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Strategic use of TQM in Project Management of Large Projects –
An Indian Experience
R. Jayaraman,
Professor, Operations Management,
SP Jain Institute of Management and Research,
Mumbai, India.
___________________________________________________________________________________
Abstract
Quality of construction projects is achieved through a mix of planning, execution, continuous
improvement - all elements of project management strategy. While methods and instances of
practicing continuous improvement as an integral element of operations / corporate strategy
in manufacturing operations have been documented, the same is not true in the case of
project management. Most approaches are piece-meal and ad-hoc. We have developed a
framework for practicing continuous improvement in a construction project environment in a
strategically integrated manner and present an example of how it was adopted in a large
project.
___________________________________________________________________________
Key Words : project management , TQM , strategy , Cold Rolling Mill Project ( CRMP ) ,
Business Excellence ( BE) , Tata Business Excellence Model ( TBEM ) , Malcolm Baldrige
Model , performance excellence , integrated practice e of TQM
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Introduction
Japanese Quality Revolution
The visit of Dr Edwards W Deming to Japan in 1950 was an epoch making event in the
modern movement for continuous improvement. In the 1940’s Dr Deming was active in the
American industry facilitating the use of SPC methods to improve efficiency and quality of
products. When the Japanese invited him to introduce the same processes in their industry he
was more than keen to help them out. He visited many Japanese companies under the aegis of
JUSE and lectured to them on the uses of SPC techniques. Based on the inputs given during
this visit Japanese companies began their journey in quality which continues to this day. This
movement was started primarily on the shop floors of Japanese companies, to improve
product quality, to begin with. Quality Circles and 5 S Circles were started to take forward the
concepts of involvement of shop floor personnel in making quality happen , formation of
improvement groups to tackle problems , use of simple statistical tools ( the Seven QC tools )
to be applied to production machinery and practice kaizens for continuous improvement .
(Artemis and David Garvin 1990).
Following the visit of Dr Deming, Dr Juran visited Japan in 1950, to build on the work
done by Dr Deming. Subsequently many Japanese workers in this area contributed to building
a body of knowledge and practice which have been chronicled in the literature (Imai, 1990;
Logothetis , 2000 and Mohanty and Lakhe, 2002 ) . These efforts which came to be known as
TQM included the following:
1. QC’s ( Quality Circles ) ( see , for example , M.H.Patel et al , 2003 )
2. 5S Circles
3. Policy Deployment (the X matrix or Hoshin Kanri) (Lee and Dale , 1998)
4. Strategy Planning
5. Strategy and Policy deployment
6. QFD (Quality Function Deployment) (see, for example, Sharma, J, 2009 )
7. TPM ( Total Productive Maintenance )
8. 7 QC Tools
9. 7 New QC Tools ( see , for example , Kume , Hitoshi , 2006 and Hosotani ,
Katsuya , 2005)
10. Visual Quality ( see , for example , Michel Greif , 1995 )
11. TPS ( Toyota Production System ) ( see , for example , Liker , 2004 )
12. Kanban ( JIT ) ( Just in Time)
13. Poke Yoke
14. Waste Elimination
Using TQM Japanese companies improved their management practices. They used systematic
daily management to gain market shares through high quality products. This happened
between 1950 and 1980 largely.
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The American Response
The threat perception by American companies reached its peak when a film was screened
in 1980, titled “If Japan can, why we can’t? “. The essence of the film was that if American
companies did not respond to the TQM advancement in Japanese companies which had led to
the demise of several leading American companies, then the leadership of American
companies could be adversely affected. While American companies pioneered introduction of
SPC techniques, in introducing many new inventions which later became best-selling
products, increasingly they were beaten in the marketplace in the US by Japanese companies
who used TQM. The following factors were amongst the many that led to this state of affairs:
1. Complacency developed due to the thinking that the quality of Japanese products
was far inferior. This thinking may have been correct in the 1950’s but then the
quality revolution through TQM in Japan was underrated by the Americans. To
the extent that even after the Japanese were capturing market after market form
American and European domination , Americans refused to change their attitude
of “ Not Invented Here “ . (See, for example, Powell, 1995).
2. The dependence of American companies on quantum jumps rather than
continuous, incremental improvement, thereby leading to inefficiencies in the
short term and long term loss of competitiveness.
