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“Total Quality Management”


A Project Report

Submitted by

Name : Devashree Thanekar

S.K.Somaiya college of Arts, Science and Commerce

Roll No : 22

Submitted to

Mumbai University

Under the guidance of

Prof. Ravikant Balkrishna

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AKNOWLEDGEMENT

We would like to take this as an opportunity to thank god

for his blessings and Prof. Ravikant Balkrishna of S.K.

Somaiya college of Arts, Science and Commerce, Mumbai for his

immense support, encouragement and giving valuable suggestion to my

project.. Prof. Ravikant Balkrishna was not only helping me out in

selecting this topic, but also providing his invaluable input through the

duration of this project.

Devashree

Thanekar

(Name of Student)

2




INDEX

Serial No. Chapter Name Pg.no

1) CHAPTER ONE INTRODUCTION 6

2) CHAPTER TWO CONCEPTS AND PHILOSOPHIES 12

OF TQM

3) CHAPTER THREE THE ACCEPTABILITY OF TQM 24

4) CHAPTER FOUR THE ESSENTIALS OF TQM 28

5) CHAPTER FIVE THE EFFECTS OF TQM 32

6) CHAPTER SIX IMPLEMENTATION OF TQM 40

CASE STUDY ON IBM (TIVOLI SOFTWARE). ------------------ 49

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GLOSSARY

1. IBM - International Business Machine

Corporation

2. TQM - Total Quality Management

3. ISO - International Standard Organization

4. TPM - Total Productive Maintenance

5. QCCs - Quality Control Circles

6. BPR - Business Process Re-Engineering

7. TQC - Total Quality Circles

8. ATM - Automated Teller Machines

9. CPC - Control Processing Centre

10.CAD - Computer Aided Design

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11.INCL. - Including

12.PDCA - Plan-Do-Check-Act

SUMMARY

Every nation has its own independent historical and cultural background. The quality sce-

-nario , therefore, differs from one national setting to the other. The nations are

orienting their quality management strategies and systems to meet the requirements

of the opera-ing environment though the primary focus remains the same, that is,Total Customer Sat-

isfication .Many of the present techniques of quality management were developed in

Japan. However, U.S.A., European nations and developing nations have also

contributed

significantly to this development. The studies carried out by researchers in different

national settings reveal that the concept and philosophies of TQM are not

understood by the managers and others.An all out effort , therefore is required to

promote the understan-

-ding by launching massive educational and management development programs at

all

levels so as to create a cultural consciousness towards quality.

So, the summarization is being done in the following points.

1. TQM has been accepted by both service and manufacturing

organizations,globally as a

systematic management approach to meet the competitive challenges.

2. TQM redefines the quality with emphasis on top management commitment and

custo-

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-mer satisfaction.

3. The benefits of TQM are numerous and are increasingly realized by

organizations.

4. TQM provides a linkage between productivity and quality.

5. The application of TQM tools increases a company’s efficiency.

6. The focus of TQM is on:

(a) Involvement of everyone in organization in continuous improvement.

(b) Commitment to satisfy customers.

(c) Participation through teamwork.

(d) Commitment and Leadership of top management.

CHAPTER ONE

INTRODUCTION

“Anyone who thinks customers are not important

should try doing BUSINESS without them for a

week”

DEFINITION

As defined by ISO:

"TQM is a management approach of an organization, centered on quality,

based on the participation of all its members and aiming at long-term success

through customer satisfaction, and benefits to all members of the

organization and to society."

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In Japanese, TQM comprises four process steps, namely:

1. Kaizen – Focuses on Continuous Process Improvement, to make

processes visible, repeatable and measureable.

2. Atarimae Hinshitsu – Focuses on intangible effects on processes and

ways to optimize and reduce their effects.

3. Kansei – Examining the way the user applies the product leads to

improvement in the product itself.

4. Miryokuteki Hinshitsu – Broadens management concern beyond the

immediate product.

TQM requires that the company maintain this quality standard in all aspects

of its business. This requires ensuring that things are done right the first time

and that defects and waste are eliminated from operations.

Total Quality Management (TQM) is a management strategy aimed atembedding awareness of quality in all organizational processes. TQM has

been widely used in manufacturing, education, government, and service

industries, as well as NASA space and science programs.

ORIGINS

Although W. Edwards Deming is largely credited with igniting the quality

revolution in Japan starting in 1946 and trying to bring it to the United States in

the 1980s, Armand V. Feigenbaum was developing a similar set of principles at

General Electric in the United States at around the same time. "Total Quality

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Control" was the key concept of Feigenbaum's 1951 book, Quality Control:

Principles, Practice, and Administration, a book that was subsequently released

in 1961 under the title, Total Quality Control (ISBN 0070203539). Joseph Juran,

Philip B. Crosby, and Kaoru Ishikawa also contributed to the body of knowledge

now known as TQM.

The American Society for Quality says that the term Total Quality Management

was first used by the U.S. Naval Air Systems Command "to describe its

Japanese-style management approach to quality improvement."[1] This is

consistent with the story that the United States Department of the Navy

Personnel Research and Development Center began researching the use of

statistical process control (SPC); the work of Juran, Crosby, and Ishikawa; and

the philosophy of Deming to make performance improvements in 1984. This

approach was first tested at the North Island Naval Aviation Depot.

In his paper, "The Making of TQM: History and Margins of the Hi(gh)-Story"

from 1994, Xu claims that "Total Quality Control" is translated incorrectly from

Japanese since there is no difference between the words "control" and

"management" in Japanese. William Golimski refers to Koji Kobayashi, former CEO of NEC, being the first to use TQM, which he did during a speech when he

got the Deming prize in 1974.

