Revolution in Quality

TQM

Revolution in Quality

The Japanese massive training program                                                                                        

Massive is the word for describing a program of training hundreds of thousands of managers and supervisors at all organization levels and in all company departments, plus millions of non-supervisors. That massive training program has made Japanese managers, specialists and workers the best trained forces on earth so far as quality is concerned. It took the Japanese an entire decade to train all those levels of managers and supervisors.

Japanese annual programs of quality improvements

Armed with their new know-how and prodded by grim necessity, the Japanese proceeded to make many improvements in product quality - millions of them. Because the training programs had included all departments, improvements came from all functions-product design, purchase of components, manufacture, inspection and test and field service. In addition, because the training was carried on at all levels, it became possible to utilize the experience and creativity of the entire company hierarchies including much of the work force.

One thing leads to another. The application of new know-how creates an added source of know-how-the experience that comes from applying concepts and tools in the environment of reality. Over the years the accumulated experience has developed its own imperatives-the precious habit of improvement. All organizations evolve the habits of control-of meeting the day-to-day schedules and putting out the fires. If they do a good job of control they will meet this year’s budgets and targets. They will also fall a year behind any competitors who have acquired the habit of improvement.

It is the habit of annual quality improvement which has put the Japanese on that steep upward climb. Each year they have gained on the rest because their pace of improvement has exceeded that of the rest. The Japanese will continue to make these gains year after year until the others can develop a pace of annual quality improvement which matches that of the Japanese.

Japanese upper management leadership of the quality function

In Japan it is quite usual for the upper managers – the presidents and the general managers-to provide leadership to the quality function. The Japanese upper managers first assumed this leadership during the quality emergency of the late 1940s and early 1950s. It was these upper managers who launched those massive training programs and those programs of annual quality improvement. Having created a successful revolution, the presidents have shown no disposition to give up their leadership roel.-they have become life long revolutionaries. In addition, they are entirely comfortable in this leadership role. They have the needed training and they are quite familiar with the underlying concepts and methods. In these matters of quality they have the support of the best trained forces on earth. And they have an understandable pride in their national attainment as to quality.

What has made Japanese quality so good?

TQM

What has made Japanese quality so good?

In any competition an important element of grand strategy is to understand the strengths of the competitor. The more we understand the ingredients of the Japanese revolution in quality, the more effective will be our response.

The Japanese could have chosen an evolutionary approach, gradually learn by experience how to compete with the West. Instead, the Japanese industrialists chose to create a revolution in quality. To this end they made three radical departures from prior practice:

1. A massive quality related training program

2. Annual programs of quality improvement

3. Upper management leadership of the quality function

Market Leadership through TQM

Market Leadership through TQM

Historically Indian industries developed management practices that suited the restrictive trade policies. Till early eighties, the domestic demand for manufactured goods exceeded supply. Economic policies then protected the home market, also offered export market in the former Soviet & Eastern block. Both markets posed limited competitive challenge. This reinforced the inward orientation of the national industries. Indian firms developed management ethos that mistook the rent seeking- through manipulation of regulations, cornering of licenses and exploitation of legal loop holes as main competitive weapon.

By mid eighties, the savings from a sizable middle class created favorable conditions for industrial investment and consumer boom. Indian consumer for the first time received competitive product offerings. Due to the inability of the low income groups to enter the consumer durable market, supply capacities of many industries soon exceeded the demand. The timing of the economic reforms also coincided with the period of sustained recession in the West and the fierce competition in the global markets.

Rated on global scales of quality, India’s performance has been abysmal: among the 41 countries whose products and services were ranked by the world competitiveness report 1994, conducted by the Geneva based World Economic Forum, India occupied a lowly 39^th place on the price to quality parameter. In customer orientation India was ranked 40^th and in time to market it was on 38^th place among 41 nations. It needs no soul searching to understand why on global bench markers on TQM practices the competitiveness report ranks India 38^th on a sample of 41.  

Indian labor productivity was rated at eighth of that in Japan and two thirds that in Thailand. Although availability of skilled labor in India was rated very high the worker motivation and flexibility which were crucial for productivity under the new manufacturing paradigms were rated extremely poor for India.

On the production lines of Motorola, the American telecommunications equipment manufacturer, engineers were laboring to attain 99.99997 percent defect free manufacturing. In India plants were struggling to reduce their rejection rates below five percent.

