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May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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CASE: CENTRE FOR ADVANCED STUDIES IN ENGINEERING
ENGINEERING MANAGEMENT
COMPANY: LEADERSHIP AND MANAGEMENT
DEVELOPMENT ASSOCIATES
SUBMITTED TO: DR. ALI SAJID, PhD, TI CEO, LMDA
SUBMITTED BY: FAHAD MAHMUD MIRZA
SP-09-CE-124
SECTION – II
DATE OF SUBMISSION: 20
SPRING 2009
QUALITY IMPROVEMENT IN TECHNICAL CONCERNS
QITC FINAL EXAM
QUALITY AUDIT
TH MAY, 2009
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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IN THE NAME OF ALLAH; THE MOST GRACIOUS, THE MOST MERCIFUL
PREAMBLE
This audit is a part of QUALITY IMPROVEMENT AND TECHNICAL CONCERNS
course of Masters in Engineering Management, conducted by Dr. Ali Sajid, PhD, TI.
The conducted audit is purely based on staff interviews, observations and getting an in-
depth view of the company’s stature.
No assumptions or guesses were made in this audit.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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TABLE OF CONTENTS
INTRODUCTION 4
PART – A: APLICATION OF DEMING’S 14 POINTS 7
PART – B: CUSTOMER-RELATIONSHIP MANAGEMENT 10
PART – C: LEADERSHIP AND STRATEGIC PLANNING 12
PART – D: INTERNATIONAL QUALITY STANDARD 14
PART – E: WORK SYSTEM FOCUS 15
PART – F: REDUCE WASTE AND SCRAP 17
PART – G: EFFECTIVE PERFORMANCE 19
MEASUREMENT SYSTEM
PART – H: COST OF POOR QUALITY 21
PART – I: FOCUSING ON CULTURAL 22
TRANSFORMATION
PART – J: 7QC IMPLEMENTATION 23
CONCLUSION 24
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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INTRODUCTION
LMDA (Leadership and Management Development Associates) is a management
training and consulting firm with fully integrated capabilities in Total Quality Management,
Manufacturing Management, Human Resource Development, Business Process improvement,
Project Management, Supply Chain Management, Business Strategy and Strategic Planning and
Soft Management issues impeding the progress of corporate or any business entity. LMDA helps
clients around Pakistan define more ambitious strategies, build more effective organizations, and
shape more successful futures. With a proven track record and over 18 years of training and
consulting experience, LMDA team members have been an innovator in developing
improvement systems for a wide variety of business applications.
LMDA prides on being able to create a training solution in partnership with everyone,
allowing choosing the correct development program and methodology that is totally company
focused to suit the company’s specific needs. They provide consulting, coaching and training
interventions firmly tied to the company’s initiatives and business objectives. They assist any
forward looking organizations willing to bring about change by developing strategies and
methods for thinking and doing things differently–with more creativity, teamwork, productivity
and speed.
LMDA gives a platform to choose world level trainers under one roof for all the training
and development needs. LMDA experts have been instrumental in training in various parts and
cities of Pakistan including Islamabad since 1995 and they worked with managers and staff at all
levels in organizations, across all types of industry and business, and with a significant number
of private sector and public sector clients. During last 13 years, their strength lies in their
relationship with clients and in their design and delivery of services. The main objective has
always been the pursuit of the excellent and the avoidance of the average.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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Focus:
• “Total system improvement” in the light of Total Quality Management Philosophy.
• Especially organizational culture – adapting to the opportunities of the environment
while enhancing organizational integrity and integration.
• When LMDA works with an organization, they operate on the assumption that most
of the wisdom and expertise needed already exists in the people of that organization.
Their job is to help them draw on that competence; possibly expand the range of
information they are looking at; and offer ways to understand and act on the
information and wisdom they have. Too many organizations spend significant energy
and time putting together the “best” plan, only to have that plan put on the bookshelf
or in a drawer. Too many grab hold of the latest management fad. Too many see a
“best practice” in another organization and try to use it in their organization without
considering that their organization may be in a very different context or have a culture
in which that “best practice” doesn’t work. LMDA helps figure out what is the “best
practice” for the company. Including –
• Vision and direction – goals, core values, “ownership” of vision”.
• People – competence & commitment, working style, job satisfaction.
• Dynamics — managing change and stability, trust development, conflict.