3. The typically adversarial relationships between workmen and management in
many American companies , as opposed to the co-operative approaches in
Japanese industry through the practice of kaizens , QC’s and 5S circles .
4. High attrition rates in American companies – compared with Japanese companies
where life time employment was the norm - leading to flight of intellectual
capacity, the replenishment of which took time and created short term setbacks.
These and other factors resulted in the development of the Malcolm Baldrige Model for
Business Excellence (MBMBE) in 1987 (see http://www.nist.gov/baldrige/ for a copy of the
latest guidelines). Put together by a group from the NIST (National Institute for Standards and
Testing), a US government body, the criteria for Business Excellence (BE) were devised as a
defence mechanism to regain competitiveness by American companies and beat back the
Japanese. Introduced as the Malcolm Baldrige National Quality Award (MBNQA) this model
was a framework for carrying out BE in all American companies. The idea was to introduce
key concepts like continuous improvement, people involvement in quality activities, co-
operative relationships between management and workmen, developing a highly motivated
workforce through deployment of Statistical Process Control (SPC) and other techniques in
all areas of management (not only the shop floor) to improve productivity and profitability of
enterprises and using tools like six sigma, ISO and TQM to improve competitiveness through
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overall quality improvement. The MBMBE, which was run throughout America through the
MBNQA, was a resounding success, in that it rejuvenated the American Industry to previous
heights, before the Japanese Juggernaut rolled over. (See, for example, Noriaki Kano, 1993)
Use of TQM in organisations
How TQM has come to be used as a systematic tool to improve the operations of
companies is summarised in Table 1:
Name of practice What was done What were the results
Quality Circles,
Improvement Groups,
Small Group Activities, 5
S Circles, Other Team
efforts
Teams of 4 to 15 formed in many functions.
Many teams were cross functional. Some
companies included members from external
stakeholders, mostly from customers and
suppliers. Concepts of QCC’s used to do the
work. Also concepts like Value Engineering ,
Poke Yoke , waste elimination , cost reduction
were utilized to plan and do work . Some
companies which were also into the BE
movement used the Balanced score Cards
method to align and integrate (example, Tata
Steel, Tata Chemicals, Tata Motors). Some used
the Hoshin Kanri technique (example, BHEL)
Development of team work, greater
and more productive involvement
of employees in company work,
deepened understanding of
company’s priorities and work
themes by all employees, a general
awakening of employees to be
values driven. Some of the themes
like agility, corporate governance,
and ethics were being discussed in
many functions amongst employees
in the front line. This has led to
better customer experiences overall.
Systematic strategy
formulation, goals setting,
target setting,
identification of areas for
priority improvement at
the company level,
communicating and
deploying strategy at the
grass roots (connecting the
Top Floor and the “Shop
“Floor )
Teams formed to devise company strategy in a
systematic manner using modern tools and
techniques (example, Blue Ocean strategy,
Scenario Building, Using Vision statements for
strategy design). Tools AQUIP (of Tata Steel)
developed to cascade strategy form the Top
Floor to the Shop Floor. Deployment of the X
Matrix and Hoshin Kanri to identify and
articulate goals and targets.
More detailed strategy formulation,
better monitoring, closer
monitoring through use of ‘AQUIP
“, improved measurability through
use of score cards. Vision and
Mission statements prepared by
many companies gave clarity to
employees. Values identified to
make company employees become
conscious of value driven behavior.
Customer consciousness
developed, satisfaction
and delight measured
regularly, market related
concepts refined and
applied more rigorously
through well-defined and
monitored practices.
Updation of practices
through benchmarking.
Customer satisfaction surveys became a regular
feature. Product development dovetailed to
customer requirements more closely through use
of QFD concepts and Kano Model. Market
segmentation, new products development,
product portfolio design using the Product
Portfolio Matrix type of concept. Use of IT
based applications to track market information
and customer visits discussions. Design of
distributor and dealers incentives schemes based
on a systematic decision making process
marked with the best through benchmarking.
Closer understanding of customer
requirements leading to market
share benefits and customer loyalty.
New products introduction became
a recognized part of product
portfolio strategy.
