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CHAPTER – I

INTRODUCTION

Quality management is the main focus of several organizations in the globalized era.

National and institutional systems for evaluation, assessment, accreditation and audit are now

routine aspects in the majority of European countries. However, this does not mean that

quality work and quality improvement are integrated parts of the sector. Available evidence

rather suggests that while systems, procedures and rules are being laid down, creating much

data, many reports and much attention, there is still a lack of active involvement of Staff and

Management in these processes. While quality culture has a taken-for-granted meaning

attached to it, it is not really helpful to those who want to improve the link between quality

work and the fundamental processes of teaching and learning. The problem related to a poor

understanding of the concept of quality culture is that it opens up for processes more

dominated by belief, faith and ideology than processes more characterised by knowledge,

analyses and empirical studies of the elements that are important for a better description and

understanding of such a culture.

A brief history of culture

Culture, as stated by Williams (1958), ‘is one of the two or three most complicated

words in English language’. The complications arise because the concept has evolved

differently in different European languages and in different disciplines. The word is derived

from the Latin ‘colere’, which had various meanings, including cultivate, protect, inhabit and

honour with worship. Some of these meanings dropped away although they remain linked

through derived nouns such as cult, for honour with worship and colony for inhabit. The

Latin noun ‘cultura’ evolved and its main meaning was cultivation in the sense of husbandry.

Much later, after it passed into English early in 15th century it also meant “cultivation of the

mind”.

So culture moved away from the notion of husbandry, although never abandoning it:

the culture in which laboratory specimens are grown and, of course, attempts to create or

grow a culture [of quality]. Culture, in the sense of a system of shared beliefs, values,

customs, behaviours, and artifacts, developed along three lines. First, culture is used as an

abstract noun implying civilised. Second, culture implies artistic culture, which was initially

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‘high’ culture but has also developed to mean any form of artistic endeavour, including the

subset of ‘popular culture’. This artistic construction, at its broadest, refers to all aspects of

human achievement that are recorded in some kind of documentary form, including, painting,

sculpture, literature, film, photographs and video. Third is the notion of diverse cultures

(including subcultures), which linked culture firmly with a way of life. This democratic view

includes everything that is part of a society or indicative of a class or other group. Thus,

culture, in this version, is closely associated with the idea of society.

This third, democratic, view is, furthermore, conducive to a cultural relativist

perspective. The core thesis of cultural relativism is that there are no absolute standards of

human cognition. Different cultures have different standards. The implication of this is that

social, political, ethical or indeed any cultural phenomena should be considered against the

prevailing standards of the particular culture in which they occur. Similarly, no judgments can

be made that the institutions of one culture are superior or inferior to those of another culture.

Cultural relativism denies the legitimacy of cross-cultural evaluations. Indeed, knowledge,

notions of truth and moral imperatives are relative to cultures and subcultures

Shift from Culture to Quality

Interest in and analysis of cultural theory continued with studies in the 1980s further

exploring the critical reaction to the dominant position of rational theories of the 1970’s. In

essence, those advocating a cultural perspective for understanding social and organisational

behaviour reacted against the functionalist neglect of how rationalist meaning is constructed

in modern societies. During the 1980s, those advocating the cultural approach to

organisations could be divided into two basic camps. On the one side, those seeing culture as

something an organisation has, i.e. culture as a potentially identifiable and manipulative

factor, and those seeing culture as something an organisation is, i.e. culture as an integrated

product of social interaction and organisational life that is impossible to differentiate from

other factors. In the latter version, culture has been viewed as an integrated dimension of

(most often) sociological and anthropological research into social behaviour. In the former

version, it emphasised as the new organisational instrument by reformers, consultants and

management gurus; sometimes because they simply had ‘run out of specifics’. Culture

became an umbrella term for all possible intangible factors in organisational life.

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During the 1980s, it was this perspective that dominated business and industry and

received considerable attention in private companies. The emerging interest in quality during

the 1980s can be related to this perspective. The success of Japanese business after World-

War II has been related by a number of authors to cultural factors and how these positively

affect organizations and organizational behaviour. One of the central ideas of the quality

movement, continuous improvement or kaizen, is very much intertwined with what

management gurus wrote about culture at that time. Hence, rather than understanding culture

and quality as independent entities, it is important to understand that quality actually stems

from a broader cultural perspective.

Partly as a result of the also emergent emphasis on new public management where

structures, responsibility, decentralisation and de-regulation became core factors of interest,

and partly as a result of much more complexity in the field of cultural studies, in the 1990s

there was less interest in culture as a dominant independent factor for understanding

organisational behaviour. Due to this increasing complexity, the dichotomy between

perspectives of organisations as either having or being culture became less relevant for

understanding the scholarly development of the field. As such, one could argue that it was the

interpretative perspective of culture that dominated the 1990s. Hence, studies in

organisational symbolism and organisational identities received considerable attention and

led to the establishment of new arenas for more interdisciplinary approaches into

organisational culture where the distinction between the two categories (having or being)

became increasingly blurred.

However, it is important to note that the interest in culture as an instrument for

improving organisational performance is still a dominant theme in much of the available

management literature. ‘Value-based management’ and similar concepts are currently highly

recommended readings in the business sphere providing advice for how managers can change

their organisation from one that is locked in tradition to one that is flexible enough to respond

positively to constant change. In essence, the emergent message is that an emphasis on values

and norms in an organisation is easily combined with the aim of securing the interest of

shareholders in making a profit. Whether these and similar concepts are as novel as claimed

is another question. There are a number of similarities between older and newer management

concepts, although the labels under which they are presented may have changed. Hence, the

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interest in culture as something manipulative, ‘designed’ and something that can be imposed

on an organisation is still a dominant perspective.