• Structures & Processes — adequate resources, physical setting and technology,
workforce structure (degree of self management, teams, etc.) parallel systems
decision making processes
• Leadership – strategic management, people development, self-differentiation
• Environment – seeking opportunity in the forces and trends external to the
organization that impact the organization
• Alignment – seeking a “fit” between the organization’s strategy for success in its
mission & primary task and the organization’s culture, processes and structures.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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Typical Business Concerns Addressed through TQM & OD at LMDA. The organization's
ability to reach its destination (to achieve results) is affected by many factors. LMDA can help
you address any or all of the typical factors given below:
1. Application of Total Quality Management Philosophy (Dr. Deming’s Theory)
2. Customer Focus Organization
3. Development of Mission and Vision Statement
4. Application of Cost of Poor Quality
5. Quality Though Leadership
6. Organizational Culture (its Transformation and impact on performance)
7. Leadership Development
8. Productivity Engineering & Management (including Time & Motion Study)
9. Total Quality Management
10. Supply Chain Management & Logistics
11. Human Resource Management
12. Project Management
13. Business Strategy Formulation and Management of Change
14. Manufacturing & Production Management
15. Total Productive Maintenance
16. Process and Performance Management & Improvement
17. Business Process Improvement
18. Safety Engineering & Management
19. International & WTO Complaint Standards
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PART – A: APPLICATION OF DEMING’S 14 POINTS
Introduction-
The Deming’s 14 points are the fundamental indicators for any organization to improve
quality structure and culture. These points are:
1. Constancy of Purpose
2. Establishing Quality Philosophy
3. Cease Dependence on Inspection
4. Cease Selecting Suppliers on Basis of Price Alone
5. Improving Constantly and Forever
6. Institute Training on the Job
7. Institute of Leadership
8. Drive-out Fear
9. Breaking down Barriers between departments
10. Eliminate Slogans and Targets
11. Eliminate Numerical Goals
12. Remove Barriers to Worker Pride
13. Institute Program of Education
14. Put Everyone to Work to Accomplish Transformation
Current Scenario-
On dealing and correlating the Deming’s 14 points with the current company’s stature,
these are the observed and recognized results to show how important this application is for the
company.
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The application of the Deming’s points needs to be flourished on the basis of the defined
outcome below:
1. No consistency in the over-all system: processes are not well-defined and not followed
correctly if defined (-1).
2. Internally professed quality in office working is not up to the desired level due to the lack
of training among staff (-1).
3. Stuck heavily in the inspection section: development of the staff is not to the mark, so the
manager is dependent on the inspection (-1).
4. The current issue of cost forces the company to sacrifice quality over quantity, and
vendors are especially selected on the basis of price due to funds (-1).
5. Till the date of 18th
6. Minimal training of the employees is incurred, but the option is there if someone wishes
to follow on-the-job training (-1).
May, 2009, the company faced losses due to the partial failure of the
courses, due to the internal weaknesses and recessionary issues. No improvement or
recovery procedures undergoing to educate the staff about showing resistance to failures
in future. Improvements are very necessary in this sector (-1).
7. As far as no formal institutionalization is conducted, the leadership is not very effective
(-1).
8. The operation in this section is based on personality-over-command, imposing one’s own
perception and aptitude. If one drives out the fear, the second forces it (-1).
9. As such no proper departments focusing on training and deployments; and forecasted
barriers are personality based (-1).
10. No slogans defined by the company (+1).
11. No such numerical goals defined for the company (+1).
12. No barriers among workers and defined pride: empowerment is highly formalized (+1).
13. No formal education institutionalized within the company; yet all is being catered for
informally (-1).
14. The prerequisites of transformation processes are weak, but good thing is the issues are
taken seriously and proper suggestions are provided (-1).
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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If there ever was a Deming Quality Level, LMDA would stand out to be -11, on summing
up all the points allotted on performance. These are the indicators and parts where serious action
needs to be implemented, besides the points as no such slogans or numerical goals are defined
and no barriers to the workers’ pride are beneficial for the company’s stature. Still, the other
eleven parts are severely in critical situation. Proper and effective implementation of Deming’s
14 points in these sections can result highly advantageous and favorable for the company’s
business development and excellence.
