Total Quality Management

There is hardly any organisation that does not know the importance of quality management to remain competitive and meet customers’ expectations. The major challenge however lies in the implementation of quality management. The concept of quality management was pioneered by American gurus such as Armand Feigenbaum, Joseph Juran and Edwards Demin. They took the message to Japan in the early 1950s. The Japanese companies popularized the concept of TQM; first undertaking its commercial applications after the concept was extended and further developed by Japanese gurus notably Genichi Taguchi, Kaoru Ishikawa and Shigeo Shingo (Beckford, 2002).

Embracing quality management practices in the 1950s changed Japan’s notoriety for cheap imitation products to being recognized for cheap high quality ones. This paved way for Japan’s imports into Europe and USA, bringing about the revival of the ailing Japan’s industrial system. The success in Japan’s industry caused a revolution in the west during the early 1980s and Total Quality Management (TQM) became a standard global practice. What is TQM? TQM is basically a metamorphosis of the traditional quality approach of inspection-based quality control and quality assurance control.

It is a holistic approach to quality management with particular attention to the role played by the people within an organisation and different parts of the organisation to promote quality. (Stack, Chambers & Johnston, 2007). The aim of TQM is to help organisations achieve excellent performance by getting it right the first time. Its relevance to the contemporary business environment is stressed by the establishment of International standardization organisation (ISO) 9000, which is the internationally recognized standard for quality management systems.

There are also three major bodies which give awards to organisations in recognition of best quality management practices. These include the ‘Demin Prize’ in Japan, the ‘Malcolm Baldrige National Quality Award’ in the U. S. and the ‘European Foundation for Quality Management’ (EFQM) award. This report seeks to examine the role and usefulness of TQM to the contemporary business environment and how it can be successfully implemented and improved upon by organisations. 2 2 The Foundations of TQM 1.

Quality When high quality is embedded in manufacturing, it will lead to increased sales, hence, higher revenue and reduced production costs through better efficiency. We can therefore conclude that the success of any organisation is tied to the quality of its products or services. In operations, the quality of a good or service is viewed as a consistent conformance to customers’ expectation whereas from the customers’ viewpoint, quality is what the consumer perceives the product or service to be.

A balanced view of quality therefore will measure how much customer expectation of a product or service matches customers’ perception of it. (Stack, Chambers & Johnston, 2007). In meeting customers’ expectation, the first step is to design the product or service. Quality of design measures how well the product or service is designed to meet the agreed requirements and it is during this process that specifications for the product or service are drawn up. Quality also needs to be controlled. By this, we refer to techniques used to achieve and maintain quality.

Quality assurance is aimed at preventing quality problems from occurring through systematic planning. (Oakland, 2003) 2. Evolution of TQM In the early days of manufacturing, the role of quality management was merely inspection i. e. to screen out defects after production. As companies grew in size, the functions of quality management also expanded to include defect prevention. Inspection became a separate department with the need to cater for training of inspectors, creating and adhering to standards as well as keeping data records and ensuring the accuracy of the measuring equipments.

This increased responsibilities necessitated the creation of quality control department with the additional function of the treatment of quality problems. The birth of quality assurance which makes use of statistical quality techniques involves functions which have no direct bearing to the manufactured products in quality management. TQM includes the above functions of quality management and also has a wider concept, involving everyone in the organisation and every part of it. 3 2. Relevance and practice of TQM TQM is a philosophy that stresses that quality should be the watchword in every operation within an organisation.

It lays emphasis on meeting customers’ needs and expectations and that quality management should be embedded in every part of the organisation, not made the job of a particular department or some appointed persons within the organisation. It goes further to argue that no matter the role of anyone within an organisation, he has a bearing directly or indirectly on quality. Quality can be improved when everyone finds better ways of doing things and also help others to achieve same. TQM can only succeed when everyone is involved.

Krafts General Foods Canada (KGFC) and many other companies illustrate this, as they initially failed in their effort to implement TQM due to a lack of commitment from staff (Keiser and Douglas, 1993). It is argued that no organisation can be truly effective if every department and each person within the organisation at whatever position does not synchronize in carrying out their activities. (Muhlemann, Oakland, and Lockyer, 1992) The practice of TQM also requires that everyone should be seen as an internal supplier and is at the same time an internal customer to others within the organisation.

This internal customer-supplier relationship is a ‘quality chain’ and can be broken at any point if customer requirements are not met. This failure then multiplies and creates problems elsewhere and the situation becomes exacerbated until it gets to the external customer. This could have damaging effects to the business and the only way to forestall this is to ensure that each internal customer is satisfied at every process until it gets to the external customer. One way to ensure this is for every internal customer or supplier to define what their role is as well as what their customers’ requirements are.

This would ensure that errors can be detected at an early stage before they become very expensive to fix. (Stack, Chambers & Johnston, 2007). The core of TQM is customer-supplier interface (both external and internal) and at each interface lie a number of processes as illustrated in fig.

• 1. This core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organisation.

These are the foundations of TQM and they are supported by key management functions of people, processes and systems within the organisation. Fig. 1: Foundations of TQM (Oakland, 2003) Wal-mart, one of the most successful and largest retail companies in the world is known to embed TQM in its operation. One of the secrets of their success is due to the fact that they strictly demand quality from their suppliers. (Kurtus, 2007) TQM emphasizes that quality can and must be managed. Organisations that imbibe quality maintenance in their culture often record tremendous success. For example, a quality improvement team visited Craftex mill inc. hen the company had a very serious problem due to a fault in their production process and discovered that the problem was due to the machine maintenance program. Solving this problem made the company realize over 100 percent return on their investment for a 500 thousand dollar capital improvement project. (Avery & Zabel, 1997) Goals should be set by every unit of the organisation strictly based on requirement and should not in any way be compromised or negotiated. To achieve this, the quality of a sample product or service must be measured using some form of sampling. This sampling can be done using either of two methods.

The first is the statistical process control (SPC) which samples processes to see whether there are anomalies while the production of goods or delivery of service is in progress. The second is the acceptance sampling method in which the decision to accept the whole batch or to reject it is based on the outcome of a particular product or service picked at random. The use of sampling technique has the tendency to give rise to making erroneous judgment about the outcome. This error can be: type I, involving making corrections when no correction is required or type II in which no correction is made when it is actually required.

Although both methods carry some degree of risks, the latter is considered more risky and intolerable if quality is to be improved because it assumes, contrary to the message of TQM, that some degree of error or failure is unavoidable in an operation. Therefore, the SPC technique is more commonly used and control chart is one important tool which it uses to monitor the performance progress of some quality characteristics in an operation. (Stack, Chambers & Johnston, 2007) For continuous improvement in TQM, a PDCA cycle also known as Deming wheel can be applied.

As shown in the fig. 2, there are four basic steps in the PDCA cycle. Planning starts with problem identification within an operation and solution generation. Next comes the doing, to experiment on a small scale to see if the proffered solution will work or not. The next step is checking to see whether or not the desired quality is being achieved and if there is any other problem. Finally, with act changes are implemented on a larger scale and also others are trained. If the change works, the cycle is started again by planning on new improvements otherwise a different plan will be chosen. Tague, 2004). 6

• 2. Costs of quality This refers to the direct and indirect costs which an organisation incurs for not having an efficient quality system in place.

Prevention costs as the name implies, are incurred in trying to prevent errors in the first place by identifying potential problems and then correcting the procedure before the errors are made. Appraisal costs on the other hand are incurred in the process of verifying whether or not an error has occurred during product manufacture or while rendering service.

This includes for example, the time and effort spent to inspect products or services before and after execution. Internal failure costs are associated with correcting errors during an operation such as reworked parts. External failure costs are incurred if the error is discovered by the customer. It includes costs incurred in replacing a product or service. (Stack, Chambers & Johnston, 2007). This type of cost may be very expensive and should be avoided at all costs as the organisation stands the risk of losing the customer. The philosophy of TQM is to prevent errors from occurring in the first place by doing things right the first time.

It supports putting all effort towards prevention of errors and argues that this will eventually lead to reduction in other costs of quality. The traditional cost of quality model, and (b) the traditional cost of quality model with adjustments to reflect TQM criticisms (Stack, Chambers & Johnston, 2007) 7 Fig. 3 shows that increasing the expenditure and effort on prevention will lead to more-than-equivalent savings in other costs.

• 3. Quality standard and awards Many companies lack guidance and direction on good quality management procedure.

This led to the establishment of a set of worldwide standards that gives requirements for company’s quality management systems, ISO 9000. There are different versions of ISO 9000. The revised version 2000 has four major principles: Quality management should be customer focused. Customer satisfaction should be measured through surveys and focus groups and improvements made should be properly documented. Quality performance should be measured and analyzed so as to understand processes. Measurements should include the processes used to create the product or service and also customer satisfaction with those products or services.

Quality management should be improvement-driven both in the creation of products and services and also in customer satisfaction Top management must show commitment to the practice of quality management and provide a clear definition and importance of quality practice, the establishment of quality policies and objectives etc. Because ISO 9000 (2000) provides guidance for organisations on the design of quality process and also gives assurance to customers that the product or service being purchased is of a certified standard quality, it is considered to be beneficial to both the organisation and the customers.

Some other benefits it provides are discussed below. ISO 9000 is adjudged to have reduced errors during production process or provision of service. Organisations that are certified also have reduced customer complaints and reduced costs of quality. Irrelevant and unnecessary processes within an organisation can be eliminated by following ISO 9000 procedures. Organisations that are ISO 9000 certified have a marketing advantage owing to the fact that present and potential customers believe their product or service is of a standard quality.

For example, some giant companies now insist on quality management certifications from their suppliers. (Bono & Heller, 2006) Nevertheless, not everyone considers that ISO 9000 is beneficial to organisations. For example, some believe ISO 9000 standard is bureaucratic in nature and encourages ‘management by manual’. It is also believed that a lot of time and money is wasted conducting internal audits, training staff, writing procedure and documenting processes. In the same vein, it costs a lot in terms of time and money to achieve and maintain an ISO 9000 registration.

They argue that it is mechanical and makes operations inflexible rather than approached from a creative and customized way. (Stack, Chambers & Johnston, 2007) Quality awards are given to encourage the practice of quality improvement in recognition of the role of TQM. Since these awards promote an organisation’s image as being producers of quality goods and services, it therefore serves as a motivation for companies to embrace and maintain quality practice. Three major of such quality awards are the ‘Demin Prize’ in Japan, the ‘Malcolm Baldrige National Quality Award’ in the U.

