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Everyone has had experiences of poor quality when dealing with business organizations.
These experiences might involve an airline that has lost a passenger’s luggage, a dry
cleaner that has left clothes wrinkled or stained, poor course offerings and scheduling at
your college, a purchased product that is damaged or broken, or a pizza delivery service
that is often late or delivers the wrong order. The experience of poor quality is
exacerbated when employees of the company either are not empowered to correct quality
inadequacies or do not seem willing to do so. We have all encountered service employees
who do not seem to care. The consequences of such an attitude are lost customers and
opportunities for competitors to take advantage of the market need. Successful companies
understand the powerful impact customer-defined quality can have on business. For this
reason many competitive firms continually increase their quality standards. For example,
both the Ford Motor Company and the Honda Motor Company have recently announced
that they are making customer satisfaction their number one priority. The slow economy
of 2003 impacted sales in the auto industry. Both firms believe that the way to rebound is
through improvements in quality, and each has outlined specific changes to their
operations. Ford is focusing on tightening already strict standards in their production
process and implementing a quality program called Six-Sigma. Honda, on the other hand,
is focused on improving customer-driven product design. Although both firms have been
leaders in implementing high quality standards, they believe that customer satisfaction is
still what matters most. Total quality management, now a well known idea, is a
philosophy of management for continuously improving the quality of products and
processes. The idea is that the quality of products and processes is the responsibility of
everyone who is involved with the development and/or use of the products or services.
TQM involves management, workforce, suppliers, and even customers, in order to meet
or exceed customer expectations. The common TQM practices are cross-functional
product design, process management, supplier quality management, customer
involvement, information and feedback, committed leadership, strategic planning, cross-
functional training, and employee involvement. Six Sigma is a business management
strategy which seeks to improve the quality of process outputs by identifying and
removing the causes of defects and minimizing variability in manufacturing and business
processes. A six sigma process is one in which 99.99966% of the products manufactured
are statistically expected to be free of defects. TQM’s focus is general improvement by
approaching the problem collaboratively and culturally whereas Six Sigma utilizes the
efforts of many departments, generally with a statistical approach. It makes use of
measuring and analyzing data to determine how defects and differences could be
minimized to the level where there are 3.4 defects per million cycles/products. Six Sigma
can easily be integrated into quality management efforts. Integrating Six Sigma into the
TQM program facilitates process improvement through detailed data analysis. Using the
Six Sigma metrics, internal project comparisons facilitate resource allocation while
external project comparisons allow for benchmarking. Thus, the application of Six Sigma
makes TQM efforts more successful. In today’s highly competitive environment,
organizations tend to integrate TQM and six sigma to gain maximum benefits. This
volume is an effort to gain insights into new developments in the fields of quality
management and six sigma and comprises of articles authored by renowned professionals
and academics working in the field. Both beginners’ and veterans in the field can learn
useful techniques and ideas from this volume.
Total quality management (TQM) refers to management methods used to enhance quality
and productivity in organizations, particularly businesses. TQM is a comprehensive
system approach that works horizontally across an organization, involving all departments
and employees and extending backward and forward to include both suppliers and
clients/customers.
TQM is only one of many acronyms used to label management systems that focus on
quality. Other acronyms that have been used to describe similar quality management
philosophies and programs include CQI (continuous quality improvement), SQC
(statistical quality control), QFD (quality function deployment), QIDW (quality in daily
work), and TQC (total quality control). Despite the ambiguity of the popularized term
"TQM," that acronym is less important than the substance of the management ideology
that underlies it. TQM provides a framework for implementing effective quality and
productivity initiatives that can increase the profitability and competitiveness of
organizations.
The way of managing organization to achieve excellence.
• Total – everything
TQM may be defined as a continuous quest for excellence by creating the right skills
and attitudes in people to make prevention of defects possible and satisfy
customers/users totally at all times.Total Quality Management (TQM) is an approach
to improving the effectiveness and flexibility of business as a whole. It is essentially a
way of organizing and involving the whole organization; every department, every
activity, every single person at every level.
1.Leadership
2. Customer Satisfaction
3. Employee Involvement
4. Continuous Process Improvement
5. Supplier Partnership
6. Performance Measures
7.Top management commitment
1.4 .Total Quality Management Characteristics of Successful Leader must possesses :
• 40% prod. Cost comes from purchased materials, therefore supplier Quality
Management important
• Substantial portion quality problems from suppliers
• Need partnership to achieve quality improvement – long-term purchase contract
• Supplier Management activities • Define product/program requirements; 1. Evaluate
potential and select the best suppliers 2. Conduct joint quality planning and execution 3.
Require statistical evidence of quality 4. Certify suppliers, e.g. ISO 900, Ford Q1 5.
Develop and apply Supplier Quality Ratings ƒ Defects/Percent non-conforming ƒ Price and
Quality costs ƒ Delivery and Service
1.9. Performance Measures
1.12 Quality
Quality = Performance x Expectations
Quality is defined as being 'the degree of excellence, relative nature or kind or
character; class or grade of thing determined by this; general excellence'. Quality is
the ability of your product to be able to satisfy your users. Quality is a concept that
should be applied to an organisation as a whole. Quality should be applied to every
process, which the organisation carries out, from getting the raw materials from suppliers,
through every stage of the production cycle or service provisionOver the years a large
amount of organisations have tried surviving in the market place merely on price, but they
have found that this was not enough. Take the example of the UK in the 1970's , the UK
once had a thriving manufacturing industry, in which the products may have been
reasonably priced but the quality was found to be somewhat lacking. During the late
1970's came the far eastern imports such as cars, televisions, radios, videos, etc. These
products were not only comparatively cheaper but they also had a much higher quality
standard, the result was a shift away from home grown products to foreign imports. The
economic effects can be seen in the ever increasing UK trade deficit with the rest of the
world, and it's declining manufacturing base.TQM is the integration of all functions
and processes within an organization in order to achieve continuous improvement of
the quality of goods and services. The goal is customer satisfaction. Total Quality
Management is a system of management based on the principle that every member of staff
must be committed to maintaining high standards of work in every aspect of a company's
operations.
There are so many definitions for Quality.
TQM may be defined as a continuous quest for excellence by creating the right skills
and attitudes in people to make prevention of defects possible and satisfy
customers/users totally at all times.Total Quality Management (TQM) is an approach
to improving the effectiveness and flexibility of business as a whole. It is essentially a
way of organizing and involving the whole organization; every department, every
activity, every single person at every level.
Quality assurance (QA) is a broad concept that focuses on the entire quality system
including suppliers and ultimate consumers of the product or service. It includes all
activities designed to produce products and services of appropriate quality.According to
ASQ, QA includes all those planned or systematic actions necessary to provide adequate
confidence that a product or service will satisfy given needs. Quality Assurance is the
process that demonstrates your product is able to satisfy your users. When good
Quality Assurance is implemented there should be improvement in usability and
performance and lessening rates of defects . When good Quality Assurance is
implemented there should be improvement in usability and performance and
lessening rates of defects
Quality control (QC) has a narrower focus than quality assurance. Quality control
focuses on the process of producing the product or service with the intent of eliminating
problems that might result in defects.QC includes the operational techniques and the
activities which sustain a quality of product or service that will satisfy given needs; also
the use of such techniques and activities. Quality management is the totality of
functions involved in the determination and achievement of quality (includes quality
assurance and quality control). When good Quality Assurance is implemented there
should be improvement in usability and performance and lessening rates of defects
.
There is no single path to achieving total quality within an organization. There are no
hard and fast rules to follow to become a world class company.
Leadership Commitment
Training
Empowerment and Involvement
Measurement
Recognition and Awards
Communication
Employee Survey
Inspection measure the characteristics of a product and compare them with its
specifications. Quality Control inspection performed by the workers themselves with a
feedback loop to the production line. Quality Assurance set of (implemented) predefined
and systematic activities necessary to give confidence in theprocess quality. Total Quality
Management management centered on quality and based on the participation of
everybody which aims at thecustomer satisfaction and at the improvement of the
company's personnel, of the company and of the society.
To bring the quality first of all any organization should focus on the customer and their
need. organization should understand
The historical evolution of Total Quality Management has taken place in four stages. The
can be categorized as follows:
1 Quality inspection
2 Quality control
3 Quality assurance
Total Quality Management
4
The concept of quality has existed for many years, though its meaning has changed and
evolved over time. In the early twentieth century, quality management meant inspecting
products to ensure that they met specifications. In the 1940s, during World War II, quality
became more statistical in nature. Statistical sampling techniques were used to evaluate
quality, and quality control charts were used to monitor the production process. In the
1960s, with the help of so-called “quality gurus,” the concept took on a broader meaning.
Quality began to be viewed as something that encompassed the entire organization, not
only the production process. Since all functions were responsible for product quality and
all shared the costs of poor quality, quality was seen as a concept that affected the entire
organization. The meaning of quality for businesses changed dramatically in the late
1970s. Before then quality was still viewed as something that needed to be inspected and
corrected. However, in the 1970s and 1980s many U.S. industries lost market share to
foreign competition. In the auto industry, manufacturers such as Toyota and Honda
became major players. In the consumer goods market, companies such as Toshiba and
Sony led the way. These foreign competitors were producing lower-priced products with
considerably higher quality. To survive, companies had to make major changes in their
quality programs.Many hired consultants and instituted quality training programs for their
employees. A new concept of quality was emerging. One result is that quality began to
have a strategic meaning. Today, successful companies understand that quality provides a
competitive advantage. They put the customer first and define quality as meeting or
exceeding customer expectations. Since the 1970s, competition based on quality has
grown in importance and has generated tremendous interest, concern, and enthusiasm.
Companies in every line of business are focusing on improving quality in order to be
more competitive. In many industries quality excellence has become a standard for doing
business. Companies that do not meet this standard simply will not survive. As you will
see later in the chapter, the importance of quality is demonstrated by national quality
awards and quality certifications that are coveted by businesses. The term used for today’s
new concept of quality is total quality management or TQM. Figure 5-3 presents a
timeline of the old and new concepts of quality. You can see that the old concept is
reactive, designed to correct quality problems after they occur. The new concept is
proactive, designed to build quality into the product and process de- sign. Next, we look
at the individuals who have shaped our understanding of quality. Quality has been
evident in human activities for as long as we can remember. However the first stage on
this development can be seen in the 1910s when the Ford Motor Company’s ‘T’ Model
car rolled off the production line. The company started to employ teams of inspectors to
compare or test the product with the project standard. This was applied at all stages
covering the production process and delivery, etc. The purpose of the inspection was
that the poor quality product found by the inspectors would be separated from the
acceptable quality product and then would be scrapped, reworked or sold as lower
quality. With further industrial advancement came the second stage of TQM
development and quality was controlled through supervised skills, written specification,
measurement and standardization. During the Second World War, manufacturing
systems became complex and the quality began to be verified by inspections rather than
the workers themselves. Statistical quality control by inspection –the post production
effort to separate the good product from the bad product- was then developed. The
development of control charts and accepting sampling methods by Shewhart and Dodge-
Roming during the period 1924-1931 helped this era to prosper further from the
previous inspection era. At this stage Shewhart introduced the idea that quality control
can help to distinguish and separate two types of process variation; firstly the variation
resulting from random causes and secondly the variation resulting from assignable or
special causes. He also suggested that a process can be made to function predictably by
separating the variation due to special causes. Further, he designed a control chart for
monitoring such process control and lower evidence of non-conformance. The third
stage of this development, i.e. quality assurance contains all the previous stages in order
to provide sufficient confidence that a product or service will satisfy customers’ needs.
Other activities such as comprehensive quality manuals, use of cost of quality,
development of process control and auditing of quality systems are also developed in
order to progress from quality control to the quality assurance era of Total Quality
Management. At this stage there was also an emphasis of change from detection
activities towards prevention of bad quality. The fourth level, i.e. Total Quality
Management involves the understanding and implementation of quality management
principles and concepts in every aspect of business activities. Total Quality Management
demands that the principles of quality management must be applied at every level, every
stage and in every department of the organization. The idea of Total Quality
Management philosophy must also be enriched by the application of sophisticated
quality management techniques. The process of quality management would also be
beyong the inner organization in order to develop close collaboration with suppliers.
Various characteristics of the different stages in the development of Total Quality
Management can be seen in Table 3.1. Here QI, QC, QA and TQM are abbreviations of
Quality Inspection, Quality Control, Quality Assurance and Total Quality Management.
The development of total quality management from 1950 onwards can be credited to
the works of various American experts. Among them, Dr Edward Deming, Dr Joseph
Juran and Philip Crosby have contributed significantly towards the continuous
development of the subject.
Stage Characteristics QI (1910) Salvage Sorting Corrective Action Identify sources of non-
conformance QC (1924) Quality manual Performance data Self-inspection Product
testing Quality planning Use of statistics Paperwork control QA (1950) Third-party
approvals Systems audits Quality planning Quality manuals Quality costs Process control
Failure mode and effect analysis Non-production operation TQM (1980) Focused vision
Continuous improvements Internal customer Performance measure Prevention
Company-wide application Interdepartmental barriers.
3- Cease dependence on inspection: eliminate the need for mass inspection as a way to
achieve quality. 4- End ‘lowest tender’ contracts end the practice of awarding business
solely on the basis of price tag.
5- Improve every process: improve constantly and forever every process for planning,
production and service.
6- Institute training on the job: institute modern methods of training on the job. 7-
Institute leadership: adopt and institute leadership aimed at helping people and
machines to do a better job. 8- Drive out fear: encourage effective two-way
communication and other means to drive out fear throughout the organization. 9- Break
down barriers: break down barriers between department and staff areas. 10- Eliminate
exhortations: eliminate the use of slogans, posters and exhortations. 11- Eliminate
targets: eliminate work standards that prescribe numerical quotas for the workf orce and
numerical goals for people in management. 12- Permit pride of workmanship: remove
the barriers that rob hourly workers, and people in management, of the right to pride of
workmanship. 13- Encourage education: institute a vigorous program of education and
encourage selimprovement for everyone. 14- Top management commitment: clearly
define top management’s permanent commitment to ever-improving quality and
productivity.
At the same time Dr. Joseph Juran (1980) through his teaching was stressing the
customer’s point of view of products’ fitness for use or purpose. According to him a
product could easily meet all the specifications and still may not be fit for use or
purpose. Juran advocated 1’ steps for quality improvements as follows: 1- Build
awareness of the need and opportunity for improvement. 2- Set goals for improvement.
3- Organize to reach the goals (establish a quality council, identify problems, select
projects, appoint teams, designate facilitators). 4- Provide training. 5- Carry out projects
to solve problems 6- Report progress. 7- Gaive recognition 8- Communicate results. 9-
Keep score. 10- Maintain momentum by making annual improvement part of the regular
systems and processes of the company
Walter A. Shewhart Walter A. Shewhart was a statistician at Bell Labs during the
1920s and 1930s. Shewhart studied randomness and recognized that variability existed in
all manufacturing processes. He developed quality control charts that are used to identify
whether the variability in the process is random or due to an assignable cause, such as
poor workers or miscalibrated machinery. He stressed that eliminating variability
improves quality. His work created the foundation for today’s statistical process control,
and he is often referred to as the “grandfather of quality control.”
1. Create constancy of purpose towards improvement of product and service with aim to
be competitive, stay in business and provide jobs.
2. Adopt a new philosophy – new economic age, learn responsibilities and take on
leadership for future change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection
on a mass basis by building quality into product in the first palace.
4. End the practice of awarding business on the basis of price, instead, minimize total
costs.
5. Improve constantly and forever the system of production and service, to improve
quality and productivity, thus decreasing costs.
6. Institute training on the job
7. Institute leadership, supervision to help do a better job.
8. Drive out fear, everyone can work effectively for company.
9. Breakdown barriers between departments. Work as teams to foresee production
problems.
10. Eliminate slogans, exhortations, and targets for workforce.
11. Eliminate numerical quotas on the workforce.
12. Remove barriers that rob people pride of workmanship.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody to work to accomplish the transformation.
improvement effort. Historically, poor quality was blamed on workers—on their lack of
productivity, laziness, or carelessness. However, Deming pointed out that only 15 percent
of quality problems are actually due to worker error. The remaining 85 percent are caused
by processes and systems, including poor management. Deming said that it is up to
management to correct system problems and create an environment that promotes quality
and enables workers to achieve their full potential. He believed that managers should
drive out any fear employees have of identifying quality problems, and that numerical
quotas should be eliminated. Proper methods should be taught, and detecting and
eliminating poor quality should be everyone’s responsibility. Deming outlined his
philosophy on quality in his famous “14 Points.” These points are principles that help
guide companies in achieving quality improvement. The principles are founded on the
idea that upper management must develop a commitment to quality and provide a system
to support this commitment that involves all employees and suppliers. Deming stressed
that quality improvements cannot happen without organizational change that comes from
upper management.
Joseph M. Juran After W. Edwards Deming, Dr. Joseph Juran is considered tohave had
the greatest impact on quality management. Juran originally worked inthe quality program
at Western Electric. He became better known in 1951, after thepublication of his book
Quality Control Handbook. In 1954 he went to Japan towork with manufacturers and
teach classes on quality. Though his philosophy issimilar toDeming’s, there are some
differences. Whereas Deming stressed the need for an organizational “transformation,”
Juran believes that implementing quality initiatives should not require such a dramatic
change and that quality management should be embedded in the organization. One of
Juran’s significant contributions is his focus on the definition of quality and the cost of
quality. Juran is credited with defining quality as fitness for use rather than simply
conformance to specifications. As we have learned in this chapter, defining quality as
fitness for use takes into account customer intentions for use of the product, instead of
only focusing on technical specifications. Juran is also credited with developing the
concept of cost of quality, which allows us to measure quality in dollar terms rather than
on the basis of subjective evaluations. Juran is well known for originating the idea of the
quality trilogy: quality planning, quality control, and quality improvement. The first part
of the trilogy, quality planning, is necessary so that companies identify their customers,
product requirements, and overriding business goals. Processes should be set up to ensure
that the quality standards can be met. The second part of the trilogy, quality control,
stresses the regular use of statistical control methods to ensure that quality standards are
met and to identify variations from the standards. The third part of the quality trilogy is
quality improvement. According to Juran, quality improvements should be continuous as
well as breakthrough. Together with Deming, Juran stressed that to implement continuous
improvement workers need to have training in proper methods on a regular basis. The
three components of the Juran Trilogy are
i. Planning
ii. Control
iii. Improvement
According to him a product could easily meet all the specifications and still may not be fit
for use or purpose. Juran advocated 1’ steps for quality improvements as follows:
1 Build awareness of the need and opportunity for improvement.
2 Set goals for improvement.
3 Organize to reach the goals (establish a quality council, identify problems, select
projects, appoint teams, designate facilitators).