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PART – B: CUSTOMER-RELATIONSHIP MANAGEMENT
Current Scenario-
The one sector where LMDA excels at corporal level is the action and proper application
of the customer satisfaction procedures, yet these procedures are based on the past experience of
the original staff honing from working at CASE-PDC and NUST, especially the company’s CEO
teaching and informally training the staff. It is required to formally educate and train the team by
educating them the bits and bytes of Customer-Relationship Management; on the basis of
marketing, sales, course programs, after-sales services and customer care services.
Currently, the scenario of CRM application is as follows:
• Accessibility & Commitment
o Extensive implementation of customer focus, with everyone having faith over
customer comes first. The loyalty with customer is thoroughly focused and
cleared, but it’s necessary to be educated about customer satisfaction parameters.
One issue of commitment is acknowledged, but once the edification is provided,
the customer satisfaction results will be four-fold.
• Customer contact Requirements
o E-support and newspapers, forums and community portals are used for accessing the
company personals and services inquiries. Similarly, the databases with detailed contact
information about the customers are registered. In one way, the contact requirements by
the company are satisfactory to access the customers as well.
• Effective Complaint Management
o Not a proper system, but the problem is seriously tackled and provided a proper solution
at any time.
• Strategic Partnership and Alliance
o Neat and good strategic partnership and alliance is focused.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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The customer requirements are thoroughly and appropriately fulfilled as per needs and
concerns. This one field obviously excels and is monitored directly by the CEO and every
working person within the company.
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PART – C: LEADERSHIP AND STRATEGIC PLANNING
Current Scenario-
Leadership Review:
Leadership is the ability to positively influence people and systems under one’s authority
to have a meaningful impact and achieve important results. Leaders develop and seed in the
motivation within the employees. In short, leadership is an influential process applied to people
so that they will strive willingly and enthusiastically towards the achievement of goals.
In this context, leadership plays its part to some extent of motivation but not up to the
desired level. As witnessed, the zeal, interest and energy shown during the meetings engaged by
the staff and directors is very high. After meeting’s dismissal, the same self-controlled and
created routine flowers back. The staff comes by their own time, works by their own interest and
the results are in front of everyone. Although the concept of leadership is there, and its impact is
at least driving the staff to work, but the culture is not there.
Strategic Planning:
Core projects at LMDA are corporal trainings, and also minor focus in consultancy. For
that reason, the team is supposed to thoroughly work on developing techniques and strategies for
marketing, promotion and innovative business development methods. Founding members
and founding group surely have a decent strategic thinking with proper timelines and consistent
focus, but the strategies are verbal, noted as minutes and not documented formally.
Market Penetration conducted through bulk mails and letters, newspaper
advertisements, and extensive personal contacts of Dr. Ali Sajid, CEO, LMDA (initially). Now it
is all performance based, after the successful course conduction at starting of LMDA, and the
initial marketing and business development measures were conducted through the previous
platform of CASE-PDC, using the contacts on that basis. Now the perceptions and awareness
among the people is pretty high, and the references are used heavily through contacts.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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The competitor is one whose platform is used for business making. The strategic think-
tanks need to be developed to come up with extensive planning for business making.
Most importantly, No strategies are being devised and conducted to rectify the actions
leading to failure of the two courses conducted recently. This is a fundamental reason of
evolution of TQM in the corporal world, but still not applied in LMDA.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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PART – D: INTERNATIONAL QUALITY STANDARD
Current Scenario-
An International Quality Standard is a certification, or we can say an assurance of proper
quality, of any service or product provided. Different products and services can have different
types of certifications. General public is truly inclined towards these standards before buying or
utilizing a service under these quality standards, so it is not just a responsibility but a necessity
for customer attraction and satisfaction.
LMDA is not following any quality standard at the moment, which may have some
resulting consequences for business development and customer preservation. When asked by the
LMDA official, the statement was that, “a Quality Standard has no dealing or dependency on
the organizational processes; it is just a cover-up or formality we can say”. It is hard to believe
how one can satisfy the customers by making this statement. This scenario is not meant to have
any merit.
De merits:
No recognition or strength of the certificate issued to the trainee. The platform NUST-
PDC used was NUST itself for business promotion and bases for the training certification and
standard. Similar was the scenario with CASE-PDC. LMDA comprises neither any standard nor
a university benchmark that quantifies the utility of the certificate. The competitive advantage of
the competitors on LMDA is certification and a standard at the start. This is a huge set-back for
LMDA currently.