S. and the ‘European Foundation for Quality Management’ (EFQM) excellence model as mentioned in the introduction. The EFQM model is also designed for self-assessment. Using this model makes it easier for companies to have a better understanding of the philosophies of TQM since they are translated into specific areas. It also enables organisations to measure themselves against achieving the objectives of TQM and makes it possible to determine the importance of different categories to its own circumstances.

• 4.Implementation of TQM Implementing TQM successfully is not as easy as it sounds.

Many companies failed while implementing TQM because they did not properly integrate it within the organisation or after successful introduction, its impact on the organisation diminishes with the passage of time. (Stack, Chambers & Johnston, 2007). The latter can be said to be the case with Motorola which formally was in the forefront of quality management but eventually lost out to competitors due to gradual fading of quality practice within the organisation. (Bono & Heller, 2008) 9

Some factors must be put into consideration in order to avoid this pitfall. They are the key elements of TQM .

1. Key Elements of TQM For ease of understanding, the key elements are divided into four groups which collectively form a building structure based on their functions. The groups are foundation, building bricks, binding mortar and roof. The foundation consists of ethics, integrity and trust while training, leadership and teamwork form the building bricks. Communication is the binding mortar that binds the elements together and recognition forms the roof as shown in fig. below. Fig. 5: Key elements of TQM (Padhi, 2009) Ethics could be either organisational or individual. Business code of ethics established by the organisation should be followed by all employees. Integrity within and outside the organisation should be maintained as TQM cannot survive without it. Similarly, trust helps to build the right atmosphere for TQM to survive and is also a necessary tool for customer satisfaction. Good leadership is vital to the survival of TQM. Without the support and commitment of top management, TQM cannot succeed.

This is because they will need to allocate the resources to make it function properly and also to boost the morale of other workers within the organisation. A survey carried out shows that top management support is the most important factor required to make TQM implementation successful. Senior managers should not only support by believing in and giving their nod to the practice of TQM; they should also be active participants in implementing quality, solving quality problems, communicating the principles and techniques of quality management and maintaining quality throughout the organisation.

Teamwork, as in other activities, is necessary to make quality management work. Working together in a group would afford members the opportunity to share knowledge and experience from daily operational routines on quality practice. Training opens up new concepts and ideas needed for the organisation to sustain and improve quality and also bring about new challenges. Training also helps to tailor the implementation of TQM to conform and meet the specific requirements of the organisation.

Communication links all the other elements together. The success of TQM is tied to flow of information among employees as well as between suppliers and customers. Communication should be clear and unambiguous so that the receiver can correctly interpret what the sender intends. Recognition is the last of the key elements. Appreciating the efforts and achievements of those involved in quality improvement will encourage continuity and serve as incentive for others. It also boosts employee’s self esteem and productivity.

Recognition brings about a healthy competition among team members which will help to sustain the practice of quality management. (Padhi, 2009) Early feedback both from within the organisation and from customers is crucial to the success of TQM because it highlights areas of improvements. Competitive benchmarking is another integral part of TQM. It is the process of comparing performance against competitors in the same or similar markets with the objective of learning ideas and information which can lead to solutions.

Furthermore, the adoption of lean operations or Just-In-Time (JIT) which aims to meet customers’ demands instantaneously, with perfect quality and no waste will aid the achievement of TQM objectives. There is also the need to have a steering group to plan and oversee the implementation of the quality management program. This group has responsibilities such as the determination of when and how to start the program, the people to be involved, monitoring the progress of the program and also ensuring that all its benefits are realized.

The steering group is only meant to exist for a while after successful implementation of the program as its functions are expected to diminish with time and if not, it should strategically reduce its influence until it wanes and the program is taken over by the people involved in the operation processes. A general framework for successful TQM implementation is shown in fig. 6 The framework is concerned with setting the direction for the organisation as the top left three boxes reveal, then managing processes and finally moving through the framework, left to right, to measure and improve performance. Fig. : Framework for TQM Implementation (source: DTI) 2. TQM Implementation issues 12 The factors explained above will lead to a successful implementation of TQM. However, there are pitfalls that must be avoided in order not to experience failure caused by quality disillusionment, a situation where quality practice loses momentum with time after initial successful implementation. They are as explained below: The concept of TQM should be defined to include all the aspects of performance objectives explained earlier and should be seen as a continuous process and not a one-time achievement.

It should also be noted that by adopting TQM, poor leadership style is not suddenly corrected and normal leadership responsibilities of top management would not be replaced by responsibility for implementing TQM. TQM should be implemented in line with the strategic objectives of the organisation. It should naturally fit into the organisation’s normal activities. Organisations should not adopt TQM because of its popularity or hype. Rather, it should be as a result of a careful consideration.

TQM should not just be implemented the way others are doing it because each organisation is peculiar and has specific needs. It should be adapted to suit the circumstances of the organisation. 7. Conclusion The concept of TQM addresses overall organisational performance and there is extensive research evidence that proves its many benefits. The relevance of TQM in this 21st century is evidenced by its developments into holistic frameworks in many countries helping organisations to perform excellently especially in business developments. DTI) However, only organisations that have a clear purpose and high level of commitment from both the top management and their subordinates to the fundamentals of TQM will excel in the present-day competitive environment.

Appendix

Process flowcharting used in the construction of process maps (Source: DTI) .Control chart is one of the key tools of SPC used to monitor processes (Source: DTI) 14 Bibliography John S. Oakland (2003) Total Quality Management, third edition. Oxford: Butterworth-Heinemann John Beckford (2002) Quality, second edition.

Oxford: Routledge Matthew Moore (2007) What is the EFQM excellence model; in: http://www. onesixsigma. com/article/what-is-the-efqm-efficiency-model&us Department of Trade & Industry (DTI) The evolution of quality; in: www. dti. gov. uk/quality/evolution Christine Avery & Diane Zabel (1997) The Quality Management Sourcebook. London: Taylor & Francis Department of Trade & Industry (DTI) Total Management quality; in: www. dti. gov. uk/quality/tqm Nigel Slack, Stuart Chambers & Robert Johnson (2007), Operations Management, fifth edition. Harlow: Pearson Education Limited

Department of Trade & Industry (DTI) Tools and Techniques for process improvement; in: www. dti. gov. uk/quality/tools Department of Trade & Industry (DTI) Implement- From Quality to Organisational Excellence; in: www. dti. gov. uk/quality/implementation 15 Jones & N. Slack (2008) Quantitative Analysis in Operations Management, first edition. Harlow: Pearson Education Limited Nancy R. Tague (2004) The Quality Toolbox, second edition. ASQ Quality press HCI, The PDCA Cycle; in: http://www. hci. com. au/hcisite2/toolkit/pdcacycl. htm#Plan-Do-Check-Act Nayantara Padhi (2009) The eight elements of TQM; in: ttp://www. isixsigma. com/library/content/c021230a. asp Edward de Bono & Robert Heller (2006) Avoiding business disaster: Watch out for the icebergs ahead and be prepared for disruptive change; in: http://www. thinkingmanagers. com/management/business-disaster. php Edward de Bono & Robert Heller (2008) Total Quality Management; in: http://www. thinkingmanagers. com/business-management/total-quality-management. php Ron Kurtus (2007) Using TQM for a competitive advantage in business; in: http://www. school-for-champions. com/competition/tqm. htm

What are the leading causes of Spreadsheet errors?

The leading causes of spreadsheet errors are:

• Human incapability of doing complex cognitive tasks with accuracy, this is a limitation in human capability and this contributes partly to the errors that are caused in spreadsheets
• Lack of disciplined development practices is one of the most common reasons why spreadsheet contains errors. Many organization has policies in general about end user development in general, much less spreadsheet development
• Many developers build the models and hardwire it to one end result they are working without considering the constraints or different possible scenarios. This ultimately leads to the fact that the model doesn’t work for any other input variables other than the one that is being used to.
• Another common reason of spreadsheet errors is due to the overconfidence of the developers in the accuracy of the spreadsheets. They don’t spend time to test the spreadsheet for any possible errors
• We could also say innocence (in a sense of not knowing the excel capabilities) as one of the common reasons why spreadsheets has errors, people tend to learn from friends and coworkers without any proper training on Excel and its capabilities which ultimately lead in unstructured spreadsheet development

Why these errors are typically not detected?

• Primary reason for missing out these errors is that there is no adoption of the standard development cycle phases, many developers directly jump in and do the development without putting any thoughts and scenarios and once the development is done there is very little or no effort put in to test what is developed with different decision parameters.
• Secondly since there is no standard approach used in the overall spreadsheet development, the possibility of standard audit mechanisms to identify those errors is difficult. Even though many know there is a lot of potential errors in spreadsheet since the human cognition limit our brains to process complex cognition, we tend to miss out.
• Thirdly, both companies and individuals don’t find a need to adopt standard development practices and hence the potential of following the life cycle is less ultimately leading to non-detection of the spreadsheet errors.

What we can do?

Does Panko believe that errors can be eliminated? Why or why not? Panko believes the years of human error research have shown there is simply no way to eliminate errors completely; rather we can reduce errors by adopting a few best practices. Human error research indicates that human error is tenacious because people are not terribly good at detecting and correcting errors. Most of the error detection even when done cell by cell only approach 90% of mechanical and pointing errors in short formulas, whereas the logical errors, mechanical errors in the longer formulas and omission errors, detection rates in spreadsheet code inspection is far lower. Given the tenacity of errors even with intensive code inspection we should not be complacent in any kind of error detection which falls short of massive testing to reduce the errors in the spreadsheets.

According to the article, what specific kinds of things should be done to reduce spreadsheet errors? Even though we cannot completely eliminate spreadsheet errors, there are a few good methods we can adopt in order to reduce the errors.