Economic reforms have remained an enigma to the Indian industry. This was evident from the apprehensions of a section of the industry to the much anticipated import tariff reduction proposed in the union budget. Industry’s hesitancy which was a major cause of the weak supply response is rooted in the fact that the competitive message of the economic reforms had not transcended to the firm level. The raison d’etre for reduced tariffs, as economists agree, was that under free competition they signal efficiency improvement.

Each new measures of economic reform bring global competition nearer home. A vital learning from Japan’s competitive success is their emphasis on adding value to products through manufacturing excellence.

Prior to World War 2 Japanese quality was poor; it was widely regarded as among the worst. Such products could be sold, but only at ridiculously low prices, and even then it was difficult to secure repeat sales.

Soon after World War 2, Japanese quality began to improve, and the pace of improvement had been remarkable. By the mid seventies this pace had brought the Japanese to a state of equality with the West. Japanese quality superiority was a major reason for a dramatic shift in share of market from the West to Japan.

Quality - The Alignment Case

Quality - The Alignment Case

 When your organization’s capabilities are equal to the demands placed on it by customers, The Voice of the Employee and The Voice of the Process are aligned with The Voice of the Customer. The relationship is steady and your growth and profitability advance at a moderately healthy pace.

Should your capabilities lag behind customer requirements, however, The Voice of the Employee and The Voice of the Process fall out of alignment with The Voice of the Customer, and you are confronted with a Rework gap.

Your organization can’t routinely satisfy its customers and must go to extraordinary lengths (e.g. recall and repair of defective products or make good on services delivered unsatisfactorily) just to sustain the relationship. As a result growth and profitability suffer.

Once the rework gap has been closed, your organization may move out of alignment in the other direction – your capabilities might run ahead of customers’ current requirements. When this happens, you create what we call an Opportunity Gap. Your organization not only routinely satisfies customers’’ current requirements, it is ready and able to meet needs that customers have not yet stated or perhaps, even imagined.

The Opportunity Gap represents your organization’s ability to make insightful, educated guesses about customers’ unstated and anticipated needs, so you can provide unexpected elements of product, service, or relationship quality that customers will immediately and intrinsically value. It is about delighting customers, as opposed merely satisfying them. Most of all, it is about leading the market place, opposed to following it.

In terms of competitive advantage, we see that organizations actually pursue two kinds of quality goals. Defensive quality goals are reactive. They are aimed at closing the Rework Gap- bringing process and employee capabilities at par with customer requirements. Rather than leading the market place the organization is trying to catch up with it. When the organization opens up an Opportunity Gap, however, it can proactively pursue Offensive quality goals that will favorably distance it from competitors in the mind of market place, drive customer retention and new business growth, and lessen pressures to compete on the basis of price, there by increasing long term profitability.

Once your organization delights its customers with unexpected value, their base requirements will rise to this new level of expectation. The Long-term growth and Profit becomes solid indicating that the Voice of the Process and The Voice of the Employee are again in alignment with The Voice of the Customer, albeit at a new higher level.

Like the Olympic high jumper who sets a new world record, you have forever raised the bar. From now on this is the level of performance and value your customers will expect from you.

The message can be summarized in five fundamental points given below:

Quality is free.

The slogan had been popularized by Philip Crosby. It is always expensive to run out-of –control work processes that it is to invest in quality approaches designed to bring work processes under control.

Quality is a management problem.

Poor quality is caused by flawed management systems and managers would have to lead the way to solutions.

The company must focus everything on customer.

Employees should think of fellow employees as internal customers. By meeting fellow employees’ valid customer requirements, everyone could help meet the needs of the external customers served by the company.

Quality is continuous improvement.

The status quo is never good enough. Quality companies constantly strive to be better, and gladly accept that their efforts to improve quality will never end.

Quality requires cultural change.

Don’t bother looking for quick-fixes or shortcuts.

A methodology for Quality Improvement

TQM

A methodology for 

Quality Improvement

• Involving the whole organization

• Initiating Quality Improvement projects or activities

• Investigating possible areas for improvement

• Establishing cause and effect relationships

• Taking improvement action

• Confirming the improvement

• Sustaining the gains

• Continuing the improvement

Deming Management Method

1. Create constancy of purpose for the improvement of product and service

2.Adopt the new philosophy

3.Cease dependence on mass inspection

4.End the practice of awarding business on price alone

5.Improve constantly and forever the system of production and service

6.Institute training & retraining

7. Institute leadership

8. Drive out fear

9.Breakdown barriers between staff areas

10. Eliminate slogans, exhortations and targets for the work force

11. Eliminate numerical quotas

12.Remove barriers to pride of workmanship

13. Institute a vigorous program of education and retraining

14. Take action to accomplish the transformation

15.Doing it with data

16. The seven deadly diseases and some obstacles

Ishikawa – Guide to quality control

In god we trust. All others must use data.