TQM :- “A QUALITY ORIENTED APPROACH”

Total Quality Management (TQM) is one of quality-oriented approaches that

many organisations adopt. It is generally acknowledged that manufacturing

companies need to be quality oriented in conducting their business to survive the

business world. TQM is an integrated management philosophy and a set of

practices that emphasise top management commitment, customer focus, supplier

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relationship, benchmarking, quality-oriented training, employee focus, zero-

defects, process improvement, and quality measurement. This paper investigates

the structural linkages between TQM, product quality performance and business

performance in the electronics industry in Malaysia. Given the nature of this

study, the statistical analysis technique called Structural Equation Modelling was

used. This preliminary result suggests that there is insufficient statistical

evidence to conclude significant simple relationships between TQM, product

quality performance, and business performance. This implies that the electronics

industry cannot assume direct causal linkages between these three constructs,

which might also suggest that there is a more complex relationship between

TQM, product quality performance, and business performance. However, the

results reveal that top management commitment, supplier relations and training

in particular appear to be of primary importance for TQM practices in Malaysian

electronics companies

CHARACTERISTICS OF TQM:

The characteristics of TQM, as revealed from above definition are as follows:

1. TQM is customer oriented.

2. TQM requires a long term commitment for continuous improvement of all

processes.

3. The success of TQM demands the leadership of top management and

continuous involvement.

4. Responsibility for establishments and improvement of systems lies with

the management of an organisation.

5. TQM is a strategy for continuously improving performance at all levels

and in all areas of responsibility.

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POTENTIAL BENEFITS OF TQM:

The advantages of adopting TQM system compared to conventional quality

system are numerous and are outlined below.

1. TQM helps to focus clearly on the needs of the market.

The traditional approach of quality control focusses on the technical details of

a product so as to satisfy the customer. However, the customer longs for

different satisfaction perspectives which are generally overlooked in the

traditional approach.The needs change from person to person and also from

place to place. As TQM focuses on the concept of university, it tries to abstract

the satisfaction perceptions of the market and thus helps the organisation to

identify and meet the requirements of the market in a better way.

2. TQM facilitates to aspire for a top quality performer in every sphere of

activity.

It is a well accepted fact that the negative attitudes of employees and non- participative culture of the organization pose the greatest hurdle to

organisation’s success, growth and prosperity. TQM emphasis, on bringing

about attitudinal and cultural change through promotion of participative work

culture and effective team-work. This serves to satisfy the higher human needs

of recognition and self-development and enhances employee’s interest in the

job. The employee’s performance, thus, is not restricted to the product or service

areas but reflects in other spheres as well.

3. It channelises the procedures necessary to achieve quality performance.

Quality in its true sense can not be achieved instantly. It requires a systematic

and a long-term planning and strategic approach. By focusing on defining the

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quality policies, goals and objectives, and communicating these properly to one

and all in the organization, adopting SQC and SPC techniques and developing

and using a system of evaluation , the organization can channelize their efforts to

achieve the desired and objectivated quality performance.

4. It helps examine critically and continuously all processes to remove non-

productive activities and waste.

The organizations always aim at improving productivity as it leads to

reduction in cost resulting in increase in profitability. The efforts in this

direction are contributed because of the formation of quality improvement

teams which meet regularly and through a systematic approach which tries to

remove non-productive activity. A continuous effort to identify the problems

and resolve them helps to reduce the waste. The culture of well being thus

improves housekeeping, cost-effectiveness and safety.

5. It gears organizations to fully understand the competition and develop

an effective combating strategy.

The dynamic changes in the global market and the open market policies

adopted by a large number of organizations has resulted in increasedcompetition and for many organizations the survival has become a key issue.

For this cause it is essential for the organistions to understand the competition

and develop and adopt suitable strategies to meet the challenges. As TQM

helps to understand the pulse of customer and thus the market, it gives an edge

to the organizations of variable nature to meet the competition.

6. It helps to develop good procedures for communication and

acknowledging good work.

Improper procedures and inadequate communication are yet another

bane of many organizations, which result in misunderstanding, confusion,

low productivity, duplication of efforts, poor quality, low morale and so on.

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TQM brings together members of various related sections, departments and

different levels of management thereby providing an effective vehicle of

communication and interaction.

7. It helps to review the process needed to develop the strategy of never

ending improvement.

Quality improvement efforts cannot be restricted to any time period. They

need to be continuous to meet the dynamic challenges. TQM emphasizes on

a continuous and periodic review so as to make the required changes.

The benefits derived by the organizations, therefore, are many and multi-

faceted. Many of these can be measured in quantitative terms. However, the

intangible benefits, which includes enrichment of the quality of the worklife

and many more are not quantifiable. At the same time, it has to be

established whether they do occur or not in order to prove or disapprove the

efficacy of the concept. This can be assessed by a well-planned research

project or by carrying out an opinion survey periodically. The tangible and

intangible benefits of TQM are variable in nature.

CHAPTER TWO

CONCEPTS AND PHILOSOPHIES OF TQM

INTRODUCTION:

Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed

and resurrected on a number of occasions. The concept and principles, though

simple seem to be creeping back into existence by "bits and pieces" through the

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evolution of the ISO9001 Management Quality System standard. Companies who

have implemented TQM include Ford Motor Company, Phillips Semiconductor,

SGL Carbon, Motorola and Toyota Motor Company. The latest changes coming up

for the ISO 9001:2000 standard’s "Process Model" seem to complete the

embodiment. TQM is the concept that quality can be managed and that it is a

process. The following information is provided to give an understanding of the key

elements of this process.

How do you feel if you receive aHow do you feel if you receive a

defective product?defective product?

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How do people feel if they receive a defective

product?

TQM as a Foundation :

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5. Problems must be prevented, not just fixed.

6. Quality must be measured.

7. Quality improvements must be continuous.

8. The quality standard is defect free.

9. Goals are based on requirements, not negotiated.

10. Life cycle costs, not front end costs.

11. Management must be involved and lead.

12. Management Commitment

1. Plan (drive, direct)

2. Do (deploy, support, participate)

3. Check (review)

4. Act (recognize, communicate, revise)

13. Employee Empowerment

1. Training

2. Suggestion scheme

3. Measurement and recognition

4. Excellence teams

14. Fact Based Decision Making

1. SPC (statistical process control)2. DOE, FMEA

3. The 7 statistical tools

4. TOPS (FORD 8D - Team Oriented Problem Solving)

15. Continuous Improvement

1. Systematic measurement and focus on CONQ

2. Excellence teams

3. Cross-functional process management

4. Attain, maintain, improve standards

16. Customer Focus

1. Supplier partnership

2. Service relationship with internal customers

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3. Never compromise quality

4. Customer driven standards

Processes must be Managed and Improved:

Processes must be managed and improved! This involves:

• Defining the process

• Measuring process performance (metrics)

• Reviewing process performance

• Identifying process shortcomings

• Analyzing process problems

• Making a process change

• Measuring the effects of the process change

Communicating both ways between supervisor and user

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Key to Quality:

The key to improving quality is to improve processes that define, produce and

support our products.