• Cell protection is one of the simplest ways to prevent at least one type of error that is hardwiring. When doing hardwiring the developer clearly understands where the input cells are and is likely to enter it correctly. But when another user tends to use the spreadsheet they tend to click the cells with formula and more likely to do mistakes of pointing the formulas to wrong cells. By doing cell protection, users are only allowed to key in using specific input cells whereas the other cells with formula or results are protected from editing.
• Another trivial method is to have two sets of input sections, using which we can highlight differences between them to detect errors. This process is traditionally termed as verification where the user is able to get a feel of the errors while having the two input data sets is same and different.
• Another common seen activity in spreadsheet development is looking the outputs for reasonableness, where users understand the results than the numbers in the spreadsheets. By doing a reasonable examination of results some errors can be reduced.
• Adopting good development practices in spreadsheet development will help in reducing errors largely, as the developers go through the analysis, design, build, test process with standard methods they are more likely to uncover errors and potentially reduce them.
• Lot of time is spent on Testing in software development process. Testing has two stages one is the execution testing and the other is code inspection. In Spreadsheet development the testing is mostly eliminated and hence the chance of errors is higher. Hence strong guidelines on the testing and audit methods to reveal errors should be used to reduce errors.

Store 24 (A) – managing employee retention

The first question in the case, posed by Doucette, relates to whether employee tenure is a driver of store level financial performance.

Based on Exhibit 1 data, there appears to be a correlation between the staff tenure and the financial performance, however we would need to further investigate based on a more representative sample size. What is obvious is that store level performance is driven by multiple factors and the decision on retention programs should not be based the staff tenure only and more factors should be evaluated. Looking at the top 10 performing stores, the average tenure is 4 times longer but at the same time we have some high performers with short tenure. Looking at the lowest 10 performing stores, the common thing is the short tenure for the crew members (1-6 months) and the managers (1- 24 months), and this is natural due lack of field experience but raises some questions on those who have a longer tenure.

The second question, posed by Gordon, is to determine how important tenure is in explaining financial performance, relative to site location factors.

Based on Exhibit 3 data, we realize that even when the site locations are favorable for the store, the financial performance is not strong due to the short tenure of the staff and especially the managers (some had no experience at all). We need to further understand the absence of Managers (Zero tenure) in certain stores as this may have a detrimental effect on the store financial performance; Leadership and hands on experience are key in managing people, setting the vision and delivering on targets. Also, having such setups in vital locations can have a negative impact on staff in terms dealing with customer’s complaints, service delivery speed and managing expectations.

This also negatively affects the customer experience and direct customers to other competitors for better service, and hence regaining market position becomes very hard. Stores should have a mix of staff tenure to ensure experience sharing and maintain financial performance. Based on our preliminary findings, shops that are open for 24 hours seem to be less profitable than the shops that are not. We believe that low customer volumes during after-hours may not justify the costs of operations.

The third question, posed by Hart, is quite difficult. Hart wants to know if the relationship between tenure and performance varies with tenure level.

Based on Exhibit 1 data, we can see stores with high level of tenure have similar financial performances, our initial assumption is that the relationship is not linear and will returns will start to diminish after a certain level of tenure (approximately 6-24 months). In these cases, we recommend considering other data such as: The staff current wages/bonuses versus tenure and its effect on the overall financials. Career promotions in relation to tenure.

Staff satisfaction surveys (job and financial related surveys). Benchmarking incentive plans with other competitors. Attrition rate and reasons behind it (taken from exit interviews). Training and development programs

Based upon your analysis, what type of employee retention program do you recommend Store24 implement? We would recommend a multi-dimensional program. A deeper analysis of each of the performance-contributing factors should to determine the optimal program: Non-financial effect programs:

Job/store rotation between staff especially for managers, this will help managers to take on new challenges to improve the business and implement best practices taken from their previous experience. Involving staff in internal best practice sessions, where staff from various stores meet to discuss and set store best practices and participate in improving the company SOPs and quality standards. This will increase the staffs’ sense of involvement and value to the company. Succession planning programs to identify and prepare future managers. Regular/refresher training programs for staff on customer service, stock management, compliance, etc. Store Benchmarking and related incentives.

Financial related programs: Review the wages and bonuses compared to the market and see if there is any need for adjustments. Improving incentive plans for the staff with long tenure only.

What are the most takeaways for you [as a group] from this case?

• Incomplete or snapshots of data can be misleading and can lead to wrong decision making.
• Advance planning and time management for decision making and related analysis should be taken into consideration.
• The importance of data analytics in supporting corporate decision making. The quality and quantity of provided data needs to be neutral, relevant and comprehensive.
• The data analyst needs to clearly understand upper management sentiments and require CEMEX is one of the world’s largest building materials suppliers and cement producers.

Founded in Mexico in 1906. They supply cement to CEMEX has operations extending throughout the world, with production facilities pning 50 countries in North America, the Caribbean, South America, Europe, Asia, and Africa. CEMEX’s holds and controls the number 1 rank market shares in almost all countries they are in. this ensures them profit from their customers which are global construction firms or even individuals building their home. CEMEX is the has the largest market share. CEMEX has already established itself as a well known and reliable brand in terms of their product that why their product is heavily preferred by their customers whether firms or individual. CEMEX also acquires companies to extend its market coverage all over the world and it is successful because of its post merger integration and their CEMEX way. CEMEX standardized business processes, technology, and organizational structure across all countries while simultaneously granting countries certain operational flexibility.

Opportunity analysis

CEMEX is very adept at looking/ identifying potential opportunities in developing countries they look for companies in developing countries in which they can acquire. CEMEX has their PMI and CEMEX way that brings their effective and proven strategies to newly acquired companies while getting strategies from the company that can be applied and set as a standard in the CEMEX way. CEMEX always recognizes the need for improvement. It applies TQM or total quality management which strives for continuous improvement in the organization and it also performs internal and external benchmarking to identify the effective strategies of the company acquired and also apply the cemex standard. CEMEX looks ways to operate efficiently to increase revenue by reducing the cost.

Distribution

An important decision when trying to determine the overall competitive marketing strategy is place. Place includes company activities that make the product available to the consumers. CEMEX is a global company that is based in various countries all around the globe. It increases its market coverage by acquiring companies in other countries and applying the proven CEMEX way to the company and getting proven effective strategies that can be applied to the organization. In the past years CEMEX has gone to acquire many companies in other countries and it has been successful because of its PMI and CEMEX way which sets the company a single standard way of doing things CEMEX centralizes other companies and looks on the business as a whole and applying continuous improvement and innovation making the effort to have a common culture or common processes.

Management capabilities

CEMEX has shown itself as being very capable of growth and global expansion. They are very good at setting the standards and applying the same strategy to the whole organization. Middle level managers also proved to be very capable because they are the best and brightest within CEMEX. They have the legitimacy to propose and advocate for changes in the firms operation and they are low enough in the organization that they can identify and evaluate different ways of doing things. CEMEX learned that alongside transferring best practices that had been standardized throughout the company, it made a concerted effort to learn best practices from acquired companies, implementing them when appropriate. This made CEMEX more capable in increasing their market coverage to other countries because they now have proven standards and practices that they could integrate to the acquired company. CEMEX’s management is very good at internal benchmarking and continuous improvement. CEMEX is very good at getting good managers and assigning them to different areas of the company including CEMEX way and PMI.

Core competencies

CEMEX has core competencies in its CEMEX way and PMI which applies standardizes proven standards and practices to other acquired companies and learn best practices form them. CEMEX way is the core best business practice with which the company conducted business throughout all its locations. Another core competency is their ability to find opportunities in other countries, opportunities to acquire and increase their market coverage they are very good at finding companies that are suitable for them and beneficial for them to acquire. Another competency is how efficient they are , coming from the continuous improvement and standardization of practices and standards. They also continue to improve because they continue to learn best practices from acquired companies, implementing them when appropriate. CEMEX is very adept at applying proven practices and standards. ments and translate that carefully when generating data and preparing reports. e) In the business world, correlations and dependencies can be very complex and data analysis should be taken very seriously; all relevant factors have to be taken into consideration.

The following is an attempt to analyze AT&T’s use of Total Quality Management throughout its organization. Since AT&T is an elaborately enormous corporation I will focus my study to AT&T Power Systems/Lucent Technologies. This division of AT&T has been the industry standard for excellence since TQM was first introduced to the company. AT&T Power Systems has become one the world’s most dynamic companies because of its use of TQM. I will provide a brief description of who AT&T Power Systems is, a description of the events that lead up to its use of TQM, AT&T’s TQM philosophy, and how this philosophy was implemented.

Finally I will discuss the benefits AT&T Power Systems realized through their use of Total Quality Management. AT&T Power Systems provides a verity of power products for the data processing and telecommunications industries. Power System and its 4,200 employee’s design, develop, manufacture, and market electronic power systems, components, and power supplies to an increasingly international marketplace. In the past ten years AT&T as a whole has gone through a dramatic metamorphous.

It was forced to change from a large telecommunications monopoly providing universal telephone service, to a competitive global corporation roviding a full range of communication services and technologies. The “new” AT&T is a potpourri of smaller, highly focussed entities. Each entity has its own customers, competitors, and operational functions. Power Systems is the pinnacle of the “new” AT&T. In less than five years Power Systems has become the prototype for successfully implementing the cultural and organizational revolution know as Total Quality Management.

It has not only received internal recognition, but external achievement as well. In 1994 Power Systems was the first American company to win Japan’s prestigious Deming Prize for Quality Management. In the ame year AT&T’s long distance division won America’s Malcolm Baldrige National Quality Award. AT&T’s TQM philosophy made it the first corporation to win these two awards. Why did Power Systems change to TQM? Prior to 1990 Power Systems provided equipment for only its parent company AT&T. Power Systems was a lackluster division of AT&T that reported losses in numerous quarters.

As the scope AT&T and business as a whole changed Power Systems was forced to survive on its own. No longer would losses be tolerated, if the work couldn’t be completed in a cost-effective manner the division would be sold and the work would be given to an A. M. (Andy) Guarriello, Vice President & COO of Power Systems, was given the job of implementing TQM. Guarriello along with Power Systems management team launched the “Dallas Vision” project, an initiative involving physical, organizational, and philosophical changes that soon led to the adoption of Total Quality Management as the management system for the future.

Power Systems consolidated several of its locations into several small internal business units. These units would become to foundation that Power Systems operated on. Each units is given the resources to develop, engineer, manufacture, and its products. Functions such as human resources, finance, marketing, and sales are provided by smaller organizations developed to support the internal Power Systems Dallas unit was completely redesigned. This 900,000 square foot facility was rearranged into what AT&T calls “focused factories.