4 Provide training.
5 Carry out projects to solve problems
6 Report progress.
7 Gaive recognition
8 Communicate results.
9 Keep score.
10 Maintain
Phillip B. Crosby Philip B. Crosby is another recognized guru in the area of TQM. He
worked in the area of quality for many years, first at Martin Marietta and then, inthe
1970s, as the vice president for quality at ITT. He developed the phrase “Do it right the
first time” and the notion of zero defects, arguing that no amount of defects should be
considered acceptable. He scorned the idea that a small number of defects is a normal part
of the operating process because systems and workers are imperfect. Instead, he stressed
the idea of prevention. To promote his concepts, Crosby wrote a book titled Quality Is
Free, which was published in 1979. He became famous for coining the phrase “quality is
free” and for pointing out the many costs of quality, which include not only the costs of
wasted labor, equipment time, scrap, rework, and lost sales, but also organizational costs
that are hard to quantify. Crosby stressed that efforts to improve quality more than pay for
themselves because these costs are prevented. Therefore, quality is free. Like Deming and
Juran, Crosby stressed the role of management in the quality improvement effort and the
use of statistical control tools in measuring and monitoring quality.
Kaoru Ishikawa Kaoru Ishikawa is best known for the development of quality tools
called cause-and-effect diagrams, also called fishbone or Ishikawa diagrams. These
diagrams are used for quality problem solving, and we will look at them in detail later in
the chapter. He was the first quality guru to emphasize the importance of the “internal
customer,” the next person in the production process. He was also one of the first to stress
the importance of total company quality control, rather than just focusing on products and
services. Dr. Ishikawa believed that everyone in the company needed to be united with a
shared vision and a common goal. He stressed that quality initiatives should be pursued at
every level of the organization and that all employees should be involved. Dr. Ishikawa
was a proponent of implementation of quality circles, which are small teams of employees
that volunteer to solve quality problems. Genichi
Taguchi Dr. Genichi Taguchi is a Japanese quality expert known for his work in the area
of product design. He estimates that as much as 80 percent of all defective items are
caused by poor product design. Taguchi stresses that companies should focus their quality
efforts on the design stage, as it is much cheaper and easierto make changes during the
product design stage than later during the production process. Taguchi is known for
applying a concept called design of experiment to product design. This method is an
engineering approach that is based on developing robust design, a design that results in
products that can perform over a wide range of conditions. Taguchi’s philosophy is based
on the idea that it is easier to design a product that can perform over a wide range of
environmental conditions than it is to control the environmental conditions. Taguchi has
also had a large impact on today’s view of the costs of quality. He pointed out that the
traditional view of costs of conformance to specifications is incorrect, and proposed a
different way to look at these costs. Let’s briefly look at Dr. Taguchi’s view of quality
costs. Recall that conformance to specification specifies a target value for the product
with specified tolerances, say 5.00 _ 0.20. According to the traditional view of
conformance to specifications, losses in terms of cost occur if the product dimensions fall
outside of the specified limits. This is shown in Figure 5-4. However, Dr. Taguchi noted
that from the customer’s view there is little difference whether a product falls just outside
or just inside the control limits. He pointed out that there is a much greater difference in
the quality of the product between making the target and being near the control limit. He
also stated that the smaller the variation around the target, the better the quality. Based on
this he proposed the following: as conformance values move away from the target, loss
increases as a quadratic function. This is called the
Taguchi loss function and is shown in Figure 5-5. According to the function, smaller
differences from the target result in smaller costs: the larger the differences, the larger the
cost. The Taguchi loss function has had a significant impact in changing the view of
quality cost. What characterizes TQM is the focus on identifying root causes of quality
problems and correcting them at the source, as opposed to inspecting the product after it
has been made. Not only does TQM encompass the entire organization, but it stresses that
quality is customer driven. TQM attempts to embed quality in every aspect of the
organization. It is concerned with technical aspects of quality as well as the involvement
of people in quality, such as customers, company employees, and suppliers.
The Malcolm Baldrige National Quality Award was established in 1987, when Congress
passed the Malcolm Baldrige National Quality Improvement Act. The award is named after
the former Secretary of Commerce,Malcolm Baldrige, and is intended to reward and stimulate
quality initiatives. It is designed to recognize companies that establish and demonstrate high
quality standards. The award is given to no more than two companies in each of three
categories: manufacturing, service, and small business. Past winners include Motorola
Corporation, Xerox, FedEx, 3M, IBM, and the Ritz-Carlton. To compete for the Baldrige
Award, companies must submit a lengthy application, which is followed by an initial
screening. Companies that pass this screening move to the next step, in which they undergo a
rigorous evaluation process conducted by certified Baldrige examiners. The examiners
conduct site visits and examine numerous company documents. They base their evaluation on
seven categories, which are shown in Figure 5-11. Let’s look at each category in more detail.
The first category is leadership. Examiners consider commitment by top management, their
effort to create an organizational climate devoted to quality, and their active involvement in
promoting quality. They also consider the firm’s orientation toward meeting customer needs
and desires, as well as those of the community and society as a whole. The second category is
strategic planning. The examiners look for a strategic plan that has high quality goals and
specific methods for implementation. The next category, customer and market focus,
addresses how the company collects market and customer information. Successful companies
should use a variety of tools toward this end, such as market surveys and focus groups. The
company then needs to demonstrate how it acts on this information. The fourth category is
information and analysis. Examiners evaluate how the company obtains data and how it acts
on the information. The company needs to demonstrate how the information is shared within
the company as well as with other parties, such as suppliers and customers. The fifth and sixth
categories deal with management of human resources and management of processes,
respectively. These two categories together address the issues of people and process. Human
resource focus addresses issues of employee involvement. This entails continuous
improvement programs, employee training, and functioning of teams. Employee involvement
is considered a critical element of quality. Similarly, process management involves
documentation of processes, use of tools for quality improvement such as statistical process
control, and the degree of process integration within the organization. The last Baldrige
category receives the highest points and deals with business results. Numerous measures of
performance are considered, from percentage of defective items to financial and marketing
measures. Companies need to demonstrate progressive improvement in these measures over
time, not only a one-time improvement. The Baldrige criteria have evolved from simple award
criteria to a general framework for quality evaluation. Many companies use these criteria to
evaluate their own performance and set quality targets even if they are not planning to
formally compete for the award.
The Deming Prize is a Japanese award given to companies to recognize their efforts in quality
improvement. The award is named after W. Edwards Deming, who visited Japan after World
War II upon the request of Japanese industrial leaders and engineers. While there, he gave a
series of lectures on quality. The Japanese considered him such an important quality guru that
they named the quality award after him. The award has been given by the Union of Japanese
Scientists and Engineers (JUSE) since 1951. Competition for the Deming Prize was opened to
foreign companies in 1984. In 1989 Florida Power & Light was the first U.S. company to
receive the award.
Increases in international trade during the 1980s created a need for the development of
universal standards of quality. Universal standards were seen as necessary in order for
companies to be able to objectively document their quality practices around the world. Then in
1987 the International Organization for Standardization (ISO) published its first set of
standards for quality management called ISO 9000. The International Organization for
Standardization (ISO) is an international organization whose purpose is to establish agreement
on international quality standards. It currently has members from 91 countries, including the
United States. To develop and promote international quality standards, ISO 9000 has been
created. ISO 9000 consists of a set of standards and a certification process for companies. By
receiving ISO 9000 certification, companies demonstrate that they have met the standards
specified by the ISO. The standards are applicable to all types of companies and have gained
global acceptance. In many industries ISO certification has become a requirement for doing
business. Also, ISO 9000 standards have been adopted by the European Community as a
standard for companies doing business in Europe. In December 2000 the first major changes
to ISO 9000 were made, introducing the following three new standards:
• ISO 9000:2000–Quality Management Systems–Fundamentals and Standards: Provides the
terminology and definitions used in the standards. It is the starting point for understanding the
system of standards.
• ISO 9001:2000–Quality Management Systems–Requirements: This is the standard used for
the certification of a firm’s quality management system. It is used to demonstrate the
conformity of quality management systems to meet customer requirements.
• ISO 9004:2000–Quality Management Systems–Guidelines for Performance: Provides
guidelines for establishing a quality management system. It focuses not only on meeting
customer requirements but also on improving performance. These three standards are the most
widely used and apply to the majority of companies. However, ten more published standards
and guidelines exist as part of the ISO 9000 family of standards. To receive ISO certification,
a company must provide extensive documentation of its quality processes. This includes
methods used to monitor quality, methods and frequency of worker training, job descriptions,
inspection programs, and statistical process-control tools used. High-quality documentation of
all processes is critical. The company is then audited by an ISO 9000 registrar who visits the
facility to make sure the company has a well-documented quality management system and that
the process meets the standards. If the registrar finds that all is in order, certification is
received. Once a company is certified, it is registered in an ISO directory that lists certified
companies. The entire process can take 18 to 24 months and can cost anywhere from $10,000
to $30,000. Companies have to be recertified by ISO every three years. One of the short
comings of ISO certification is that it focuses only on the process used and conformance to
specifications. In contrast to the Baldrige criteria, ISO certification does not address questions
about the product itself and whether it meets customer and market requirements. Today there
are over 40,000 companies that are ISO certified. In fact, certification has become a
requirement for conducting business in many industries.
As we have seen, total quality management has impacts on every aspect of the organization.
Every person and
every function is responsible for quality and is affected by poor quality. For example, recall
that Motorola
implemented its six-sigma concept not only in the production process but also in the
accounting, finance,and administrative areas. Similarly, ISO 9000 standards do not apply only
to the production process; they apply equally to all departments of the company. A company
cannot achieve high quality if its accounting is inaccurate or the marketing department is not
working closely with customers. TQM requires the close cooperation of different functions in
order to be successful. In this section we look at the involvement of these other functions in
TQM.
Marketing plays a critical role in the TQM process by providing key inputs that make TQM
a success. Recall that the goal of TQM is to satisfy customer needs by producing the exact
product that customers want. Marketing’s role is to understand the changing needs and wants
of customers by working closely with them. This requires a solid identification of target
markets and an understanding of whom the product is intended for. Sometimes apparently
small differences in product features can result in large differences in customer appeal.
Marketing needs to accurately pass customer information along to operations, and operations
needs to include marketing in any planned product changes.
Finance is another major participant in the TQM process because of the great cost
consequences of poor
quality. General definitions of quality need to be translated into specific dollar terms. This
serves as a baseline for monitoring the financial impact of quality efforts and can be a great
motivator. Recall the four costs of
quality discussed earlier. The first two costs, prevention and appraisal, are preventive costs;
they are intended to prevent internal and external failure costs. Not investing enough in
preventive costs can result in failure
costs, which can hurt the company. On the other hand, investing too much in preventive costs
may not yield added benefits. Financial analysis of these costs is critical. You can see that
finance plays a large role in evaluating and monitoring the financial impact of managing the
quality process. This includes costs related to preventingand eliminating defects, training
employees, reviewing new products, and all other quality efforts.
Accounting is important in the TQM process becauseof the need for exact costing. TQM
efforts cannotbe accurately monitored and their financial contribution assessed if the company
does not have accurate costing methods.
Engineering efforts are critical in TQM because of the need to properly translate customer
requirements
into specific engineering terms. Recall the process we followed in developing quality function
deployment (QFD). It was not easy to translate a customer requirement such as “a good
looking backpack” into specific terms such as materials, weight, color grade, size, and number
of zippers. We depend on engineering to use general customer requirements in developing
technical specifications, identifying specific parts and materials needed, and identifying
equipment that should be used.
Purchasing is another important part of the TQM process. Whereas marketing is busy
identifying what the customers want and engineering is busy translating that information into
technical specifications, purchasing is responsible for acquiring the materials needed to make
the product. Purchasing must locate sources of supply, ensure that the parts and materials
needed are of sufficiently high quality, and negotiate a purchase price that meets the
company’s budget as identified by finance.
Human resources is critical to the effort to hire employees with the skills necessary to work
in a TQM environment. That environment includes a high degree of teamwork, cooperation,
dedication, and customer commitment. Human resources is also faced with challenges relating
to reward and incentive systems. Rewards and incentives are different in TQM from those
found in traditional environments that focus on rewarding individuals rather than teams.
Information systems (IS) is highly important in TQM because of the increased need for
information
accessible to teams throughout the organization. IS should work closely with a company’s
TQM development program in order to understand exactly the type of information system best
suited for the firm, including the form of the data, the summary statistics available, and the
frequency of updating. Implementing total quality management requires broad and sweeping
changes throughout a company. It also affects all other decisions within operations
management. The decision to implement total quality management concepts throughout the
company is strategic in nature. It sets the direction for the firm and the level of commitment.
For example, some companies may choose to directly compete on quality, whereas others may
just want to be as good as the competition. It is operations strategy that then dictates how all
other areas of operations management will support this commitment. The decision to
implement TQM affects areas such as product design, which needs to incorporate customer-
defined quality. Processes are then redesigned in order to produce products with higher quality
standards. Job design is affected, as workers need to be trained in quality tools and become
responsible for rooting out quality problems. Also, supply chain management is affected as
our commitment to quality translates into partnering with suppliers. As you can see, virtually
every aspect of the operations function must change to support the commitment toward total
quality management.
Quality Function Deployment
"Time was when a man could order a pair of shoes directly from the cobbler. By
measuring the foot himself and personally handling all aspects of manufacturing,
the cobbler could assure the customer would be satisfied," .QFD was developed in
Japan in the late 1960s by Professors Shigeru Mizuno and Yoji Akao. At the
time, statistical quality control, which was introduced after World War II, had
taken roots in the Japanese manufacturing industry. QFD is an approach to
continual improvement that brings customers into the design of processes. It
translates what the customer wants into what the organization produces.
Once a team has identified the customers' wants, QFD is used for two fundamental
reasons:
QFD links the needs of the customer (end user) with design, development,
engineering, manufacturing, and service functions.
QFD empowers organizations to exceed normal expectations and provide a level
of unanticipated excitement that generates value.
Quality Function Deployment (QFD) is a systematic process for motivating a
business to focus on its customers.
It is used by cross-functional teams
to identify and resolve issues involve in providing products, processes, services
and strategies which will more than satisfy their customers.
What is QFD?
QFD is quite different in that it seeks out both "spoken" and "unspoken" customer
requirements and maximizes "positive" quality (such as ease of use, fun, luxury)
that creates value.
BENEFITS OF QFD
QFD yields the following benefits to organizations that are interested in continual
improvement:
Customer focus
Time efficiency
Teamwork orientation
Documentation orientation
Customer information falls into two broad categories: input and feedback.
Feedback is given after the fact; input is given before the fact (early in the product
development cycle). Both types of information can be further classified according
to the following categories:
Solicited
Unsolicited
Quantitative
Qualitative
Structured
Random.
The "voice of the customer" is the term to describe these stated and
unstated customer needs or requirements. The voice of the customer is
captured in a variety of ways: direct discussion or interviews, surveys,
focus groups, customer specifications, observation, warranty data, field
reports, etc. This understanding of the customer needs is then summarized
in a product planning matrix or "house of quality". These matrices are used
to translate higher level "what's" or needs into lower level "how's" -
product requirements or technical characteristics to satisfy these needs.
While the Quality Function Deployment matrices are a good
communication tool at each step in the process, the matrices are the means
and not the end. The real value is in the process of communicating and
decision-making with QFD. QFD is oriented toward involving a team of
people representing the various functional departments that have
involvement in product development: Marketing, Design Engineering,
Quality Assurance, Manufacturing/ Manufacturing Engineering, Test
Engineering, Finance, Product Support, etc.
Quality must be designed into the product, not inspected into it.
Quality can be defined as meeting customer needs and providing superior
value.
The "voice of the customer" is the term to describe these stated and
unstated customer needs or requirements.
These matrices are used to translate higher level "what's" or needs into
lower level "how's" - product requirements or technical characteristics to
satisfy these needs.
Even within one buying unit, there are multiple customer voices (e.g.,
children versus parents).
There are even multiple customer voices within a single organization: the
voice of the procuring organization, the voice of the user, and the voice of
the supporting or maintenance organization.
Quality Function Deployment requires that the basic customer needs are
identified.
Frequently, customers will try to express their needs in terms of "how" the
need can be satisfied and not in terms of "what" the need is.
Customer needs or requirements are stated on the left side of the matrix
Develop a difficulty rating (1 to 5 point scale, five being very difficult and risky) for
each product requirement or technical characteristic.
Consider technology maturity, personnel technical qualifications, business risk,
manufacturing capability, supplier/subcontractor capability, cost, and schedule.
Avoid too many difficult/high risk items as this will likely delay development and
exceed budgets.
Assess whether the difficult items can be accomplished within the project budget and
schedule.
Step 10 - Analyze the Matrix
Analyze the matrix and finalize the product development strategy and product plans.
Determine required actions and areas of focus.
Finalize target values. Are target values properly set to reflect appropriate tradeoff's?
Do target values need to be adjusted considering the difficulty rating?
Are they realistic with respect to the price points, available technology, and the difficulty
rating?