All people work in processes.

People

• Get processes "in control"

• Work with other employees and managers to identify process problems and

eliminate them

Managers and/or Supervisors Work on Processes

• Provide training and tool resources

• Measure and review process performance (metrics)

• Improve process performance with the help of those who use the process

THE EIGHT ELEMENTS OF TQM:

Total Quality Management is a management approach that originated in the 1950's

and has steadily become more popular since the early 1980's. Total Quality is a

description of the culture, attitude and organization of a company that strives to

provide customers with products and services that satisfy their needs. The culture

requires quality in all aspects of the company's operations, with processes being

done right the first time and defects and waste eradicated from operations.

To be successful implementing TQM, an organization must concentrate on the eight

key elements:

1. Ethics

2. Integrity

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3. Trust

4. Training

5. Teamwork

6. Leadership

7. Recognition

8. Communication

This paper is meant to describe the eight elements comprising TQM.

Key Elements

TQM has been coined to describe a philosophy that makes quality the driving force

behind leadership, design, planning, and improvement initiatives. For this, TQM

requires the help of those eight key elements. These elements can be divided into

four groups according to their function. The groups are:

I. Foundation - It includes: Ethics, Integrity and Trust.

II. Building Bricks - It includes: Training, Teamwork and Leadership.

III. Binding Mortar - It includes: Communication.

IV. Roof - It includes: Recognition.

I. Foundation

TQM is built on a foundation of ethics, integrity and trust. It fosters openness,

fairness and sincerity and allows involvement by everyone. This is the key to

unlocking the ultimate potential of TQM. These three elements move together,

however, each element offers something different to the TQM concept.

1. Ethics - Ethics is the discipline concerned with good and bad in any situation. It

is a two-faceted subject represented by organizational and individual ethics.

Organizational ethics establish a business code of ethics that outlines guidelines that

all employees are to adhere to in the performance of their work. Individual ethics

include personal rights or wrongs.

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2. Integrity - Integrity implies honesty, morals, values, fairness, and adherence to

the facts and sincerity. The characteristic is what customers (internal or external)

expect and deserve to receive. People see the opposite of integrity as duplicity.

TQM will not work in an atmosphere of duplicity.

3. Trust - Trust is a by-product of integrity and ethical conduct. Without trust, the

framework of TQM cannot be built. Trust fosters full participation of all members.

It allows empowerment that encourages pride ownership and it encourages

commitment. It allows decision making at appropriate levels in the organization,

fosters individual risk-taking for continuous improvement and helps to ensure that

measurements focus on improvement of process and are not used to contend people.

Trust is essential to ensure customer satisfaction. So, trust builds the cooperativeenvironment essential for TQM.

II.Bricks

Basing on the strong foundation of trust, ethics and integrity, bricks are placed to

reach the roof of recognition. It includes:

4. Training - Training is very important for employees to be highly productive.

Supervisors are solely responsible for implementing TQM within their departments,and teaching their employees the philosophies of TQM. Training that employees

require are interpersonal skills, the ability to function within teams, problem solving,

decision making, job management performance analysis and improvement, business

economics and technical skills. During the creation and formation of TQM,

employees are trained so that they can become effective employees for the company.

5. Teamwork - To become successful in business, teamwork is also a key element

of TQM. With the use of teams, the business will receive quicker and better

solutions to problems. Teams also provide more permanent improvements in

processes and operations. In teams, people feel more comfortable bringing up

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problems that may occur, and can get help from other workers to find a solution and

put into place. There are mainly three types of teams that TQM organizations adopt:

A. Quality Improvement Teams or Excellence Teams (QITS) - These are

temporary teams with the purpose of dealing with specific problems that often re-

occur. These teams are set up for period of three to twelve months.

B. Problem Solving Teams (PSTs) - These are temporary teams to solve certain

problems and also to identify and overcome causes of problems. They generally last

from one week to three months.

C. Natural Work Teams (NWTs) - These teams consist of small groups of skilledworkers who share tasks and responsibilities. These teams use concepts such as

employee involvement teams, self-managing teams and quality circles. These teams

generally work for one to two hours a week.

6. Leadership - It is possibly the most important element in TQM. It appears

everywhere in organization. Leadership in TQM requires the manager to provide an

inspiring vision, make strategic directions that are understood by all and to instill

values that guide subordinates. For TQM to be successful in the business, the

supervisor must be committed in leading his employees. A supervisor must

understand TQM, believe in it and then demonstrate their belief and commitment

through their daily practices of TQM. The supervisor makes sure that strategies,

philosophies, values and goals are transmitted down through out the organization to

provide focus, clarity and direction. A key point is that TQM has to be introduced

and led by top management. Commitment and personal involvement is required

from top management in creating and deploying clear quality values and goalsconsistent with the objectives of the company and in creating and deploying well

defined systems, methods and performance measures for achieving those goals.

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people are recognized, there can be huge changes in self-esteem, productivity,

quality and the amount of effort exhorted to the task at hand. Recognition comes in

its best form when it is immediately following an action that an employee has

performed. Recognition comes in different ways, places and time such as,

Ways - It can be by way of personal letter from top management. Also by award

banquets, plaques, trophies etc.

• Places - Good performers can be recognized in front of departments, on

performance boards and also in front of top management.

• Time - Recognition can given at any time like in staff meeting, annual

award banquets, etc.