Each “focused factory” has the capability to accept incoming material, manufacture, and ship finished products. This layout was designed much within the guidelines of the Japanese JIT system. Power Systems took the Japanese approach to TQM and modified to fit the AT&T culture. The TQM riteria developed within Power Systems were selected to ensure the company’s ongoing focus on high standards for customer orientation, process excellence, employee involvement and continuous improvement. AT&T’s TQM philosophy has three main components Quality Policy Deployment, Daily Work Management, and Quality Improvement.

These three components combine to ensure robust solutions and continuous improvements. Quality Policy Deployment is the process of aligning the company’s attention and resources on a few high-priority, customer-focused issues. This is done to achieve to realize vast improvements in performance. Daily Work Management is a process of defining, measuring, and managing the day-to-day work of individuals and groups to obtain incremental improvements. This gives individual employees the opportunity to see improvements in measures they understand.

Quality Improvement is a team-based problem-solving methodology that uses the seven-step process known as the “QI story process. ” The “QI story process” is designed to detect and eliminate errors that cause defects. Together these three concepts formed an effective solution to Underlying these three concepts are four principles that are the foundation of AT&T’s TQM philosophy. These four are customer satisfaction, management-by-fact, respect for people, and P-D-C-A. P-D-C-A is Plan-Do-Check-Act developed by Shewhart.

These four principles helped Power Systems implement its cultural change. Without any one of these TQM will not work, so Power Systems’ management instituted a training regiment that had every employee had at least two full days of training within the first year of implementation. Power Systems has instilled pride in each one of its employees, which perpetuates outside the business to their customers. Each manager, worker, team member, and internal group believe that they can make a ifference in the operation of the company.

Each also believes they have the responsibility to produce a quality product efficiently that not only meets their customer’s needs, but also makes profit. This attitude as propelled Power Systems, or as it is now known Lucent Technologies, to the top of its industry. What Benefits did Power Systems see from TQM? Power Systems surpassed the expectations of management to realize colossal growth. Below is a list of improvements from a 1994 AT&T press release. These improvements pertain specifically to Power Systems.

Total quality management is “a management approach of an organization, centered on quality, based on the participation of all of its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society”. This is the definition of total quality management as given by the International Standards Organization, and while the definition provides a vague notion of what total quality management is, it fails to provide any real knowledge of total quality management.

Instead, as with many things in life, in order to fully understand what total quality management is, what its various facets are, and how it gets implemented, it is necessary to explore first hand how real corporations define and use total quality management. In this paper, I will analyze the way in which the Toyota Motor Corporation uses total quality management, with a specific focus on the Toyota Production System and the three main tools by which Toyota Motor Corporation manages total quality management.

More Abstract from Total Quality Management and Toyota

However, before going further, it must be noted that total quality management can be applied to a company that produces material goods or a company that provides intangible services, and that the principles of total quality management, as well as the execution of TQM, is different in both cases. As Toyota Motor Corporation is primarily a manufacturing firm this paper will only focus on total quality management as it applies to manufacturing. Total quality management in manufacturing starts with taking a random sample of products and performing statistical tests to maintain quality assurance. The sample is then tested to identify and isolate, the causes of any failures.

Under the TPS, Toyota utilizes a just-in-time production system, the ability to stop the production process at any time, and a dedication to continuous improvement. Through the interaction of these three elements, Toyota Motor Corporation is able to cut costs, isolate and identify production defects before they spread, develop a team of highly skilled and motivated employees, and most importantly, provide the consumer with a low cost and high-quality product.

Organizational Problem

Toyota needed to redesign the company’s United Kingdom website in order to meet new corporate guidelines. The website had to manage content for internal corporate users, as well as for consumers. Toyota wanted to make the best use of Internet technology to enhance the consumer experience and build a closer relationship with consumers by personalizing the website functions and keeping the website fresh and inviting. The efficient and effective delivery of content to consumers was the major goal of the website.

They also needed the site to be easy for the Toyota business users to manage. Since the website already existed, they needed to do a major upgrade without causing the site to be down for very long. They wanted consumers to continue using the website while the upgrades were being installed and tested, so they had to be able to do system diagnosis without disruption of the service. Relevant Approaches to the Problem IS Solutions approached the problem with an eye to the future, developing and building in the means to make changes after the foundations of the website were established.

They illustrated the possibilities for what the website could do for consumers. They used consultant services in the areas of business analysis, technical analysis and information architecture. Information architecture is important because it blends business requirements with the design and navigation of the website that makes it efficient and effective for delivering information to the user (IS Solutions, 2003). The approach of taking down the website and replacing it with an entirely new website was rejected.

Instead, they developed major upgrades and additions to the existing website to improve the functionality and user-friendliness for both consumers and Toyota business users. Site Management The site was designed with publishing categories that match the site navigation, so the business managers can easily publish content to be displayed on the page where they want consumers to see it. When they generate content in the Oracle database, they can view the page where it will be displayed, to see how it looks.

The site is divided into zones, so managers can see which zones are more popular, as well as track the visitors on the site as they move from zone to zone. Zones provide a hierarchical structure, so high priority messages reach the website visitor. In addition, the buttons on the side of the page allow visitors to find each zone easily. Thus, the dealers can see which zones the consumers visit most often, and they can place their high-priority content in those zones. This helps them to target advertisements to consumers and ensure that the consumers see those advertisements.

The website was easy to manage, and it was easy for both consumers and Toyota business users to find the content that they needed. Site Content The content was designed to help change website visitors into Toyota buyers. A “persistent guest” technology enabled them to personalize the content based on the online behavior of the guests and the business rules of the website. Thus, they could show visitors the content that interests them, and encourage them to become prospects for the sales of Toyota cars. The site also offered data on used cars for consumers.

In addition, the site contained content for Toyota business users, including databases that they could access and use for their marketing activities. The Oracle databases can be retrieved easily, and the site has a management tool for debugging, so they can view the page and fix any problems before it becomes available for viewing by consumers who visit the website (IS Solutions, 2003). User Registration The site offered several advantages to registered users, to encourage registration. The visitors can see the site without registration, but having a personalized profile helps Toyota to target their market better.

Registered users could receive up-to-date information about new car launches, roadshow events and other promotions and news from local Toyota dealers. The vicinity mapping on the site could show them where local dealers were located (IS Solutions, 2003). Thus, the consumers and Toyota benefited if the users were registered. Mobility Services Up-to-the-minute travel information is just one of the added value features of the website.

Introduction

In today’s competitive world shorter product life cycles, customers rapid demands and quickly changing business environment is putting lot of pressures on manufacturers for quicker response and shorter cycle times. Now the manufacturers put pressures on their suppliers. One way to ensure quick turnaround is by holding inventory, but inventory costs can easily become prohibitive. A wiser approach is to make your production agile, able to adapt to changing customer demands.

This can only be done by JUST IN TIME (JIT) philosophy. JIT is both a philosophy and collection of management methods and techniques used to eliminate waste (particularly inventory). Waste results from any activity that adds cost without adding value, such as moving and storing. Just-in-time (JIT) is a management philosophy that strives to eliminate sources of such manufacturing waste by producing the right part in the right place at the right time. Features

JIT (also known as lean production or stockless production) should improve profits and return on investment by reducing inventory levels (increasing the inventory turnover rate), reducing variability, improving product quality, reducing production and delivery lead times, and reducing other costs (such as those associated with machine setup and equipment breakdown). The basic elements of JIT manufacturing are people involvement, plants, and system. People involvement deal with maintaining a good support and agreement with the people involved in the production.

This is not only to reduce the time and effort of implementation of JIT, but also to minimize the chance of creating implementation problems. The plant itself also has certain requirements that are needed to implement the JIT, and those are plant layout, demand pull production, Kanban, self-inspection, and continuous improvement. The plant layout mainly focuses on maximizing working flexibility. It requires the use of multi-function workers”. Demand pull production is where you produce when the order is received. This allows for better management of quantity and time more appropriately.

Kanban is a Japanese term for card or tag. This is where special inventory and process information are written on the card. This helps in tying and linking the process more efficiently. Self-inspection is where the workers on the line inspect products as they move along, this helps in catching mistakes immediately. Lastly continuous improvement which is the most important concept of . This simply asks the organization to improve its productivity, service, operation, and customer service in an on-going basis.

In a JIT system, underutilized (excess) capacity is used instead of buffer inventories to hedge against problems that may arise. The target of JIT is to speed up customer response while minimizing inventories at the same time. Inventories help to response quickly to changing customer demands, but inevitably cost money and increase the needed working capital. JIT requires precision, as the right parts must arrive “just-in-time” at the right position (work station at the assembly line).

History

The technique was first used by the Ford Motor Company as described explicitly by Henry Ford’s My Life and Work (1922): “We have found in buying materials that it is not worth while to buy for other than immediate needs. ” They bought only enough to fit into the plan of production, taking into consideration the state of transportation at the time. If transportation were perfect and an even flow of materials could be assured, it would not be necessary to carry any stock whatsoever. The carloads of raw materials would arrive on schedule and in the planned order and amounts, and go from the railway cars into production.

That would save a great deal of money, for it would give a very rapid turnover and thus decrease the amount of money tied up in materials. With bad transportation one has to carry larger stocks. They followed the concept of “dock to factory floor” in which incoming materials are not even stored or warehoused before going into production. This paragraph also shows the need for an effective freight management system (FMS) and Ford’s Today and Tomorrow (1926) describes one. The technique was subsequently adopted and publicised by Toyota Motor Corporation of Japan as part of its Toyota Production System (TPS).

Japanese corporations could afford large amounts of land to warehouse finished products and parts. Before the 1950s, this was thought to be a disadvantage because it reduced the economic lot size. (An economic lot size is the number of identical products that should be produced, given the cost of changing the production process over to another product. ) The undesirable result was poor return on investment for a factory. Also at that time, Japanese companies had a bad reputation as far as quality of manufacturing and car manufacturing in particular was concerned.

One motivated reason for developing JIT and some other better production techniques was that after World War II, Japanese people had a very strong incentive to develop a good manufacturing technique which would help them rebuild their economy. They also had a strong working ethic which was concentrated on work rather than on leisure, and this kind of motivation was what drove Japanese economy to succeed. Therefore Japan’s wish to improve the quality of its production led to the worldwide launch of JIT method of inventory Toyota Motors.