Are they reasonable with respect to the importance ratings?
Determine items for further QFD deployment.
To maintain focus on "the critical few", less significant items may be ignored with the
subsequent QFD matrices.
Maintain the product planning matrix as customer requirements or conditions change.
Features of QFD
Benefits of QFD
The major advantage of the QFD process is that it encourages proactive product
development instead of reactive product development (Figure 1). Proactive
product development results in fewer and earlier design changes, decreased
development time, fewer start-up problems, lower start-up costs, fewer field
problems, and a more satisfied customer. A less obvious, though equally
important, benefit of QFD is that it facilitates organizational knowledge transfer
and establishes a proprietary knowledge base. The matrices that are generated
during a QFD project make the logic flow obvious and act to preserve technical
and customer knowledge. This affords others in the organization the opportunity
to easily access and use the accumulated knowledge.
The Purpose of QFD The purpose of QFD is three fold. Firstly, it allows us to get
higher quality products to market faster and at a lower cost. Secondly, we will
achieve customer driven product design and, finally, it will provide a tracking
system for future design or process improvements. The results we can expect by
carrying out the QFD studies are many:
QFD is a management tool developed by two Japanese professors, Yoji Akao and
Shigeru Mizuno in 1965. It sought to improve the quality of the products before
the process of manufacturing begun, aiding in fast decision-making with regard to
the final product. This method became popular in the West in the 1980s. As with
other Japanese management techniques, there are bound to be some problems
when QFD is applied elsewhere.
QFD can be your tool of choice if you are working to determine what you need to
accomplish to satisfy and delight your clients. A major disadvantage is that it
solely focuses on quality and related engineering metrics while ignoring other vital
factors such as cost, product life cycle, strategy and the company's strength in
technology. Failure to address these other factors can potentially lead to trade-offs,
yielding a product that is not optimally designed.
Against the backdrop of a successful QFD, market surveys are crucial in garnering
the perceptions of customers about services or goods. A lot rides on the
effectiveness of the survey process. If the questions do not gather the right
information, the wants, needs and wow factors that lead to customer satisfaction
will be missed. Varied or intangible statistical results can be detrimental in the
eventual product design, since they are not representative. You have to prepare for
the eventuality of inaccurate survey results if your company practices QFD.
Another disadvantage with QFD is the assumption that customer needs can be
captured, documented and remain stable over the duration of the whole process.
Customer needs change quickly and unexpectedly. The QFD tool, therefore, can
complicate matters further for your firm, since adapting to dynamic market needs
can be complex, confusing and costly.
Areas of application
QFD Summary
Quality circle
"a small group of employees doing similar or related work who meet regularly
to identify, analyze, and solve product-quality and production problems and to
improve general operations.
Concept
It is "a way of capturing the creative and innovative power that lies within the
work force".
2. Small Size:
3. Regular Meeting:
QC meetings are held once a week for about an hour on regular basis. The
members meet during working hours usually at the end of the working day in
consultation with the manager. The time of the meetings is usually fixed in
advance in consultation with the manager and members.
4. Independent Agenda:
Each QC has its own agenda with its own terms of reference. Accordingly, each
QC discusses its own problems and takes corrective actions.
5. Quality Focused:
As per the very nature and intent of QC, it focuses exclusively on quality issues.
This is because the ultimate purpose of QC is improvement in quality of product
and working life.
The concept of QC is primarily based upon recognition of the value of the worker
as a human being, as someone who willingly activises on his job, his wisdom,
intelligence, experience, attitude & feelings. It is based upon the HRM considered
as one of the key factors in the improvement of product quality & productivity.
QC concept has 3 major attributes:
Objectives
Inadequate Training
Unsure of Purpose
Not truly Voluntary
Lack of Management Interest
Quality Circles are not really empowered to make decisions.
Quality Circles are not limited to manufacturing firms only.
They are applicable for variety of organisations where there is scope for
group based solution of work related problems.
The Quality Circle philosophy calls for a progressive attitude on the part of the
management and their willingness to make adjustments, if necessary, in their style
and culture
2. Selection of the problem: The members then decide the preferences and select
the problem of apex priority.
3. Analysis of the problem: The selected problem is then classified and analyzed
by basic problem solving techniques like brain storming and Pareto analysis etc.
5. Select the most appropriate solution: The most appropriate and suitable solution
is selected after considering various solutions related to cost, possibility of
implementation etc.
7. Approval of the Management: The chosen solution and the plan of action must
be put forward before the management for their approval.
8. Implementation:
Process of operations
2. Constitution of QC:
Workers doing the same or similar type of work are drawn voluntarily to form
quality circle. The membership of a QC is generally restricted to eight to ten. Once
a QC is formed, they remain as permanent members of the circle unless they leave
that work area.
5. Implementation:
Once the suggestion or solution is approved by the management, the same is being
put into practice in a particular workplace. Quality circles may be organized
gradually for other workplaces or departments also. In this way, following above
outlined process, the entire organisation can have quality circles.
The success of the quality circles depends solely on the attitude of the Top management
and plays an important role to ensure the success of implementation of quality circles in
the organization.
Roles of Steering Committee (Management) involves Formally announce the launching of
quality circle initiative in the organization and Provide full support and encouragement to
quality circle movement in the organization.it Provide leadership and guidance to develop
the quality circle models, structure and policies.the Design the opportunities for
presentations by the quality circles and Facilitate the approval and implementation of the
solutions presented by quality circles.it Develop guidelines for measuring the
effectiveness of quality circles and also the quality circle initiative as a whole and review
thperformance and progress of quality circles periodically.Roles of Facilitators includes
Act as an effective link between the quality circles and the management,Coordinate the
work of several quality circles through their respective leaders,Act as a resource person
for the quality circles being facilitated.,Arrange for obtaining necessary expertise from
other agencies and quality circles,Keep the motivation and morale level of all the leaders
and members at the highest level,Facilitate and guide the quality circle leaders and
members to make the management presentations.Roles of Leaders Includes Decide date
and time of each quality circle meeting and inform to all the members,Ensure maximum
attendance of all the members in the meetings,Conduct the meetings effectively,Motivate
the members for their full participation in the proceedings of quality circle meetings and
related activities,Facilitate the members in data collection,Maintain the records of quality
circles meetings and other related activities.,Interact with other quality circle
leaders,Interact with the quality circle facilitator frequently,Make presentations of
solutions to the management. Involve the members in making the presentations,Seek
management approvals of the solutions,Ensure implementation of the approved solutions
with the active involvement of the members,Arrange first time training and later on, the
refresher training of the members and self in the quality circles group process, tools and
techniques.
Support from the top management and cooperation from the middle
management is an essential request for the success of circle. Half
hearted support is not adequate.
Benefits of QC
Self development.
Promotes leadership qualities among participants.
Recognition.
Achievement satisfaction.
Promotes group/team working.
Serves as cementing force between management/non- management
groups.
Promotes continuous improvement in products and services.
Brings about a change in environment of more productivity, better
quality, reduced costs, safety and corresponding rewards.
code of conduct of quality circle
1. BHEL -1980 –Mr.S.R.Udapa (GM Operations) 1st Indian to start quality circle
2. Hero Honda motors “Sunrise Quality circle”
3. Lucas TVS, Chennai “honey bee quality circle”
4. Tata Refectories (located in orissa) “Niharika quality circle” (saved Rs.4000 p.a)
5. Kudhremukh –Iron Ore Plant (located in Karnataka) “Soorthy Quality Circl
The basic principles for the Total Quality Management (TQM) philosophy of doing
business are to satisfy the customer, satisfy the supplier, and continuously improve the
business processes.
The first and major TQM principle is to satisfy the customer--the person who pays for the
product or service. Customers want to get their money's worth from a product or service
they purchase.
Users
If the user of the product is different than the purchaser, then both the user and customer
must be satisfied, although the person who pays gets priority.
Company philosophy
A company that seeks to satisfy the customer by providing them value for what they buy
and the quality they expect will get more repeat business, referral business, and reduced
complaints and service expenses.
Some top companies not only provide quality products, but they also give extra service to
make their customers feel important and valued.
Internal customers
Within a company, a worker provides a product or service to his or her supervisors. If the
person has any influence on the wages the worker receives, that person can be thought of
as an internal customer. A worker should have the mind-set of satisfying internal
customers in order to keep his or her job and to get a raise or promotion.
Chain of customers
Often in a company, there is a chain of customers, -each improving a product and passing
it along until it is finally sold to the external customer. Each worker must not only seek to
satisfy the immediate internal customer, but he or she must look up the chain to try to
satisfy the ultimate customer.
A second TQM principle is to satisfy the supplier, which is the person or organization
from whom you are purchasing goods or services.
External suppliers
A company must look to satisfy their external suppliers by providing them with clear
instructions and requirements and then paying them fairly and on time.It is only in the
company's best interest that its suppliers provide it with quality goods or services, if the
company hopes to provide quality goods or services to its external customers.
Internal suppliers
A supervisor must try to keep his or her workers happy and productive by providing good
task instructions, the tools they need to do their job and good working conditions. The
supervisor must also reward the workers with praise and good pay.
The reason to do this is to get more productivity out of the workers, as well as to keep the
good workers. An effective supervisor with a good team of workers will certainly satisfy
his or her internal customers.
Empower workers
One area of satisfying the internal suppler is by empowering the workers. This means to
allow them to make decisions on things that they can control. This not only takes the
burden off the supervisor, but it also motivates these internal suppliers to do better work.
Continuous improvement
The third principle of TQM is continuous improvement. You can never be satisfied with
the method used, because there always can be improvements. Certainly, the competition is
improving, so it is very necessary to strive to keep ahead of the game.
Working smarter, not harder
Some companies have tried to improve by making employees work harder. This may be
counter-productive, especially if the process itself is flawed. For example, trying to
increase worker output on a defective machine may result in more defective parts.
Examining the source of problems and delays and then improving them is what is needed.
Often the process has bottlenecks that are the real cause of the problem. These must be
removed.
Worker suggestions
Workers are often a source of continuous improvements. They can provide suggestions on
how to improve a process and eliminate waste or unnecessary work.
Quality methods
There are also many quality methods, such as just-in-time production, variability
reduction, and poka-yoke that can improve processes and reduce waste.The principles of
Total Quality Management are to seek to satisfy the external customer with quality goods
and services, as well as your company internal customers; to satisfy your external and
internal suppliers; and to continuously improve processes by working smarter and using
special quality methods.
Customer Focus
In a TQM approach, small businesses must understand who their current customers are
(and are not), noting their key needs and requirements and keep these expectations at the
forefront of their strategy and processes. This principle should extend to internal clients,
as well, treating coworkers as customers and satisfying their demands.
Leadership
Leaders create the environment in which their business operates. They set policy, plan
strategy and launch tactics for staff to execute. Small businesses can take advantage of the
necessity for participative management, as they are more likely to be intimately aware of
all facets of their business and how they interconnect. Managers and owners can educate
staff on business operations, industry developments and market trends, giving them a
broader perspective on what it takes to make the company successful.As leaders set and
communicate customer-focused strategy, they become smarter in acquiring and keeping
quality staff. Selecting, training and motivating staff to work together, particularly in
cross-functional teams, enables faster problem identification and resolution, process
execution and overall productivity. In applying TQM, well-trained and motivated
employees also have more control over their work and a greater sense of ownership in the
company.
Process Approach
In TQM, a well-informed staff, with a keener sense of what the customer expects, can
help develop a proactive process that builds quality into each stage as they design and
deliver products, rather than trying to catch flaws during post-production inspection,
which wastes resources on potentially defective products.
Supplier Relationships
Businesses can apply these TQM philosophies to suppliers. This will help them
understand their attitudes, values and capabilities, as well as the minimum and maximum
variations in the goods they deliver to the company, to monitor quality and create value
across the supply chain.
Continuous Improvement
Continuous improvement is fundamental in TQM. Essentially, in this practice, the
business executes the first six principles continuously. The whole organization, from top
leadership to front-line employee, must commit to the time and effort necessary in making
modest gains in the operations. Rather than launching a revolution in how a company
runs, step-by-step changes initiated by everyone in the organization ultimately convert the
business and ingrain the TQM philosophy into the corporate culture.
You can't implement just one effective solution for planning and implementing TQM concepts in
all situations. Below we list generic models for implementing total quality management theory:
2- Assess the current: Culture, customer satisfaction, and quality management system.
3- Top management determines the core values and principles and communicates them.
5- Identify and prioritize customer needs and determine products or service to meet those needs.
8- Managers supports the efforts by planning, training, and providing resources to the team.
Now these six basic concepts are describe in detail to understand properly about
TQM:
Quality goals give all employees clear indication of what is going to be achieved
concerning quality. Quality policies when described in detail will provide
guideline on how employees are to achieve that goal. Management commitment;
requires developing management systems that assure and ensure that quality is
built into each and every process in organization. Thus, meaningful plans, such as
performing an annual quality audit help top management acquire the necessary
insight into problems the company faces in realizing the quality plan.
4. Emphasize prevention.
2. Customer satisfaction:
The key to an effective TQM program is its focus on the customer. An excellent
place to start is by satisfying internal customer. We must listen to the” voice of the
customers” & emphasize design quality & defect prevention. Do it right the first
time & every time, for customer satisfaction is the most important consideration.
An organization must give its customers a quality product or service that meets
their needs, at reasonable price, on-time delivery, and outstanding service.
Listening to the ‘customers’ and responding quickly to their changing needs,
expectations and perceptions is one of the TQM basic approaches. By keeping
close to their customer, companies can establish customer needs; gather
information on customer trend and benchmarking them with their competitors.
This can be a winning strategy towards winning new customers and retaining
customer loyalty.
Customer
Front-line representative
Functional
operational areas
Senior
manager
CEO
Fig: Customer satisfaction organizational diagram.
3. Employee Involvement:
Deming’s fourteen points for management are worth remembering. The basis of
his philosophy is contained in the following principle:
Involving employees, empowering them, & bringing them into the decision-
making process provide the opportunity for continuous process improvement.
There must be a continual striving to improve all business & production process.
Process refers to business & production activities of an organization. Business
process such as purchasing, engineering, accounting, & marketing are areas where
nonconformance can represent an opportunity for substantial improvement.
Following figure shows a process model,
FEEDBACK
PROCESS
People
Equipment
INPUT OUTPUT
Material Information
OUT
Money Data COMES
Information Product
CONDITIONS
The most frequently used guidelines for quality management systems are the ISO
9000 international standards, which emphasize the establishment of a well-
documented, standardized quality system. The role of the ISO 9000 standards
within the TQM circle of continuous improvement is presented in the following
figure.
Continuous improvement is a circular process that links the diagnostic, planning,
implementation and evaluation phases. Within this circular process, the ISO 9000
standards are commonly applied in the implementation phase.
5. Supplier partnership:
Customers & suppliers have the same goal to satisfy the end user. On the average
40% of the sales dollar is purchased product or service, therefore the supplier
quality must be outstanding. The better the supplier’s quality, the better the
supplier’s long-term position because the customer will have better quality.
Because both the customer & supplier have limited resources, they must work
together as partners to maximize their return on investment. Suppliers focus
should be on quality & life-cycle costs rather than price.
Dr. Kaoru Ishikawa has suggested ten principles to ensure quality products &
services & eliminate unsatisfactory conditions between the customer & the
supplier:
10. Best interest of the end user should be considered while doing business
transactions. There are some conditions for the selection and evaluation of
suppliers:
The core concept of TQM consisted of supplier & customer relationship. Now
show this relationship by diagrammatically:
The core of TQM is the customer-supplier interfaces, both externally and
internally, and at each interface lay a number of processes. This core must be
surrounded by commitment to quality, communication of the quality message, and
recognition of the need to change the culture of the organization to create total
quality.
6. Performance Measures:
The sixth & final concept of Total Quality Management (TQM) is performance
measures. Managing an organization without performance measures is like a
captain of a ship navigating without instrument. The ship would most likely end
up traveling in circles, as would an organization.
Balanced Scorecard:
The balanced scorecard is a popular tool for performance measurement. It uses
four perspectives from which to manage organizational performance including
customers, finances, internal processes, and innovation and learning.
The scorecard is built on the premise that using only financial measures is not
sufficient to achieve an organization's strategic objectives. The scorecard measures
how an organization reaches its financial goals. Simply stated, what gets measured
gets done.
Implementation of Quality
Discussed below are some of the barriers or obstacles that total quality management face
during implementation. Most scholars who have researched on the subject choice to focus
on the specific industries like the construction, Agriculture e.t.c and specific economies.
What we came up with are general barriers that are likely to cut across the economic
board.
1. Competitive markets
A competitive market is a driving force behind many of the other obstacles to quality.
One of the effects of a competitive market is to lower quality standards to a minimally
acceptable level. This barrier to quality is mainly a mental barrier caused by a
misunderstanding of the definition of quality. Unfortunately, too many companies equate
quality with high cost. Their definition leads to the assumption that a company can’t
afford quality. A broader definition needs to be used to look at quality, not only in the
company’s product, but in every function of the company. All company functions have an
element of quality. If the quality of tasks performed is poor, unnecessary cost is incurred
by the company and, ultimately, passed to the customer. TQM should work by inspiring
employees at every level to continuously improve what they do, thus rooting out
unnecessary costs. Done correctly, a company involved with TQM can dramatically
reduce operating costs. The competitive advantage results from concentrating resources
(the employees’ brainpower) on controlling costs and improving customer service.
The competitive environment, poor management practice, and a general lack of higher
expectations have contributed to unproductive and unhealthy attitudes. These attitudes
often are expressed in popular sayings, such as “It’s not my job” and “If I am not broke,
don’t fix it. Such attitude sayings stem from the popular notion that management is
always right and therefore employees are” only supposed to implement management
decisions without questioning. Lethargy is further propagated through management’s
failure to train employees on TQM fundamentals that build better attitudes by involving
them in teams that identify and solve problems. Such training can transform employees
from being part of the problem to part of the solution. This will foster motivation and
creativity and build productive and healthy attitudes that focus employees on basic
fundamentals, such as: keep customer needs in mind, constantly look for improvements,
and accept personal responsibility for your work.