We can conclude that these eight elements are key in ensuring the success of TQM

in an organization and that the supervisor is a huge part in developing these

elements in the work place. Without these elements, the business entities cannot be

successful TQM implementers. It is very clear from the above discussion that TQM

without involving integrity, ethics and trust would be a great remiss, in fact it would

be incomplete. Training is the key by which the organization creates a TQM

environment. Leadership and teamwork go hand in hand. Lack of communication

between departments, supervisors and employees create a burden on the whole

TQM process. Last but not the least, recognition should be given to people who

contributed to the overall completed task. Hence, lead by example, train employees

to provide a quality product, create an environment where there is no fear to share

knowledge, and give credit where credit is due is the motto of a successful TQM

organization

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THE TQM MODEL:

At the century close, the creation of the global market, international orientation of

management that sweeps national boundaries, introduction of new technologies, and

shift towards customer focused strategies, make the competition stronger than ever.

The criteria for success in this global, internationally oriented market have been

changing rapidly. In order to expand business, enter new markets, and set realistic,

competitive long-term objectives, excellence became an imperative. Management's

effort has been directed towards discovering what makes a company excellent.

To achieve excellence, companies must develop a corporate culture of treating

people as their most important asset and provide a consistent level of high quality

products and services in every market in which they operate. Such an environment

has supported the wide acceptance of Total Quality Management (TQM) which

emerged recently as a new, challenging, marketable philosophy. It involves three

spheres of changes in an organization -- people, technology and structure.

There is also a need for a systematic approach so that each element of TQMEX can

be bonded together smoothly. Oakland [1989] originated the idea of a 3-cornerstone

model. The proposed 4-pillar model (Figure 3.1) brings the customer's requirement

into the system. This makes the approach to TQM more complete. The additional

pillar -- satisfying customers -- is vital because it explicitly addresses customers

requirements. Without it TQM would have no objective.

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The Four Pillars of TQM

The role of top management in implementation of total quality is crucial and itsinput on people far-reaching. TQM, therefore, should be understood as management

of the system through systems thinking, which means understanding all the elements

in the company and putting them to work together towards the common goal. The

TQMEX Model advocates an integrated approach in order to support the transition

to systems management which is an ongoing process of continuous improvement

that begins when the company commits itself to managing by quality. The Model

illuminates the elements that form a base to the understanding of TQM philosophy

and implementation of the process company-wide.

CHAPTER THREE

THE ACCEPTABILITY OF TQM

JAPANESE TQM MODEL:

At first, few but the Japanese took Deming seriously. Known for his legendary

attacks on executives and compassion for the worker, the Japanese sense of

responsibility to one's superiors and subordinates made it easier to accept Deming's

25




message that management's role was to provide the optimal conditions for the

workers to do the best job.

The Japanese then extended Deming's teaching to many dimensions of management.

Here are TQM models from the Japanese Society of Quality and the Japan

Standards Association that show how extensive their definition of TQM is.

The Japanese identify three major dimensions of TQM: Daily Management,

Hoshin/Policy Management, and Cross Function Management. We will study these

in detail in the course. They can be visualized with the following picture.

TQM IN USA:

As regards quality, USA is at crossroads today.Inspite of the fact that USA

developed the techniques and concepts of SQC and TQC and the japenese imported

these techniques, the further orientation and development in philoshophy, concept

and techniques in terms of Q.C. circles and company wide quality control took place

26




in Japan more rapidly and successfully. While the American companies remained

concerned about detecting and segregating defective parts from good ones, the

Japanese companies devised systems to reduce defects and produce good quality

products.This resulted in America losing its position of dominance not only in the

American market but also in the world.

Much of the quality movement in USA is based on tools and techniques

developed by the japenese. Adoption of these techniques requires complete re-

development in both methods and emphasis.The most critical challenge facing U.S

quality movement is the development and implementation of quality focused

corporate management systems that achieve the coherence, integration and

comprehensiveness of quality management in japan. The American companies are

characterized by:

1. A high concentration of industry on relatively few companies.

2. Stress on promoting share-holders, and

3. Running the company by professional managers.

These features of autonomous organisations and professional management have a

considerable impact on the conduct of quality function. Each organisation

determines independently what it will produce and what quality policies it will

adopt.

Marguardt divides the evolution of quality movement in USA in three periods:

1. Advocates for SQC- Emphasis on technical tools of control charts, lot inspection

and sampling schemes.

2. Administrators for system of quality control- Emphasis on the cost of quality and

managerial aspects of organizing the quality.

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3. Advertising and selling quality consciousness-Emphasis on changing

organizational culture and providing an environment that will enable people to

activate and sustain in their own work and in products and services produced by the

organistions with the focus on needs of customers. TQM in Service Industry

TQM in Service Industry

Introduction

Today’s customer has before him the possibility of a wider choice of products &

Services than ever before .He is going to be demanding & keen on having the best

services in the shortest possible time & at the minimum cost .He will look for

solutions that are more specific to his needs thus creating opportunity of many niche

market.

-Today customers avail ATM services 24 hrs

-Book airline tickets & check-in over phone

-Self-service at fast food restaurant.

-And many more

What is different ?

-Service is also a product of different kind .

-No time delay between the production & delivery of service

-A defective product can be replaced but a defective service may create a permanent

damage.

Growth of Service sector

Service sector is growing rapidly due to

-Change in environment , life style etc

-Demand for new kind of services

-Advent of new technologies

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-Fast development of information technology & computerisation

-Lean manufacturing . (contracting out most activities)

Challenge of Service sector

Delight customers

-In a dynamic environment which is changing fast

-In growing competitive market

-With relatively shorter product life cycle

-Requiring more customisation

Service Quality Dimensions

Quality of Services differs from manufactured products

-Special characteristics including intangibility.

-Simultaneity ( promptness )

-Heterogeneity

-Unique dimensions of some services (e.g. Banking)

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CHAPTER FOUR

THE ESSENTIALS OF TQM

Introduction

TQM is the way of managing for the future, and is far wider in its application than

just assuring product or service quality – it is a way of managing people and

business processes to ensure complete customer satisfaction at every stage,

internally and externally. TQM, combined with effective leadership, results in an

organization doing the right things right, first time.

The core of TQM is the customer-supplier interfaces, both externally and internally,

and at each interface lie a number of processes. This core must be surrounded by

30




commitment to quality, communication of the quality message, and recognition of

the need to change the culture of the organisation to create total quality. These are

the foundations of TQM, and they are supported by the key management functions

of people, processes and systems in the organisation.

