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Fitting Quality IntoFitting Quality IntoSaudi Industry:Saudi Industry:

The Road to SuccessThe Road to Success

By:Dr. Tarik Al-Sulimani

Advanced Electronics Co.

April 19, 2000

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Introduction

Change in the way business is done– Competition– Product Change– Technology Impact– Information Availability and its Use

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Background

More developing nations are advancing toward technological independence demanding for technology transfer

Change in management style More focus on customer

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Transition in Management Outlook

Managers supervise Managers supervise workers closelyworkers closely

Measurements and rewards Measurements and rewards related to individual related to individual departmentsdepartments

Motivation relates to Motivation relates to pleasing the bosspleasing the boss

Steady customersSteady customers

Homogeneous localized Homogeneous localized workforce working with workforce working with respective specialtiesrespective specialties

Managers set directions, Managers set directions, build and coach teamsbuild and coach teams

Measurements and rewards Measurements and rewards related to the whole related to the whole organizationorganization

Motivation related to pleasing Motivation related to pleasing the customerthe customer

Globalization, multinational Globalization, multinational activitiesactivities

Heterogeneous multi-racial Heterogeneous multi-racial workforce working as multi-workforce working as multi-discipline teams. discipline teams.

Old-World OrganizationOld-World Organization New-World OrganizationNew-World Organization

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Transition in Management OutlookCont’d

Old-World OrganizationOld-World Organization New-World OrganizationNew-World Organization

Vertical-Horizontal-Vertical-Horizontal-Geographical- External Geographical- External BoundariesBoundaries

Moderate use of Moderate use of information technologyinformation technology

Focus on functional Focus on functional operationsoperations

Tending to be boundarylessTending to be boundaryless

Explosion of boundless Explosion of boundless applications of ITapplications of IT

Focus on processFocus on process

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Changes in Corporation

Explosive Explosive changes inchanges intechnologytechnology

FundamentalFundamentalchanges inchanges inhow peoplehow people

workwork

RE-INVENTION OF ENTERPRISE STRUCTURE

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Increase of Competitive Pressures

Changing Technology– Fast redesign of products– Growth of high-tech countries– Growth of cheap-labor countries (China,

India,..)– Increasing rate of change– Shorter windows for opportunities

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High-Speed Enterprise

FASTER PRODUCT DEVELOPMENT

Company Product Early 1990s Now

Honda Cars 5 years 2 years

Lucent Phones 2 years 6 months

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High-Speed Enterprise

FASTER PRODUCTION

GE Circuit 3 Weeks 3 daysbreaker boxes

Motorola Pagers 3 weeks 2 hours

Hewlett Electronic 4 weeks 5 days Packard Testers

Company Product Early 1990s Now

(from order to finished goods)

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Changes in Corporation

HIGHHIGHSPEEDSPEED

HIGHHIGHQUALITYQUALITY

LOWLOWCOSTCOST

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Giants of the 21st Century

East and Southwest Asia are the world’s fastest developing regions

Japan: The most developed country in the pacific rim

South Korea now is challenging leading industrialized nations with export of consumer products

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Success of the Giants

Major emphasis on ‘EDUCATION’– In the US 44% of Asian-Americans hold college

degrees– In Japan, 94% of students stay in schools beyond

the legal age– About one-third of Korean young population goes

on to universities

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Core Ideas of Quality

Customer FocusCustomer Focus

EmployeeEmployeeEmpowermentEmpowerment

Continuous Continuous ImprovementImprovement Use of Data for Use of Data for

Decision-MakingDecision-MakingQualityQuality

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What is TQM?

Total Quality Management is performance leadership in meeting customer requirements by doing the right things right the first time.

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The Quality Revolution More focus on quality approaches

– Deming, Juran, Crosby, and Hammer

TQM in the Gulf, including ISO 9000 TQM and the HR functions

– Establishing company’s goal, and satisfying business needs

– Concentration on employee’s satisfaction

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Pillars of the House of Total Quality

Customer satisfaction Continuous improvement Speaking with facts Respect for people Commitment

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Conditions for Excellence for Total Quality

TotalQuality

Requirements

Customer Orientation

Participation

Processes/ Procedures

Culture

Training Motivation

CustomerOrientation

Information Suppliers

Planning Communications Accountability

Human Resources Excellence

Product/Process Leadership

Management Leadership is the Foundation of Total Quality

Products/ Services

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HR’S New Role Traditionally, HR undertakes training and

developing employees to be managers/leaders in their respective disciplines.

The new TQMized HR has to train itself become a functional leader in the organization.

HR is poised now to provide functional leadership in attaining quality performance by the organization in delivering goods & services.

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TQM and HR

Development of human resources in the Gulf Organization

The need for a more pro-active HR function TQMizing the HR function

– Bringing quality for continuous improvements in HR activities

– Integrating TQM with HR and making HR responsible for all TQM activities

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TQM & HRM, A Natural Partnership

Compatible or common aspects for partnership between TQM and HRM are:– Creating corporate culture– Training and development– Company policies and functional procedures– Attainment of quality through personal– Continuous improvement in the company's products,

processes, procedures and services– Customer satisfaction through employee satisfaction.