Excess layers of management quite often lead to duplication of duty and responsibility.
This has made the lower employees of an organization to leave the quality
implementation to be a management’s job. In addition, quality has not been taken as a
joint responsibility by the management and the employees. Coupled with the notion that
management is infallible and therefore it is always right in its decisions, employees have
been forced to take up peripheral role in quality improvement. As a result employees who
are directly involved in the production of goods or delivery of services are not motivated
enough to incorporate quality issues that have been raised by the customers they serve
since they do not feel as part of the continuous process of quality improvement.
Moreover, top management is not visibly and explicitly committed to quality in many
organizations.
Every organization has its own unique way of doing things. This is defined in terms of
culture of the organization. The processes, the philosophy, the procedures and the
traditions define how the employees and management contribute to the achievement of
goals and meeting of organizational objectives. Indeed, sticking to organizational culture
is integral in delivery of the mission of the organization. However, culture has to be
reviewed and for that matter re-adjustments have to be done in tune with the prevailing
economic, political, social and technological realities so as to improve on efficiency. In
adequate cultural dynamism has made total quality implementation difficult because most
of the top level management of many organizations are rigid in their ways of doing things.
Since most companies do not involve quality in their strategic plan, little attention is paid
to TQM in terms of human and financial resources. Much of the attention is drawn to
increasing profit margins of the organization with little regard as to whether their offers/
supply to customers is of expected quality. There is paltry budgetary allocation made
towards employee training and development which is critical for total quality
management implementation. Employee training is often viewed as unnecessary cost
which belittles the profits margins which is the primary objective for the existence of
businesses and as a result TQM has been neglected as its implementation “may not
necessarily bring gains to the organization in the short term”.
Most strategic plans of organizations are not customer driven. They tend to concentrate
much on profit-oriented objectives within a given time frame. Little (if any) market
research is done to ascertain the product or service performance in the market relative to
its quality. Such surveys are regarded by most organizations as costly and thus little
concern is shown to quality improvement for consumer satisfaction.
TQM is centered on monitoring employees and processes, and establishing objectives that
anticipate the customer's needs so that he is surprised and delighted. This has posed a
considerable challenge to many companies. Measurement problems are caused by goals
based on past substandard performance, poor planning, and lack of resources and
competitor-based standard. Worse still, the statistical measurement procedures applied to
production are not applicable to human system processes.
8. Poor Planning
The absence of a sound strategy has often contributed to ineffective quality improvement.
Duran noted that deficiencies in the original planning cause a process to run at a high
level of chronic waste. Using data collected at then recent seminars, Duran (1987)
reported that although some managers were not pleased with their progress on their
quality implementation agenda, they gave quality planning low priority. As Oakland
(1989) said, the pre-planning stage of developing the right attitude and level of awareness
is crucial to achieving success in a quality improvement program.
Newell and Dale (1990) in their study observed that a large number of companies are
either unable or unwilling to plan effectively for quality improvement. Although many
performed careful and detailed planning prior to implementation, not one of the firms
studied or identified beforehand the stages that their process must endure.Perhaps the root
cause of poor plans and specifications is that many owners do not understand the impact
that poor drawings have on a project’s quality, cost, and time. Regardless of the cause,
poor plans and specifications lead to a project that costs more, takes longer to complete,
and causes more frustration than it should. Companies using TQM should always strive
towards impressing upon owners the need to spend money and time on planning. If
management took reasonable time to plan projects thoroughly and invest in partnering to
develop an effective project team, a lot could be achieved in terms of product
performance as these investments in prevention- oriented management can significantly
improve the quality of the goods or services offered by an organization
Lack of commitment in quality management may stem from various reasons. Major
obstacles include the preoccupation with short-term profits and the limited experience and
training of many executives. Duran, for example, observed that many managers have
extensive experience in business and finance but not in quality improvement. Similarly,
Bothe (1988) pointed out that although the CEO does not have to be a quality expert,
programs fail when the CEO does not recognize the contribution these techniques make
toward profitability and customer satisfaction.
A workforce is often unwilling to embrace TQM for a variety of reasons. Oakland (1989)
explained that a lack of long-term objectives and targets will cause a quality
implementation program to lose credibility.
Keys (1991) warned that an adversarial relationship between management and non-
management should not exist, and he emphasized that a cooperative relationship is
necessary for success. A TQM project must be supported by employee trust, acceptance
and understanding of management's objectives .Employees ,therefore, should be
recognized by the management as vital players in the decision making processes
regarding to quality improvement as involving them would have motivating effect on
implementation of quality programs.
There is evidence that lack of understanding and proper training exists at all levels of any
organization, and that it is a large contributor to worker resistance. Schein (1990), for
example, mentioned that business school failure to teach relevant process skills
contributed to manager ineffectiveness.TQM requires a well-educated workforce with a
solid understanding of basic math, reading, writing and communication. Although
companies invest heavily in quality awareness, statistical process control, and quality
circles, often the training is too narrowly focused. Frequently, Duran’s warning against
training for specific organizational levels or product lines is unheeded. This has also been
underscored by Newell and Dale who argue that poor education and training present a
major obstacle in the development and implementation of a quality program. . For a
company to produce a quality product, employees need to know how to do their jobs. For
TQM to be successful, organizations must commit to training employees at all levels.
TQM should provide comprehensive training, including technical expertise,
communication skills, small-team management, problem-solving tools, and customer
relations.
All organizations should focus on the following for successful TQM implementation:
Features :Features are additional characteristics that enhance the appeal of the product or
service to the user.Similar thinking can be applied to features, a second dimensions of
quality that is often a secondary aspects of performance. Features are the "bells and
whistles" of products and services, those characteristics that supplement their basic
functioning. Examples include free drinks on a plane, permanent-press cycles on a
washing machine, and automatic tuners on a color television set. The line separating
primary performance characteristics from secondary features is often difficult to draw
Reliability :Reliability is the likelihood that a product will not fail within a specific time
period. This is a key element for users who need the product to work without fail.This
dimension reflects the probability of a product malfunctioning or failing within a specified
time period. Among the most common measures of reliability are the mean time to first
failure, the mean time between failures, and the failure rate per unit time. Because these
measures require a product to be in use for a specified period, they are more relevant to
durable goods than to products and services that are consumed instantly.Reliability
normally becomes more important to consumers as downtime and maintenance become
more expensive. Farmers, for example, are especially sensitive to downtime during the
short harvest season. Reliable equipment can mean the difference between a good year
and spoiled crops. But consumers on other markets are more attuned than ever to product
reliability too. Computers and copying machines certainly compare on this
basis.Reliability may be closely related to performance. For instance, a product
specification may define parameters for up-time, or acceptable failure rates. Reliability is
a major contributor to brand or company image, and is considered a fundamental
dimension of quality by most end-users. I.E., recent market research shows that,
especially for women, reliability has become an automobile's most desired attribute.
Conformance :The dimension of conformance depicts to what extent a product’s design
and operating characteristics meet established standards. This dimension owes the most to
the traditional approaches to quality pioneered by experts like Juran.All products and
services involve specifications of some sort. When products are developed, these
specifications are set and a target is set, for instance the materials used or the dimension
of the product. Not only the target but also the tolerance (the range of permitted deviation
from the target) is defined. One problem with this approach is that there is little interest in
whether the specifications have been met exactly as long as the tolerance limits are
met.On the one hand, this can lead to the so-called “tolerance stack-up”. When two or
more parts are to be fit together, the size of their tolerances often determine how well they
will match. Should one part fall at a lower limit of its specification and a matching part at
its upper limit, a tight fit is unlikely. The link is likely to wear more quickly than one
made from parts whose dimensions have been centered more exactly.This problem can be
addressed by taking a different approach to measuring quality. Instead of measuring a
simple conformance to specifications, the degree to which parts or products diverge from
the ideal target is measured. Using this approach, process 1 (see picture) is better even
though some items fall beyond specification limits. The traditional approach would have
favoured process 2 because it produces more items within the specification limit. It was
demonstrated that the problem of “tolerance stack-up” is worse when the dimensions of
parts are more distant from the target than when they cluster around it, even if some parts
fall outside the tolerance. This approach requires a fresh look at the common process
quality factor of 'defect rate', to take into account the fact that two parts may each pass the
'tolerance test' separately but be unusable when the attempt is made to join them
together.In service businesses, measures of conformance normally focus on accuracy and
timeliness and include counts of processing errors, unanticipated delays and other
frequent mistake
Durability:Durability measures the length of a product’s life. When the product can be
repaired, estimating durability is more complicated. The item will be used until it is no
longer economical to operate it. This happens when the repair rate and the associated
costs increase significantly. Technically, durability can be defined as the amount of use
one gets from a product before it deteriorates. After so many hours of use, the filament of
a light bulb burns up and the bulb must be replaced. Repair is impossible. Economists call
such products "one-hoss shays.In other cases, consumers must weigh the expected cost, in
both dollars and personal inconvenience, of future repairs against the investment and
operating expenses of a newer, more reliable model. Durability, then, may be defined as
the amount of use one gets from a product before it breaks down and replacement is
preferable to continued repair.This approach to durability has two important implications.
First, it suggests that durability and reliability are closely linked. A product that often fails
is likely to be scrapped earlier than one that is more reliable; repair costs will be
correspondingly higher and the purchase of a competitive brand will look that much more
desirable. Second, this approach implies that durability figures should be interpreted with
care. An increase in product life may not be the result of technical improvements or the
use of longer-lived materials. Rather, the underlying economic environment simply may
have changed
Serviceability :Serviceability involves the consumer's ease of obtaining repair service
(example: access to service centers and/or ease of self-service), the responsiveness of
service personnel(example: ease of getting an appointment, willingness of repair
personnel to listen to the customer), and the reliability of service (example: whether the
service is performed right the first time). Competence and ease of repair is the speed with
which the product can be put into service when it breaks down, as well as the competence
and the behavior of the service personnel.Consumers are concerned not only about a
product breaking down but also about the time before service is restored, the timeliness
with which service appointment are kept, the nature of dealings with service personnel,
and the frequency with which service calls or repairs fail to correct outstanding problems.
In those cases where problems are not immediately resolved and complaints are filed, a
company's complaint handling procedures are also likely to affect customer's ultimate
evaluation of product and service quality.Some of these variables reflect differing
personal standards of acceptable service. others can be measured quite objectively.
Customers may remain dissatisfied even after completion of repairs. How these
complaints are handled is important to a company's reputation for quality and service.
Eventually, profitability is likely to be affected as well. Companies differ widely in their
approaches to complaint handling and in the importance they attach to this element of
serviceability. Some do their best to resolve complaints; others use legal gimmicks,
the silent treatment and similar ploys to rebuff dissatisfied customers.For example
recently,[5] General Electric, Procter & Gamble and other companies have sought to
preempt consumer dissatisfaction by installing toll-free telephone hot lines to their
customer relations departments.Important attributes for serviceability dimension are:
service warranty, parts warranty, parts availability, number of reasonable distance to
dealer service centers, distance to service parts center-dealer, distance to service parts
center individual, length of wait for service appointment, schedule of preventive
maintenance, employees listen to customers, information regarding repairs, courteous
service centers, repaired correctly first time, service time relative to other dealers,
warranty claims handled without argument, average repair cost/year, extended warranty,
underestimation of service cost and provision of loan car
Aesthetics :The aesthetic properties of a product contribute to a company's or brand's
identity. Faults or defects in a product that diminish its aesthetic properties, even those
that do not reduce or alter other dimensions of quality, are often cause for rejection.
Aeshetics refers to how the product looks,feels,sounds,tastes or smells.It is clearly a
matter of personal judgement and a reflection of individual preference.Nevertheless,there
appear to be some patterns in consumers' rankings of products on the basis of taste. A
recent study of quality in 33 food categories,for example,found that high quality was most
often associated with "rich and full flavour,tastes natural,tastes fresh,good aroma, and
looks appetizing". Aesthetics also refers to the "outside" feel of the product. The
aesthetics dimension differs from subjective criteria pertaining to "performance" in that
aeshetic choices are not nearly universal. Not all people prefer "rich and full" flavor or
even agree on what that means. Companies therefore have to search for a niche.On this
dimension of quality, it is impossible to please everyone.
Perception :Perception is not always reality. Consumers do not always have complete
information about a product's or service's attributes; indirect measures may be their only
basis for comparing brands. A product's durability for example, can seldom be observed
directly; it usually must be inferred from various tangible and intangible aspects of the
product. In such circumstances, images, advertising and brand names-inferences about
quality rather than the reality itself-can be critical. For this reason, both Honda-which
makes cars in Marysville, Ohio-and Sony-which builds color televisions in San Diego-
have been reluctant to publicize that their products are "made in America". Reputation is
the primary stuff of perceived quality. Its power comes from an unstated analogy: that the
quality of products today is similar to the quality of products of yesterday,or the quality of
goods in a new product line is similar to the quality of a company's established products
SUPPLIER SELECTION
SUPPLIER SELECTION
1. The supplier should understand clearly the management philosophy of the organization.
7. The supplier should quote right price and should meet the delivery schedule. The
9. The supplier should have an effective quality system such as ISO / QS 9000.
SUPPLIER CERTIFICATION :
A certified supplier is one which, after extensive investigation, is found to supply material of such
quality that is not necessary to perform routine testing.The Eight criteria for supplier certification
are
SUPPLIER RATING :
It makes no difference what business you are in, suppliers and vendors play a key role in your
company's success. Having a formalized system in place to track and evaluate supplier and vendor
performance is essential to the smooth operation and profitability of your company.
Successful companies embrace their suppliers and vendors, viewing them as partners in helping to
grow the business. Making sure that this is a mutually beneficial partnership will impact the price
you are negotiating today and the quality of service you get in future, says Dennis Wright, a
management consultant from the SCORE Orange County office. If a supplier/vendor is a key part
or service to your operation invite that supplier or vendor to strategic meetings that involve the
product they work with. A common mistake companies make is to have a combative relationship
with their suppliers and vendors. 'That is the opposite of what you want to do,' says Drew
Greenblatt, president of Baltimore-based Marlin Steel Wire Products, which makes custom
stainless steel metal baskets, brackets and other parts. 'A lot of companies will actually have an
adversarial relationship where they hire purchasing people who have on brass knuckles and try to
beat up on vendors to get better prices or better terms.' That is a very shortsighted way to do
business, according to Wright and Greenblatt.
Instead of getting stuck on price, focus on quality of service. A vendor can have the lowest price
and the lowest quality of work, too. Your goal is understand what value-add is a given vendor
bringing to your company. Your business should have a system in place for evaluating, selecting
and then reevaluating the suppliers and vendors it works with.
Here are seven tips and tools you'll need to effectively rate your suppliers and vendors , track their
performance, and ultimately increase your company's overall productivity.
At the onset of the vendor relationship you have to determine what characteristics a vendor needs
to have, demonstrate, or maintain to continue doing business with your company. Create specific
performance criteria for tracking and evaluating your suppliers and vendors on a regular basis —
monthly, quarterly, and/or annually.
Considerations include size of the company, number of certifications, quality management
systems, complaint history, and financial stability. For instance, you might consider if they have a
documented procedure for the product or service they provide? 'We look at a couple of driving
metrics to evaluate how good our vendors are,' says Greenblatt, 'including percentages of on -time
performance, number of times we received a quality part or product, and how quickly the vendor
responded to requests for quotes.'
Your own processes and needs will dictate what criteria you apply. For a business owner who is
looking for a shipping company, the biggest concerns might revolve around what is that supplier's
on time delivery track record, how many trucks they own, how many accidents have their drivers
reported, and what certifications do they hold.
A basic consideration for every business owner should be whether the supplier has a quality
management system in place. 'This doesn't just apply to manufacturing but any business including
service providers,' explains Miriam Boudreaux, president of Mireaux Management Solutions, a
Houston-based consulting that specializes in the implementation of quality management systems.
'It's really about if the supplier has a certain set of procedures in place that its people are expected
to follow. Is there a system for handling complaints or problems? Are there corrective or
preventive actions?' Such standards will be addressed if the vendor is ISO certified.
If you have a huge number of suppliers and vendors and you intend to craft a survey to evaluate
them, it will be cumbersome to apply the same survey to each and every one, says Boudreaux. It is
better to separate suppliers into levels (1, 2, and 3) based on how critical they are, she advises.
Decide the classification that is best for you and evaluate suppliers according to the effect they
have on your product or service in order of importance, Boudreaux adds.
Marlin Steel exports wire baskets and forms all around the world including Japan, Columbia and
China. Greenblatt points to the fact that 'about 80 percent of my vendors do 20 percent of my dollar
amount of work and about 20 percent of my vendors do 80 percent of my activity.'
By divvying up suppliers into two categories such as critical and non-critical or primary and
secondary, you can devote more time to measuring the performance of your critical suppliers.
There are common techniques for rating a supplier's performance including evaluation forms,
surveys, system metrics, and software applications. Marlin Steel tracks vendor performance using a
customized program he created in QuickBooks Enterprise Solutions accounting software, the
Manufacturing & Wholesale edition.
You can craft a survey where you ask your own employees to answer questions and to rate
suppliers and vendors. You can review how many corrective actions you had to issue a supplier or
vendor, how many products you had to scrap or return because the supplier or vendor failed to
meet specifications, or how many customer complaints you received due to a bad part or service
from a vendor. You also can monitor suppliers and vendors by doing an audit periodically. The
bottom line is that you need to generate measurements or reports at the on set of the purchase and
throughout the course of the supplier and vendor relationship.