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PART – E: WORK SYSTEM FOCUS
Current Scenario-
Parts-
• Work & Job Design
o Proper design and implementation to carry out a job or project is not specifically
drafted, but collaborated vocally and instrumentally. The communication is pretty
loud so as even a customer may find out the whole project process being carried
out.
• Employee Involvement
o Actively involved, show full participation even at any level they can work. No
one can differentiate between the manager and the employee or even an internee.
• Empowerment
o LMDA focuses on employee empowerment to extreme, as every single employee
feels like a senior executive and treats LMDA like home organization (from
bottom to top). This part has both positive and negative traits as well, as the
extreme level of this phase can cost heavily.
• Recruitment & Career Development
o Career development at LMDA is highly acknowledged, as every new potential
student is given a sparkling chance to improve his/her skills in the field of
business; but it is noticed that proper training for the employees is still required
for business development.
• Training & Education
o Training is all vocal and informal. No formal, conservative training is carried out
so as to properly teach and educate the staff with basic corporal knowledge and
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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skill enhancement. The staff is learning on its own, through various masses.
• Health Safety & Employee Welfare
o No such formal policy is issued.
• Motivating employee
o Employees are motivated by the CEO weekly on end-week meetings scheduled.
But due to the lack of leadership within the official culture at LMDA, employees
tend to work with their own reasoning and intentions.
• Performance appraisal
o On behalf of every successful project carried out, with good customer satisfaction
level, the working team is rewarded by the CEO satisfyingly.
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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PART – F: REDUCE WASTE AND SCRAP
Current Scenario-
Wastage is present in both blue-collar and white-collar. Effective and productive actions
should be catered to improve the followings in the system of processes. Few elaborated wastes
are defined as follows:
• Timings
o Punctuality in attendance and working hours utilization
• No awareness on waste of stationary
o Staff not capable of effectively using the office stationary
• Delays in responses
• Non-productive outputs for days
• No public dealings department
o Anyone visiting the office can find out about the projects and working capacity of
LMDA within 15 minutes; which can be favorable for competitors
• No recovery activity for failures
o A set plan of actions to make sure the failures resulted once don’t occur again;
again favorable for competitors
• Recruitment is not up to the mark
o Experimental hiring is turning LMDA to a chemistry laboratory where newly
recruited staff can carry out tests in their own ways on business development
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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• Wasting the workforce capabilities
o By not educating a competent employee, as all are, their energies are being
wasted and resulting in non-productive results
• No competitive-scenario analysis
o No such charts or graphical representations of competitive scenario in Islamabad;
a Pareto analysis setting up competitors (NUST, CASE, CISCOM etc) or Scatter
Plots of performance (marketing, training popularity, customer satisfaction etc).
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*Improving Corporate Governance through Corporate Social Responsibilities using Analytical
Methodologies (2009), by Fahad M. Mirza, H. M. Umer Arfi, 12th QMOD Conference, Italy, 2009.
PART – G: EFFECTIVE PERFORMANCE MEASUREMENT
SYSTEM
Current Scenario-
Besides being extensively critical towards LMDA and neglecting the traditional excuse
of LMDA being new born, a performance measurement system should be devised to present and
express the evaluation system of processes taking place. From the scratch, and using the
Corporate Governance- Spiral Model of Success (CGSMS)* to identify initial performance
parameters of LMDA, following Ten (10) indicators for developing an early performance
measurement system to be effective are devised. Let’s name this model as LMDA IIP-Model.
Initial Indicators of performance (IIP) from Top to Bottom:
1. Customer Feedback
o Primary indicator of performance
2. Training Results
o The outputs of courses conducted
3. Promoter’s Role
o The marketing strategies and business enhancing effects
4. Director’s Role
o The effective planning and operations measures with results
5. Quality of Workmanship
o The outputs of the staff to compare the previous and current quality of work
6. Decision-makers Role
o Taking effective decisions for nurturing and development of business forecasts
7. Deming’s Quality Level
o Relating the company with Deming’s points and improve the standings
8. Values and Data for Analytical Modeling
o Registering and concluding numerical data stated for graphical representations
covering all the necessary aspects of processes conduction
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9. Competitive Analysis
o Establishing a relationship with competitors graphically to see the current
standings
10. Proper Reporting and Auditing
o Day by day reporting of work completed and accountability should be forced
May 20, 2009 LMDA- QITC FINAL EXAM: QUALITY AUDIT
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PART – H: COST OF POOR QUALITY
Current Scenario-
The Cost of Poor Quality (CoPQ), is cost of not doing the work right at first time. For a
certain period of time, poor quality of visiting cards, brochures and certificates resulted in heavy
losses for the company. And in near future, poor quality of web-design and features may result in
loss as well, being unappealing and not reflecting a core business-type web design. Failure of
two courses (supply chain management) resulted in heavy loss for the company because of
quality of conduction. Before discussing the tangible losses, the intangibles are Customer
requirements and company status. LMDA works for utmost satisfaction, and data is gathered for
customer feedback but translation of the feedback is not up to the mark, which may result in
the future business loss. Secondly, LMDA is only registered as a firm, no certification in process.