Table 1: Showing how TQM tools have been used to drive continuous improvements systematically in operation sin
organisations (adopted from R.Jayaraman , 2013 ) ( for a description of AQUIP see B.Muthuraman et al , 2014)
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Use of TQM as a strategy tool
While the Japanese pioneered the concept and development of TQM as a toolkit to
superior performance their efforts started flagging in the mid 1980’s. While TQM is a great
set of tools to improve the competitive position of business organisations , the emergence of
six sigma , lean management ( the American way ) and business excellence ( as defined and
exemplified in the Malcolm Baldrige model for performance excellence ) in American
companies became a show-stopper . Led by the likes of Motorola , GE , Honeywell ,
Westinghouse these companies managed to stop the onslaught of Japanese TQM firms
which lost out primarily because TQM was a piece-meal approach and not an organisation
integrating mechanism . While TQM initiatives were helpful in improving performance ,
the emphasis on “ continuous , incremental improvements “ , in the long term , had serious
deficiencies in facing the “ quantum leaps “ by American firms which started using the MB
model .
Application of TQM in companies was characterised by:
1. Individual departments forming teams and practicing continuous improvement by
forming small groups. These were variously called quality circles , small groups , 5 S
circles , value engineering teams , etc
2. These teams made incremental improvements using PDCA principles and the 7 QC
tools and the 7 new QC tools. These continuous improvements resulted in
performance progress in individual departments
3. Goals and targets were set based on departmental requirements
4. The approach was department centric and there was little done by way of connecting
these improvements into a unified whole , although the hoshin kanri technique ,
annual themes /slogans were used in some companies to bring about a strategic
integration
The overall effect was that while individual pockets of excellence were functional the
company as a whole did not benefit in a strategic way. This lacuna became pronounced when
company-wide programs like six sigma, lean, waste reduction were all put together into the
Malcolm Baldrige model and driven by the company’s top management through the balanced
score cards / X matrix / hishin kanri frameworks.
With the advent of “disruptive technologies “ as described by Clayton Christensen (1995),
innovations and the boom in the services sector TQM started losing its sheen .However David
Garvin’s work (1987) breathed new life into quality as a strategic tool to improve competitive
position of companies.
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While Dr Deming, who emphasised the SPC (Statistical Process Control) base of TQM,
Dr Juran and Philip Crosby all spoke in favour of a total quality approach
(Artemis and Garvin , 1990) , the revolution which was started in Japan in 1950 was slowly
vending its way to a close in view of the changed scenario engendered by competition which
itself was a result of TQM . The new competition situation called for strategic responses from
companies. It was no truer that if a company performed well it could expect market success.
This success was now being heavily influenced by how well companies could compete using
both TQM and BE. The main architects of the newly emerging industrial picture were:
The Malcolm Baldrige Model for performance excellence ( and many other imitators
of this model ( see , for example , Pankaj Madan 2010 )
The Balanced Score Cards ( Kaplan and Norton , 1992 , 1993)
The primacy of company strategy emerging as the main pillar to drive company
success in the marketplace
Innovations and disruptive technologies which helped companies leapfrog
competition in many cases and opened up new products and technologies
opportunities
The Malcolm Baldrige model was introduced in 1987 and since then companies have used the
framework to design and implement “business excellence “programs. This was in many ways
similar to the TQM programs introduced in companies in the 1950’s, 60’s 70’s and 80’s.
However there were several critical differences as well, as shown in table 2:
Aspect
TQM ( highlights of
progress during the period
1950 – 1985)
Business Excellence ( highlights of progress
during the period 1987 to 2015 )
Competitive
situation
1950 : Very few large ,
global companies to begin
with
Japan had the first mover
advantage
USA companies the
strongest serving mainly
NA and European markets
1985: Many companies in
many parts of the world
doing business. Higher level
of competition. Quality of
goods and services higher.
Costs down. Service
industries beginning to
appear.