'We did vendor reviews where we would bring them together offsite at a hotel with our IT and
procurement people,' says Wright, who in his last business life for eight years was vice president
and director of procurement for a large global engineering company. At the point he retired, the
company had 100 plus suppliers and vendors ranging from Microsoft to United Airlines to a small
staffing agency. 'We would line them up. So, at 9 in the morning AT&T would be making a
presentation to our group. When AT&T finished and left the room they would find the Verizon
salespeople standing in the lobby waiting for their turn,' Wright explains. 'We created a little
competition amongst vendors.'
Wright says periodic vendor reviews would also entail a discussion about what the company had
been buying, how much it had been buying, what did that vendor have on the shelf or working on
for push out six months or a year down the road and did it represent a significant improvement
over what had been previously purchased, and what were competitors buying from a particular
vendor.
Once you establish the criteria for evaluating suppliers and vendors, wh o in your company will be
responsible for reviewing the data. It depends on how much resources you have to dedicate to
evaluating your suppliers, says Boudreaux. 'You may want to assign one person or a team with this
task.' For instance, selecting and evaluating level 1 suppliers and vendors, might require the chief
financial officer or someone from the finance department along with the president and
representatives from purchasing, operations, and engineering or IT. With level 2 and 3 suppliers
and vendors, it may be the purchasing or procurement officer who approves the supplier or vendor
list and monitors performance.
'I always made sure that the user group was involved in the process. The individuals who were
using the product or service were very active in the process from the very beginning—at the point
of selection,' Wright says.
'To improve our relationship and communication with our vendors, we added a page to all of our
print materials (drawings) calling out exactly how we are going to package things,' adds
Greenblatt. 'So, if it is going to be two layers of bubble wrap or an extra layer of padding between
each part so that there is no scratching. We go through that level of detail so that we are not
disappointed when parts come in.'
As you monitor a supplier's performance, you have to decide when to praise them and when to
issue a read flag, says Boudreaux. Show appreciation for a job well done; give a supplier additional
business because of excellent performance. 'A bad supplier will provide you with mediocre or poor
products and services and cause a problem with your customers,' adds Boudreaux.
You can drop a supplier for poor performance but strategically it is better to reta in your vendors
and not to flip around all of the time to replace them. By giving a warning, you give the supplier or
vendor an opportunity to correct the problem. Use data that you have collected like on -time
delivery rate, return rate, and number of supplier corrective actions to work with your suppliers,
says Boudreaux. 'This process is not just about reviewing your suppliers but helping them to
improve their performance.'
7. Cut Loose Weak Links
No one of course should tolerate ongoing bad service. There may come a time when you have to let
go of an underperforming supplier or vendor. 'We fired a vendor that was really cheap but was not
meeting the ship dates. They were also non-responsive to complaints. They cut corners and handed
in shoddy paperwork,' Greenblatt cites an example.
'We give a warning and then put them on notice or a short leash before we cut ties completely,' he
explains. 'We will call the vendor and give them an opportunity to correct the situation. We will
send them digital pictures, e-mails, and quality reports. So, there is no mystery when there is a
challenge or an issue.'
The relationship with your supplier is a business partnership, says Wright, and if both parties are
working to make sure that the partnership is a success it will be a success. In the long run, having a
win-win supplier and vendor relationship will be a competitive advantage.
Vendor rating is the result of a formal vendor evaluation system. Vendors or suppliers are given
standing, status, or title according to their attainment of some level of performance, such as
delivery, lead time, quality, price, or some combination of variables. The motivation for the
establishment of such a rating system is part of the effort of manufacturers and service firms to
ensure that the desired characteristics of a purchased product or service is built in and not
determined later by some after-the-fact indicator. The vendor rating may take the form of a
hierarchical ranking from poor to excellent and whatever rankings the firm chooses to insert in
between the two. For some firms, the vendor rating may come in the form of some sort of award
system or as some variation of certification. Much of this attention to vender rating is a direct result
of the widespread implementation of the just-in-time concept in the United States and its focus on
the critical role of the buyer-supplier relationship.
Most firms want vendors that will produce all of the products and services defect -free and deliver
them just in time (or as close to this ideal as reasonably possible). Some type of vehicle is needed
to determine which supplying firms are capable of coming satisfactorily close to this and thus to be
retained as current suppliers. One such vehicle is the vendor rating.
In order to accomplish the rating of vendors, some sort of review process must take place. The
process begins with the identification of vendors who not only can supply the needed product or
service but is a strategic match for the buying firm. Then important factors to be used as criteria for
vendor evaluation are determined. These are usually variables that add value to the process through
increased service or decreased cost. After determining which factors are critical, a method is
devised that allows the vendor to be judged or rated on each individual factor.
It could be numeric rating or a Likert-scale ranking. The individual ratings can then be weighted
according to importance, and pooled to arrive at an overall vendor rating. The process can be
somewhat complex in that many factors can be complementary or conflicting. The process is
further complicated by fact that some factors are quantitatively measured and others subjectively.
Once established, the rating system must be introduced to the supplying firm through some sort of
formal education process. Once the buying firm is assured that the vendor understands what is
expected and is able and willing to participate, the evaluation process can begin. The evaluation
could be an ongoing process or it could occur within a predetermined time frame, such as
quarterly. Of course the rating must be conveyed to the participating vendor with some firms
actually publishing overall vendor standings. If problems are exposed, the vendor should formally
present an action plan designed to overcome any problems that may have surfaced. Many buying
firms require the vendor to show continuing improvement in predetermined critical areas.
Vendor performance is usually evaluated in the areas of pricing, quality, delivery, and service.
Each area has a number of factors that some firms deem critical to successful vendor performance.
Competitive pricing. The prices paid should be comparable to those of vendors providing
similar product and services. Quote requests should compare favorably to other vendors.
Price stability. Prices should be reasonably stable over time.
Price accuracy. There should be a low number of variances from purchase-order prices on
invoiced received.
Advance notice of price changes. The vendor should provide adequate advance notice of
price changes.
Sensitive to costs. The vendor should demonstrate respect for the customer firm's bottom
line and show an understanding of its needs. Possible cost savings could be suggested.
The vendor should also exhibit knowledge of the market and share this insight with the
buying firm.
Billing. Are vendor invoices are accurate? The average length of time to receive credit
memos should be reasonable. Estimates should not vary significantly from the final
invoice. Effective vendor bills are timely and easy to read and understand.
Compliance with purchase order. The vendor should comply with terms and conditions as
stated in the purchase order. Does the vendor show an understanding of the customer
firm's expectations?
Conformity to specifications. The product or service must conform to the specifications
identified in the request for proposal and purchase order. Does the product perform as
expected?
Reliability. Is the rate of product failure within reasonable limits?
Reliability of repairs. Is all repair and rework acceptable?
Durability. Is the time until replacement is necessary reasonable?
Support. Is quality support available from the vendor? Immediate response to and
resolution of the problem is desirable.
Warranty. The length and provisions of warranty protection offered should be reasonable.
Are warranty problems resolved in a timely manner?
State-of-the-art product/service. Does the vendor offer products and services that are
consistent with the industry state-of-the-art? The vendor should consistently refresh
product life by adding enhancements. It should also work with the buying firm in new
product development.
Time. Does the vendor deliver products and services on time; is the actual receipt date on
or close to the promised date? Does the promised date correspond to the vendor's
published lead times? Also, are requests for information, proposals, and quotes swiftly
answered?
Quantity. Does the vendor deliver the correct items or services in the contracted quantity?
Lead time. Is the average time for delivery comparable to that of other vendors for similar
products and services?
Packaging. Packaging should be sturdy, suitable, properly marked, and undamaged.
Pallets should be the proper size with no overhang.
Documentation. Does the vendor furnish proper documents (packing slips, invoices,
technical manual, etc.) with correct material codes and proper purchase order numbers?
Emergency delivery. Does the vendor demonstrate extra effort to meet requirements when
an emergency delivery is requested?
Finally, these are service factors to consider:
Good vendor representatives have sincere desire to serve. Vendor reps display courteous
and professional approach, and handle complaints effectively. The vendor should also
provide up-to-date catalogs, price information, and technical information. Does the vendor
act as the buying firm's advocate within the supplying firm?
Inside sales. Inside sales should display knowledge of buying firms needs. It should also
be helpful with customer inquiries involving order confirmation, shipping schedules,
shipping discrepancies, and invoice errors.
Technical support. Does the vendor provide technical support for maintenance, repair, and
installation situations? Does it provide technical instructions, d ocumentation, general
information? Are support personnel courteous, professional, and knowledgeable? The
vendor should provide training on the effective use of its products or services.
Emergency support. Does the vendor provide emergency support for repair or
replacement of a failed product.
Problem resolution. The vendor should respond in a timely manner to resolve problems.
An excellent vendor provides follow-up on status of problem correction.
A 2001 article in Supply Management notes that while pricing, quality, delivery, and service are
suitable for supplies that are not essential to the continued success of the buying firm, a more
comprehensive approach is needed for suppliers that are critical to the success of the firm's strategy
or competitive advantage. For firms that fall into the latter category performance may need to be
measured by the following 7 C's.
If two or more firms supply the same or similar products or services, a standard set of criteria can
apply to the vendor's performance evaluation. However, for different types of firms or firms
supplying different products or services, standardized evaluation criteria may not be valid. In this
case, the buying firm will have to adjust its criteria for the individual vendor. For example, Honda
of America adjusts its performance criteria to account for the impact of supplier problems on
consumer satisfaction or safety. A supplier of brakes would be held to a stricter standard than a
supplier of radio knobs.
Many buying firms utilize awards and certification programs to rate vendors. Attainment of
certification status or an award serves as an indicator of supplier excellence. Certification and
awards-program recognition represents a final step in an intense journey that involves rigorous data
collection under the total-quality-management-rubric as well as multitudes of meetings with
suppliers and purchasing internal customers. Serious buying firms view these programs as
an integral part of their overall efforts to improve the total value of the company.
The attainment of a supplier award usually serves as an indication that the vendor has been rated as
excellent. Intel awards their best suppliers the Supplier Continuous Quality Improvement Award
(SCQI). Other firms may utilize a hierarchy of awards to indicate varying degrees of performance
from satisfactory to excellent. DaimlerChrysler awards its best suppliers the Gold Pentastar Award.
Several hundred vending firms receive this award per year. However, only a handful (less than a
dozen) of DaimlerChrysler's vendors are good enough to garner the Platinum Pentastar Award.
For other firms, supplier certification is desirable. Supplier certification can be defined as a process
for ensuring that suppliers maintain specific levels of performance in the areas of price, quality,
delivery, and service. Certification implies that participating firms have reached a level of
excellence that other firms were unable or unwilling to achieve. For example a quality certified
firm maintains a level of quality such that customer-receiving inspection may be utilized with
decreasing frequency up to the point where it is eliminated altogether. Theoretically, this will
ensure that all of the supplier's products meet the customer's product specifications. In this case, the
goal of supplier certification is quality at the source.
While it is uncertain whether individual firms are consistent in the manner in which
they certify vendors, a quality certification would likely require that the vending firm be part of a
formal education program, utilize statistical process control (SPC), and have a quality assurance
plan (set written procedures).
--
BENEFITS
Helping minimize subjectivity in judgment and make it possible to consider all relevant
criteria in assessing suppliers.
Providing feedback from all areas in one package.
Facilitating better communication with vendors.
Providing overall control of the vendor base.
Requiring specific action to correct identified performance weaknesses.
Establishing continuous review standards for vendors, thus ensuring continuous
improvement of vendor performance.
Building vendor partnerships, especially with suppliers having strategic links.
Developing a performance-based culture.
Vendor ratings systems provide a process for measuring those factors that add value to the buying
firm through value addition or decreased cost. The process will continually evolve and the criteria
will change to meet current issues and concerns.
For example, some feel that supplier evaluation must now reflect the strategic direction of the
buying company's environmental initiatives. As a result, some firms have recently developed
supplier evaluation systems that place significant weight on environment al criteria. It would seem
that the concept will remain valid for some time.
PDSA Cycles
Making improvements in services requires changing things. Change can seem threatening
or overwhelming for busy people doing demanding work. The PDSA method is a way to
break down change into manageable chunks, and test each small part to make sure that
things are improving and no effort is wasted.
What is it?
PDSA stands for Plan, Do, Study, Act. It's a model for testing ideas that you think may
create an improvement. It can be used to test ideas for improvement quickly and easily
based on existing ideas, research, feedback, theory, review, audit, etc or practical ideas
that have been proven to work elsewhere. It uses simple measurements to monitor the
effect of changes over time. It encourages starting with small changes, which can build
into larger improvements in the service through successive quick cycles of change. The
PDSA Cycle
It is:
A common sense of approach to change and improvement Quick and simple Do' able It is
not: Complicated Difficult Gimmicky Why is it useful? It works! The PDSA cycle has
been used for decades as an effective tool for improvement and it's still going strong! The
method is well established and validated and is particularly suited to small, dynamic
organisations like general practice. It's an extremely practical, common sense based
approach that is easy to understand. How do I do it? - The step-by-step guide to the PDSA
cycle:
Step 1 PLAN
Identify what change you think will create improvement and then plan the test of the
change. What is your objective in introducing the change? It is important to establish the
scope of the change to be introduced, and how you are going to collect information about
the differences that occur, how will you know whether the change made has 'worked' or
not?The change should bring about differences which are measurable in isolation. A
major change could be broken down into smaller more manageable 'chunks'. Once the
actual change to be introduced has been agreed, the following questions should be asked:
What are we trying to do during this cycle? What exactly will you do? Who will be
involved? Where will it take place? When will it take place? What do you predict will
happen? What data/information will you need to collect?
Step 2 DO
Put the plan into practice - test change by collecting the data. This stage involves carrying
out the plans agreed in step 1. It is important that the Do stage is kept short as possible.
There may be changes that should only be measured over long periods. Record any
unexpected events, problems and other observations. Start analysing the data.
Step 3 STUDY Review and reflect. Complete the analysis of the data. Has there been an
improvement? Did your expectations match the reality of what happened? What could
have been done differently?
Step 4 ACT
Make further changes or amendments after you have decided what worked and what
didn't and collect data again. Carry out an 'amended' version of what happened during the
Do stage and measure any differences. Handy Hints Keep it simple Keep it small and
manageable to start - massive projects can be broken down into a number of small, quick
PDSA cycles. Cycles should happen quickly - think in terms of a day or two not a month!
There is no wrong answer, if you find something that works - use it!
Literature Review
A systematic literature search was performed independently by both presenters. The first
presenter’s literature search was completed using Cumulative Index to Nursing and Allied
Health Literature (CINAHL) Plus EBSCOhost, Medline via OVID, Proquest Nursing and
Allied Health, and Google Scholar electronic databases. The search was limited to 1998
– 2012 scholarly peer reviewed English articles, using the key word PDSA which resulted
in 399 articles. A Boolean search using PDSA in combination with staff development,
organizational change, advantages and disadvantages narrowed the results to 24 articles.
These articles were hand reviewed for presentation relevancy and article content
saturation yielding a total of six articles. A primary search by the second presenter using
CINAHL Plus EBSCOhost, Medline via OVID, and Google Scholar was limited to 2002-
2012, and used the key word PDSA which produced 2,530 articles. A Boolean search
usingPDSA in multiple combinations with healthcare change, team functioning, change
leadership, organizational context resulted in 955 articles of which abstracts from the first
75 articles in Google Scholar and first 20 articles from each CINAHL and Medline via
OVID were scanned for presentation relevancy. Content saturation produced 11 peer
reviewed English articles. Three duplicates from the presenters’ results were eliminated
yielding a collective result of 14 articles, composed of research (n=2), case study (n=5),
literature synthesis (n=4) and clinical practice (n=3).
PDSA Literature Review
What does the literature say about PDSA and Healthcare Organizational Change?
The PDSA model is composed of four phases (Baxley et al., 2011; Duffy & Morgan,
2011; Johnson & Raterink, 2009; Powell, et al., 2009; Spence & Cappleman, 2011; Taylor
& Hamilton Crowe, 2011; Walley & Gowland, 2004):
Plan
Do
Study
Act
Case Study reports demonstrate PDSA’s positive contribution to team collaboration
(O’Toole, Cabral, Blumen & Blake, 2011; Spence & Cappleman, 2011) as well as
improvements to health care service models through process improvements that better
meet the needs of the patient and the staff (Hoffman, Green, Ford, Wisdom, Gustafson &
McCarty, 2012; Johnson & Raterink, 2008; Varkey, Sathananthan, Scheifer, Bhagra,
Fujiyoshi, Tom & Murad, 2009).
However, PDSA is not shown successful in every change situation. The literature
suggests poor outcomes are most prevalent in situations where the cycle was not fully
completed (Baxley, et al., 2011; Spence & Cappleman, 2011), or the PDSA cycle as a
small step change model was inappropriately selected for the organizational context and
culture (Curnock, et al., n.d.; Kaplan, et al., 2010; Powell, et al., 2008).
Successful change using the PDSA model relies on a bottom up approach with strong
frontline engagement and leadership support, along with dedicated time and resources
(Curnock, et al., n.d.; Hoffman, et al., 2012; Johnson & Raterink, 2009; Powell, et al.,
2008; Spence & Cappleman, 2011).
PDSA is consistently referred to as a renown Quality Improvement tool that supports
successful change using small incremental steps (Baxley, Bennett, Pumkam, Crutcher, &
Helms, 2011; Berwick, 1998; Curnock, Ferguson, McKay & Bowie, n.d.; Duffy &
Morgan, 2011; Hoffman, Green, Ford, Wisdom, Gustafson, McCarty, 2012; Johnson &
Raterink, 2009; Kaplan, Brady, Dritz, Hooper, Linam, Froehle, Margolis, 2010; O’Toole,
Cabral, Blumen & Blake, 2011; Powell, Rushmer, & Davies, 2008; Powell, Rushmer &
Davies, 2009; Spence & Cappleman, 2011;Taylor & Hamilton Crowe, 2011; Varkey,
Sathananthan, Scheifer, Bhagra, Fujiyoshi, Tom & Murad, 2009; Walley & Gowland,
2004).