Historical Perspective of Quality

Quality initiatives began to develop in the early 1930s. Walter Shewhart made a

significant contribution to the philosophy of quality improvement with his book “Economic

Control of Quality of Manufactured Products”. Shewhart with a stroke of a pen developed the

control chart, which relied on probability and statistical theory to define common-cause and

special-cause variation of manufactured products. Shewhart’s work provided the statistical

basis for many quality improvement initiatives of the 20th century.

Shewhart’s quality improvement philosophy represented a significant departure from

the Scientific Management manufacturing philosophy of the 1930s and earlier. Even though

Shewhart’s views were being practiced within Bell Laboratories, most manufacturers of this

era adopted the ideas and concepts of Scientific Management promoted by Frederick Taylor.

Taylor is associated with the extreme division of labor and with using time and motion

studies to turn people into mindless automatons (Hayes, 1988). Many feel that Taylorism led

to the birth of managers and collective bargaining. Scientific Management had four basic

principles:

o Find the most efficient way to do a job

o Match people to tasks

o Supervise, reward and punish and

o Use staff to plan and control

Controlling and reducing variation in manufacturing reduces defective products and

rework. Shewhart’s philosophy as related to the control chart identifies and quantifies process

and product variation. By collecting time ordered data the process can be constantly

monitored. The Shewhart control chart defines variation as being either common-cause

variation (natural system variation) or special-cause variation. Shewhart defined common-

cause variation as variation that is inherent to the manufacturing system. Common-cause

variation is caused by day-to-day machinery variation, operator-to-operator variation,

supplier variation. Shewhart defined special-cause variation as variation that occurs from an

event in the manufacturing process. The event may be due to downtime, start-up, a new

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supplier, motor-stop, tool-wear. Shewhart observed that variation due to common-causes

exhibited a symmetric or normal distribution whereas variation due to special-causes goes

beyond natural variation and does not follow typical statistical laws

Even though W.E. Deming studied under W.A. Shewhart and was shunned by the U.S.

automotive industry in the 1950s, he is considered by many to be the father of the “American

Quality Revolution.” In America, Deming became well known in 1984 after a prime-time

NBC television broadcast titled, “If Japan can, Why can’t we?” The television broadcast

highlighted Japan’s international business success in the 1970s and 1980s against the

backdrop of a struggling U.S. economy and a U.S. automotive industry that was closing

plants due to a loss of 25% market share due to Japanese competition.. The television

broadcast highlighted Deming’s work with the Japanese in the 1950s and 1960s and many

feel the television broadcast was the start of the American Quality Revolution of the 1980.

Deming emphasized the importance of statistical thinking in the continuous

improvement of processes. He felt that Statistical Process Control (SPC) and Shewhart’s

Plan-Do-Check-Act (PDCA) cycle were important tools to understanding sources of

variability and improving processes. The continuous improvement philosophies of Deming

were best communicated in his Fourteen Points for Management. His Fourteen Points served

as a framework for quality and productivity improvement. Deming’s fourteen points were:

1. Create constancy of purpose toward improvement of product and service, with the

aim to become competitive and to stay in business, and to provide jobs.

2. Adopt the new philosophy. We are in a new economic age. Western management

must awaken to the challenge, must learn their responsibilities, and take on

leadership for change.

3. Cease dependence on inspection to achieve quality. Eliminate the need for

inspection on a mass basis by building quality into the product in the first place.

4. End the practice of awarding business on the basis of price tag. Instead, minimize

total cost. Move toward a single supplier for any one item, on a long-term

relationship of loyalty and trust.

5. Improve constantly and forever the system of production and service, to improve

quality and productivity, and thus constantly decrease costs.

6. Institute training on the job.

7. Drive out fear, so that everyone may work effectively for the company

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8. Institute leadership. The aim of supervision should be to help people and machines

and gadgets to do a better job. Supervision of management is in need of overhaul,

as well as supervision of production workers.

9. Institute a vigorous programme of education and self-improvement.

10. Break down barriers between departments. People in research, design, sales, and

production must work as a team, to foresee problems of production in use that

may be encountered with product or service.

11. Eliminate slogans, exhortations, and targets for the work force asking for zero

defects and new levels of productivity. Such exhortations only create adversarial

relationships, as the bulk of the causes of low quality and low productivity belong

to the system and thus lie beyond the power of the work force.

o Eliminate work standards (quotas) on the factory floor. Substitute leadership.

o Eliminate management by objective. Eliminate management by numbers,

numerical goals.

12. Remove barriers that rob the hourly worker of his right to pride of workmanship.

The responsibility of supervisors must be changed from sheer numbers to quality.

13. Remove barriers that rob people in management and in engineering of their right

to pride of workmanship. This means abolishment of the annual or merit rating

and of management by objective.

14. Put everybody in the company to work to accomplish transformation.

Transformation is everybody's job.

Deming believed that one of the “great evils” of American management was to

produce products or services to a “quality standard” or an “acceptable-level” of quality. He

felt that “quality standards” did not promote continuous improvement. He believed that

“quality standards” produced numerical quotas, which were often met “on paper” in the

quarterly report but rarely could be verified on the plant floor.