1987: Many large companies, some global (Porter’s
five forces theory had just kicked in, CK Prahalad
came up with the core competency theory in 1990
and bottom of the pyramid in 2004). Large range of
products, companies starting to consider
globalization. China had not yet stirred. USA ,
Europe , Japan , Korea and parts of Asia were dotted
with some / many competitive companies
Early stages of MNC’s
2015 : MNC’s and global corporations , large
companies ( with sales of over a billion USD ) many
in number , China in full cry , Japan in recession ,
USA on top , Europe in stages of recession , Asian
companies growing through acquisition to become
global
Quality of
goods and
services
Starting with good in the
USA and parts of Europe
and poor in rest of the world
Good quality in USA, Europe, parts of Asia, Japan,
and Korea. Service sector starting to develop, with
McDonalds, Walmart, Tesco, Takashimaya and
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( 1950 ) , the situation
changed to Japan – very
good , Korea – good , US /
Europe – quality challenged
(1985)
similar others. The industrial scenario was starting
the move away from manufacturing to services
(1987)
High quality goods , huge range of products and
services , technologies ubiquitous and multiple
choices , global slowly becoming the norm ,
Popular and
much used
tools
Quality circles , QFD ,
Hoshin Kanri , Poke – yoke
, Lean , Value engineering ,
etc
Six sigma , innovations , Environment issues ,
Balanced score cards , Integrated approaches , Agile
manufacturing , Lean , Six sigma ,
Emerging
global issues
Globalisation , MNC’s ,
service industry growth ,
mass customization , boom
in demand for goods and
services , economic growth
across many parts of the
world
Climate change , Global warming , Use of renewable
energy resources , economic stagflation , turmoil in
specific industries , peaks and troughs of industrial
cycles becoming more pronounced but the mean of
amplitude of the cycle moving up in magnitude
Table 2 : Issues and aspects of the two major industrial eras – the TQM era and the BE era (Source :
author’s research )
Although many companies ( at least the larger ones in the organised sector ) adopted and
embraced the TQM way of doing business , some did not see the benefit of getting engaged
in TQM , as they thought that it was “ just a set of things to do “ and do not have much
relevance for the business as such . (See, for example, Go and Ridgway (1994)). This
negativism about TQM is more pronounced in SME’s and larger companies which are in an
early stage of their development. (For a description of the theory of 4 stages of a company’s
development and growth, see R.Jayaraman, 2013, September). The same is the case with
company’s attitude towards ISO 9000 and other systems standards certifications (with some
honourable exceptions, like ISO 27000).
As explained before, the main architects who developed a new way of doing business
proposed these changes based on certain premises:
1. Malcolm Baldrige was introduced with the specific aim of making American
companies more competitive and face up to the Japanese industrial attack.
2. A holistic approach to re-orient companies was needed to address the complexities
arising from the multiple products , services , markets
3. Due to the increasing industrialization acid rain and other climate related phenomena
were appearing on the horizon and a general clamour was building up to make
industry address these ill effects of unbridled industrialization
4. Environmental degradation was another issue
5. CSR ( Corporate Social Responsibility ) was becoming a serious business
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6. Ill effects on climate change were becoming more apparent
7. Corporate governance was another area of concern as societal and governmental
agencies were expressing concern about the “ wealthy getting wealthier and the poor
getting poorer “
8. Increasing globalization
Business complexity had greatly increased as evident from the above points. When the
Baldrige model was introduced it certainly did not include all the above issues but the model
was open to interpretations. Over the course of the next 20 years every one of the above
issues got included and thus a holistic SOP (Standard Operating Procedure) for running
businesses was developed through the efforts of companies from all parts of the globe. Unlike
the TQM movement which was mostly Japan centric, at least for many years beginning 1950,
the MB movement was more severally actioned, with inputs coming in from the USA,
Europe, Asia and other regions. It has now become a truly global phenomenon. The BE
movement, over the years, became an integrated run companies in an “excellent” way, and
TQM became embedded in BE .The paper by Garvin made this inclusion a “must “. Other
similar works also supported this view. PDCA, continuous improvement, achieving and
aspiring for high quality were all a part of the SOP in the TQM era, and they continued into
the Baldrige era as well. TQM became an integral part of a company’s strategy. The details of
how this actually happened and was actioned is not within the scope of this paper.