Performance Appraisal
“It is a systematic evaluation of an individual with respect to performance on the job and
individual’s potential for development.” “It is formal, structured system of measuring,
evaluating job related behaviors and outcomes to discover reasons of performance and
how to perform effectively in future so that employee, organization and society all
benefits.”
To collect PA data, there are three main methods: objective production, personnel, and
judgmental evaluation. Judgmental evaluations are the most commonly used with a large
variety of evaluation methods. [1] Historically, PA has been conducted annually (long-
cycle appraisals); however, many companies are moving towards shorter cycles (every six
months, every quarter), and some have been moving into short-cycle (weekly, bi-weekly)
PA .The interview could function as "providing feedback to employees, counseling and
developing employees, and conveying and discussing compensation, job status, or
disciplinary decisions".PA is often included in performance management systems. PA
helps the subordinate answer two key questions: first, "What are your expectations of
me?" second, "How am I doing to meet your expectations?"
Performance management systems are employed “to manage and align" all of an
organization's resources in order to achieve highest possible performance“How
performance is managed in an organization determines to a large extent the success or
failure of the organization. Therefore, improving PA for everyone should be among the
highest priorities of contemporary organizations".
Describe the work and Translate job requirements Describe the job relevant
personnel requirement of a into levels of acceptable or strengths and weaknesses
particular job. unacceptable performance of each individual.
Objectives of Performance Appraisals
Use of Performance Appraisals
1. Promotions
2. Confirmations
4. Compensation reviews
5. Competency building
6. Improve communication
7. Evaluation of HR Programs
Performance feedback
Promotion
Retention / Termination
Recognition
Lay offs
Training Needs
Goal Identification
HR Systems Evaluation
For HR Decisions
Legal Requirements
5. Performance Interviews
Broadly all methods of appraisals can be divided into two different categories.
1. Rating Scales: Rating scales consists of several numerical scales representing job
related performance criterions such as dependability, initiative, output, attendance,
attitude etc. Each scales ranges from excellent to poor. The total numerical scores are
computed and final conclusions are derived. Advantages – Adaptability, easy to use, low
cost, every type of job can be evaluated, large number of employees covered, no formal
training required. Disadvantages – Rater’s biases
3. Forced Choice Method: The series of statements arranged in the blocks of two or
more are given and the rater indicates which statement is true or false. The rater is forced
to make a choice. HR department does actual assessment. Advantages – Absence of
personal biases because of forced choice. Disadvantages – Statements may be wrongly
framed.
4. Forced Distribution Method: here employees are clustered around a high point on a
rating scale. Rater is compelled to distribute the employees on all points on the scale. It is
assumed that the performance is conformed to normal distribution. Advantages –
Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors of
central tendency.
10. Essay Method: In this method the rater writes down the employee description in
detail within a number of broad categories like, overall impression of performance,
promoteability of employee, existing capabilities and qualifications of performing jobs,
strengths and weaknesses and training needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees that often occur in a better-
structured checklist. Disadvantages – It its highly dependent upon the writing skills of
rater and most of them are not good writers. They may get confused success depends on
the memory power of raters.
11. Cost Accounting Method: Here performance is evaluated from the monetary returns
yields to his or her organization. Cost to keep employee, and benefit the organization
derives is ascertained. Hence it is more dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are
collection of different methods that compare performance with that of other co-workers.
The usual techniques used may be ranking methods and paired comparison method.
Ranking Methods: Superior ranks his worker based on merit, from best to worst.
However how best and why best are not elaborated in this method. It is easy to administer
and explanation.
Paired Comparison Methods: In this method each employee is rated with another
employee in the form of pairs. The number of comparisons may be calculated with the
help of a formula as under.
N x (N-1) / 2
Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting
short-term goals rather than important and long-term goals etc.
Applications of results[edit]
Despite all the potential advantages of formal performance appraisals (PAs), there are also
potential drawbacks. It has been noted that determining the relationship between
individual job performance and organizational performance can be a difficult
task. Generally, there are two overarching problems from which several complications
spawn. One of the problems with formal PAs is there can be detrimental effects to the
organization(s) involved if the appraisals are not used appropriately. The second problem
with formal PAs is they can be ineffective if the PA system does not correspond with
the organizational culture and system.
Although performance appraisals can be so easily biased, there are certain steps that can
be taken to improve the evaluations and reduce the margin of errors through the
following:
Labor Unions
Labor unions represent 11% (7% in the private sector) of the work force in
the United States. In some cases they may require that seniority be taken as
one of the main criteria for promotion. However, length of job experience
may not always be a reliable indication of the ability to perform a higher
level job. That is why some employers give senior people the first
opportunity for promotion, but the employer may seek to further qualify the
employee for that promotion because of their abilities (not solely because of
length of service). Performance appraisals may provide a basis for
assessment of employee merit as a component of these decisions.
Managers
Managers who have had unsatisfactory experiences with inadequate or poorly designed
appraisal programs may be skeptical about their usefulness.
Some managers may not like to play the role of a judge and be
responsible for the future of their subordinates.
They may be uncomfortable about providing negative feedback to the
employees.
This tendency can lead them to inflate their assessments of the workers’
job performance, giving higher ratings than deserved.
Advantages Of Performance Appraisal
It helps the supervisors to chalk out the promotion programs for efficient
employees. In this regards, inefficient workers can be dismissed or
demoted in case.
It helps in chalking out compensation packages for employees. Merit
rating is possible through performance appraisal. PA tries to give worth to
a performance. Compensation packages which include bonus, high salary
rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
The systematic procedure of PA helps the supervisors to frame training
policies and programs. It helps to analyze strengths and weaknesses of
employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programs.
It helps the supervisors to understand the validity and importance of the
selection procedure. The supervisors come to know the validity and
thereby the strengths and weaknesses of selection procedure. Future
changes in selection methods can be made in this regard.
For an organization, effective communication between employees and
employers is very important.
It serves as a motivation tool. Through evaluating performance of
employees, a person's efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him
to improve his performance in the future.
Leadership can be hard to define and it means different things to different people.
In the transformational leadership model,leaders set direction and help themselves
and others to do the right thing to move forward. To do this they create an inspiring
vision, and then motivate and inspire others to reach that vision.
Leaders are people who do the right thing; managers are people who do
things right.– Professor Warren G. Bennis
Leadership is the art of getting someone else to do something you want
done because he wants to do it.– Dwight D. Eisenhower
“Leadership appears to be, like power, an ‘essentially contested concept’”
(Gallie, 1955 cited in Grint, 2004, p1)
The word "leadership" can bring to mind a variety of images. For example:
An explorer, cutting a path through the jungle for the rest of his group to
follow.
In this article, we'll focus on the process of leadership. In particular, we'll discuss
the "transformational leadership" model, first proposed by James MacGregor
Burns and then developed by Bernard Bass. This model highlights visionary
thinking and bringing about change, instead of management processes that are
designed to maintain and steadily improve current performance.Leadership means
different things to different people around the world, and different things in
different situations. For example, it could relate to community leadership,
religious leadership, political leadership, and leadership of campaigning groups..
A compelling vision provides the foundation for leadership. But it's leaders' ability
to motivate and inspire people that helps them deliver that vision.
For example, when you start a new project, you will probably have lots of
enthusiasm for it, so it's often easy to win support for the project at the beginning.
However, it can be difficult to find ways to keep your vision inspiring after the
initial enthusiasm fades, especially if the team or organization needs to make
significant changes in the way that they do things. Leaders recognize this, and they
work hard throughout the project to connect their vision with people's individual
needs, goals, and aspirations.
One of the key ways they do this is through Expectancy Theory means effective
leaders link together two different expectations:
1. The expectation that hard work leads to good results.
2. The expectation that good results lead to attractive rewards or incentives.
This motivates people to work hard to achieve success, because they expect to
enjoy rewards – both intrinsic and extrinsic – as a result.
Other approaches include restating the vision in terms of the benefits it will bring
to the team's customers, and taking frequent opportunities to communicate the
vision in an attractive and engaging way.
What's particularly helpful here is where leaders have expert power . People
admire and believe in these leaders because they are expert in what they do. They
have credibility, and they've earned the right to ask people to listen to them and
follow them. This makes it much easier for these leaders to motivate and inspire
the people they lead.
Leaders can also motivate and influence people through their natural charisma and
appeal, and through other sources of power .
This is the area of leadership that relates to management .Leaders must ensure that
the work needed to deliver the vision is properly managed – either by themselves,
or by a dedicated manager or team of managers to whom the leader delegates this
responsibility – and they need to ensure that their vision is delivered
successfully.To do this, team members need performance goals that are linked to
the team's overall vision. Our article on Performance Management and KPIs
Leaders also need to make sure they manage change effectively. This helps to
ensure that the changes needed to deliver the vision are implemented smoothly
and thoroughly, with the support and backing of the people affected.
1. Specificity
Employees want leaders to provide them with specific
direction and to avoid corporate speak – to get to the point
and be direct in telling them what to do and what is
specifically expected from them. Don’t beat around the
bush. Be specific rather than vague to avoid unexpected
surprises without the proper preparation.
2. Empowerment
Employees don’t always want to have to ask for
permission. They want to be empowered to make
decisions and to learn from their failures. Employees want
leaders that will provide them with the mentoring and
wisdom to effectively solve problems and become more
independent and productive.
4. Honesty
Many leaders tend to tell only half the truth. While it is
understandable that they may want to hold back the whole
truth to avoid the unnecessary chaos and uncertainty that
may come with it – employees expect real leaders to be
transparent, trustworthy, open up their hearts and lead with
kindness.
5. Accountability
Employees expect leaders to be accountable to others as
much as themselves. Too many leaders cut corners,
delegate too much and push off problems to others that
they should handle themselves. Leaders that avoid
adversity and the accountability that goes with it are those
who are trying to protect their reputations – when they
should be willing to put their reputations on the line to
protect those they lead.
Accountable leaders are the most respected and admired.
When leaders protect their employees and have their
backs, they will want to do the same for their leaders.
6. Respect
There is a distinct difference between recognition and
respect. Recognition explodes and subsides. Respect
reverberates and multiplies. The recognized leader
appeals to the head where things are easily forgotten, while
the respected leader captivates the heart – and the heart
does not forget.
Or maybe it's someone you know personally – like your boss, a teacher, or a
friend.
You can find people in leadership roles almost everywhere you look.
Instructions
For each statement, click the button in the column that best describes you. Please
answer questions as you actually are (rather than how you think you should be),
and don't worry if some questions seem to score 'in the wrong direction'. When
you are finished, please click the 'Calculate My Total' button at the bottom of the
test.
Not
at Rarely Sometimes Often Very Often
18 Statements to Answer All
6When circumstances
change, I can struggle to
know what to do.
Not
at Rarely Sometimes Often Very Often
18 Statements to Answer All
8 I am highly motivated
because I know I have what it
takes to be successful.
13 I make exceptions to my
rules and expectations – it’s
easier than being the enforcer
all the time!
Calculate My Total
Total = 0
Score Interpretation
Score Comment
You need to work hard on your leadership skills. The good news is that
18-34 if you use more of these skills at work, at home, and in the community,
you'll be a real asset to the people around you. You can do it – and now
Score Comment
Personal Characteristics
Successful leaders tend to have certain traits. Two keys areas of personal growth
and development are fundamental to leadership success: self-confidence, and a
positive attitude.
Self-Confidence
(Questions 2, 8)
Emotional Intelligence
(Questions 5, 15)
Transformational Leadership
Transformational leadership is a leadership style where leaders create an inspiring
vision of the future, motivate their followers to achieve it, manage implementation
successfully, and develop the members of their teams to be even more effective in
the future. We explore these dimensions below.
(Questions 6, 14)
This is your ability to create a robust and compelling vision of the future , and
to present this vision in a way that inspires the people you lead.
The first part of being able to do this is to have a thorough knowledge of the area
you're operating in. See our Bite-Sized Training session on Building Expert
Power to find out how to develop this.
From there, good use of strategic analysis techniques can help you gain the key
insights you need into the environment you're operating in, and into the needs of
your clients. See our Strategy section for more than 50 powerful techniques that
give you these insights.
With these tools, you can explore the challenges you face and identify the options
available to you. You can identify the best of these with good use of prioritization
skills and appropriate decision-making techniques .
Finally, to sell your vision, you need to be able to craft a compelling and
interesting story. Our article, "Powers of Persuasion ," can help you open closed
minds, so that people consider your ideas fairly. Another great way of inspiring
people is to use vivid stories to explain your vision: find out more about this in our
Expert Interview with Annette Simmons, titled Whoever Tells the Best Story
Wins.
(Questions 9, 12)
This is closely related to creating and selling a vision. You must be able to
convince others to accept the objectives you've set. Emphasize teamwork, and
recognize that when people work together, they can achieve great things. To
provide effective leadership by linking performance and team goals,
use Management by Objectives (MBO) and Key Performance Indicators
(KPIs) .
Ultimately, you need to motivate people to deliver your vision. To better
understand your ability to motivate, complete our quiz How Good Are Your
Motivation Skills? , and explore our articles on Herzberg's Motivators and
Hygiene Factors andSirota's Three Factor Theory .
(Questions 4, 11)
Good leaders lead by example . They do what they say, and say what they do.
These types of leaders are trustworthy, and show integrity. They get involved in
daily work where needed, and they stay in touch with what's happening throughout
the organization. Great leaders don't just sit in their offices and give orders; they
demonstrate the actions and values that they expect from the team.
As with building vision, above, a key part of being a good role model is leading
from the front by developing expert power . A leader can't rely on position
alone: by keeping current, and staying relevant within the organization, you'll
inspire people because you're worthy of your power and authority, not just because
you're the boss.
(Questions 3, 13)
Think about your approach to Task Allocation , and look for opportunities to
match people with jobs and responsibilities that will help them grow and develop.
UseHeron's Six Categories of Intervention to decide when and how to help
team members to shine. Perform Training Needs Assessments on a regular
basis to determine what your team needs to be successful.
Remember that emotional support is also important. The Blake-Mouton
Managerial Grid is a great tool for thinking about the right balance between
concern for people, and productivity.
To be successful in your career, regardless of your title or position, focus on
developing your leadership skills. Effective leaders can add value simply by being
present on teams. They are inspirational and motivating. They know the right
things to say to people to help them understand what's needed, and they can
convince people to support a cause. When you have talented and effective leaders
in your organization, you're well on your way to success. Develop these leadership
skills in yourself and in your team members – and you'll see the performance and
productivity of your entire team improve.
Transformational leadership
Transformational leadership blends the behavioral theories with a little dab of trait
theories. Transactional leaders, such as those identified in contingency theories,
guide followers in the direction of established goals by clarifying role and task
requirements. However, transformational leaders, who are charismatic and
visionary, can inspire followers to transcend their own self‐interest for the good of
their organizations.
Transformational leaders appeal to followers' ideals and moral values and inspire
them to think about problems in new or different ways. These leaders influence
followers through vision, framing, and impression management.
Vision is the ability of the leader to bind people together with an idea. Framing is
the process whereby leaders define the purpose of their movements in highly
meaningful terms. Impression management is an attempt to control the
impressions that others form of a leader by practicing behaviors that make him or
her more attractive and appealing to others.
“leadership is like the Abominable Snowman, whose footprints are
everywhere but who is nowhere to be seen.” (Bennis and Nanus, 1985)
Change leadership
Organizations go through a four‐stage life cycle. For some organizations, the four
periods of growth come and go very rapidly; for others, that process may take
decades. Failure to follow through with the needed changes in any of the four
growth periods could mean the end for an organization.
Throughout these periods of change, which is just about all the time for a good
organization, leaders must concentrate on having their people go from change
avoidance to change acceptance. The five steps that accompany change—for
individuals facing life‐altering circumstances and for organizations facing
fundamental shifts—are denial, anger, bargaining, depression, and finally,
acceptance.
Leaders can help the change process by changing their employees' attitudes from
avoidance into acceptance. This change is accomplished by managers as strong
leaders transforming their employees' avoidance questions and statements into
acceptance questions:
Senge's concept of the learning organization places high value on developing the
ability to learn and then make that learning continuously available to all
organizational members.
Leadership Defined
Leading is establishing direction and influencing others to follow that direction.
But this definition isn't as simple as it sounds because leadership has many
variations and different areas of emphasis.
Common to all definitions of leadership is the notion that leaders are individuals
who, by their actions, facilitate the movement of a group of people toward a
common or shared goal. This definition implies that leadership is an influence
process.
Leadership traits
Theories abound to explain what makes an effective leader. The oldest theories
attempt to identify the common traits or skills that make an effective leader.
Contemporary theorists and theories concentrate on actions of leaders rather than
characteristics.
A number of traits that appear regularly in leaders include ambition, energy, the
desire to lead, self‐confidence, and intelligence. Although certain traits are helpful,
these attributes provide no guarantees that a person possessing them is an effective
leader. Underlying the trait approach is the assumption that some people are
natural leaders and are endowed with certain traits not possessed by other
individuals. This research compared successful and unsuccessful leaders to see
how they differed in physical characteristics, personality, and ability.
Honesty and integrity. Leaders are truthful and do what they say they will
do.
Self‐confidence. Leaders are assertive and decisive and enjoy taking risks.
They admit mistakes and foster trust and commitment to a vision. Leaders
are emotionally stable rather than recklessly adventurous.
Cognitive ability. Leaders are intelligent, perceptive, and conceptually
skilled, but are not necessarily geniuses. They show analytical ability, good
judgment, and the capacity to think strategically.
Traits do a better job at predicting that a manger may be an effective leader rather
than actually distinguishing between an effective or ineffective leader. Because
workplace situations vary, leadership requirements vary. As a result, researchers
began to examine what effective leaders do rather than what effective leaders are.