This section discusses each of these elements that, together, can make a total quality

organisation. Other sections explain people, processes and systems in greater detail,

all having the essential themes of commitment, culture and communication running

through them.

Customers and suppliers

There exists in each department, each office, each home, a series of customers,

suppliers and customer supplier interfaces. These are “the quality chains”, and they

can be broken at any point by one person or one piece of equipment not meeting the

requirements of the customer, internal or external. The failure usually finds its way

to the interface between the organization and its external customer, or in the worst

case, actually to the external customer.

Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere,

leading to yet more failure and problems, and so the situation is exacerbated. The

ability to meet customers’ (external and internal) requirements is vital. To achieve

quality throughout an organization, every person in the quality chain must be trained

to ask the following questions about every customer-supplier interface:

The building blocks of TQM: processes, people, management systems

and performance measurement

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Everything we do is a Process, which is the transformation of a set of inputs, which

can include action, methods and operations, into the desired outputs, which satisfy

the customers’ needs and expectations.

In each area or function within an organisation there will be many processes taking

place, and each can be analysed by an examination of the inputs and outputs to

determine the action necessary to improve quality.

In every organisation there are some very large processes, which are groups of

smaller processes, called key or core business processes. These must be carried out

well if an organisation is to achieve its mission and objectives. The section on

Processes discusses processes and how to improve them, and Implementation covers

how to prioritise and select the right process for improvement.

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The only point at which true responsibility for performance and quality can lie is

with the People who actually do the job or carry out the process, each of which has

one or several suppliers and customers.

An efficient and effective way to tackle process or quality improvement is through

teamwork. However, people will not engage in improvement activities without

commitment and recognition from the organisation’s leaders, a climate for

improvement and a strategy that is implemented thoughtfully and effectively. The

section on People expands on these issues, covering roles within teams, team

selection and development and models for successful teamwork.

An appropriate documented Quality Management System will help an

organisation not only achieve the objectives set out in its policy and strategy, but

also, and equally importantly, sustain and build upon them. It is imperative that the

leaders take responsibility for the adoption and documentation of an appropriate

management system in their organisation if they are serious about the quality

journey. The Systems section discusses the benefits of having such a system, how to

set one up and successfully implement it.

Once the strategic direction for the organisation’s quality journey has been set, it

needs Performance Measures to monitor and control the journey, and to ensure the

desired level of performance is being achieved and sustained. They can, and should

be, established at all levels in the organisation, ideally being cascaded down and

most effectively undertaken as team activities and this is discussed in the section on

Performance.

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CHAPTER FIVE

THE EFFECTS OF TQM

Improving Financial Services through TQM

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. The demonstration project, which used the Seven Steps of

Problem Solving (similar to DMAIC), was to show them how TQM concepts

worked in practice before they committed resources for a company-wide program.

Step 1. Define the Problem

1.1) Selecting the theme: A meeting of the senior management of the company was

held. Brainstorming produced a list of more than 20 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.

34




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.

1.2) 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. The key process stages were mapped:

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).

35




Later the entire cycle could be included. The perception of the length of turnaround

by different members of the team was recorded. It averaged:

Non-Medical Policies 17 days

Medical Policies 35 days

Invoking the slogan from the awareness program "In God we trust, the rest of us

bring data" the group was asked to collect data and establish reality. Armed with a

suitably designed check sheet they set about the task.

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. The concept of

sigma was explained and was rapidly internalized. For 99.7 percent delivery within

the customer limit the metric was defined.

Customer desire:

Average+3 Sigma turnaround = less than 6 days

Current status:

Non-medical policies (Average 19/Sigma 15) Average+3 sigma= 64 days

Medical (Average 37/Sigma 27) Average+3 sigma= 118 days

The Problem was therefore defined:

Reduce Average+3 sigma of turnaround for:

36




Non-Medical Policies From 64 to 6 days

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. The aggregate results are summarized below:

Number of operations 84

Number of handovers 13

In-house processing time (estimated) 126 man-mins.

Range of individual stage time 2 to 13 mins.

37




Could this be true? Could the turnaround be 126 minutes for internal processing

without waiting? The group started to question of the status quo. The change process

had begun. 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 toeach 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

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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. The

head of the CPC summarized: "I gave five files for processing, and went for a

meeting. Emerging from the meeting about 30 minutes later I was greeted by the

dispatch clerk jubilantly reporting, "'Madam, the TQM files are ready for dispatch.'"

The mindset was dramatically changed and line personnel were now keen to push

the implementation.

Stage 2: It was agreed to run the new system for five days -- and compute the

average and sigma of the 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:

1. For all non-medical policies From 64 to 42 days or 34%

2. 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

39




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 in 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. Check the Result

The process was run for one month with regular checks. The results obtained were

marginally better than the trials conducted in Step 5:

Average 11 days

Sigma 9 days

Average+3 sigma 38 days

Step 7. Standardize Control/Document the Improvement Story

• Essentially the in-house processes in two centers of processing -- the CPC

and one sales branch -- had been impacted so far. To make sure that the

gains were held, control charts were introduced in both locations. Sample x-

40




bar and sigma-control charts for the CPC are shown below:

• A special "Grind It In" session was conducted for line personnel to ensure

that the control chart was updated every day, and any deterioration was dealt

with by finding and killing the root causes of the problems.

•

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

41




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+3 sigma of 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.

Future Actions

Non-medical policies: Goal to reduce turnaround from 42 days to about 15 days.

1. Roll out process to branches to achieve 24 days throughout the country.

2. Minimize rework by analyzing, prioritizing and training sales branches to avoid

the causes of rework.

3. Working with the bank to improve the turnaround time of banking checks.

4. Considering processing proposals while check clearance is in progress.

Medical policies: Goal to reduce turnaround from 71 days to about 24 days.

1. Roll out process to branches to reduce turnaround from 71 to 37 days.

2. Streamline the process of medical exam of the client from 37 to 24 days.

CHAPTER SIX

IMPLEMENTATION OF TQM

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Implementation Principles and Processes

A preliminary step in TQM implementation is to assess the organization's current

reality. Relevant preconditions have to do with the organization's history, its current

needs, precipitating events leading to TQM, and the existing employee quality of

working life. If the current reality does not include important preconditions, TQM

implementation should be delayed until the organization is in a state in which TQM

is likely to succeed.