Deming stressed the importance of constantly trying to improve product design and

performance through research, development, testing, and innovation. He also emphasized that

production and service systems should be continuously improved. He was emphatic about the

idea that quality was not some minor function to be handled by inspectors, but a company’s

central purpose and a top priority of executive management. Deming felt that employees

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would not consider quality an important issue if there was no support from and

communication with the executive management level within an organization

Deming understood the reason for Japan’s success. He was quoted as saying

“Hundreds of Japanese engineers learned the methods of Walter A. Shewhart. Quality became

at once in 1950, and ever after, everybody’s job, company wide and nation wide”. Deming

was also well known for his philosophy that reductions in variation lead to reductions in costs

and improved productivity. Deming stressed the importance of constantly trying to improve

product design and performance through research, development, testing, and innovation. He

also emphasized that production and service systems should be continuously improved. He

was emphatic about the idea that quality was not some minor function to be handled by

inspectors, but a company’s central purpose and a top priority of executive management.

Deming deemed that “quality is achieved through the never-ending improvement of

the process, for which management is responsible”. Deming defined three quality categories:

(1) Quality of design / redesign: Quality of design is based on consumer research,

sales analysis, and service call analysis and leads to the determination of a

prototype that meets the consumer’s needs.

(2) Quality of conformance: In considering consumers’ needs, the critical aspect is

that firms look years ahead to determine what will help customers in the future.

Next, specifications are constructed for the prototype and disseminated throughout

the firm and back to the suppliers, i.e., “Quality of Conformance.”

(3) Quality of performance: “Quality of performance” is the determination through

research and sales/service call analysis of how a firm’s products or services are

actually performing in the marketplace. “Quality of performance” leads to

“quality of redesign,” and so the cycle of the never-ending improvement

continues.

Deming was a firm believer in Walter A. Shewhart’s teachings of the “Control Chart.”

The understanding of common-cause and special-cause variation was a critical element of

Deming’s philosophies. Deming was quoted, “Management must realize that unless a change

is made in the system (which only management can make), the system’s process capability

will remain the same. This capability will include the common-cause variation that is inherent

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in any system. Workers should not be penalized for common cause variation; it is beyond

their control”. Such things as poor-lighting, lack of training, or poor product design lead to

common-cause variation. New materials, a broken die, or a new operator could cause special-

cause variation. Workers can become involved in creating and utilizing statistical methods so

that common and special-cause variation can be differentiated and process improvements can

be implemented. Since variation produces more defective and less uniform products, the

crucial understanding is that managers know how to reduce and control variation.

Understanding and controlling variation can lead to the total achievement of quality.

Managers must understand that there is no easy way to change the current situation.

There can be no quick results because what is needed is a continuing cycle of improved

methods of manufacturing, testing, consumer research, product redesign. This view extends

to include the company’s vendors, customers, and investors. All must play a role in the

continuing improvement of quality. Deming made great contributions to the quality

movement through his work in statistical thinking and management philosophies. His work in

statistics provided a way to analyze data for the purpose of improving and controlling

processes. His idea was to reduce variation in the process by identifying possible sources of

variation by using the statistical tools available. Once improvements were made to the

process, the PDCA cycle was again reinitiated to promote continuous improvement.

Definitions of Quality:

Basing on the type of approach the quality has seven major definitions:

Approach: Transcendent

“Quality is neither mind nor matter, but a third entity independent of the two men.

Even though Quality cannot be defined, you know what it is”

Approach: Product Based

“Quality refers to the amounts of the un priced attributes contained in each unit of the

priced attribute”

Approach: User Based

“Quality is fitness for use”

“Quality consists of the capacity to satisfy wants”

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Approach: Production Based

“Quality means conformance to requirements”

Approach: Value Based

“Quality means best for certain conditions… (a) the actual use and (b) the selling

price”

Approach: System Based

“Quality is system of means to economically produce goods or services which satisfy

customer requirements”

Approach: Cultural

“Quality means that the organization’s culture is defined by and supports the constant

attainment of customer satisfaction through an integrated system of tools, techniques

and training”

TABLE – 1.1: SUMMARY OF COMMONLY IDENTIFIED CHANGE AGENTS THAT

CONTRIBUTE TOWARDS THE DEVELOPMENT OF A QUALITY CUL TURE

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Vouzas (2007) asserts that as organizations begin to engage in quality improvements,

they usually do not allow for sufficient staff contributions. Research also shows, that the

stronger the individual linkage to the objectives of an organization, the more successful the

organization is overall. The relationship between individuals and the organization’s success

places great emphasis on selecting the best process improvement methodology. Today those

options range from Total Quality Management and ISO 9000:2000 to Lean and Six Sigma.

Process Improvement Method

Total Quality Management (TQM):

Total Quality Management (TQM) is the aspect of the function of an organization,

which determines and implements the quality policy, congruent with total quality concept. It

is a comprehensive and fundamental rule or belief, for leading and operating an organization,

aimed at continually improving performance over the long term by focusing on customers

while addressing the needs of all other stakeholders. TQM focuses not only on the output but

also on the entire process. It aims at delivering the output that meets the customer’s

expectations.

Total Quality approach creates an environment where people start taking a closer look

at the process and identify where and why thing are going wrong and what could be done to

improve them. The major strength of this approach lies in the fact that people actually

involved in the process work together, cutting across the traditional sectional and

departmental barriers, to find solutions in the overall interest of the organization.

Improvement of process reduces rework, waste of manpower, machine time and materials and

thus increases output with less effort and less cost. In fact “Better Quality” leads to “Higher

Productivity” and “Less Cost”.

TQM helps organizations to focus clearly on the needs of the market. It keeps the

company in the improvement mode. It aims at achieving excellent performance in all the

areas and improving the organizational productivity. It also helps in bringing out the best in

all employees.