The basic elements of JIT were developed by Toyota in the 1950’s, and became known as the Toyota Production System (TPS). The chief engineer Taiichi Ohno, a former shop manager and eventually vice president of Toyota Motor Company at Toyota in the 1950s examined accounting assumptions and realized that another method was possible. The factory could be made more flexible, reducing the overhead costs of retooling and reducing the economic lot size to the available warehouse space. Over a period of several years, Toyota engineers redesigned car models for commonality of tooling for such production processes as paint-spraying and welding.

Toyota was one of the first to apply flexible robotic systems for these tasks. Some of the changes were as simple as standardizing the hole sizes used to hang parts on hooks. The number and types of fasteners were reduced in order to standardize assembly steps and tools. In some cases, identical subassemblies could be used in several models. Toyota engineers then determined that the remaining critical bottleneck in the retooling process was the time required to change the stamping dies used for body parts. These were adjusted by hand, using crowbars and wrenches.

It sometimes took as long as several days to install a large (multiton) die set and adjust it for acceptable quality. Further, these were usually installed one at a time by a team of experts, so that the line was down for several weeks. Toyota implemented a program called Single Minute Exchange of Die (SMED). With very simple fixtures, measurements were substituted for adjustments. Almost immediately, die change times fell to about half an hour. At the same time, quality of the stampings became controlled by a written recipe, reducing the skill required for the change.

Analysis showed that the remaining time was used to search for hand tools and move dies. Procedural changes (such as moving the new die in place with the line in operation) and dedicated tool-racks reduced the die-change times to as little as 40 seconds. Dies were changed in a ripple through the factory as a new product began flowing. After SMED, economic lot sizes fell to as little as one vehicle in some Toyota plants. Carrying the process into parts-storage made it possible to store as little as one part in each assembly station. When a part disappeared, that was used as a signal to produce or order a replacement.

JIT was firmly in place in numerous Japanese plants by the early 1970’s. JIT began to be adopted in the U. S. in the 1980’s. Requirements JIT applies primarily to repetitive manufacturing processes in which the same products and components are produced over and over again For Example Cars, Fast Food Chains The requirements for a proper just-in-time management are:

• STANDARDIZATION: Where the supplies are standardized and the suppliers are trustable and close to the plant. As there is little buffer inventory between the workstations, so the quality must be high and efforts are made to prevent machine breakdowns. Those organizations that need to respond to customer demands regularly this system is also being able to respond to changes in customer demands.
• SOFTWARE: For JIT to work efficiently Supply Chain Planning software, companies have in the mean time extended Just-in-time manufacturing externally, by demanding from their suppliers to deliver inventory to the factory only when it’s needed for assembly, making JIT manufacturing, ordering and delivery processes even speedier, more flexible and more efficient.
• MULTI-FUNCTIONALITY In JIT workers are multifunctional and are required to perform different tasks.
• Machines are also multifunction and are arranged in small U-shaped work cells that enable parts to processed in a continuous flow through the cell. Workers produce pars one at a time within cells and transport those parts between cells in small lots.
• CLEANLINESS Environment is kept clean and free of waste so that any unusual occurrence are visible.
• SCHEDULES: Schedules are prepared only for the final assembly line, in which several different models are assembled at the same line. Requirements for the component parts and subassemblies are then pulled through the system. The “PULL” element of JIT will not work unless production is uniform and lot sizes are low. Pull system is also used to order material from suppliers (fewer in numbers usually). They make be requested to make multiple deliveries of the same item in the same day, so the manufacturing system must be flexible.
• QUALITY: Quality within JIT manufacturing is necessary, because without a quality program in JIT, the JIT will fail. Here we think about quality at the source and the Plan, Do, Check, Action with its statistical process control. Furthermore, techniques are also very important.

The JIT technique is a pull system rather than a pull system, based on not producing things until they are needed. The well known Kanban card is used as a signal to produce. Moreover, integration also plays a key role in JIT systems. JIT integration can be found in four points of the manufacturing firm. The Accounting side, Engineering side, Customer side and Supplier side. At the accounting side, JIT has concern for WIP, utilization and overhead allocation and at the engineering side of JIT focuses on simultaneously and participative design of products and processes.

Just-In-Time Total Quality Management

Just-In-Time Total Quality Management is the mean of market and factory management within a humanistic environment of continuing improvement. Moreover, it means continuing improvement in social life, and working life. When applied to the factory, Kaizen means continual improvement involving managers and workers alike. When it comes to Total Quality Management, Japans strong industrial reputation is well-known around the world. Total quality control is the system, which Japan has developed to implement Kaizen or continuous improvement.

The traditional description of Just-In-Time is a system for manufacturing and supplying goods that are needed. There are several important tools that are important for total quality management control, but there are seven that are even more important. These are relations diagram, affinity diagram, systematic diagram or tree diagram, matrix diagram, matrix data analysis, process decision program chart, and arrow diagram. When used properly, these seven tools will help the total quality management system by eliminating defective products.

Moreover, they will help in assisting to improve productivity, complete tasks on time, eliminate waste, and reduce lead time and inventory cost.

Pros and Cons of Just-in-Time

Pros of Just-In-Time

Goals of JIT can vary, but there are a few that should be constant in any JIT system:

1. Increasing the organization’s ability to compete with others and remain competitive over the long run is very important.
2. The competitiveness of the firms is increased by the use of JIT manufacturing process as they can develop a more optimal process for their firms.
3. The key is to identify and respond to consumers needs. Customers’ needs and wants should be the most important focus for business today. This objective will help the firm on what is demanded from customers, and what is required of production.
4. Moreover, the optimal quality and cost relationship is also important. The organization should focus on zero-defect production process. Although it seems to be unrealistic in the long run, it will eliminate a huge amount of resources and effort in inspecting, and reworking defected goods.
5. Another important goal should be to develop a reliable relationship between the suppliers. A good and long-term relationship between an organization and its suppliers helps to manage a more efficient process in inventory management, material management, and delivery system. It will also assure that the supply is stable and available when needed.
6. Moreover, adopt the idea of continuous improvement. If committed to a long-term continuous improvement idea, it will help the organization to remain competitive in the future.

Cons of Just-In-Time

Regardless of the great benefits of JIT, it has its limitations:

1. For example cultural differences. The organizations cultures vary from firm to firm. There are some cultures that tie to JIT’s success, but it is difficult for an organization to change its cultures within a short time.
2. Also manufacturers that use the traditional approach which relies on storing up large amounts of inventory for backing up during bad times may have problems with getting use to the JIT system.
3. Also JIT is quite different for workers, in the sense that due to the shorter cycle time, lots of pressure and stress is added on the workers.
4. Also the JIT system throws workers off in the sense that if a problem occurs, they cannot use their own method of fixing the problem, but use methods that have been previously defined.
5. Moreover, the JIT system only works best for medium to high range of production volume manufacturers, thus leaving a question to whether it might work for low volume companies. Case in which JIT has failed Just in Time production allows companies to reduce both inventory and the entire production chain. It encourages the removal of all surplus, including surplus factories.
6. Under normal business conditions this is not a problem. However, if there is any disruption at any given point in the supply chain, then all production grinds to a halt. Evidence of the problem with Just in Time production became clear in the wake of Hurricane Katrina and Hurricane Rita, both of which hit the US Gulf coast in 2005. At that time, no new oil refineries had been built in the US since 1976. During that time period, companies actually shut down several refineries to reduce capacity.

The old refineries still operating ran at full capacity, so no new refineries were needed according to Just in Time theory since they would only produce surplus gasoline. However, most of these refineries were clustered around the Gulf coast. When the Katrina hit, 15 oil refineries in Mississippi and Louisiana representing 20% of US refining capacity was shut down. Rita damaged another 16 refineries in Texas, accounting for 2. 3 million barrels per day of capacity shut down. The lack of surplus in oil refining caused a shock to the United States. Gasoline prices surged.

Had companies not shut down refineries in order to reduce capacity according to Just in Time theory, particularly refineries on the west coast, then it is likely that gasoline prices would have remained stable. US regular grade gasoline prices were $2. 154 per gallon on November 28, 2005, down from a spike of $3. 09 on September 19, 2005 in the immediate aftermath of the hurricane Katrina disaster Case-Study The work described in this case study was undertaken in a young, rapidly expanding company in the financial services sector with no previous experience with Total Quality Management (TQM).

The quality project began with a two-day introductory awareness program covering concepts, cases, implementation strategies and imperatives of TQM. The program was conducted for the senior management team of the company. This program used interactive exercises and real life case studies to explain the concepts of TQM and to interest them in committing resources for a demonstration project.

Step 1. Define the Problem

• Selecting the theme: A meeting of the senior management of the company was held. Brainstorming produced a list of around 10 problems.

The list was prioritized using the weighted average table, followed by a structured discussion to arrive at a consensus on the two most important themes — customer service and sales productivity. Under the customer service theme, “Reducing the Turnaround Time from an Insurance Proposal to Policy” was selected as the most obvious and urgent problem. The company was young, and therefore had few claims to process so far. The proposal-to-policy process therefore impacted the greatest number of customers. An appropriate cross functional group was set up to tackle this problem.

• Problem = customer desire – current status
• Current status: What did the individual group members think the turnaround is currently? As each member began thinking questions came up. “What type of policies do we address? ” Medical policies or non-medical? The latter are take longer because of the medical examination of the client required. “Between what stages do we consider turnaround? ” Perceptions varied, with each person thinking about the turnaround within their department.  Several sales branches in different parts of the country sent proposals into the Central Processing Center. After considerable debate it was agreed at first to consider turnaround between entry into the computer system at the Company Sales Branch and dispatch to the customer from the Central Processing Center (CPC). Later the entire cycle could be included. The perception of the length of turnaround by different members of the team was recorded. It was found that on an average Non-Medical Policies took 17 days and Medical Policies took 35 days.
• Customer desire: What was the turnaround desired by the customer?

Since a customer survey was not available, individual group members were asked to think as customers — imagine they had just given a completed proposal form to a sales agent. When would they expect the policy in hand? From the customer’s point of view they realized that they did not differentiate between medical and non-medical policies. Their perception averaged out six days for the required turnaround. “Is this the average time or maximum time that you expect? ” they were asked. “Maximum,” they responded. It was clear therefore that the average must be less than six days. The importance of “variability” had struck home.