If an organization has a track record of effective responsiveness to the environment,

and if it has been able to successfully change the way it operates when needed,

43




TQM will be easier to implement. If an organization has been historically reactive

and has no skill at improving its operating systems, there will be both employee

skepticism and a lack of skilled change agents. If this condition prevails, a

comprehensive program of management and leadership development may be

instituted. A management audit is a good assessment tool to identify current levels

of organizational functioning and areas in need of change. An organization should

be basically healthy before beginning TQM. If it has significant problems such as a

very unstable funding base, weak administrative systems, lack of managerial skill,

or poor employee morale, TQM would not be appropriate.

However, a certain level of stress is probably desirable to initiate TQM. People need

to feel a need for a change. Kanter (1983) addresses this phenomenon be describing building blocks which are present in effective organizational change. These forces

include departures from tradition, a crisis or galvanizing event, strategic decisions,

individual "prime movers," and action vehicles. Departures from tradition are

activities, usually at lower levels of the organization, which occur when

entrepreneurs move outside the normal ways of operating to solve a problem. A

crisis, if it is not too disabling, can also help create a sense of urgency which can

mobilize people to act. In the case of TQM, this may be a funding cut or threat, or

demands from consumers or other stakeholders for improved quality of service.

After a crisis, a leader may intervene strategically by articulating a new vision of the

future to help the organization deal with it. A plan to implement TQM may be such

a strategic decision. Such a leader may then become a prime mover, who takes

charge in championing the new idea and showing others how it will help them get

where they want to go. Finally, action vehicles are needed and mechanisms or

structures to enable the change to occur and become institutionalized.

The Concept of Continuous Improvement by TQM

TQM is mainly concerned with continuous improvement in all work, from high

level strategic planning and decision-making, to detailed execution of work

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elements on the shop floor. It stems from the belief that mistakes can be avoided and

defects can be prevented. It leads to continuously improving results, in all aspects of

work, as a result of continuously improving capabilities, people, processes,

technology and machine capabilities.

Continuous improvement must deal not only with improving results, but more

importantly with improving capabilities to produce better results in the future. The

five major areas of focus for capability improvement are demand generation, supply

generation, technology, operations and people capability.

A central principle of TQM is that mistakes may be made by people, but most of

them are caused, or at least permitted, by faulty systems and processes. This means

that the root cause of such mistakes can be identified and eliminated, and repetition

can be prevented by changing the process.

There are three major mechanisms of prevention:

1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-

Yoke).

2. Where mistakes can't be absolutely prevented, detecting them early to

prevent them being passed down the value added chain (Inspection at source

or by the next operation).

3. Where mistakes recur, stopping production until the process can be

corrected, to prevent the production of more defects. (Stop in time).

. TQM is the foundation for activities, which include:

• Commitment by senior management and all employees

• Meeting customer requirements

• Reducing development cycle times

• Just In Time/Demand Flow Manufacturing

• Improvement teams

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• Reducing product and service costs

• Systems to facilitate improvement

• Line Management ownership

• Employee involvement and empowerment

• Recognition and celebration

• Challenging quantified goals and benchmarking

• Focus on processes / improvement plans

• Specific incorporation in strategic planning

This shows that TQM must be practiced in all activities, by all personnel, in

Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.

TQM in manufacturing

Quality assurance through statistical methods is a key component in a

manufacturing organization, where TQM generally starts by sampling a random

selection of the product. The sample can then be tested for things that matter most to

the end users. The causes of any failures are isolated, secondary measures of the

production process are designed, and then the causes of the failure are corrected.

The statistical distributions of important measurements are tracked. When parts'measures drift into a defined "error band", the process is fixed. The error band is

usually a tighter distribution than the "failure band", so that the production process

is fixed before failing parts can be produced.

It is important to record not just the measurement ranges, but what failures caused

them to be chosen. In that way, cheaper fixes can be substituted later (say, when the

product is redesigned) with no loss of quality. After TQM has been in use, it's very

common for parts to be redesigned so that critical measurements either cease to

exist, or become much wider.

46




It took people a while to develop tests to find emergent problems. One popular test

is a "life test" in which the sample product is operated until a part fails. Another

popular test is called "shake and bake", in which the product is mounted on a

vibrator in an environmental oven, and operated at progressively more extreme

vibration and temperatures until something fails. The failure is then isolated and

engineers design an improvement.

A commonly-discovered failure is for the product to disintegrate. If fasteners fail,

the improvements might be to use measured-tension nutdrivers to ensure that screws

don't come off, or improved adhesives to ensure that parts remain glued.

If a gearbox wears out first, a typical engineering design improvement might be to

substitute a brushless stepper motor for a DC motor with a gearbox. The

improvement is that a stepper motor has no brushes or gears to wear out, so it lasts

ten or more times as long. The stepper motor is more expensive than a DC motor,

but cheaper than a DC motor combined with a gearbox. The electronics are radically

different, but equally expensive. One disadvantage might be that a stepper motor can

hum or whine, and usually needs noise-isolating mounts.

Often, a "TQMed" product is cheaper to produce because of efficiency/performanceimprovements and because there's no need to repair dead-on-arrival products, which

represents an immensely more desirable product.

TQM and contingency-based research

TQM has not been independent of its environment. In the context of management

accounting systems (MCSs), Sim and Killough (1998) show that incentive pay

enhanced the positive effects of TQM on customer and quality performance. Ittner

and Larcker (1995) demonstrated that product focused TQM was linked to timely

problem solving information and flexible revisions to reward systems. Chendall

47




(2003) summarizes the findings from contingency-based research concerning

management control systems and TQM by noting that “TQM is associated with

broadly based MCSs including timely, flexible, externally focused information;

close interactions between advanced technologies and strategy; and non-financial

performance measurement.”

Customer-driven quality

TQM 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 requirements' goes beyond

defect and error reduction, and merely meeting specifications or reducing customer

complaints. The concept of requirements 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 functions 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.