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TQM is a systems approach to management that aims to enhance value to customer by

designing and continually improving organizational processes and systems. It provides a new

vision for management leadership. It places customers as principal focal point and redefines

quality as customer satisfaction. TQM relies on fact-based decision-making. TQM is a broad-

based approach used by world class companies to achieve organizational excellence, the

highest weighted category of all the quality and excellence awards. Most of the researchers

agree that TQM is a useful philosophy for management if properly planned and implemented

(Flynn and Saladin, 2006). It has been proposed that if TQM is used properly and fully

integrated into the business, this approach will help any organization deliver its goals, targets

and strategy. According to Lundquist (1995), TQM implementation is based on three core

elements:

o The TQM philosophy that comprises a set of TQM principles;

o The organizational culture - the present and desired state of culture that will be

reached when the TQM philosophy is realized; and

o The implementation strategy - the approach to realizing the philosophy that will

specifically include the activities to identify and offset TQM implementation

barriers.

Different organizations use different methodologies, approaches and tools for

implementing quality management and programmes for continuous quality improvement. The

programme is likely to have a different name or label, such as Total Quality Management

(TQM), Six Sigma, Business Process Re-engineering (BPR), Operational Excellence or

Business Excellence. Regardless of the methodology, approach, tool or the name of the

continuous improvement programmes, each organization will certainly need to use a proper

selection and combination of different approaches, tools and techniques in its implementation

process. Most of these tools, approaches and techniques are used worldwide and simple to

understand and can be used by a large number of people of the company (e.g. PDCA cycle or

Deming's circle). However, some techniques in this area are more complex and demanding

(e.g. Six Sigma, Lean Sigma, Design for Six Sigma or EFQM excellence model). Specialists

for specific problem-solving applications and implementation use these advanced techniques

and methodologies. It is very important that tools, approaches and techniques should be

selected for the appropriate team and applied correctly to the appropriate process. The

successful implementation of approaches, tools and techniques depends on their

understanding, knowledge and proper application in organizational processes.

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TQM is a revolutionary management philosophy that requires radical and pervasive

change within the firm. The strength of TQM lies in successfully combining the scientific

/system-oriented school of management with that of the human behaviour/social system

school of management. It relies on systems, but unlike the scientific school of management, it

does not assume that people will fit into system. Therefore, in designing structures and

systems, human emotions and needs are taken into account. The human behaviour/social

system school of management unlike the scientific school is based on the premise that

employees are essentially honourable; therefore, correction is replaced by cooperation.

Employees are allowed to take initiative and participate in the decision-making processes

directly relevant to them and as such deviation from tightly defined rules does not result in

sanction provided that there is no transgression against the organisational values. The

organisation is viewed as a system of cultural interrelationships rather than a series of tasks,

procedures and rules.

Because quality means both producing products to specifications and meeting

customer’s expectations, the needs of customers becomes a key input to TQM. A review of

the literature also shows that, according to some authors, TQM is rather than a mere set of

factors, a network of interdependent components, a management system consisting of critical

factors, techniques and tools.

The TQM approach is characterized by an orientation towards quality which helps to

prevent problems and to produce continuous improvement of the existing situation. This

attention should permeate all levels of the company right from the top management down and

all company functions. Many organizations have difficulties with measuring TQM progress,

which is one of the reasons for the failure of attempts to introduce TQM. There is support for

conducting a cultural assessment before implementing TQM or similar initiatives in order to

identify possible barriers and to assist in designing the implementation programme.

TQM can be studied from three different approaches: contributions from quality

leaders, formal evaluation models and empirical research. Taking the initial research as a

basis, the critical factors of TQM found in the literature vary from one author to another,

although there is a common core, formed by the following requirements: customer focus,

leadership, quality planning, management based on facts, continuous improvement, human

resource management (involvement of all members, training, work teams and communication

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systems), learning, process management, cooperation with suppliers and organizational

awareness and concern for the social and environmental context.

A company’s success in the long term depends on how effectively it satisfies its

customers’ needs on a constant basis. Therefore, TQM’s success is determined by how

willing the organization is to change and whether it uses customer satisfaction as a measure in

assessing the success of its decisions and actions

Imperatives of TQM

o Management Leadership: It communicates clearly its vision for the organization.

It plans suitably for the actions to convert the vision into reality. It deliberately

develops a new culture and it encourages participation.

o Product, Process and System Excellence: Listening to the voice of the customer

and developing suitable processes having suitable procedures and systems.

o Human Resources Excellence: It talks about the continuous training and

education, participation of every individual in the improvement effort of the

organization. It aims at eliminating the fear of failure. Linking up every

individual’s role to organizational goal.

o Customer Orientation: Satisfying the needs of both Internal and External

customers.

o Continual Improvement: To be ahead of customer’s requirement and the

competitors.

TQM helps Organizations to:- focus clearly on the needs of their market; achieve

excellent performance in all areas, not just in product or service quality; build superior

quality and reduce waste, improve organizational productivity to keep the company in

improvement mode. Develop an effective strategy and team approach to problem solving. It

helps in bringing out the best in all employees.

Lean:

Among the several quality management concepts that have been developed, the lean

concept, as in lean manufacturing, lean production. is one of the more wide-spread and

successful attempts. Briefly, lean is about controlling the resources in accordance with the

customers’ needs and to reduce unnecessary waste (including the waste of time). The concept

was introduced at a larger scale by Toyota in the 1950’s.

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While there are many formal definitions of the lean concept, it is generally understood

to represent a systematic approach to identifying and eliminating elements not adding value

to the process. Consequences of this are striving for perfection and a customer-driven pull of

the process. Thus, the definition of NIST is relevant:

A systematic approach to identifying and eliminating waste through continuous

improvement, flowing the product at the pull of the customer in pursuit of perfection

(NIST, 2000).