Leadership skills
Whereas traits are the characteristics of leaders, skills are the knowledge and
abilities, or competencies, of leaders. The competencies a leader needs depends
upon the situation.
These competencies depend on a variety of factors:
The number of people following the leader
The extent of the leader's leadership skills
The leader's basic nature and values
The group or organization's background, such as whether it's for profit or
not‐for‐profit, new or long established, large or small
The particular culture (or values and associated behaviors) of whomever is
being led
To earn and keep the trust of others. Good leaders have personal
integrity and inspire trust among their followers; their actions are consistent
with what they say.
Very simply put, leading is establishing direction and influencing others to follow
that direction. Keep in mind that no list of leadership traits and skills is definitive
because no two successful leaders are alike. What is important is that leaders
exhibit some positive characteristics that make them effective managers at any
level in an organization.
Leadership styles
No matter what their traits or skills, leaders carry out their roles in a wide variety
of styles. Some leaders are autocratic. Others are democratic. Some are
participatory, and others are hands off. Often, the leadership style depends on the
situation, including where the organization is in its life cycle.
Autocratic. The manager makes all the decisions and dominates team
members. This approach generally results in passive resistance from team
members and requires continual pressure and direction from the leader in
order to get things done. Generally, this approach is not a good way to get
the best performance from a team. However, this style may be appropriate
when urgent action is necessary or when subordinates actually prefer this
style.
Participative. The manager involves the subordinates in decision making
by consulting team members (while still maintaining control), which
encourages employee ownership for the decisions.
Many experts believe that overall leadership style depends largely on a manager's
beliefs, values, and assumptions. How managers approach the following three
elements—motivation, decision making, and task orientation—affect their
leadership styles:
Keep in mind that managers may exhibit both task and employee orientations to
some degree.
The managerial grid model, shown in Figure and developed by Robert Blake and
Jane Mouton, identifies five leadership styles with varying concerns for people
and production:
The impoverished style, located at the lower left‐hand corner of the grid,
point (1, 1), is characterized by low concern for both people and
production; its primary objective is for managers to stay out of trouble.
The country club style, located at the upper left‐hand corner of the grid,
point (1, 9), is distinguished by high concern for people and a low concern
for production; its primary objective is to create a secure and comfortable
atmosphere where managers trust that subordinates will respond positively.
The authoritarian style, located at the lower right‐hand corner of the grid,
point (9,1), is identified by high concern for production and low concern
for people; its primary objective is to achieve the organization's goals, and
employee needs are not relevant in this process.
The middle‐of‐the‐road style, located at the middle of the grid, point (5,
5), maintains a balance between workers' needs and the organization's
productivity goals; its primary objective is to maintain employee morale at
a level sufficient to get the organization's work done.
The team style, located at the upper right‐hand of the grid, point (9, 9), is
characterized by high concern for people and production; its primary
objective is to establish cohesion and foster a feeling of commitment
among workers.
The Managerial Grid model suggests that competent leaders should use a style that
reflects the highest concern for both people and production—point (9, 9),
team‐oriented style.
Effective leaders develop and use power, or the ability to influence others. The
traditional manager's power comes from his or her position within the
organization. Legitimate, reward, and coercive are all forms of power used by
managers to change employee behavior and are defined as follows:
Reward power stems from the authority to reward others. Managers can
give formal rewards, such as pay increases or promotions, and may also use
praise, attention, and recognition to influence behavior.
Coercive power is the opposite of reward power and stems from the
authority to punish or to recommend punishment. Managers have coercive
power when they have the right to fire or demote employees, criticize them,
withhold pay increases, give reprimands, make negative entries in
employee files, and so on.
Keep in mind that different types of position power receive different responses in
followers. Legitimate power and reward power are most likely to generate
compliance, where workers obey orders even though they may personally disagree
with them. Coercive power most often generates resistance, which may lead
workers to deliberately avoid carrying out instructions or to disobey orders.
Unlike external sources of position power, personal power most often comes from
internal sources, such as a person's special knowledge or personality
characteristics. Personal power is the tool of a leader. Subordinates follow a leader
because of respect, admiration, or caring they feel for this individual and his or her
ideas. The following two types of personal power exist:
The most common follower response to expert power and referent power is
commitment. Commitment means that workers share the leader's point of view
and enthusiastically carry out instructions. Needless to say, commitment is
preferred to compliance or resistance. Commitment helps followers overcome fear
of change, and it is especially important in those instances.
Keep in mind that the different types of power described in this section
are interrelated. Most leaders use a combination of these types of
power, depending on the leadership style used. Authoritarian leaders,
for example, use a mixture of legitimate, coercive, and reward powers to
dictate the policies, plans, and activities of a group. In comparison, a
participative leader uses mainly referent power, involving all members
of the group in the decision‐making process. Situational Approaches to
Leadership
The theme in early approaches to understanding leadership was the desire to
identify traits or behaviors that effective leaders had in common. A common set of
characteristics proved to be elusive, however. Researchers were continually
frustrated by the lack of consistent support for their findings and conclusions. As a
result, research began to focus on what style of leadership was most effective in a
particular situation. Contingency or situational theories examine the fit between
the leader and the situation and provide guidelines for managers to achieve this
effective fit.
The theorists in this section believe that managers choose leadership styles based
on leadership situations. Managers adjust their decision‐making, orientation, and
motivational approaches based upon a unique combination of factors in their
situations: characteristics of employees, types of work, organizational structures,
personal preferences, and upper‐level management's influences.
The following sections describe the three most well‐known situational theories.
Fred E. Fiedler's contingency theory centers on the belief that there is no best way
for managers to lead. Different situations create different leadership style
requirements for managers. The style that works in one environment may not work
in another.
Fiedler looked at three elements that dictate a leader's situational control. These
elements are:
Fiedler then rated managers as to whether they were relationship oriented or task
oriented. Task‐oriented managers tended to do better in situations with good
leader/member relationships, structured tasks, and either weak or strong position
power. They also did well when the tasks were unstructured but position power
was strong, as well as when the leader/member relations were moderate to poor
and the tasks were unstructured. Relationship‐oriented managers, on the other
hand, do better in all other situations.
Judging whether a leadership style is good or bad can be difficult. Each manager
has his or her own preferences for leadership. Task‐motivated leaders are at their
best when their teams perform successfully—such as achieving new sales records
or outperforming major competitors. Relationship‐oriented leaders are at their best
when greater customer satisfaction is gained and positive company images are
established.
Once maturity levels are identified, a manager can determine the appropriate
leadership style: telling, selling, participating, or delegating.
Telling. This style reflects high task/low relationship behavior (S1). The
leader provides clear instructions and specific direction. Telling style is best
matched with a low follower readiness level.
Selling. This style reflects high task/high relationship behavior (S2). The
leader encourages two‐way communication and helps build confidence and
motivation on the part of the employee, although the leader still has
responsibility and controls decision making. Selling style is best matched
with a moderate follower readiness level.
Path‐goal theory assumes that leaders are flexible and that they can change their
styles as situations require. This theory proposes two contingency variables that
moderate the leader behavior‐outcome relationship: Enlightened leadership is
spiritual if we understand spirituality not as some kind of religious dogma or
ideology but as the domain of awareness where we experience values like truth,
goodness, beauty, love and compassion, and also intuition, creativity, insight and
focused attention.
Effective leaders clarify the path to help their followers achieve their goals, and
make their journeys easier by reducing roadblocks and pitfalls. Research
demonstrates that employee performance and satisfaction are positively influenced
when leaders compensate for shortcomings in either their employees or the work
settings.
Motivated people are those who have made a conscious decision to devote considerable effort to
achieving something that they value. What they value will differ greatly from one individual to
another. There are a variety of ways to motivate people, including the fear of losing a job, financial
incentives, self-fulfilment goals and goals for the organisation or groups within the organisation.
The traditional view - finds some of its origins in the work of Taylor and the school of scientific
management. At its most extreme, this view postulates the following:
people dislike work
people will only work for money
people are not capable of controlling their work or directing themselves
simple, repetitive tasks will produce the best results
workers should be closely supervised and tightly controlled
extra effort must lead to greater reward
people will meet standards if they are closely controlled
firm but fair supervision will be respected
Taylor took the view that there is a right (meaning best) way to perform any task. It is management’s
job to determine the right way. Workers gain from this approach because the ‘right way’ is easier
and pay is enhanced as a result of increased productivity.
The human relation view - originates in the work of Mayo, known as the Hawthorne Studies. The
series of studies essentially concluded that the strongest motivational force behind most employees’
behaviour at work was the preservation and nurturing of social relationships with their colleagues.
The main tenets of this view are as follows:
Mayo’s work leads to an approach towards people which encourages contribution and self-direction,
advocating full participation on matters of significance in order to improve the quality of decisions
made and the nature of supervision.
Theory X and Theory Y managers
Douglas McGregor proposed a Theory X and Theory Y model to explain basic human traits.
Theory X assumptions are:
The average human being has an inherent dislike of work and will avoid it if he can.
Most people must be coerced, controlled, directed or threatened with punishment to get them to
expend adequate effort towards the achievement of organisational objectives.
The average human being prefers to be directed, wishes to avoid responsibility, has relatively little
ambition, and wants security above all.
On the other hand, Theory Y makes different assumptions about the nature of people:
Expenditure of physical and mental effort in work is as natural as play or rest. The average human
being does not inherently dislike work, which can be a source of satisfaction.
External control and the threat of punishment are not the only means of bringing about effort. People
can exercise self-direction to achieve objectives to which they are committed.
Commitment to objectives is a result of the rewards associated with their achievement. The most
significant of those rewards is satisfaction of the self-actualisation needs.
The average human being learns, under proper conditions, not only to accept, but to seek,
responsibility. Avoidance of responsibility, emphasis on security and low ambition are the result of
experience and are not inherent in man’s nature.
Capacity to exercise a relatively high degree of imagination, ingenuity and creativity in the solution
of organisational problems is widely, not narrowly, distributed in the population.
Under conditions of modern industrial life, the intellectual potential of the average human being is only
partially uti
These various needs can be categorised in a number of ways eg, physiological and social motives or
intrinsic and extrinsic motivation.
Extrinsic motivation is related to tangible rewards such as salary and fringe benefits, security,
promotion, contract of service, the work environment and conditions of work.
Intrinsic motivation is related to ‘psychological’ rewards such as the opportunity to use one’s ability,
a sense of challenge and achievement, receiving appreciation, positive recognition and being treated
in a caring and considerate manner.
Content theories focus on the question of what arouses, sustains and regulates goal directed
behaviour ie, the particular things that motivate people. They offer ways to profile or analyse
individuals to identify their needs.
Often criticised as being static and descriptive they appear to be linked more to job satisfaction than
to work effort. Maslow, Herzberg and McGregor take a universal approach whereas McClelland and
Argyris list forces and drives that will vary in relation to different individuals.
Process theories attempt to explain and describe how people start, sustain and direct behaviour
aimed at the satisfaction of needs or the reduction of inner tension. The major variables in process
models are incentive, drive, reinforcement and expectancy. The best-known work in this area has
been concerned with Vroom’s expectancy theory, Handy’s motivation calculus and Adam’s equity
theory
Maslow’s hierarchy of needs
Man’s needs are arranged in a series of levels - a hierarchy of importance. As soon as needs on a lower
level are met those on the next, higher level will demand satisfaction. Maslow believed the underlying
needs for all human motivation to be on five general levels from lowest to highest, shown below.
Within those levels, there could be many specific needs, from lowest to highest.
Physiological - the need for food, drink, shelter and relief from pain.
Safety and security – once the physical needs of the moment are satisfied, man
concerns himself with protection from physical dangers with economic security,
preference for the familiar and the desire for an orderly, predictable world.
The major finding of the study was that the events that led to satisfaction were,
not surprisingly, of a quite different kind from those that led to dissatisfaction.
One set of factors are those which, if absent, cause dissatisfaction. These
factors are related to job context. They are concerned with job environment and are
extrinsic to the job itself.
They are called ‘hygiene’ factors and include such elements as:
company policies and administration
supervision
working conditions
interpersonal relations
money, status and security
The other set of factors are those which, if present, serve to motivate the
individual to superior effort and performance. These factors are related to the job
content of work. They are ‘motivators’ or growth factors. Motivation factors include:
achievement
increased responsibility
challenging work
recognition for achievements
growth and development
David McClelland
(a) Need for achievement - where this is high then people have an intense
desire to succeed and an equally intense fear of failure.
(b) Need for affiliation - where this is high people tend to seek acceptance
by others, need to feel loved and are concerned with maintaining pleasant social
relationships.
(c) Need for power - people with a high need for power seek
opportunities to influence and control others, seek leadership positions and are often
articulate, outspoken and stubborn.
C Argyris
Expectancy theory
There must also be the expectation that rewards are available. These
relationships determine the strength of the motivational link.
the strength of the individual’s preference for an outcome
the belief in the likelihood that particular actions will achieve the
required goal
R e q u ire d Outcome
E ffo rt e g, p ro m o t io
p e rfo rm a n c e n
Porter and Lawler’s model - Vroom’s theory has been extended by the
findings of Porter and Lawler (Managerial Attitudes and Performance, 1968)
in devising a more complete model of motivation for management.
Basically, Porter and Lawler’s model (shown below) shows that the amount
of effort generated depends upon:
the value of the reward
the amount of effort seen to be necessary
the probability of receiving the reward
The amount of effort deemed necessary and the probability of receiving the
reward are in turn influenced by the individual’s record of performance to
date, and range of skills, personality, perception of his role, and any number
of other environment factors.
Skills, abilities,
personality
Value of rewards
Effor
t
Perform ance
Probability of
achieving reward
Role perception
(a) external rewards that are given by others and form part of the job situation
(eg wages, status, security)
(b) intrinsic rewards which the individual manager awards himself. These arise
from the performance of the tasks (eg feelings of self-esteem,
accomplishment)
The idea put forward here is that each person has a specific ‘motivation
calculus’ in respect of every decision taken – and this can be on a conscious
or a subconscious basis. This assesses three factors:
Needs - these may be defined in accordance with the ideas of Maslow or
any other researchers, and they are the person’s needs at that time.
Desired results - these are what a person is expected to accomplish in the
work.
When people sense inequities in their work they will be aroused to remove
the discomfort and restore a state of felt equity to the situation by:
changing work inputs
changing rewards received
leaving the situation
changing the comparison points
psychologically distorting the comparisons
People who feel overpaid (feel positive inequity) have been found to increase
the quantity or quality of their work, whilst those who are underpaid (feel
negative inequity) do the opposite. Feelings of inequity are determined solely
by the individual’s interpretation of the situation - the fact that a manager
feels that the annual pay review is fair is immaterial.
There is the assumption that everyone responds in much the same way to
motivating pressures and that there is, therefore, one best way to motivate
everybody. These theories provide a prescriptive list which managers can
follow in an attempt to increase productivity.
Process theories (expectancy and goal) change the emphasis from needs to
the goals and processes by which workers are motivated. They attempt to
explain and describe how people start, sustain and direct behaviour aimed at
the satisfaction of needs or reduction of inner tension. They place emphasis
on the actual process of motivation.
Job satisfaction
allowing the employee greater freedom to decide how the job should be
done
Koontz and Weihrich identify four elements that are necessary to make job
enrichment a practical and worthwhile exercise:
Participation
The intention is to improve all aspects of work life, especially job design,
work environment, leadership attitudes, work planning and industrial
relations.
It is an all-embracing systems approach, which usually starts with a joint
management and staff group looking at the dignity, interest and productivity
of jobs.
5 THE IMPORTANCE OF THE REWARD SYSTEM
Money
Whether in the form of wages, piecework, incentive pay, bonuses, stock options, company paid
insurance or any of the other things given to people for performance, money is important.
Economists, accountants and many managers tend to regard money as a prime motivator.
However, behavioural scientists tend to place it low on the scale of motivators. Probably, neither
view is correct as an all-embracing approach; it depends on the individual.
Money in the form of pay is a powerful motivator, which can be related to the motivational
theories that we have examined.
Money in absolute terms, as an exact amount, is important because of its purchasing power. It is
what money can buy, not money itself, that gives it value.
Incentive schemes
There are several features which are unique to money as a motivating force and which can affect
workers in different ways:
Money is more important to people who are seeking to establish an initial standard of living
rather than those who have arrived.
Schumacher defined his principle of motivation in which he states that if all efforts by the
company are devoted to doing away with work by automation and computerisation, then work is
a devalued activity which people put up with because no other way has been found of doing it.
People would therefore be working just for money.
Most organisations use money not as a motivator, but simply as a means of ensuring adequate
staffing.
The need for apparent fairness encourages the use of salary grades and hence comparability of
earnings.
Financial incentives operate with varying strengths for different people in different situations.
Much research has shown that money is not a single motivator or even a prime motivator.
Empowerment
Sociological empowerment often addresses members of groups that social discrimination processes have
excluded from decision-making processes through - for example - discrimination based on disability, race,
ethnicity, religion, or gender. Empowerment as a methodology is often associated with feminism:
see consciousness-raising.
"Marginalized" refers to the overt or covert trends within societies whereby those perceived as lacking
desirable traits or deviating from the group norms tend to be excluded by wider society and ostracized as
undesirables.
Sometimes groups are marginalized by society at large, but governments are often unwitting or enthusiastic
participants. This Act made it illegal to restrict access to schools and public places based on race. Equal
opportunity laws which actively oppose such marginalization, allow increased empowerment to occur.
They are also a symptom of minorities' and women's empowerment through lobbying.
Marginalized people who lack self-sufficiency become, at a minimum, dependent on charity, or welfare.
They lose their self-confidence because they cannot be fully self-supporting. The opportunities denied them
also deprive them of the pride of accomplishment which others, who have those opportunities, can develop
for themselves. This in turn can lead to psychological, social and even mental health problems.