TQM leadership from top management

TQM is a way of life for a company. It has to be introduced and led by top

management. This is a key point. Attempts to implement TQM often fail because

top management doesn't lead and get committed - instead it delegates and pays lip

48




service. Commitment and personal involvement is required from top management in

creating and deploying clear quality values and goals consistent with the objectives

of the company, and in creating and deploying well defined systems, methods and

performance measures for achieving those goals. These 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 to management and employee remuneration.

Continuous improvement

Continuous improvement of all operations and activities is at the heart of TQM.

Once it is recognized that customer satisfaction can only be obtained by providing a

high-quality product, 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

recognizing the link between product quality and customer satisfaction, TQM also

recognizes that product quality is the result of process quality. As a result, there is a

focus on continuous improvement of the company's processes. This will lead to an

improvement in process quality. In turn this will lead to an improvement in product

quality, and to an increase in customer satisfaction. Improvement cycles areencouraged for all the company's activities such as product development, use of

EDM/PDM, and the way customer relationships are managed. This implies that all

activities include measurement and monitoring of cycle time and responsiveness as

a basis for seeking opportunities for improvement.

Elimination of waste is a major component of the continuous improvement

approach. There is also a strong emphasis on prevention rather than detection, and

an emphasis on quality at the design stage. The customer-driven approach helps to

prevent errors and achieve defect-free production. When problems do occur within

the product development process, they are generally discovered and resolved before

they can get to the next internalcustomer.

49




Fastresponse

To achieve customer satisfaction, the company has to respond rapidly to customer

needs. This implies short product and service introduction cycles. These can be

achieved with customer-driven and process-oriented product development because

the resulting simplicity and efficiency greatly reduce the time involved. Simplicity is

gained through concurrent product and process development. Efficiencies are

realized from the elimination of non-value-adding effort such as re-design. The

result is a dramatic improvement in the elapsed time from product concept to first

shipment.

Actions based on facts

The statistical analysis of engineering and manufacturing facts is an important part

of TQM. Facts and analysis provide the basis for planning, review and performance

tracking, improvement of operations, and comparison of performance with

competitors. The TQM approach is based on the use of objective data, and provides

a rational rather than an emotional basis for decision making. The statisticalapproach to process management in both engineering and manufacturing recognizes

that most problems are system-related, and are not caused by particular employees.

In practice, data is collected and put in the hands of the people who are in the best

position to analyze it and then take the appropriate action to reduce costs and

prevent non-conformance. Usually these people are not managers but workers in the

process. If the right information is not available, then the analysis, whether it be of

shop floor data, or engineering test results, can't take place, errors can't be identified,

and so errors can't be corrected.

Employee participation

50




A successful TQM environment requires a committed and well-trained work force

that participates fully in quality improvement activities. Such participation is

reinforced by reward and recognition systems which emphasize the achievement of

quality objectives. On-going education and training of all employees supports the

drive for quality. Employees are encouraged to take more responsibility,

communicate more effectively, act creatively, and innovate. As people behave the

way they are measured and remunerated, TQM links remuneration to customer

satisfaction metrics.

A TQM culture

It's not easy to introduce TQM. An open, cooperative culture has to be created by

management. Employees have to be made to feel that they are responsible for

customer satisfaction. They are not going to feel this if they are excluded from the

development of visions, strategies, and plans. It's important they participate in these

activities. They are unlikely to behave in a responsible way if they see management

behaving irresponsibly - saying one thing and doing the opposite.

Product development in a TQM environment

Product development in a TQM environment is very different to product

development in a non-TQM environment. Without a TQM approach, product

development is usually carried on in a conflictual atmosphere where each

department acts independently. Short-term results drive behavior so scrap, changes,

work-arounds, waste, and rework are normal practice. Management focuses on

supervising individuals, and fire-fighting is necessary and rewarded.

Product development in a TQM environment is customer-driven and focused on

quality. Teams are process-oriented, and interact with their internal customers to

deliver the required results. Management's focus is on controlling the overall

51




process, and rewarding teamwork.

Awards for Quality achievement

The Deming Prize has been awarded annually since 1951 by the Japanese Union of

Scientists and Engineers in recognition of outstanding achievement in quality

strategy, management and execution. Since 1988 a similar award (the Malcolm

Baldrige National Quality Award) has been awarded in the US. Early winners of the

Baldrige Award include AT&T (1992), IBM (1990), Milliken (1989), Motorola

(1988), Texas Instruments (1992) and Xerox (1989)

CASE STUDY

IBM Tivoli Development Labs to reap more than $2 million savings with

release management initiative.

Company : IBM Corporation

Deployment Country : New York – USA

Industry : Computer Services, Professional Services

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http://www.ibm.com/

http://www.ibm.com/




Solution : IT Optimization, On Demand Business, On Demand Workplace,

Workload Management

Business need : Improve the quality and efficiency of software testing processes

Solution : An automated provisioning process that standardizes release

management, reduces manual operations and optimizes resource utilization

Benefits : 94 percent reduction in attended time to provision software; $2 million

per year expected savings following roll out to more labs; improved test quality;

increased platform coverage; better utilization of valuable skills

"By employing IBM IT Service Management software, we’ve been able to align our

testing processes with business goals and significantly improve operational

efficiency." - Phil Buckellew, Program Director, IBM Tivoli Development Labs.

Overview :Automating information technology and business processes is helping

organizations worldwide realize enormous savings. Consider, for example, Tivoli®

Development Labs, the IBM team responsible for testing Tivoli software prior to its

release. Tivoli Development Labs develops enterprise-class software that supports

numerous heterogeneous operating system platforms. Each product undergoes

extensive, mandatory

Consistent, cost-effective software deployment

Using Tivoli Provisioning Manager software, Tivoli Development Labs has

automated more than 800 tasks that were once performed manually across 415

systems. This includes tasks for allocating and removing servers from the test

53

http://www.ibm.com/ondemand

http://www.ibm.com/ondemand




environment; configuring servers; installing and uninstalling software and patches;

and performing bare-metal builds. Doing so has helped the team minimize human

errors, such as incorrectly setting a registry value or forgetting to remove an old file

that may cause a software conflict, and increase the accuracy of the testing

environment. As a result, lab staff can rapidly identify the source of code defects

and retest with confidence. And because the solution enables the organization to

automate the set up of new test environments during non business hours, lab staff

spend their time testing each software product more quickly and more often for

greater test coverage.