Methodologies and Tools:

Lean principles are fundamentally customer value driven, which makes them

appropriate for many manufacturing and distribution situations. Five basic principles of lean

manufacturing are generally acknowledged:

o Understanding customer value. Only what the customers perceive as value is

important.

o Value stream analysis. Having understood the value for the customers, the next

step is to analyse the business processes to determine which ones actually add

value. If an action does not add value, it should be modified or eliminated from

the process.

o Flow: Focus on organising a continuous flow through the production or supply

chain rather than moving commodities in large batches.

o Pull: Demand chain management prevents from producing commodities to stock,

i.e. customer demand pulls finished products through the system. No work is

carried out unless the result of it is required downstream.

o Perfection: The elimination of non-value-adding elements (waste) is a process of

continuous improvement. “There is no end to reducing time, cost, space, mistakes,

and effort” (McCurry and McIvor, 2001).

Lean principles do not always apply, however, when customer demand is unstable and

unpredictable. The main elements contributing to the elimination of non-value-added

activities are the following: excess production, excess processing, delays, transport,

inventory, defects and movement. A variety of approaches are available for reducing or

eliminating waste. These approaches include value stream analysis, total productive

maintenance, Kaizen costing and cost analysis, engineering and change management, and

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document management. Tools used include Kanban cards for pull through the supply chain

and the closely related JIT system for inventory reduction.

Seven wastes in Lean:

The 7 Wastes (also referred to as Muda) in Lean are:

o Overproduction

o Correction (defects, rework)

o Inventory

o Motion

o Over-processing

o Transportation

o Waiting

The underutilization of talent and skills is sometimes called the 8th waste in Lean.

Waste 1: Overproduction is producing more than the next step needs or more than the

customer buys. Waste of Overproduction relates to the excessive accumulation of work-in-

process (WIP) or finished goods inventory. It may be the worst form of waste because it

contributes to all the others. Examples are:

o Preparing extra reports

o Reports not acted upon or even read

o Multiple copies in data storage

o Over-ordering materials

Waste 2: Correction or defects are as obvious as they sound. Waste of Correction includes the

waste of handling and fixing mistakes. This is common in both manufacturing and

transactional settings. Examples are:

o Incorrect data entry

o Paying the wrong vendor

o Misspelled words in communications

o Making bad product or materials or labour discarded during production

Waste 3: Inventory is the liability of materials that are bought, invested in and not

immediately sold or used. Waste of Inventory is identical to overproduction except that it

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refers to the waste of acquiring raw material before the exact moment that it is needed.

Examples are:

o Transactions not processed

o Bigger “in box” than “out box”

o Over-stocking raw materials

Waste 4: Motion is the unnecessary movement of people and equipment. This includes

looking for things like documents or parts as well as movement that is straining. Waste of

Motion examines how people move to ensure that value is added. Examples are:

o Extra steps

o Extra data entry

o Having to search for something for approval

Waste 5: Over processing relates to tasks, activities and materials that don’t add value. Can

be caused by poor product or process design as well as from not understanding what the

customer wants. Waste of Over-processing relates to over-processing anything that may not

be adding value in the eyes of the customer. Examples are:

o Sign-offs

o Reports that contain more information than the customer wants or needs

o Communications, reports, emails, contracts that contain more than the necessary

points (concise is better)

o Voice mails that are too long

o Duplication of effort/reports

Waste 6: Transportation is the unnecessary movement of material and information. Steps in a

process should be located close to each other so that movement is minimized. Examples are:

o Extra steps in the process

o Moving paper from place to place

o Forwarding emails to one another

Waste 7: Waiting is non-productive time due to lack of material, people, or equipment. This

can be due to slow or broken machines, material not arriving on time. Waste of Waiting is the

cost of an idle resource. Examples are:

o Processing once each month instead of as the work comes in

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o Waiting on part of customer or employee for a service input

o Delayed work due to lack of communication from another internal group

Effects: There are many reasons to introduce lean techniques in an organisation, it may

contribute substantially to cutting costs and providing competitive advantages. Lean benefits

include reduced work-in-process, increased inventory turns, increased capacity, cycle-time

reduction and improved customer satisfaction. According to a survey, see NIST (2003), of 40

companies that had adopted lean manufacturing, typical improvements are visible in three

areas. These improvement areas include: operational improvements (reduction of lead time,

increase in productivity, reduction in work-in-process inventory), administrative

improvements (reduction in order processing errors, streamlining of customer service

functions so that customers are no longer placed on hold) and strategic improvements

(reduced costs).

Criticism :

Despite the several success stories associated with the lean concept, it has some

shortcomings. Examples of shortcomings which can be found in the literature on the subject

are the following:

The lean organisation may become very susceptible to the impact of changes. The

leanness in itself leads to reduced flexibility and less ability to react to new conditions and

circumstances.

JIT deliveries cause congestion in the supply chain, leading to delays, pollution,

shortage of workers.

To summarise, lean requires a stable platform, where scale efficiency can be

maximised. Highly dynamic conditions cannot be dealt with, as there is no room for

flexibility due to the focus on perfection, which is always a function of particular market

conditions at a certain period of time.

Poka-Yoke:

Poka-yoke is a structured methodology for mistake-proofing operations. It is any

device or mechanism that either prevents a mistake from being made or ensures that the

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mistakes don’t get translated into errors that the customers see or experience. The goal of

poka-yoke is both prevention and detection: “errors will not turn into defects if feedback and

action take place at the error stage.” (Shigeo Shingo, industrial engineer at Toyota. He is

credited with starting “Zero Quality Control”). The best operation is one that both produces

and inspects at the same time.