Developing a framework for using TQM in project management to practice continuous
improvement
While TQM is now an integral part of the strategy of a company it is not embedded yet in
the project management area. Table 3 shows the embedment of TQM in different areas of
management:
Area of company
management How TQM is embedded Actions
Strategic planning Mission , Vision , Values , strategy
description , cascading of strategy to
the entire organization through
Balanced score Cards
Co-creating VMV , strategy map ,
strategy architecture , X matrix , new
techniques in strategy preparation ,
continuous improvement in strategy
preparation using PDCA
Operations
Management
Goals setting , efficiency &
effectiveness metrics , use of tools
like six sigma , value stream
mapping , lean , takt time
Optimisation studies , business
modelling , operations planning using
techniques like AQUIP and BSCV
driven initiaitives , PDCA through
quality circles
Marketing
management
CRM , CSI measurement , Customer
loyalty building , mystery shopping ,
linking CSI to other areas of
management ,Customer Value
Management
Customer polling , questionnaire
administration , use of conjoint and
other analysis , PDCA through
marketing initiatives using team
culture
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Financial
management
Debtor management , optimization of
working capital , global sources of
funds , treasury management ,
average cost of capital
Working capital pipeline model ,
inventory management , PDCA
through risk management , group
initiatives , continuous improvement
to reduce capital costs , cost of
operations and budget management
Table 3 : How TQM is embedded in all areas of company management – a sample of actions and
initiatives and PDCA ( Source : author’s research )
Why is TQM not embedded in project management and how to achieve the same?
The main reasons include : project is a one-time activity (except in the case of project
companies or companies which have a project management department which plans and
executes projects in-house) and apparently is not amenable to PDCA , each project is different
and hence repetition of activities is not a regular phenomenon , formation of groups across
areas of project management is not often possible due to lean manning , the temporary nature
of project jobs makes personnel short term oriented especially if the incentive structure
rewards inly current performance . These factors make the embedment of TQM in project
management a non-critical area for corporate management. Hence projects suffer from
considerable delays (for example, the Standish Group report 1995, Dmitry Chulkov et al,
2005, Jake Widman, 2009).
Many studies which have been done to identify the reasons for such delays list several
causes, but do not examine whether the project was managed using TQM or BE techniques.
All these studies use the questionnaire technique to get responses from industry practitioners,
however the questionnaires do not include some basic inquiries on the systematic practices
followed to make the project a success. Examples of such studies are plentiful - Abd El-Razek
et al ,2008 ; Abdelhak Challal and Mohamed Tkiouat , 2012 ; Aibinu and Jagboro 2002 ;
Arshi Shakeel Faridi and Sameh Monir El Sageh , 2006 ; Daniel W M Chan and Mohan M
Kumaraswamy , 1997 ; Mohamed M Marzous and Tarek I . El – Rasas , 2013 ; Mohammed
Ruqaishi and Hamdi A. Bashir , 2015 ; Odeyinka , Henry and Ade Yusif , 1997. None of
these indicate that construction projects use either TQM or BE methods to improve
performance or achieve project success. While we have cited the possible reasons why TQM
or BE do not usually form a part of project management there are instances which clearly and
unambiguously demonstrate that the application of TQM and BE (using TQM in a strategic
way) has enabled achievement of superior results in project management.
Using TQM and BE techniques in a strategic framework, as strategic tools, in
construction projects management
The CRMP of Tata Steel, Jamshedpur, India was taken up as an initiative to reinvent the
process of project management in the company. The top management decided to do a BPR
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exercise to completely revamp and reinvent the project management processes in the
company to address the several developments that had taken place in this field of
management practice. While the company had a large engineering department to design and
implement in-house projects, whose cost could range from 10 million USD to 600 million
USD and more (the CRMP cost the company about 400 million USD), the company wanted
to update and improve the efficiency of the processes in this archaic department which had
been in existence since the early 1930’s. The main impetus came from the TBEM thrust that
the company was giving across the organisation to become world class. Project management
and engineering were also included in the ambit of TBEM which was a bold and courageous
decision.
In table 4 is shown how the BE framework of TBEM was deployed using the principles of
Dr Deming – this was the convergence of BE and TQM. The company already had a rich
tradition of practicing several TQM initiatives and had achieved great success in cost
reduction as shown in Figure 1, 2 and 3:
Dr Deming’s principles Relevant
Baldrige core
values
How practiced in the
CRMP
Benefits to the project
Create constancy of purpose Visionary
leadership
Declared a co-created
vision statement
Aligned all project managers.
The purpose statement -
Adopt the new philosophy.
Leadership for change.
Organisational
and personal
learning , focus
on the future
Transform the project
management function
in the company , do a
BPR through the
CRMP
Set up a new projects and
engineering department, closed
down the old one
progressively.
Cease dependence on
inspection to achieve quality.
Management by
fact , focus on
results and
creating value
Adopted new method
as per guidance from
TBEM
Provided pro-active
suggestions to all contractors
and project personnel to build-
in quality rather than inspect
quality. Used ISO 9000 ( the
CRMP was separately certified
for ISO 9000 )
End the practice of awarding
business on the basis of price
tag. Instead, minimise total
cost.
