is done once a year. Stems are removed by this machine using computer

technology. This machine costs more than 100 lacks & this is the most expensive machine in

any tea factory.

4.6 Packaging & Storage

Definition:

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Packaging, is a process design and produce the container or wrapper for a product

Storage, is a process of stored final out puts after packaging before it handed over to the customers.

Current Situation:

Wood boxes, Polythene and thick paper bags are used for packing, sorted and graded tea.

Quantities and weights that can be packed in tea

Boxes Grade Boxes(Kg) Bags(Kg)

FPEK 36-38 39-42

FBOP 38-40 40-42

FBOP 1 36-38 30-40

FBOPE 1 42-44 44-45

FBOPF 48-50 48-50

BOP 1 A 33-34 35-37

BM 35-36 37-39

05.Main Drawbacks of the Tea Manufacturing Process

There is not a proper standard system to measure quality of tea.

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The management of the factory doesn’t implement a proper standard system to

measure the quality of tea & also the workers don’t have enough awareness about the

manufacturing process.

Lack of Training & Development programs to enhance the quality of work life &

productivity of human resources.

Experience of working is inherited by employees from their generation & they

don’t have proper technical skills & knowledge.

Lack of Research & Development Activities.

There are not innovations of tea. They only produce traditional black tea due to

the lack of scientist knowledge& financial limitations.

Less percentage of interest to the HR practices.

They don’t have separate HR department & pay minimum attention to the

motivation of the employees. As a result employee dissatisfaction can be increased & it

will cause to reduce the productivity of final outcome.

There is not well organized management board.

Top managers inherit their positions from generation to generation & lack of

education is the reason for this problem.

Workers don’t have proper dress code &safety equipment.

They wear casual dresses & don’t use any safety equipment. This will badly

affect to the quality of tea & their lives.

Maintenance issues regarding to the operations machines.

They don’t get any steps to prevent machine breakdowns. They only consider

about that once a machine is broken down.

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Cause-and-Effect Diagram for Rathnayaka Tea Factory

According to this cause – and – effect diagram major quality issue & its root & sub causes can

be clearly identified.

P-D-C-A Cycle

PDCA is a systematic approach used for problem solving. After Identifying the root & sub

causes, carrying out a PDCA cycle is recommended to identify & solve quality issues faced by

the Rathnayaka tea factory. Following are the major recommendations which were suggested.

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06. Recommendations

Changing the plucking method appropriately

When discussing with tea pluckers we came to know that they use the same

plucking method throughout the year. But in the modern world most of giants in tea

manufacturing industry change their plucking method in accordance with environmental

conditions.

For instance they use a method called sheer plucking during July to September

when there is a scarcity of workers. Some of the other methods used are step up method,

fish leaf plucking, Janam plucking.

So we think, workers should be educated regarding this matter & it will help to

increase the quality of the plucking stage.

Replacing machinery with latest equipment

All most all the machinery used in Rathnayaka tea factory has been placed

around 1980 which means that they are still using a technology which is old for more

than 2 & half decades. But with the technological improvements nowadays there are so

many machines available in the market into which latest technologies are embedded.

Although the company is having financial limitations, management should pay some

consideration to replace the equipment even in a step by step basis. This will generate

some kind of short term financial difficulties towards the company but it will ensure the

long term quality & efficiency of the production.

Axial flow fans-for withering

ROTOVANES- for rolling (easy to be cleaned & maintained)

OXYTEA continuous fermenting machine- available in both steel tray & PES

belt systems.

Super indirect fired coal heaters-for drying (guarantees the lowest fuel

consumption in tea industry)

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Continuous maintenance of the equipment

Another issue we found in Rathnayaka tea factory is that machinery are only

tested & repaired when a defect is occurred. So if machinery breaks down, it will cause

to create some idle time in the overall process. In order to prevent from these types of

inefficiencies, a continuous monitoring & maintenance system of capital assets should

be implemented within the organization.

Using a belt system to transfer tea leaves among the processes

Management of the tea factory stated that their normal loss is around 17% per

annum from the plucking stage to the consumption by end users.& while visiting the

factory we observed that a significant amount of tea leaves become a waste due to

getting trampled by workers.

Another thing is that a considerable amount of dust is mixed with the WIP as

they are laid on mats. This would have an identifiable impact over the quality of the final

product.

To address both of the above mentioned issues, a belt system can be used to

transfer WIP among the different processes. This will enhance the quality of the final

product as well as the efficiency of the overall process.

Optimization of the tea manufacturing process through an integrated computer system

Here the integrated computer system refers to an expert based plant monitoring

system in which all the critical processes are linked with an overall MIS. In the current

market most of the Sri Lankan tea manufacturers use this strategy to enhance

performance & quality of the production. Rathnayaka tea factory can also adopt this

strategy to their firm to minimize the overall energy conservation & increase the total

quality of their product.

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07. Conclusion

We have selected Rathnayaka tea factory located in Deniyaya for our OM assignment &

introduced a Quality management system to enhance the quality of final outcome.

In this project we have given brief introduction to the Rathnayaka tea factory & the current

situation of its process. Tea manufacturing process is namely Withering, Rolling,

Fermentation, Drying, and Sorting & Grading & Packaging & Storage.

We identified main drawbacks of this process & gave our recommendations to improve the

quality of the overall functions of the organization.

Finally we expect their overall quality will improve by implementing our recommendations.

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08. References

DSC 2302, “Operations Management Course Manual”, Seventh Edition, 2010, Page

41 – 50

Rathnayaka Tea Factory (PVT) Ltd - Deniyaya

www.dti.gov.uk/quality/gurus

www.school-for-champions.com

www.pureceylon tea .com

www.slideshare.net

www.winsomeindia.com/manu.html

http://www.twinings.com/en_int/tea_production

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Appendixes

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