There are three approaches to Poka-Yoke:

o Warning (let the user know that there is a potential problem – like door ajar

warning in a car)

o Auto-correction (automatically change the process if there is a problem – like turn

on windshield wipers in case of rain in some advanced cars)

o Shutdown (close down the process so it does not cause damage – like deny access

to ATM machines if password entered is wrong 3 times in a row)

Kaizen:

Kaizen is a Japanese word that means to break apart to change or modify (Kai) to

make things better (Zen). Kaizen is used to make small continuous improvements in the

workplace to reduce cost, improve quality and delivery. It is particularly suitable when the

solution is simple and can be obtained using a team based approach. Kaizen assembles small

cross functional teams aimed at improving a process or problem in a specific area. It is

usually a focused 3-5 day event that relies on implementing “quick” and “do-it-now” type

solutions. Kaizen focuses on eliminating the wastes in a process so that processes only add

value to the customer. Some of the 7 wastes targeted by Kaizen teams are:

o Waiting / Idle Time / Search time (look for items, wait for elements or instructions

to be delivered)

o Correction (defects / rework & scrap - doing the same job more than once)

o Transportation (excess movement of material or information)

o Over-production (building more than required)

o Over-processing (processing more than what is required or sufficient)

o Excess Motion (excess human movements at workplace)

o Storage/warehousing (excess inventory)

The benefits of doing Kaizen are less direct or indirect labour requirements, less space

requirements, increased flexibility, increased quality, increased responsiveness, and increased

employee enthusiasm.

34

ISO 9001: 2000:

International Organization for Standardization (ISO) was established in 1947. It has

its headquarters at Geneva, Switzerland. It is an International Organization with National

Standards bodies from 120 countries as its members. Its primary aim is to facilitate

international trade by providing a single set of standards that people everywhere would

recognize and respect. ISO 9000 series of standards were first published by International

Organization for Standardization (ISO) in 1987 revised them in 1994 and republished an

updated version in 2000. These new standards are referred as to, “ISO 9001:2000” standards.

ISO published its quality system standards in 1987 and within a few years these

standards caught the imagination of industry world over. Even though these standards were

developed for manufacturing industry, seeing its success, service industries also started using

these standards by adopting the requirements of standard to suit their business.

As per rules of ISO, all standards are to be reviewed every 5 years. The very first

revision of standards took place in the year 1994. However, because of inadequate experience

in usage of these standards, 94 revisions of standards were limited in character. Basic

structure of the standards was retained and the revision was mainly aimed to bring greater

clarity in requirements for ease of implementation.

ISO 9000 standards have been used by hundreds of thousands of companies of

different types and sizes during the last decade. ISO 9001:2000 marks a complete departure

from earlier standard. It has been developed in the light of experiences gained during its

application for over 10 years and taking into account needs of users of the standards and other

stakeholders.

Quality Management Principles:

ISO standard is based on 8 universally accepted quality management principles,

which is synthesis of philosophy of quality gurus. These 8 quality management principles

have been defined in ISO 9001:2000, which serves as the framework of new set of standards

on quality management.

1. Customer focused Organization: Organization depends on their customer and

therefore should understand current and future customer needs, should meet

35

customer needs, should meet customer requirements and strive to exceed customer

expectations.

2. Leadership: Leaders establish unity of purpose and direction of organization.

They should create and maintain the internal environment in which people can

become fully involved in achieving the organizations objectives.

3. Involvement of people: People at all levels are essence of an organization and

their full involvement enables their abilities to be used for the organizations

benefit.

4. Process Orientation: A desired is achieved more efficiently when activities and

related resources are managed as a process.

5. System approach to management: Identifying, understanding and managing

inter-related processes as a system contributes to the organizations’ effectiveness

and efficiency in achieving its objectives.

6. Continual Improvement: Continual improvement of the organizations’ overall

performance should be a permanent objective of the organization.

7. Factual approach to decision making: Effective decisions are based on the

analysis of data and information. Making decisions and taking action based on

actual analysis, balanced with experience and intuition.

8. Mutually beneficial supplier relationship: An organization and its suppliers are

inter-dependent and a mutually beneficial relationship enhances the ability of both

to create value.

ISO has a totally new structure, which no longer uses twenty-element structure of

earlier standard. It follows a process approach, which is closer to the way most businesses

operate.

The new version of the ISO 9000 standards came with new ideas in the company

quality approach. It is already known that the process approach, continuous quality

improvement, and customer focus are the major new specific demands required by ISO

9000:2000. These demands correspond perfectly to the philosophy of another very well-

known quality focus method: the Lean Six Sigma method.

Lean Six Sigma Method:

36

Lean Six Sigma is an approach focused on improving quality, reducing variation and

eliminating waste in an organization. It is based on the concept of combining two

improvement programmes, Six Sigma and Lean Enterprise. Six Sigma is both a quality

management philosophy and a methodology that focuses on reducing variation, measuring

defects and improving the quality of products, processes and services. The concept of Six

Sigma was developed in the early 1980s at Motorola Corporation. Six Sigma was popularized

in the late 1990s by General Electric Corporation and their former CEO Jack Welch. Lean

Enterprise is a methodology that focuses on reducing cycle time and waste in processes. Lean

Enterprise originated from the Toyota Motor Corporation as the Toyota Production System

and increased in popularity after the 1973 energy crisis. The term ‘Lean Thinking’ was coined

by James P. Womack and Daniel T. Jones in their book, Lean Thinking (Womack & Jones,

1996). The Financial Times (Oct. 10, 1997) defines the Six Sigma initiative as "a programme

aimed at the near- elimination of defects from every product, process and transaction. The

term ‘Lean Enterprise’ is used to broaden the scope of a Lean programme from

manufacturing to embrace the enterprise or entire organization (Alukal, 2003).