Promotion, marketing and decision-making have been poorly active in this sector, which is
resulting in losses. If per course charges are Rs. 33,700/-, and due to ineffective planning and
decision-making policies along with the marketing strategy for customer attraction and retention;
the losses focused can reach more than Thirty (30) to Forty (40) times the average charge of the
course (by formulating the average people taking and not taking the course: forecasting method).
Tangible Losses:
Neglected Certificates: Rs. 15,000/-
Neglected Brochures: Rs. 12,000/-
Neglected Visiting Cards: Rs. 8,000/-
Neglected Letterheads: Rs. 1,000/-
Course Cancellation (once occurred): Rs. 80,000/-
Wasting Stationary: Rs. 5,000/- monthly
Total Loss: Rs. 120,000/-
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PART – I: FOCUSING ON CULTURAL TRANSFORMATION
Current Scenario-
The mission, vision, objectives and goals are already specified by LMDA, and no doubt
the staff and directors are striving to get there as soon as possible. But one needs to recognize the
proper road map and method to move on to the destination. According to the corporal level of
governance, LMDA stands at first step of financial phase. It is not properly even in to its
operational phase as yet to quantify the parameters necessary for applying the vast TQM
concepts and studies, along with the modeling.
One model, at this step, is catered out during the conduction of this audit as discussed
above (LMDA-IIP Model), which can be utilized as a transforming tool. The basic sections that
need to be focused are; (i) the need to apply and institutionalize leadership and training structure
within the company, (ii) Office setup and facilities should be improved and provided with proper
corporal education of the staff and trainees, and (iii) implement Deming’s 14 points properly and
executively.
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PART – J: 7QC IMPLEMENTATION
Current Scenario-
As such no measuring mechanism is present at LMDA till now, due to lack of
documentation and parameters for applying 7QC, this part will be skipped. This is only possible
when properly renowned and tabulated data values are available for each and every section, with
defined processes and sub-processes, differentiable departments, numerical data of competitive
scenario, forecasted values and fiscal stature reports.
This section needs time to be calculated as far as the proper implementation of quality
and services are defined. At this stage of LMDA, the Deming’s 14 Points should be executed as
the first step towards quality improvements. Then after that, the 7QC model will be applicable,
once the company is in smooth operational and financial phase.
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CONCLUSION
The issues discussed step by step, from application of Deming’s points to devising a
performance measurement system with defined indicators can prove to gleam and glorify the
quality aspects of LMDA. Asides, the new sector of e-LMDA has taken place which may add
complexity to business handling at the initial stages, when LMDA itself needs more business to
feed itself. But it is still theoretically believed, and practically proven that establishing the quality
culture within any organization can produce desired level outputs, from all aspects. Recognizing
the mistakes and issues are the first step towards improvements, and identifying the corrupted
sectors with effective solution makes it easier to improve the quality stature.
This audit conducted may result as an ambassador of hope for LMDA, and is not to be
taken as a negative impact for the company. Institutionalizing the education and leadership
culture within the organization should be catered as the initial responsibility by the directors.
Secondly, the competitive analysis to know LMDA’s standing in the current market scenario
should be devised. And most importantly, the accountability section should be created to conduct
regular reporting and day to day working is documented. A well and improved office setup is
necessary for the working environment, to jog the employees’ mind and boost the working
capabilities. The work system design should be improved by defining processes and measuring
the performance of each and every section on weekly. This is all possible, but only through
commitment and knowledge. And as far having a critical audit is concerned, there is a very
valuable saying of Hazrat Ali Murtaza (R.A) saying, “My best friend is the one who does not
mention me my qualities, but mentions my mistakes”.
THE END