Customer driven
excellence ,
agility
Contracts were
awarded based on a
techno-economic –
commercial basis,
based on merits.
A new cost estimation ,
allocation , progressive control
method was innovated (
R.Jayaraman , accepted for
publication , 2014 )
Improve constantly and
forever the system of
production and service, to
improve quality and
productivity, and thus
constantly decrease costs.
Organisational
and personal
learning
Used TBEM and TQM
methods , like use of
latest techniques in
project management
adopted through
benchmarking from
world class companies
The project was completed in a
lowest ever cost (at that time)
for a facility of the type
installed. It was accepted as a
world record.
Institute training on the job.
Institute a vigorous program
of education and
self-improvement.
Organisational
and personal
learning , Valuing
employees and
partners
Training was provided
as per the AQUIP (
Annual Quality
improvement Plan ) for
the CRMP
Training areas included PM,
quality, construction. Training
was provided in India and
abroad
Institutionalise leadership Visionary
leadership ,
The project was run on
a decentralized basis
See B.Muturaman et al , 2001
and B.Muthuraman et al , 2014
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Organisational
and personal
learning , systems
perspective
with each PM put in
charge of one or more
ell defined “package”
Break down barriers between
departments. Put everybody in
the company to work to
accomplish the ransformation.
The transformation is
everybody's job.
Systems
perspective
The entire project team
was seated in an open
office. Integrated PM
using a PRIMAVERA
software
See R.Jayaraman , 2014 for
further details
Table 4: Dr Deming’s principles as given by Dr Kosaku Yoshida (the first assistant to Dr Deming) in a
presentation to the top management in Tata Steel in 2001 , Jamshedpur . (source : authors research )
52101
137
247
295
497
740
0
100
200
300
400
500
600
700
800
Rs
in
Cro
re
s
95-96 96-97 97-98 98-99 99-00 00-01 2001-02
Savings through CIPs(Savings excludes TOP)
Increase Over
last year
by 49%
Figure 1: Cost savings due to TQM initiatives – CIP’s (Continuous Improvement
Projects) done by groups within the company. TOP refers to the Total Operating
Performance, which was another program to obtain large scale cost reduction under
the TBEM umbrella (In 2015 1 Million USD = INR 6.6 crores) (source: company
documents)
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Figure 2 : Cost savings classified into new and recurring – one of the key metrics of TBEM
efforts – achieved due to TBEM practices in the company (source : company documents )
Figure 3: Savings in cost as a percentage of sales revenue , showing the impact of the
benefits of running TQM as a strategic tool under the TBEM framework , Tata Steel ,
India operations ( source : company documents )
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Details of the construction , project planning , monitoring , control , cost control etc of the
CRMP are available in other published works (B Muthuraman et al , 2000 ; B Muthuraman ,
et al 2000 ; B Muthuraman , et al , 2000 ; R Jayaraman wet al , 2000 ; R. Jayaraman , et al ,
1999 ; R.P.Singh et al , 2001 ) . In this work we include the details which illustrate the
systematic practice of using TQM tools under the TBEM to make the CRMP a world class
project.
The key difference in using TQM in manufacturing and using TQM as a strategic tool
under TBEM in a manufacturing set-up are shown in Figures 4 and 5:
R & D Prodn Maint
Quality Inspection PPC
Inspection Packing Stores
Figure 4: Using TQM as a continuous improvement
tool. The rings show PDCA.
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The WBS of the project management practiced in CRMP is shown in figure 6 and the
integration of TQM into the project management of CRMP through BE is shown in figure 7:
Project approval
phase
Project planning and readying for
execution phase
Project
execution hase
Daily
Management
Project idea
initiation
Select and appoint
project "owner” (for
internal projects).
Else the customer is
the client.