More important than the technical definition is the concept of Six Sigma as a

disciplined, quantitative approach for improvement-based on defined metrics-in

manufacturing, service, or financial processes. This drives the process of selecting projects

based on their potential to improve performance metrics, and identifying and training the

right people to get the business results. Six Sigma uses the DMAIC problem solving

approach, and a wide array of quality problem solving tools. The use of the tools varies based

on the type of process studied and the problems that are encountered. There are many tools in

the Lean tool set that help to eliminate waste, organize, and simplify the work processes.

Lean Six Sigma Applications in Private Industry

The concept of combining Lean Manufacturing and Six Sigma principles began in the

middle to late 1990s, and quickly took hold. There are many examples of manufacturing

companies implementing a combined effort of Lean and Six Sigma. An early example,

starting in 1997, was by an aircraft-engine-controls firm, BAE Systems Controls, in Fort

Wayne, Indiana. They blended Lean-manufacturing principles with Six Sigma quality tools.

Another early innovator combining Lean and Six Sigma was Maytag Corporation. It

implemented Lean Sigma in 1999. They designed a new production line using the concepts of

Lean and Six Sigma. Lean Six Sigma has been implemented at Northrop Grumman, an

37

Aerospace Company. They had already begun to implement Lean Thinking when they

embarked upon their Six Sigma programme. They integrated the Workout events (a problem-

solving process developed at GE) with the Lean Thinking methods and Kaizen events.

Lockheed Martin Aeronautical Systems reduced costs, improved competitiveness, customer

satisfaction and the first-time quality of all its manufactured goods. They had separate Lean

and Six Sigma projects, depending on the objective of the project and the problem that

needed to be solved.

Lean Six Sigma Applications in the Public Sector

The majority of the applications of Lean Six Sigma in the literature have been in the

private sector, mostly in the manufacturing industry and typically in larger companies. Many

experts in Lean and Six Sigma suggest that the tools can be used in non-manufacturing

settings including: software development, service industries such as customer service call

centers, education, in administrative functions such as accounting and order processing,

material procurement, and new product development.

From a review of the literature, there was no evidence found of local governmental

entities using a combined approach of Lean Enterprise and Six Sigma. There are some

examples of local governmental entities applying Six Sigma principles and tools. An example

of a city government applying Six Sigma principles to improve customer service and increase

the effectiveness of their services is the City of Fort Wayne, Indiana.

The City of Coral Springs, Florida won the Florida Governor’s Sterling Award in

1997 and again in 2003, being the first repeat winner of the award. The Florida Governor’s

Sterling Award is based on the Malcolm Baldrige criteria of leadership, strategic planning,

customer and market focus, information and analysis, human resource focus, process

management and business results. The Malcolm Baldrige criteria are nationally recognized as

standards of organizational excellence. The City of Kingsport Tennessee received a Good

Works Initiative grant from the American Society for Quality (ASQ). The goal of the Good

Works Initiative is to transfer Quality knowledge to not-for-profit, community-based

organizations. A grant was provided to the City of Kingsport to reduce costs and improve the

service reliability of trash collection.

Although the literature does not provide cases of Lean Six Sigma programmes in local

governments, there is evidence in the literature of applications of quality principles and tools

38

in the public sector. Boyne &Walker (2002) studied how TQM was used in private and public

organizations and whether TQM helped to improve performance in these organizations.

A study by Hellein and Bowman investigated the impact of the implementation of

quality management in four Florida state government agencies. Although only four agencies

were studied, the research demonstrated that even though it may be difficult to deploy quality

management in public organizations, it is possible.

A study in the UK investigated the use of quality management in the public sector and

in the private service sector. Quality management efforts in the public sector in the UK

appear to be widespread within the public organizations that they surveyed.

There are a few long-term examples in the literature of mature quality programmes

and the application of quality principles and tools in the governmental sector. Surveys

indicate that large numbers of agencies at all levels of government have adopted quality

programmes, but it is not clear whether many of them have moved beyond the initial stages

with a strong commitment to making quality a way of life on an on-going basis.

Need for the study

Six Sigma as a powerful business strategy which has been well recognised as an

imperative for achieving and sustaining operational and service excellence. While the original

focus of Six Sigma was on manufacturing, today it has been widely accepted in both service

and transactional processes. It is also a measure of quality that strives for near elimination of

defects using the application of statistical methods. In Six Sigma, a defect is defined as any

process output that does not meet customer specifications, or that could lead to creating an

output that does not meet customer specifications.

One key innovation of Six Sigma involves the "professionalizing" of quality

management functions. Six Sigma utilises the concept of statistical thinking and encourages

the application of well-proven statistical tools and techniques for defect reduction through

process variability reduction methods. Prior to Six Sigma, quality management in practice

was largely relegated to the production floor and to statisticians in a separate quality

department.

39

For global competitiveness, Indian industries have been striving to achieve overall

operational excellence in their businesses. To respond to the fast changing economic

conditions and customer needs, various industrial engineering and quality management

strategies such as ISO 9000, TQM , KAIZEN, Just in Time (JIT) manufacturing, Enterprises

Resources Planning (ERP), Lean Management, Business Process Reengineering (BPR) have

been developed. A new paradigm in this area of manufacturing strategies is Six Sigma.