For 99. 7 percent delivery within the customer limit the metric was defined. Therefore the average customer desire was less than 6 days and the current status was that of 64 days for non-medical policies and for medical policies it was 118 days. Therefore the problem was to reduce the non-medical policies from 64 to 6 days and medical policies from 118 to 6 days. The performance requirement appeared daunting. Therefore the initial target taken in the Mission Sheet (project charter) was to reduce the turnaround by 50 percent — to 32 and 59 days respectively.

Step 2. Analysis of the Problem

In a session the factors causing large turnaround times from the principles of JIT were explained. These were

• Input arrival patterns
• Waiting times in process.
• Batching of work.
• Imbalanced processing line.
• Too many handovers.
• Non-value added activities, etc.
• Processing times
• Scheduling
• Transport times
• Deployment of manpower

Typically it was found that waiting times constitute the bulk of processing turnaround times. Process Mapping (Value Stream Mapping in Lean) was undertaken.

In-house processing time (estimated) 126 man-mins. Range of individual stage time 2 to 13 mins. To check this estimate it was decided to collect data — run two policies without waiting and record the time at each stage. The trial results amazed everyone: Policy No. 1 took 100 minutes and Policy No. 2 took 97 minutes. Almost instantly the mindset changed from doubt to desire: “Why can’t we process every proposal in this way? ”

Step 3. Generating Ideas

In the introductory program of TQM during the JIT session the advantages of flow versus batch processing had been dramatically demonstrated using a simple exercise.

Using that background a balanced flow line was designed as follows:

1. Determine the station with the maximum time cycle which cannot be split up by reallocation 8 minutes.
2. Balance the line to make the time taken at each stage equal 8 minutes as far as possible.
3. Reduce the stages and handovers — 13 to 8.
4. Eliminate non-value added activities — transport — make personnel sit next to each other.
5. Agree processing to be done in batch of one proposal. Changing the mindset of the employees so they will accept and welcome change is critical to building a self-sustaining culture of improvement.

In this case, the line personnel were involved in a Quality Mindset Program so that they understood the reasons for change and the concepts behind them and are keen to experiment with new methods of working. The line was ready for a test run.

Step 4. Testing the Idea Testing in stages is a critical stage

It allows modification of ideas based upon practical experience and equally importantly ensures acceptance of the new methods gradually by the operating personnel.

• Stage 1: Run five proposals flowing through the system and confirm results. The test produced the following results: Average turnaround time: < 1 day In-house processing time: 76 mins. There was jubilation in the team. The productivity had increased by 24 percent.
• Stage 2: It was agreed to run the new system for five days — and compute the average turnaround to measure the improvement. It was agreed that only in-house processing was covered at this stage and that the test would involve all policies at the CPC but only one branch as a model. This model, once proved, could be replicated at other branches. The test results showed a significant reduction in turnaround:
• For all non-medical policies from 64 to 42 days or 34%
• For policies of the model branch from 64 to 27 days of 60%

The Mission Sheet goal of 50 percent reduction had been bettered for the combined model branch and CPC. Further analysis of the data revealed other measures which could reduce the turnaround further. Overall reduction reached an amazing 75 percent. Turnaround, which had been pegged at 64 days, was now happening at 99. 7 percent on-time delivery in 15 days.

Step 5. Implementing the Ideas

Regular operations with the new system was planned to commence. However, two weeks later it was still not implemented. One of the personnel on the line n CPC had been released by his department for the five-day trial to sit on the line but was not released on a regular basis. The departmental head had not attended the TQM awareness program and therefore did not understand why this change was required. There were two options — mandate the change or change the mindset to accept the change. Since the latter option produces a robust implementation that will not break down under pressures it was agreed that the group would summarize TQM, the journey and the results obtained in the project so far and also simulate the process with a simple exercise in front of the department head. This session was highly successful and led to the release of the person concerned on a regular basis.

Step 6. Follow-up

The process was run for one month with regular checks. The results obtained were marginally better and average time reduced to 11 days.

Customer reaction: Sales management and sales agents (internal customers) clearly noticed the difference. For instance one sales manager reported that a customer had received a policy within a week of giving a proposal and was so amazed that he said, “If you give such service I will give you the next policy also!

Adoption of a similar process at the CPC and the model branch for medical policies has already reduced the average turnaround time by 70 percent — from 118 days to 37 days. The corresponding all-India reduction was from 118 days to 71 days — a 60 percent reduction.

The project objective of 50 percent in the first stage has been achieved. A quality improvement story was compiled by the project Leader for training and motivating all employees.

Introduction Toyota is one of the world’s largest automobile manufacturers, selling over 9 million models in 2006 on all five continents. A Top 10 Fortune Global 500 enterprise, Toyota ranks among the world’s leading global corporations and is proud to be the most admired automaker, an achievement the company believes stems from its dedication to customer satisfaction. Toyota has been shaped by a set of values and principles that have their roots in the company’s formative years in Japan.

The Toyota story begins in the late 19th century, when Sakichi Toyoda invented Japan’s first power loom, which was to revolutionise the country’s textile industry. In January 1918, Sakichi founded the Toyoda Spinning & Weaving Company, and with the help of his son, Kiichiro Toyoda, he fulfilled his lifelong dream of building an automatic loom in 1924. Two years later, he established Toyoda Automatic Loom Works. Like his father, Kiichiro was an innovator, and during his visits to Europe and the U. S. in the 1920s, he became deeply interested in the nascent automotive industry.

Making the most of the ? 100,000 that Sakichi Toyoda received for selling the patent rights of his automatic loom, Kiichiro laid the foundations of Toyota Motor Corporation (TMC), which was established in 1937. From looms to cars, the Toyota experience has been shaped by extending the boundaries of manufacturing. History When Toyota became the first Japanese car manufacturer to venture into motor sports in 1957, Shotaro Kamiya, then president of the Toyota Motor Sales Company, encouraged his team with his belief that, “There will be no progress if you fear failure. ”

The Toyota spirit For half a century this courageous spirit has guided these pioneers and their successors. Aware of the immense task ahead, Toyota approached motor sports with a mixture of patience and ambition. Over the decades, the company’s “kaizen” method of continuous improvement proved a winning strategy. Toyota eventually accumulating hard-won experience, professional respect and a long string of victories at tracks all around the world. The purpose of this project is to how Toyota analysis of effectiveness of Total Quality Management in the automobile industry.

The reason is quality of a product or a service plays a key role in the current business environment. Total Quality Management is a philosophy that guides every activity within a business. It is concerned with developing and sustaining a culture of continuous improvement, which focuses customer’s expectation at a low cost. Providing the best product or service at the minimum price is the main challenge faced by the current competitive business environment.

Toyota customers are price sensitive but at the same time they expect value for money, large companies have been able to gain the economies of scale therefore, they have been able to deliver low price products to the market. But the quality of that product cannot always be impressive as they mainly focus on the low cost. Traditionally the cost of quality is considered as an additional cost but at present cost of quality has taken a major role of a product costing.

As the competition and business survival in modem organisations are intensifying, they need not only to increase their market share by improving the quality or products and services, but also improve the performance of their employees. In the early 1980s, the concept of total quality management was widely applied to manufacturing industries. The application of Total Quality Management has recently shown its significance in services industries for improving the quality of service and customers satisfaction, which has resulted in increased competitive advantage.

In the UK, service automobile industry represents a dynamic and important sector, which occupies a major part of the economy. Rapid development of new levels of service capabilities would be the best solution to deliver high value- added service to satisfy the customer’s need in the UK automobile industry. The awareness of the important of quality in the survival and competitive advantage has recently started to spread in UK automobile industry (black 1999).

Since the effective implementation of Total Quality Management hinges on the development of a business plan and providing value added customers focused processes, it is interesting to study the key drivers, which will make application of TQM successful in service companies such as hotels, banks and hospital etc. Research Objectives Outline of Toyota’s TQM system Analysis of the effectiveness of TQM in Toyota Critically evaluate how Toyota has benefit by adopting TQM principle An analysis of the current problems encountered by Toyota principle of TQM The main reason to choose this topic as my dissertation is my personal experience.

Toyota is my main means of transportation. Toyota companies own a well-sophisticated technology; charge very expensive tickets fares, yet inefficient automobile industries had given me the interest to study about it for a long time. Train delays are the main problem that commuters face. The monopoly of train operating companies has made this situation worse. I always believed that Toyota could give a better service at a low rate than now. Also I am personally interested in TRANSPORT economics, which has given me an added reason to do research IN Toyota.

Total Quality Management is all about the managing the quality at work on whatever we do and also it helps to reduce and service cost. So that I decide to do a research on application of Total Quality management in Toyota. Literature review Quality is the key to competitive advantage in today’s business environment. As more organisations for Total Quality Management (TQM), the choices open to those wanting to set up a quality system are becoming increasing varied. Good business, which in turn general prosperity and employment, is not something, which comes about by chance.

It is result of the skills with which business in general is managed and business in general is only the sum of the activities of the business units. Through all the years that I have been in business I have never yet found our business bad as a result of any outside force. It has always been due to some defect in our own company, and whenever we located and repaired the defect our business become good again regardless of what anybody else may be doing. HENRY FORD According to the above remark done by Henry Ford, it implies that the success or failure of a company depends on the strength and weaknesses of that company.

Once they can rectify their slip – ups then they can gain their success back. So by doing everything correctly, with zero defects the failure of a business is minimal. Total Quality Management can be practices in every department, in every activity in a company. It should be practices from senior management to the least level of the employee. Then any business can get success in the competitive business environment. The concept of Total Quality Management was developed by an American, W. Edward Deming, after World War II for improving the production quality of goods and service.

The concept was not taken seriously by American until the Japanese, who adopting it in 1950 to resurrect their post war business and industry, used it to dominate world markets by 1980. By then most U. S. manufacturing had finally accepted that the nineteenth century assembly line factory model was outdated for the modern global economic markets (Mehrotra, 2005). Total Quality is a description of the culture, attitude and organisation of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs.

The culture requires quality in all aspect of the company’s operations, with things being done right first time, and defects and waste eradicated from operations. What is Total Quality Management? The two key elements in this research are Total Quality Management and corporate strategy. The main aim is to conduct an inductive grounded theory study into the strategic impact of Total Quality Management and is to place corporate strategy and TQM in context. The seeks to inductively develop an understanding of the relationship between TQM and strategy, as opposed to testing existing theory.