Pre-bid meetings
with suppliers
Land levelling ,
preparation
Update the
project
network
Figure 5: Using TQM as a strategic tool in the overall strategy of an organisation. The rings and the arrows
bounded framework show PDCA loops. (source: author’s research )
Motivate
Employees
Empower Teams
Set
Direction
Learn &
Improve Plan
Perform
to Plan ( Do) Check Results
Continuously Improve
Support
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In principle
approval to
examine feasibility
Chief project
manager (CPM )
appointed
Award contracts and
appoint suppliers
and contractors
Construction -
civil , structural
Communicate
with all
package
managers
Commit funds Finalise project
network , WBS
Finalise the project
budget , allocation
of costs for
individual packages
Mechanical ,
electrical
Hold meetings
with the
package
managers
Appoint consultant Finalise the project
packages
Receive
equipment ,
install
Hold meetings
with suppliers
Prepare Detailed
Feasibility Report
(DFR)
Finalise the project
organisation
Test and
commission
Hold meetings
with
customers
Board approval for
the DFR
Obtain concurrence
of the project owner
Handover to
owner / customer
Hold meetings
with senior
management
Sanction of funds
by the Board
Appoint Package
Managers
Update
milestones
Discuss and obtain
views of all
package managers
on the project
details
Appoint an
independent project
cost control and
schedule
monitoring cell ,
reporting to the
CPM
Figure 6 : The work breakdown structure for the project management of CRMP
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Top
Management
Project Strategy
Project
Reporting
Figure 7: An integrated TQM practice with strategic alignment and synergy in CRMP
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In terms of practicing TQM in a strategic way, integrated into the overall strategy of the
CRMP, the project management activities were designed and executed based on a design as
suggested by the TBEM framework. This is shown in Figure 8:
TBEM ( Baldrige ) Category How applied in the PM of CRMP
Leadership VMV declared , package managers appointed
Strategy CRMP strategy was described through a balanced score
card
Customer focus Extensive discussions with potential customers , using
QFD type of inputs , discussions with world renowned
suppliers , collaborator Nippon Steel , internal customer
concept used to ensure that package managers do what is
needed by their customers
Information Management PRIMAVERA software used as the central control tool,
using a WBS for the project which contained as many as
12,000 activities. Centralised MIS , the PMC ( project
Management and Cost Control ) Group was the central
information clearing and disseminating agency , which
worked in close co-ordination with all package managers
, using best practices adopted from world leaders like
Fluor Daniel , Afcons , Larsen and Toubro
HR practices Used best practices based on TBEM work done in Tata
Steel , new conspts based on best practices form other
well-known Baldrige winners ( these efforts are described
in a separate work which is to be published shortly )
Processes and continuous improvement ISO 9000 certification obtained for CRMP. Process grid
used to define and describe all processes based on best
practices obtained from Baldrige winners ( published
information ) as well as given by Baldrige consultants
invited form the USA
Results orientation Was declared by project management community as a
world class project , in terms of cost , time to completion
and many other areas , which became new benchmarks
in project management
Figure 8 : TQM strategic embedment based on TBEM guidelines
Based on the benchmarked best practices, world class project management techniques,
embedment of TQM as a strategic tool, and working under the overall umbrella of TBEM
world class results were achieved as shown in figures 9, 10 and 11:
Achieved highest rate of concrete pouring of 15,000 cum per month, a record
for Tata Steel.
Achieved highest rate of structural fabrication of 2,255 tonnes/month in the
month of Aug’98, a record for Tata Steel.
Achieved the highest rate of structural erection of 2,475 tons / month, a record
for Tata Steel.
Completed 130,000 cum of concreting in 12 months, a record for Tata Steel.
Achieved 14,160 tonnes for structural fabrication in 12 months, a record for
Tata Steel.
Achieved 13,170 tonnes of structural erection in 12 months, a record for Tata
Steel.
Placed orders for a Continuous, Coupled Pickling Line + Tandem Cold Mill at
the lowest cost, a world record.
Received shipment of first mill housing from Hitachi within 12 months of
placement of order, a world record.
Commissioning of roll grinder done in 14 months, a world record.
Obtained EPCG licence within 2 ½ months, a record for such type of activity.
Threading of first strip in the Pickling Line done in 24 hours, a world record.
Completed commissioning of the Coupled Pickling Line + Tandem Cold Mill in
26 ½ months, a world record.
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Item of project management Remarks
Discrete turnkey method of project
execution
Helped in achievement of world class results due to – role
clarity , superior contracting , appropriate utilisation of
expertise , meticulous planning
Repeated negotiations before placement
of order
Negotiations were held a record number of times , and
order was placed only after the bid value of the package
was brought under the budget provided for the package
Target package cost A new practice started by the CRMP, which enabled to
identify a target cost for each item of the project. If orders
are placed below these values , the cost of the project
would come within the budget
Liquidity damages clause in the contract The contract included only the LD clause, no bonus. Since
the target was world best , a bonus clause was felt to be
superfluous ( however , in the end , the world’s best target
was bettered , but without payment of any bonus )
Shipping and clearing of FOB items MOU signed with TKM. Another ‘first ‘for the CRMP.