What is TQM?

What is TQM?

Total Quality Management assumes maximum effectiveness and efficiency within an organization by putting in place processes and systems which will ensure that every aspect of its activity is aligned to satisfy customer needs and all other objectives without waste of effort and using the full potential of every person in the organization. This philosophy recognizes that customer satisfaction, health, safety, environmental considerations and business objectives are mutually dependent.

In TQM approach Statistical process control, employee involvement and team problem solving systems could be effectively combined and focused on management’s strategic goals. When an organization provides value even its customers had not anticipated it is wielding quality as a competitive weapon.

World class leaders consistently recognize that customer loyalty, employee commitment and operating efficiency are all essential elements of business success. They consistently listen to:

The voice of the customer: What customers need and value?

The voice of the employee: the sum total of what employees think, feel, need & believe?

The voice of the process: to continually tap into the process data that tell how work actually gets done in the organization so as to key work processes thereby controlling and improving results.

The tools of world class leadership are TQM tools. Total quality management is mind set. It’s 90% attitude. What is needed is training people in quality management techniques and empowering them to implement total quality approach in their work place.

Since truly competitive edge comes from people who know why they are there, what their job is and how it fits in to the larger picture. Therefore the training and retooling the mind becomes necessary.

Company ethos and the values of those who lead have to be of the highest order to command respect. The statements and actions of leaders have to be such that when managers translate these values in to daily practice; their subordinates respect them and align themselves with the organization. Employees believe in the chain of command. They know what the top management says is important but they study their immediate managers and supervisors to interpret what is real and what is just talk.

Breakthrough leadership calls on the organization to articulate a clear vision (where are we going?),a mission(What do we do?) and values(what do we stand for?)

TQM is a fact based management process. It requires everyone to analyze, understand and continuously improve their own work processes. The main issue in TQM approach is cultural change not skills training. What the system needs is people who are more resourceful, innovative and educated, who can operate in the new culture with its new values, new attitudes and life styles.

Organizational change through training is a slow process. Any input which is meaningful should cover all people involved in the process of change. Learning must be by actual doing, by experiencing, by living through a long series of situations in which a new behavior is made highly satisfactory and old ones not satisfactory.

The business leader’s most fundamental task is to align the organization’s employees and work processes with every changing customer requirements.

A TQM effort that involves people but fails to enhance competitive advantage is not functional. The key to making quality work is leadership that prepares the organization to withstand any competitive threat, from any source.

TQM - Product Quality

TQM

Product Quality

It is now widely believed by those in the industry that quality is meeting the needs of the customer. The focus on the customer is important. It is the customer that defines quality expectations in the market place.

For suppliers of companies making consumer products, this has severe implications. More than ever before, suppliers must thoroughly understand the application of their product. Even more important, they must deal with how their portion fits in with the general strategy of getting customer satisfaction. This takes a close working relationship, which may be described as a partnership among companies. The success of a supplier really depends on how the products entering the consumer market place are perceived by the final customer. If there is wide acceptance, the supplier will likely prosper. If not the survival may be questionable.

According to the American Society for Quality Control, Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy given needs. The definition implies that the needs of the customer are the drivers of quality. It also implies that satisfaction of those needs really determines whether quality is met.

Consumers for the most part, do not really care about satisfaction. They have their individual perceptions of what a product should be like. They evaluate whether quality has been met by how the product differs from what they think it should be like.

A way of understanding these perceptions is to consider that consumer may look at quality in four ways. These are, function, use feature, perception features and price.

Function relates to the ability of the product to do the job for which it was purchased. Using an auto, for example, one function is that it goes from starting point A to destination B whenever desired. Consumers are also concerned with how long it will do the function without failing. This is a measure of reliability or durability of the product.

Use features relate to how the consumer interfaces with the product. In a car,for example, this may be how comfortable the seats are and how accessible the controls are.

Perception features relate to the customer appeal, or how the consumer feels about the excitement of the product. For a car enthusiast, it may be that a vehicle has all the available technical advances.

Price is, in reality, a trade- off with the other ways a customer perceives quality.

It is the value the customer places on the product to determine whether a purchase is made.