“By employing IBM IT Service Management software, we’ve been able to easily

implement best practices for software provisioning,” says Buckellew. “This, in turn,

is helping

us better align our testing processes with business goals and significantly improve

operational efficiency.”

Savings to reach several million dollars

The benefits realized through automation of provisioning testing processes and use

of Tivoli Provisioning Manager software have been enormous. The Tivoli

Development Labs team reports that Phase 1 of the project resulted in a 94 percentreduction in attended time to provision software, with more than 1,200 person-hours

saved over the first seven months of the project.

Tasks that once required several hours to perform under constant supervision can

now be completed in just five minutes. And by freeing up resources from mundane

tasks, testers have more time to focus on product innovation and code quality.

Ultimately, the organization estimates that the savings associated with maintaining

the test infrastructure will reach more than $2 million a year as it expands use of the

solution to more labs.

“Faster, unattended installs allow our existing test teams to complete more tests in

less time,” says Buckellew. “We can better utilize our resources and cost-effectively

54




deliver high-quality solutions to our customers as a result”

Key Components

Software -IBM Tivoli Provisioning Manager

Server -IBM System x™ running Red Hat Linux®

On Demand Business Benefits

• Automating manual processes improves operational efficiency, driving

expected savings of more than $2 million a year

• Leveraging best practices drives greater consistency to help minimize human

errors and speed the execution and accuracy of the testing process

• Improving the reliability of the testing environment helps testers identify the

source of code defects more quickly and retest with confidence

• Enabling testers to focus on testing, rather than preparing environments,

enables better utilization of staff skills

Why is quality important?

The most successful organizations are those that give customers what they want.

Satisfied customers are loyal to those suppliers they feel best understand their

requirements. As a result they will make repeat purchases and will recommend a

business to their friends.

55

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http://popup%28%27glossary.php/?gID=549%27);




There are two main types of customers for a business:

• end customers - people like you and me, looking to buy an iPod or plasma

screen television

• organizational customers - for example, a company recording audio CDs

would buy in blank CDs, record music to them and sell them on as a finished

product.

When you buy a piece of electrical equipment, you will want to know a lot of

information about its specification. Obvious information that you will be looking for

include:

• Is it safe?

• Does it do what I want?

• Does it meet the required standards?

As a customer you will have a lot more confidence in products you know have been

tested and meet British, European and International Standards. In the same way,

your school will want to purchase gym and science lab equipment that meets the

specifications of the safety standards.

Businesses therefore benefit from working with IBM to meet standards, because:

• Standards protect consumers' fundamental right to safety, the right to be

informed and the right to choose. These rights relate to products, services,

processes and materials.

• Standardization promotes effective research and development, and makes

products easier to use.

56






ii. aims to improve customer satisfaction as a result of applying the system. This

includes continually improving the system.

ISO 9001 sets out eight quality management principles. These include:

• customer focus

• leadership - a commitment to quality by the leaders of the organization

• involvement of people - everyone in the organization having a part to play

• making sure that those processes which create quality are identified

• continual improvement of the system.

In practical terms, organizations wishing to apply QMS take the following steps:

1. Read and understand the standard. They read through the literature and discuss

any issues with IBM.

2. Use supporting literature and software tools to help understand, develop and

implement QMS.

58




3. Involve top management (heavily) in developing a quality management plan.

Typically a Quality Manager will be responsible for the initiative.

4. The Quality Manager can be trained in ways of implementing the standard.

5. The QMS is then created and put into practice.

6. When the organization feels confident it is meeting the standard, it informs an

assessor, who will assess the effectiveness of the QMS. If it meets the standard a

certificate will be awarded. This is subject to regular reviews.

Implementing a quality system – external

Internal systems are ones that are built inside an organization. However, in addition,

modern businesses need to build external systems. External systems are those that

involve people outside the organization - e.g. suppliers.

Today, many businesses have long supply chains in which they source materials,

parts and finished goods from across the globe.

Take, for example, a modern plasma screen television. Some of the componentsmay come from India, others from China, or Eastern European countries. These

separate components will then be assembled into a sub-assembly i.e. part of the

finished television. This sub-assembly may take place in India, whilst a number of

parts may then be transported and delivered to a final assembly plant in Wales.

59




This has led to a change in attitude. Instead of a company having a 'them' and 'us'

attitude - where 'them' are the suppliers, it now makes sense to see the process as a

shared one in which everyone relies on each other. This is known as

interdependence

Conclusion of Case Study

In world trade, for buyers and sellers to work together there must be trust. Standards

can provide the necessary bridge of confidence and understanding that builds mutual

trust, helping trade to thrive.

Sales are the lifeblood of any business, so the implementation of standards helps

sales. This is the case whatever the size of the business or the sector they are

operating in.

Establishing clear standards creates order in an increasingly complex world.

Standards meet changing market needs and are customer driven. Businesses benefit

from standards because they establish ground rules that help to guarantee quality.

Achieving certification to a standard might add reassurance for its customers and

enables a business to boost its sales performance. Consumers benefit because their

safety and their satisfaction are both greatly enhanced. Governments benefit because

such measures contribute to greater productivity and economic growth, and safer

work, leisure and home environments.

IBM was the world's first national standards making body. Today it is the most

prestigious international standards institution. It works with the British government,

manufacturers and other stakeholders to create quality standards. These guarantee

fitness for purpose, and help British manufacturers to gain a competitive edge both

in the UK and internationally. IBM assists British businesses in all markets to grow

and to concentrate on meeting customers' requirements.

60




TEXT REFERENCES

1. “HANDBOOK OF TOTAL QUALITY MANAGEMENT”, R.P.MOHANTY

2. WWW.ISIXSIGMA.COM

3. WWW.WIKEPEDIA.COM

4. “TQM TOOLS AND TOOL KITS”, J.ReVelle

5. WWW.360-IBM.COM

DIAGRAMATIC REFERENCES

1. WWW.YEADONINC.COM/DIAGRAM.GIF

2. WWW.QAPROJECT.ORG/IMAGES/SCATTERDIAGRAM.GIF

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