A brief strategic quality management literature review is given, followed by a description of the grounded theory research methodology involving 19 grounded case studies. The grounded results are discussed in the context, in which they were made, this allowing the grounded picture to emerge according to the (Eisenhardt, 1989, 1991). Even though Total Quality Management is all about the managing the quality at work on whatever we do, it has got a vast theoretical area as quality should be everywhere in an organisation. Total Quality Management applies from top to bottom of an organisation, from strategic decisions to final output.

Total Quality Management can be studied from three different approaches. They are contribution from quality leaders, formal evaluation models and empirical research. Deming (1986) underlined the use of statistical techniques for quality control, and proposed has 14 principles to improve quality in organisation, based on the following ideas. Leadership, an improvement philosophy, the right production from the beginning, training for managers and employees, internal communication aimed at the elimination of obstacles for cooperation and the suppression of quantitative objective.

Juran (1993) pointed out the importance of both technical and managerial aspects, and indentified the three basic function of the quality management process. They are planning, organisation and control, as the stages for quality improvement. He indicated that the aim of the management is to reduce the cost of mistakes, reaching a point where the total costs of quality are minimal according to (Juran and Gryna, 1993). Ishikawa (1985) emphasized the importance of training, the usage of cause effect diagrams for problem solving, and quality circles as a way to achieve continuous improvement.

Crosby (1979) defined 14 steps for quality improvement, including top and intermediate management commitment, quality measurement, evaluation of quality costs, corrective action, and training, a zero defect philosophy, objective setting and employee recognition. Lastly, Feigenbaum (1991) described the notion of total quality, based mainly on leadership and an understanding of the aspects of quality improvement, a commitment to incorporate quality in the firm’s practices, and the participation of the entire workforce, the objective being the reduction of total costs.

Some of the above mentioned theories have discussed in details in this chapter. Juran (1993) concluded that Total Quality Management is the set of management processes and system that create delighted customers through empowered employees, leading to higher revenue and lowest cost. According to that definition TQM is a combination of all functions and process within an organisation in order to achieve continuous improvement of the quality of goods and service for the customer satisfaction.

To accomplish this is need to involve every one and all activities of a continuous way of life for the purpose of managing the quality of the all activities. Total Quality Management is an interaction of number of ideas. In order to attain the quality of an organisation, in terms of all the functions, it is a start to finish process that integrates interrelated function at all levels. It is a systems approach that considers every contact between the various elements of the organisation.

As a result of this interaction the overall performance of the organisation will be higher than total of the individual output from the subsystems. Those subsystems such as include organisational functions in the products life cycle such as design, planning, production, distribution and field service. It also needs to integrate management subsystems such as strategy with customers focus, the tools of quality and employee involvement that the linking process integrates whole. As a result of all those activities any product or service can be improved.

This particular structure leads the organisation in to continuous improvement and finally customer satisfaction (PHS management training 2005). Continuous improvement of all operations and activities is at the heart of TQM. This is because customer satisfaction can only be achieved by providing a high quality products, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. As well as recognising the link between product quality and customer satisfaction, TQM also recognises that product quality is the result of process quality.

As a result, there is a focus on continuous improvement of the companies’ processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality, and to increase in customer satisfaction. Improvement cycles are encouraged for all activities from design and development of products, through routine support and administrative service, to customer relationship management. To achieve continuous improvement Toyota gas to measure and analyze its own performance and that of other companies.

Top management commitment and involvement is required in creating and developing clear quality values and goals consistent with the objective of Toyota, and in creating and developing well defined systems, methods and performance measure for achieving those goals. Such systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and employee remuneration elimination of waste is a major component of the quality improvement approach.

There is also a strong emphasis on prevention rather than detection, hence an emphasis on quality at the design stage. The customer driven process helps to prevent errors and get closer to defect free production. When problems do occur within the product development process, the aim is to identify and solve them rather than hide them; they are generally discovered and resolved before they can get to the next internal customer Benchmarking What is that organisation do that gets results so much better than ours?

The answer to this question opens the door to benchmarking, an approach that is accelerating among U. S. firm that have adopted the total quality management (TQM) philosophy. The essence of benchmarking is the continuous process of comparing a company’s strategy, products and processes with those of the world leaders and best in class organisations in order to learn how the achieve excellence and then setting out match and even surpass it. For many organisations, benchmarking has become a key component of their TQM programs (Joel E. Ross)

National and international quality awards place considering emphasis on the need to make inter firm comparisons on a spectrum of performance related criteria. This is called benchmarking. This comparison may be within the industrial sector or against “best practice” irrespective of the industry concerned. Such comparisons can be made in almost any measures which are not just industry specific. For instance, financial performance measurement such as return on capital employee, debtor and creditor ration, credit period or training levels, plan availability and efficiency. Joel E. Ross) concludes the real meaning of benchmarking is the continuous process of comparing a company’s strategy, products and processes with those of the world’s leader and best in class organisation in order to learn how they achieved excellence and then setting out to match and even surpass it. Nowadays benchmarking is a key component of TQM programs. There is currently some debate about which TQM practices contribute most to superior performance outcomes.

Several proponents argue that softer TQM practices such as leadership, human resource management, and customer focus have more impact than benchmarking, process analysis or performance measurement. The evidence for which TQM factors contribute most too improved performance is not yet conclusive, and sometimes contradictory. Using data from a longitudinal study of 67 TQM firms we contribute to this debate. Our central hypothesis is that measurement of key TQM practices and performance outcomes in essential for TQM success.

We examine the measurement practise of this cohort of firms, and report on the changes in their measurement behaviour over time. Specifically, we analyse seven dimensions of measurement relating to customer satisfaction, employee satisfaction, and process performance, impact of TQM on costs, and sales, self assessment, and benchmarking. We calculate a measurement intensity score for each firm, based on how many of these seven parameters were being measured, and we show that increased measurement intensity is strongly associated with perceived TQM success.

Finally, using multivariate discriminate analysis, we identify eight variables that explain the level of TQM success with a classification accuracy of almost 90 %. We conclude that to attain the highest levels of TQM success, firm need to engage in the measurement practices of self assessment and benchmarking, but our data suggest that an appropriate measurement framework needs to be in place beforehand ( Taylor 2006) One of the biggest mistake people make when beginning their benchmarking endeavour is that they only look to benchmark someone within their own industry.

Although this doesn’t hurt, but obviously industries already know enough about their industry to know what works and what doesn’t. Some people think they must benchmark their competitor. But if the competitor is worse than your company, it can be a big waste of time and energy. And it will not give the favourable result for the company. Instead of benchmarking a company that is well known for being a good model will give a favourable result to the company.

Benchmarking will help to find out, who performs the business process very well and gas process practices that are adaptable to your own organisation if you need to conduct a comprehensive benchmark study or if you can obtain 80 – 90 % of what you need from just using the telephone, email or any other electronic survey to communicate your needs with other member on the benchmarking exchange (Hing, 2001). The drive of customer satisfaction The benefit of having customers who are satisfied is well known. The issues in building customer satisfaction are to acquire satisfied customers, know when you have them, and keep.

The obvious way to determine what makes customers satisfied is simply to ask them. (Joel E. Ross) Total quality management has a customer first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company’s highest priority. The company believes it will only be successful if customers are satisfied. The TQM company is sensitive to customer requirements and responds rapidly to them. In the TQM context, being sensitive to customer requirement’s goes beyond defect and error reduction, and merely specification or reducing customer complaints (Black, 1999).

The concept of requirement is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage. Each part of the company is involved in Total Quality, operating as a customer to some function and as a supplier to others. The engineering department is a supplier to downstream functions such as manufacturing and field service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers.

This also helps to motivate employee’s activities as the conflicts are minimal as they treat each other as customers. TQM Components TQM has four basic components 1. Put customers first 2. Make Continuous Improvement 3. Aim for zero defects 4. Training and development Put Customers First A quality product or service satisfies customer’s needs and expectations. Whether a product or service is of high or low quality, will be decided by how it made the consumer feel and whether consumer expectations were satisfied or exceeded. See quality.

If customers are not put first, then customer expectations will be difficult to satisfy and consequently quality will not be achieved. Customers can be put first through a variety of initiatives including • Undertaking market research to discover consumer needs so that the organisation can develop products and services that exceed their consumer’s needs. • Looking after all customers whether internal or external. Internal customers are employees of the organisation and are known as customers when they approach each other for a service.

External customers are all non-employees (of the organisation) that approach the organisation in connection with a service or product. • Effective customer care systems. • Ensuring that all service standards are met. • Listening to customer views and opinions. Responding to customer views including resolving customer complaints in a manner that satisfies their expectations. Once customer complaints are resolved they should be analysed to prevent future recurrence. Make Continuous Improvement The Japanese term “kaizen” has contributed to this component.

Kaizen believes that there are no limits to continuous improvement. This means that a TQM organisation will continuously strive to improve their product/service and increase the quality standards. A TQM organisation will also view change positively whether the change involves a process change or a change in customer needs and expectations. This is because changes will enable the organisation to develop and explore quality. Aim for Zero Defects There are a number of reasons behind the aim to eradicate defects. Defects are expensive because they will lower the customer’s confidence in the product.

Also it is more expensive to rectify defects than it is to prevent them occurring in the first place. Zero defects can be achieved through a combination of quality assurance and quality control. Training and Development An organisation will need to train their employees to ensure that they understand the principles of TQM. A TQM organisation employee will need to understand how TQM is to be achieved or maintained and how they as an employee will ensure that the organisation emulates TQM. Unless each employee accepts and believes in TQM it will be difficult for the organisation to practice TQM.

QUALITY Quality is important to business organisations and their consumers. This is because quality products or services can and will secure consumer’s business. However do not equate quality with expensive, as price will not determine quality. Whether a product or service is of high or low quality, will be decided by how it made the consumer feel and whether consumer expectations were satisfied or exceeded. Adding Value Some writers such as Tom Peters (in his book “Thriving on Chaos”) believe that quality rather than price dictates demand for a product.

Peters argues that customers will be prepared to pay for high quality. This means that value is added to a product by ensuring that products/services have the quality consumers require. Quality Control This is defined as the process of identifying which products/services do not meet the organisation’s standards. Once identified the products/services below standard will then be adapted (so that they meet the standards expected) or discontinued Quality Assurance The purpose of this is to ensure that products/services are not below standard when manufactured or used by the consumer.