Goods from Japan reached the site within 32 days of
leaving the foreign port, a record low time. Freight costs
were also a record low. ( TKM – Tata Korf maritime , a
shipping subsidiary of Tata Steel )
EPCG licence for TCM items An EPCG licence was procured in a record time of 2 ½
months. This reduced the cost of the project by some Rs 45
crores. Another ‘ first ‘ for CRMP ( EPCG - a type of
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Se
p-9
7
No
v-9
7
Jan
-98
Ma
r-98
Ma
y-9
8
Ju
l-98
Se
p-9
8
No
v-9
8
Jan
-99
Ma
r-99
Ma
y-9
9
Ju
l-99
Se
p-9
9
No
v-9
9
Jan
-00
Ma
r-00
Ma
y-0
0 CU
MU
LA
TIV
E P
RO
GR
ES
S (
%)
MO
NT
HL
Y P
RO
GR
ES
S (
%)
MONTHS
TATA STEEL COLD ROLLING MILL PROJECT AT JAMSHEDPUR
PROGRESS - PROJECT (OVERALL)
Plan % Achievement % Cum. Plan % Cum. Achievement %
Figure 10: Showing the close fit of the plan vs actual performance of the CRM project of Tata Steel
(adopted from R.Jayaraman et al ,( 2001)
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import licence)
Supply of first mill housing Done by Hitachi within 11 months of LOI, a world record (
LOI – letter of intent )
Erection of EOT crane in pickling bay Done in 7 months from the order date by TGS. A record for
TGS. ( Tata Growth Shop )
Erection completed by October , 1999 Work completed two months ahead of schedule
Start testing of equipment in November,
1999
Done two months ahead of schedule
Dry run of all mill stand motors Done in February , 2000 , 2 months ahead of schedule
Threading of coil through the pickling
line on 5 th April , 2000
Done 1 ½ months ahead of schedule , a world record
Pull coil through the pickling line Done in 24 hours , a world record for such activity
Run first coil through the PL/TCM (
Pickling Line / Tandem Cold Rolling
Mill )
Done on 15 th April , 2000 , 1 ½ months ahead of schedule
, a world record
Level III automation installed and first
coil run with Level III
A first for Tata Steel
Figure 11 : World class results achieved by using TQM as a strategic tool integrated into the project
management of CRMP using TBEM framework ( source : company documents )
An Approach to Develop the Framework Further
The culmination of the work done in the CRMP was reflected in the score of the first
TBEM application filed for assessment by a team of Baldrige assessors , who gave a score of
500 on 1000 , which is considered a very high performance . The score indicates that the
CRMP was managed in a manner leading to superior results, continuously improving through
processes used to gather, disseminate and do CAPA (corrective and preventive actions). The
methodology followed in the CRMP has been applied in Tata Steel projects in Jamshedpur
which yielded further world class results (for example , D blast furnace revamp , which was
done in a world class time of 107 days) . However there is a lot of scope to adopt and improve
TQM practices in project management , The way to go forward is to adopt the Baldrige ( or
equivalent frameworks like EFQM) for the overall project management and use TQM
techniques (like benchmarking , best practices , PDCA) within the several work spheres as
shown in figure 6 . Configurations like those shown in figures 7 and 8 will have to be worked
out to suit the project needs and deployed. These efforts can be taken up by EPC companies
and large companies with in-house project management / engineering departments using the
thoughts distilled by academic researchers and practitioners.
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Conclusions
Using TQM in every department of companies was an outcome of the Japanese quality
revolution kicked off by Dr Demings visit toi Japan in 1950. Using a stratgegic framework to
run organisations using the PDCA philosophy was developed through the Malcolm Baldrige
beginning 1987. Using the TQM techniques in a strategic way in project management is still
evolving. A significant contribution to this effort is the CRMP at Tata Steel, India. The usage
of TQM and Baldrige will surely make project management an efficient and people oriented
endeavour where excellence can be practiced with world class results.
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