As per the literature review the Six Sigma practices in various organisations are very

limited. LG polymers India Pvt. Ltd. is committed to customer satisfaction. To foster the

same LG Started improving the quality instead of increasing the price to meet the market

competition by using one of the quality initiatives like Six Sigma. So far there has been no

study conducted on Six sigma in LG Polymers, Visakhapatnam. Therefore, the present study

is undertaken to bridge the gap in the research area.

Objectives of the study

a. To examine the six sigma tools and techniques

b. To review research and literature

c. To study the project implementation and advantages of six sigma.

d. To analyse the perceptions of employees in implementation process of six sigma.

e. The ultimate objective is to offer suggestions for effective implementation of Six

Sigma in LG polymers.

Methodology

This study is designed as a descriptive, based on both primary data and secondary

data.

The major sources of secondary data are books, journals reports and records of LG

polymers, various published and unpublished sources have been used to collect data. The

researcher visited the Academic Staff College of India, Institute of public enterprise, Indian

School of Business, and various libraries in Hyderabad and Visakhapatnam, for the collection

of secondary data.

The population consists of employees of LG polymers in Visakhapatnam. The total

size is 300. While preparing the sample design, the nature of the work of the employees and

40

position in the departments where they are working is considered as the basis. They are

namely Mangers, Assistant Managers, Engineers, Officers and Chemists from the

departments commercial (QAD, QI&S, F&A, EDP, M&I, IR&HR and Safety), Engineering

(engineering, Innovative and process engineering) and Production (GPPS,HIPS,EPS). For the

study 150 employees have been selected by using simple random technique.

The researcher, on completion of the pilot study has collected the required data using

questionnaire, interview and observation methods. One comprehensive questionnaire has

been designed for the purpose of the study, which forms the third important source of data

collection. The questionnaire contains in all about 39 items including the items eliciting the

personal information of the respondents. Out of 39 items, 9 items are related to personnel

information and the remaining 30 items related to Six Sigma practices

Similarly, the questionnaire has been originally administered to a small sample of 30

respondents for the pilot study. Later the questionnaire has been finalised and date collected

from 150 employees pertaining to the above stated departments.

Reliability of the Questionnaire

Cronbach's Alpha

Cronbach's alpha is a measure of internal consistency that is, closely related to a set of

items as a group. Cronbach's alpha can be written as a function of the number of test items

and the average inter-correlation among the items. For conceptual purposes, the formula for

the standardized Cronbach's alpha is given below.

Here N is equal to the number of items, c-bar is the average inter-item covariance

among the items and v-bar equals the average variance. The researcher .has administered the

alpha scale method of reliability analysis for the questionnaire. The alpha coefficient is

0.702, suggesting that the items have relatively internal consistency among them.

Data Interpretation:

41

An attempt has been made to analyze and understand the perceptions of the sample

respondents about Six sigma Practices in LGPI. The data were fed to the computer. The

tabulations and the results for analysis were done with the help of SPSS (Statistical Package

for Social Sciences) version 16, MINITAB version-15 and Microsoft Excel-2007 for

Statistical measurements such as simple percentages, mean values.

Awareness Score:

Awareness score has been calculated by giving one mark to each item for correct

respondents and for the wrong response the researcher has not given any mark. So totally the

awareness score is 28. The average awareness score of all the respondents is 17.68 and the

standard deviation is 2.67 which suggests that, overall 63.14% has knowledge about the six

sigma practices in LGPI

ANOVA test has been administered to know the significant difference in the opinion of the

different categories of the respondents irrespective of their Age, Designation Department and

experience.

Chi-square test has been conducted to know the significant association between the

statement and department

Further, these percentages and tests incorporate pie charts, bar charts, Doughnut

diagrams, multiple bar charts and box plots.

Box Plot: The box plot explains the variation of the data and also shows the average value,

median value, highest value, lowest value, 25th percentile, 75th percentile as well as the

outliers of the data as shown below

42

Study Area

Visakhapatnam is a port city on the south coast of India, and it is the second largest

city in the state of Andhra Pradesh, the third largest city on the east coast of Chennai and

Kolkata .The city is known for several state –owned heavy industries and India’s largest sea

port and oldest Shipyard. The district has many large and medium industries pertaining to

mining explosives, steel, power, cement.

Six Sigma is a strategy which is highly practised in the production houses. However,

in Visakhapatnam, most of the companies have not implemented six sigma as extensively as

LG polymers, which is a subsidiary of Korean multinational viz., LG group. In view of the

brand image of LG, the quality initiatives undertaken by the company like six sigma to

improve the quality instead of increasing the price to meet the competition in the market. Due

to the above facts the LG polymers has been selected for a detailed study on six sigma

practices.

Presentation of the study

Chapter – I deals with the introduction to quality and six sigma concepts. The need,

objectives, methodology and presentation of the study, limitations are covered. Chapter – II

presents the review of literature, which covers the collection of studies on six sigma

implementation and process across the world. Chapter – III presents the conceptual frame

43

work of the study which gives an overview about Six Sigma in the selected area. Chapter –

IV presents the profile of polymers industry and also the profile of LG Polymers,

Visakhapatnam. Chapter – V Analyses the responses of the executives on various aspects of

Six Sigma. Chapter – VI presents the summary and suggestions of the study.

Limitations of the study:

o The study was on organizational matters; some of the responses could have been

biases, as the respondents could have felt reluctant to give the right responses.

o The sample was small when compared to the universe. The findings might not be

applicable to the total universe.

o Efforts have been made to make the sample representative to the extent possible.

o The present study is confined to LG Polymers Visakhapatnam.

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