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What does a company looksfor in its employees?

Emphasis on:- Team Player - Leadership Qualities

- Strong Communication - Result Oriented

- Take Ownership in Job

Principles and Values- To Act with Integrity - To be Fair

- To be Socially Responsible - To have fun

Employee must have at least a Masters' Degree in Business Administration with a minimum of 10 years experience.

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The Industrial Blast in Saudi Arabia

Tremendous focus on industrialization Dependence on foreign expertise Private sector is still saturated with non-

Saudi workforce The need for the development of the know-

how

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Industrial Scenario in KSA

1. Over 2,100 Factories; Production worth SR 30B +Export over SR 40B

2. No. of industries 2,000+; Total capital SR 120B. 1,300 industrial projects under study 350 projects implemented in 1992, joint ventures with foreign countries

3. Investment in basic industries in billions non-oil downstream industries SR 97B up to 1990

4. Chemical industries 320 factories, investment SR 60B building materials next @SR17B, absorbing 38,000 laborers (25% of total industrial labor)

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Quality Approach

Religion as a way of life Stimulate industrial diversification beyond oil Develop an advanced private market economy Focus on local industries Focus on education

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Failure of Quality Lack or ignorance of objectives No clear vision is established for the organization gap in the management hierarchy More focus on quick profit and less focus on services No policies and procedures exist No feedback on customer needs and requirements No feedback on customer satisfaction Cultural handicaps Limited competition among companies No understanding of quality (TQM or BPR)

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Implementation of TQM Creating a cultural base Commitment from top management Developing a philosophy for Quality Training Developing teamwork Open lines of communications

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Advanced Electronics CompanyA Successful Journey

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AEC VISION

“ It is AEC’s vision to becomethe regional industry leader for

Total Quality ElectronicProducts and Services.”

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Mission AEC is developing a comprehensive strategy

for the 21st century that defines its market– Challenging the organization to maintain an

environment of continuous process improvement– Providing increased company focus on meeting

customer requirements– Enhancing workforce knowledge and skills– Supplying high quality products and services– Creating Total Quality culture consistent with

AEC style of management

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Executive Steering Committee

• President & Chief Executive OfficerPresident & Chief Executive Officer• Chief Operating OfficerChief Operating Officer• Chief Financial OfficerChief Financial Officer• Sr. V.P., Prog. Magmt. & ContractsSr. V.P., Prog. Magmt. & Contracts• V.P. R & DV.P. R & D• V.P., TQM-HRV.P., TQM-HR

Develops the vision and mission Develops the vision and mission and identifies key customer and identifies key customer issues; monitors metrics and issues; monitors metrics and sets goals/objectives for AECsets goals/objectives for AEC

EXECUTIVESTEERING

COMMITTEE

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TQM Planning Council

TQM PLANNINGCOUNTIL

• Chief Operating OfficerChief Operating Officer• V.P., Research & DevelopmentV.P., Research & Development• V.P., Program Mgmt & ContractsV.P., Program Mgmt & Contracts• V.P., TQM-HRV.P., TQM-HR• Director, FacilitiesDirector, Facilities• Director, IMISDirector, IMIS• Director, Quality AssuranceDirector, Quality Assurance• Director, MaterialsDirector, Materials• Director, ContractsDirector, Contracts• Director, OperationsDirector, Operations• Director, HRDirector, HR

Develops the action plan for achieving Develops the action plan for achieving goals/objectives set by the Executive goals/objectives set by the Executive Steering Committee, for continues Steering Committee, for continues improvement; sponsors and recognizes improvement; sponsors and recognizes quality improvement achievements of quality improvement achievements of teams and individuals.teams and individuals.

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Total Quality Fitness Review

Yearly Evaluation Identifies strength and weak areas in

the organization. Take action for improvement

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Quality Improvement Teams

1. Procedures Improvement2. Productivity Improvement3. Vendor Payment Cycle Improvement4. Motivation Improvement5. SPC - reduction of defects to the assembly

of Radios6. Career Development Procedure

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Quality Recognition

• Certified to Mil-I-45208, Mil-Std-45662, Mil-Std-20000A, Mil-Std-1686

• Certified to ISO 90001

• Obtained highest quality rating from leading international companies, examples:

- Boeing: “Gold” Supplier

- Lucent Technologies: Grade “A” Supplier

- Lockheed Martin: “Star” Supplier

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Transition to Total Quality

Is a culture change Is a continuous process and will not occur

overnight Requires time and resources Requires involvement, persistence and

dedication from all of us

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Are We Ready for the Change? The world is going through fierce changes and

advances in technology We must prepare not just the resources of

technology, but provide the appropriate culture of the changes

Our dependence on industry will be a challenge The new generation must be ready for the 21st

century

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New Concepts of Education and Management

Increased knowledge of science and mathematics will be required to provide a scientific talented population

The university of the future must focus on more hands-on and practical experience

The gap between the university and the industry must be bridged

More focus on English training must be done to allow students to be more prepared for the challenges in the future

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Conclusion

Challenges of the 21st century Expectations of the coming generation of

workers Challenges for the Gulf organizations Focus on quality for survival Focus on HR leadership for TQM

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Thank YouThank You