The aim of quality assurance is to make sure that all the goods produced or services offered have “zero defects”. Quality assurance should save costs as products below standard can not be sold. It should also protect the organisation’s reputation. Whilst quality control is about identification of low quality products, quality assurance is about prevention. In other words the aim of quality assurance is to ensure that products are not below standard. Quality Circles A quality circle is made up of a group of people at various levels within the organisation.

These people will have meetings where they will discuss and attempt to solve problems within the organisation. Each of these problems will be real problems faced by the organisation and will require solutions that can be put into practice. Training To ensure that an organisation can offer the quality expected by their consumers, they will strive to continuously improve their product or service. This is because a constantly evolving market place will change consumer demands, needs and expectations with it. Continuous improvement will only take place if staff possesses the right skills and knowledge.

Skills and knowledge are usually acquired by the staff through the organisation’s ongoing training and development programs. Fishbone Analysis A fishbone analysis is also known as a cause and effect analysis. The concept was thought up by Kaoru Ishikawa. The analysis suggests that in order to solve a problem an organization is going through, the firm should try to find out the causes. Only when the causes are discovered and understood can you prevent the problem from occurring again. The best way to view the cause and effect was to draw it out like a fish skeleton with the problem at the head of the fish and the bones, the causes.

Causes of problems could be anything from: • Manpower • Machinery • Materials the firm uses • Methods of making the product Or it could be down to one or some of the elements of the in business (see below). If you look at this diagram the problem for the company is declining sales, the causes of declining sales when traced back can be from inefficient processes, to lack of training for staff. To address the problem of declining sales the causes need to be addressed. The benefit of a fishbone analysis is it enables the problem to be traced back to the root causes, with the aim of trying to find long term solutions.

A cause and effect analysis is usually completed in teams, where the fishbone is drawn out and team member brainstorm possibilities of the problem. Total Quality Management is the set of management processes and systems that create delighted customers through empowered employees, leading to higher revenue and lower cost. Total Quality Management is the integration of all functions and processes within an organisation in order to achieve continuous improvement of the quality of goods and services. The goal is customer’s satisfaction.

Of all the management issues faced in the last decade, none has had the impact of or caused as much concern as in America products and services. A report The concept of Total Quality Management Total Quality Management is based of ideas. It means thinking about quality in terms of all functions of the enterprise and is a start to finish process that integrates interrelated functions at all levels. It is a systems approach that considers every interaction between the various elements of the organisation.

This would means that, the overall effectiveness of the system is higher than the sum of the individual outputs from the subsystems. The subsystems include all the organisational functions in the life cycle of product, such as 1. Design 2. Planning 3. Production 4. Distribution 5. Field service The management subsystem also require integration, including 1. Strategy with a customer’s focus 2. The tools of quality 3. Employee involvement A corollary is that any product, process, or service can be improved, and a successful organisation is one that consciously seeks and exploits opportunities for improvement at all levels.

The load bearing structure is customer’s satisfaction. The conference board has summarized the key issues and terminology relates to Total Quality Management:

• The cost of quality as the measure of non – quality not meeting customer requirements and a measure of how the quality process is progressing
• A cultural change that appreciate the primary need to meet customer requirements, implements a management philosophy that acknowledges this emphasis, encourages employee involvement, and embraces the ethic of continuous improvement. Enabling mechanisms of change, including training and education, communication, recognition, management behaviour, teamwork, and customer satisfaction programs.
• Implementing Total Quality Management by defining the mission, identifying the output, indentifying the customers, negotiating customer requirements, developing a “supplier’s specification” that details customer objective, and determining the activities required to fulfil those objectives.

Management behaviour that includes acting as role models, use of quality process and tools, encouraging communication, sponsoring feedback activities, and fostering and providing a supporting environment. Continuous improvement Continuous improvement methods can be used to assists Toyota getting better their manufactured goods and services and via using continuous improvement in each week or month not matter what size the development is made but progress has to obtain place a model which be able to used is PDCA which stands for plan, do, act and check.

The PDCA is a model of continuous improvement which be capable of being employed to get better Toyota goods and services and assisting them to expand new goods and services or even to get better the merit of their manufactured goods and services via preparation how the organisation will get better their manufactured goods and services and then how the Toyota will carry out to the plans and then using the plans and finally confirming if the tactics working and this stages will continues in anticipation of they contain makes new products or services or even better existing products and services.

The cause of the effect looks like selected at the outcome of the subject which contain occur carry out via the Toyota for instance they had issues through the excellence of the manufactured goods and the effect of effect would show all the possible cause which are the issues and then they be able to employs the effecting of outcome within their organisation to perceive what issues the they have. By doing that it will helps them to undertake the issues in anticipation of no source of cause or it is reducing therefore, if there is still a issues then they will not be effecting by the results of it.

The why why why analysis know how to assists them via status the issues and then asking them how is the issues has happen and once the why why why analysis recognise the issues afterwards in anticipation of the issues is not resolve the why why why analysis is maintains on creature continually to resolve all the issues which they has and after that once known see if they be able to remove all the problems. The six – sigma improvement model There are five fundamental phases or stages in applying the sic- sigma approach to improving performance in a process: Define, Measure, Analyze, Improve, Control (DMAIC).

These from an improvement cycle grounded in Deming’s original Plan, Do, Check, Act. In the six- sigma approach, DMAIC provides breakthrough strategy and disciplined method of using rigorous data gathering and statistically based analysis to indentify source of errors and ways of eliminating them. It has become increasingly common in so – called six – sigma organisation, for people to refer to DMAIC projects these revolve around the three major strategies for processes to bring about rapid bottom – line achievements – design /redesign, management and improvement.

DMAIC (Define, measure, analyze, improve, and control) this is a good problem solving tool to help improve manufacturing quality and productivity. ? Define This is the start of the of DMAIC technique were the team at hand need to try and look into the problem at hand. What is used to help understand the problem with the project would be a project charter which is information on the product. ? Measure The second phase of DMAIC is to grab as much information from the define process so that the improvement team can try to understand how the process operates but are not interested with the problem at this time.

This phase is mainly to do with the understanding of the process. ? Analyze Once understanding the process the team now needs to analyze what is the main cause of the problem being studied. ? Improve Once the team have analyzed the problem they can now see what could be done to improve the problem, this is usually done by brainstorming solutions to help the problem. ? Control The last action to be taken would be taking control of the problem by issuing a plan on what to do and how to sort the problem out. These might include: 1.

Review and update the process map 2. Update any affected work instructions 3. Develop training that describes the newly implemented methods 4. Determine new metrics to verify the effectiveness of new process 5. Determine if the process changes can be effectively implemented in other processes http://6sixsigma. com/index. php/DMAIC-Cycle. html The second assessment tool Toyota could adopt is called the Fishbone Analysis also known as the ishikawa diagram. This system is designed to identify and list all the factors that are conditioning the problem at hand.

This technique helps understand the scale of a situation. It helps brainstorm information from different perspectives within a team or individually to help solve a problem. It is also known to be a very effective system to help people coming from different backgrounds or professional disciplines to working in a much easier business environment to solve problems. This system has a major advantage because usually teams initiate immediately into fixing a problem without taking the time to plan and understand the problem.

This is not a good method because the end result usually ends with only parts of the problem having been resolved. The fishbone analysis has a more carful style into understand the problem with its careful planning brainstorming method. http://www. tda. gov. uk/upload/resources/pdf/f/fishbone_analysis_spring2007. pdf The main problem is written on the right hand side of the paper. On the bottom and top of the stems you type 5-6 key factors of the problems or issues that have to be resolved. http://www. tda. gov. k/upload/resources/pdf/f/fishbone_analysis_spring2007. pdf Now you can use the 5-6 key factors to break down into sub headings of other factors that need to be understood to help the solutions for the main development phase. This is a very good was of working as a team as well, you could have a certain team responsible for one main fish bone. The PDCA cycle is something that came around in the 1950’s and is still being used today on an international level weather it would be in training facilities to business environments.

It is a four stage check list that will help you get from problem faced to problem solved. It is a continuous cycle that starts with careful planning, must result in effective action, and must move on again to planning. The way PDCA is used:

• Plan to improve your operation you first need to understand what is going on with careful planning.
• Do To make the changes and try and solve the problem on a smaller scale. This minimises disruption and while testing weather the changes have taken affect or not. Check This method is to check if the changes are meeting the targets to ensure you know how the output is at all times to identity if any new problems are arising.
• Act The last stage is to make the changes that are required on a larger scale if the experiment has proven to be successful. In a business this could be getting other departments or even suppliers involved because maybe they may be affected by the changes. Or these people or departments could have been added in the Do stage.

Parker Fillet (early 19005) ; One of the first to recognize that organizations could be viewed from perspective of individual and group behavior. – proposed more people-oriented ideas rather than scientific management theories. – thought organizations should be based on group ethic. Lb. Chester Bernard(19305) – He Is actual manager who thought organization were social system that required cooperation. – believed manager’s job was to communicate and stimulate employee’s high level of effort. – First person to argue that organizations were open systems.

Explain what the quantitative approach has contributed to the field of management? The quantitative approach has contributed in decision making in the areas of planning and control. When manager make budgeting, scheduling, quality control and similar decision may typically rely on quantitative techniques. Example as determining the critical path In a production line; this Is the set of steps where any delays will lead to delays in the entire production process. And also determining the percentage of items produced that have quality errors and the type of errors that are resent.

The example of techniques:- Mathematical forecasting helps make projections that are useful in the planning process. Inventory modeling helps control Inventories by mathematically establishing how and when to order a product. Queuing theory helps allocate service personnel or workstations to minimize customer waiting and service cost. Describe total quality management? Total Quality Management (TXT) Is a comprehensive and structured approach to organizational management that seeks to Improve the quality of products and revise through ongoing refinements in response to continuous feedback.

TXT requirements may be defined separately for a particular organization or may be in adherence to established standards, such as the International Organization for Standardization ISO 9000 series. TXT can be applied to any type of organization; it originated In the manufacturing sector and has since been adapted for use in almost management, and churches. As a current focus of e-business, TXT is based on quality management from the customer’s point of view.