Empowerment is the process of obtaining basic opportunities for marginalized people, either directly by
those people, or through the help of non-marginalized others who share their own access to these
opportunities. It also includes actively thwarting attempts to deny those opportunities. Empowerment also
includes encouraging, and developing the skills for, self-sufficiency, with a focus on eliminating the future
need for charity or welfare in the individuals of the group. This process can be difficult to start and to
implement effectively.
Employees’ empowerment
Innovation can thrive when collaboration takes place and collaboration can occur best when teams are
empowered [10].Empowerment is a concept that links individual strengths and competencies, natural helping
systems and proactive behaviour to social policy and social change. In the other words, empowerment links
individual and his or her well being to wider social and political environment in which he or she functions [11].
Successful implementation of total quality management depends heavily on changes in employee attitude and
activities. But what its impact on these changes on the employee, especially on employee turnover intentions?
Studies revealed from one company field test using 113 employees before TQM and a subset of 73 employees
after TQM implementation. Results indicated significant improvements in a role of: ambiguity, job satisfaction,
job involvement, organizational commitment, and employee turnover intentions, but no significant changes in
role conflict, task characteristics, and career satisfaction. TQM managers are expected to gain employee’s trust,
encourage employees’ problems solving, and promote co-operation among departments. In fact, many of the
basic elements of TQM deal with people: team work participate management, creativity, innovation, reward
structure, extensive training, high level communications, reduction of fear of losing security, obsession with
improvement, management commitment at all levels, customer feedback, employee’s involvement and
empowerment, for improved communications through flatter organizations and quicker decision making.
Empowerment does not mean that the management has no role to play or no responsibility. In fact, the
management has more responsibilities. They have to monitor the skills continuously required for carrying out the
ever-changing complexity of jobs of the teams. The management must be willing to help the teams when they
are unable to solve issues. The responsibilities of the management are to control the processes and not the
individual team members. It was proved that productivity increased by empowerment by 30 percent.
The employees should be encouraged to their own responsibility and top management should help them to
achieve it. The top management should take responsibilities on the following:
2 Management should listen to attitude. Good listener makes the difference.
2 Accept the recommendation given by a team and believe that it is good for the organizational growth.
2 Invest time and money as requested by teams.
2 Prepared to wait for the success of the teams and do not pressure them to achieve results immediately.
2 Spend more time at the initial stages and listen to the problems of the team. During execution there may be
some problems and should be heard instead of finding fault.
2 Reward the good teams and this motivate further.
2 Provide information technology based communication
systems.
The definition given by Xerox Corporation Management Institute is reproduced below as definition for the
empowerment. Empowerment is, an organizational state, where people are obliged to direct business and
understand their performance boundaries, thus it enables them to take responsibility and ownership while
seeking improvements, identifying the best course of action and imitative steps to meet customer requirements
[12]. The empowered team should conduct themselves in a responsible manner, i.e... They should know their
performance boundaries; or in the other words, employees have to conduct themselves within delegated
authority and responsibility. They have to align with management philosophy approach to customer satisfaction
and organization’s vision and mission. They cannot have their own way of doing things since management has
to achieve cohesion in the organization and will have more information about the business than even the
smartest employee and hence well equipped to formulate the policies and overall directions. One of the criteria
on European Foundation for Quality management (EFQM) model is people’s development and innovation in
maximizing the contribution of employees through their development and involvement [13]. Figure 2 shows
EFQM model and its parameters with percentage of points.
Empowerment is not without bounds bounds
Empowerment of employees is without bounds or limitations. It should be structured and planned to achieve
the goal in the TQM way. The employees should be aligned with business direction as brought out in the vision
and mission statements by the CEO. They have to understand their performance boundaries and expected
performance / results. An employee owns his processes; it means employees themselves improve the quality of
their processes, while the management is watching and is ready to help them when needed. Therefore,
empowering means that they
should do what they are authorised to do and with management approval before making changes.
People
People Satisfaction
Managemen
t 90 points
90 points (9%)
(9%) Busine
ss
Impact on
Resources Society
90 points 60 points
(9%) (6%)
EFQM model
Empower teams and not individuals
A team of employees should be empowered and not the individuals. Even when an individual is empowered
it is done as in his capacity as coordinator of the team. The team has to achieve the objectives set forth by the
management. The team has to identify the best course of action in every context. The team has to take decisions
on its own within prescribed boundaries. It also has to carry out mid –course corrections wherever required. The
team should function in a democratic way to achieve success. The team members should try to solve their
problems within the organizational frame work. The management will not take part in day to day activities; it
should watch what is happening. The management should have a mechanism for obtaining a feedback of the
results. It is not detachment of the teams from the management, but it is the process of equipping the teams and
motivating and encouraging them to carry out the assigned tasks, as per the requirements.
One of the fundamental requirements before embarking on forming self managing teams is training of all the
employees in the team so that they are prepared for the empowerment. They should have wiliness to change.
They should be able to manage a change. The team members should learn good qualities and they establish
sound relationship with the other team members. This is more important for any teams. For the interest of the
organization, all teams members should work single minded to discharge their duties. The training of teams
should be done in such way that all the members should understand their responsibilities, adjust them with the
other members, motivate the others and they should have a motivational attitude.
Empowerment.Empowermentinacrisisina crisis
When a product design is changed for improvement, this may be good for some customers but it may not
satisfy all. When there was a complaint and need to be addressed by the service personal immediately in the
interest of the organization and for future business. The person deputed to attend the complaint should be given
empowerment to take spot decision wisely and rectify the same instead of referring it back to organization. In
this case, an employee was given empowerment to make it quickly on the spot and rectify the same instead of
referring it back to organization. The decision may take back the product for servicing at service centre or
changing the parts for free of charge at the place of functioning or free replacement for the entire products.
These types of decision should be at the interest to satisfy a customer or future business. The taken action should
be for the interest of the organization, not for the individual. The decision taken by an individual was a decision
taken by the organization. This empowerment will bring happiness to the customers.
Brain.Brainstormingstorming
Brainstorming with the other employees serves as catalysts in drawing out group members. Participants are
encouraged to share any idea that comes to their mind. All ideas are considered valid. Participants are not
allowed to make judgement or to evaluate suggestions. All ideas and suggestions are recorded, preferably on a
marker board, flip chart, or another medium that allows group members to review them continuously. After
ideas have been recorded, the evaluation process begins. The team members are asked to go through the list one
at a time, weighing the relative merits of each. This process is repeated until the group narrows the choice to a
specified number. Brain storming can be an effective vehicle for collecting employee’s input and feedback,
particularly if managers understand the weakness associated with it and how they try to overcome it. Managers
being interested in soliciting the employee’s input through brainstorming should be familiar with the concepts of
group thinking and group shifting. These two concepts can undermine the effectiveness of brainstorming and the
other group techniques. Group thinking is the phenomenon that exists when people being in a group focus more
on reaching a decision than on making a good decision. A number of factors can be contributed to a group
thinking, including the following:
x Encourage criticism,
x Encourage to develop several alternatives. Do not allow the groups to rush through hasty decisions,
x Hold last chance meeting. When a decision is reached, arrange a follow up meeting a few days later.
After group members have had time to think things over, they may have second thoughts. Last chance meetings
give the employees an opportunity to voice their second thoughts.
Group shifting is a phenomenon that exists when group members exaggerate their initial position hoping that the
eventual decision will be what they really want to. If groups members get together prior to meeting and decide to
take an overly risky or overly conservative view, then it may be difficult to overcome.
.Improving.Improvingsuggestionsuggestionschemesschemes
The suggestion systems are the collection of process used to solicit, collect, evaluate and adopt or turn down
suggestions. Good suggestion systems should have the following:
beginning to accept employees’ input as not only desirable but necessary to compete. From the above criteria, it
can be seen that operating a suggestion system involves more than having employee’s tools into a box, accepting
some, throwing the rest away. An approach that is being used increasingly is the computer aided suggestion
system. Once the suggestion is logged into the system, an acknowledgement may be provided on line. Even, the
suggestion may be awarded with small gift items so that each and every employee is proud of his or her
response.
.Improving.Improvingidividualindividualsuggestionssuggestions.
x clearly and concisely communicate their ideas in a written form. The following three steps to formulate
ideas for work place
improvements can increase a number of ideas they generate and the quality of those ideas.
x Problem identification involves identifying situations that differ from the desired result. At this point, no
attempt is made to determine the cause of the problem, nor should a cause be too quickly assumed. Employees
should be helped to learn to approach problems systematically and in a step by step manner. The task is to record
problem situations that are candidates for improvement.
x Research into why it is important because, if done properly, it can prevent the expenditure of resources
treating symptom rather than causes.
x Idea development improves the development of ideas for solving the problem identified in the first step
by eliminating the cause identified in the second step. When ideas for improvement have been formulated,
employees should write them down using graphics appropriately to illustrate their ideas.
Top managers and management can help employees to improve their individual suggestions by coaching them to
do the following.
x Get to the heart of the proposed change with no preliminaries or rationalizations, and be specific.
x prepare illustrations to clarify the proposed change, in every case where this is appropriate.
Employees are often in the best position to make suggestions for work place improvements, but in the final
analysis it is still the manager who must decide, whether the proposal idea is feasible. It is like a loan officer in a
bank trying to decide which loan applicants will pay off and which will be deadbeats. The following may be
taken into considerations while evaluating suggestions:
x Not all suggestions can be evaluated fairly while sitting at your desk. Questions about a suggestion
should be resolved by going to the source and discussing them with the suggested. Be patient and find out what
the suggester is trying to say. If necessary, help the suggester to improve his or her suggestion,
x A suggestion that looks bad or outdated on the surface may still contain and discount the whole suggestion
if part of it is bad.
x Be generous for the first time with suggesters to build up their confidence. If possible, try to accept the
suggestion, or at least part of it, making revision to the suggestion if necessary,
x Employees who are experienced in making suggestion, evaluate their suggestions carefully and change
them into a set of higher goals,
x Consider the level of the suggester when evaluating a suggestion. If you under estimate a person’s
ability, he or she will not be challenged and grow. If you expect too much, you will discharge the worker’s
creativity and initiative,
x Suggesters will be anxious for feedback. Evaluate suggestions promptly. If a delay is unavoidable,
notify the suggester of the reason of it,
x If possible, notify the suggester evaluation results in person. Make sure to add a few words of
encouragement, especially if the idea is not accepted. When providing a written notice, always add a positive
comment along with the result,
x A suggestion is often a product of the suggester and his or her supervisor. Remember to compliment all
contributors for their efforts.
A formal rating system should be formulated to evaluate a suggestion scheme. The rating system should
provide a means for quantifying the results of evaluations and have at least the following:
x Criteria are the factors considered as the most important in assessing the feasibility of employee
suggestions. The expected benefit out of the suggestion, time that will elapse before benefits will begin to be
realized, and how successful suggestions made be the individual or team submitting this suggestion have been in
the past.
x The actual criteria might differ from company to company. However, within the company they should
be the same for all departments, to ensure consistency and fairness. Each criterion should be assigned to a
numerical score or rating. This is the key to step in the entire process. It requires a judgement, common sense, a
thorough knowledge of the situation in question, and an open mind.
x This is to accommodate the fact that some criteria are more important than others. The individual rating
for each criterion is multiplied it is assigned to a weight factor to determine its weighted score.
x Total points and conversion scale. The weighted scores are added together to determine the total score
for the suggestion. Just as numerical scores are converted to letter grades in a college class, the total score for the
suggestion is converted to a level, category or grade of suggestion.
Advantages
Employee empowerment provides some distinct advantages. Employee empowerment should lead to increased
organizational responsiveness to issues and problems and an increase in productivity. It should also lead to a
greater degree of employee commitment to organizational goals, since employees can take some degree of
ownership in the decisions made towards goal achievement.
Not all staff is trained to operate in dynamic environment and hence take decisions you cannot standardise the
processes.conflict can increase - interpersonal relations may suffer coz there can be a clash between employees.
• Competition – Today’s market demand high quality products at low cost. Having `high
quality’ reputation is not enough! Internal cost of maintaining the reputation should be less.
• Changing customer – The new customer is not only commanding priority based on volume
but is more demanding about the “quality system.”
• Changing product mix – The shift from low volume, high price to high volume, low price
have resulted in a need to reduce the internal cost of poor quality.
Why quality
• Product complexity – As systems have become more complex, the reliability requirements
for suppliers of components have become more stringent.
• Higher levels of customer satisfaction – Higher customers expectations are getting
spawned by increasing competition.
Relatively simpler approaches to quality viz. product inspection for quality control and
incorporation of internal cost of poor quality into the selling price, might not work for today’s
complex market environment.
Quality perspectives
Everyone defines Quality based on their own perspective of it. Typical responses about the
definition of quality would include:
1. Perfection
2. Consistency
3. Eliminating waste
4. Speed of delivery
5. Compliance with policies and procedures
6. Doing it right the first time
7. Delighting or pleasing customers
8. Total customer satisfaction and service
Judgmental perspective
• “goodness of a product.”
• Shewhart’s transcendental definition of quality – “absolute and universally recognizable, a
mark of uncompromising standards and high achievement.”
• Examples of products attributing to this image: Rolex watches, Lexus cars.
Product-based perspective
User-based perspective
Value-based perspective
• “quality product is the one that is as useful as competing products and is sold at a lesser
price.”
• US auto market – Incentives offered by the Big Three are perceived to be compensation
for lower quality.
Manufacturing-based perspective
Quality levels
• What products and services are most important to the external customer?
• What processes produce those products and services?
• What are the key inputs to those processes?
• Which processes have most significant effects on the organization’s performance
standards?
Everyone defines Quality based on their own perspective of it. Typical responses about the
definition of quality would include:
1. Perfection
2. Consistency
3. Eliminating waste
4. Speed of delivery
5. Compliance with policies and procedures
6. Doing it right the first time
7. Delighting or pleasing customers
8. Total customer satisfaction and service
Quality policies
Quality goals
Deployment of goals
Plans to meet goals
Organizational structure
Resources
Measurement feedback
Review of progress
Training
• Developed by taking everyone in confidence. Guide for the Quality journey. Ties quality to overall
business goals.
• Vision Statement: Collection of quality policies. A vision statement outlines what a company wants to
be. It focuses on tomorrow; it is inspirational; it provides clear decision-making criteria; and it is
timeless. A vision needs to address three areas: people, culture (or values) and product or service.
• Mission statement: A mission statement outlines what the company is now. It focuses on today; it
identifies the customers; it identifies the critical processes; and it states the level of performance.
• It has been said that a vision is something to be pursued, while a mission is something to be
accomplished.
• Mission is what you do best every day, and vision is what the future looks like because you do that
mission so exceedingly well.
• For vision – Think leading with inspiration and courage, obsessed with future possibility.
• For mission – Think managing with greatness and untamed strength, improving everything daily.
• Famous vision statement – “By the end of the decade, we will put a man on the moon.” JFK.
• Prepared to provide guidelines for planning the overall quality program; and defining the action to
be taken in situation for which personnel had requested guidelines.
• Examples of quality policy – For a computer manufacturer: “In selecting suppliers, decision makers
are responsible for choosing the best source even if this means internal sources are not selected.”
• A goal (or objective) is a statement of the desired result to be achieved within a specified period – an
aimed-at target.
• Tactical goals are short range (up to 1 year), whereas strategic goals are long range (say, 5 years).
• Examples of corporate quality goals – For a health product company, the quality goals over the next
year could be: “The average leakage rate for …. product shall be reduced to …”
• Note that quality goal statements include quantified data.
•
SQM: Deploying quality goals
Broad goals don’t lead to results. First they have to be deployed as follows:
• Division and subdivision of the goal until specific deeds to be done are identified.
KAIZEN
IN BRIEF
Kaizen
1. Kaizen is the practice of continuous improvement. Kaizen was originally introduced to the
West by Masaaki Imai in his book Kaizen: The Key to Japan's Competitive Success in 1986.
Today Kaizen is recognized worldwide as an important pillar of an organization's long-term
competitive strategy.
There is a lot of controversy in the literature as well as the industry as to what Kaizen signifies.
Kaizen is a Japanese philosophy for process improvement that can be traced to the meaning
of the Japanese words ‘Kai’ and ‘Zen’, which translate roughly into ‘to break apart and
investigate’ and ‘to improve upon the existing situation’ (4). The Kaizen Institute
defines Kaizen as the Japanese term for continuous improvement. It is using
common sense and is both a rigorous, scientific method using statistical quality
control and an adaptive framework of organizational values and beliefs that keeps workers and
management focused on zero defects. It is a philosophy of never being satisfied with what was
accomplished last week or
last year
Improvement begins with the admission that every organization has problems, which provide
opportunities for change. It evolves around continuous improvement involving everyone in the
organization and largely depends on cross-functional teams that can be empowered to
challenge the status quo.
The essence of Kaizen is that the people
(8). So, when Kaizen for every individual could be an attitude for continuous improvement, for
the company
also be a
corporate
leadership
Improvement Cross- attitude for
fuctional
teams continuous
The Kaizen improvement .
Philosophy
Te ams 5S As presented
by Imai ,Kaizen
Discipline In the is an umbrella
Workplace Productivity
Improvemetnt concept that
Process Focus
embraces
different
continuous
Figure2: The kaizen constituents improvement
with Kaizen, the job of improvement is never finished and the status quo is always challenged.
Kaizen techniques became famous when Toyota used them to rise to world automotive
leadership. Rather than undertake large projects, Toyota's staff was encouraged to identify
problems, no matter how small, trace their root causes, and implement all necessary solutions.
The companies that undertake a Kaizen philosophy place an emphasis on the processes - on
the 'how' of achieving the required results .A process emphasis goes beyond designing
effective processes; it requires the teams to understand why a process works, whether it can
be modified or replicated somewhere else in the company and how it can be improved. Table
1 ,illustrates some of the major differences between a conventional and a process-emphasis
approach.
Conventional approach Process-emphasis approach
Farming Hunting
-Long term -Short term
-The process is king -The Individual is king
-So enhance participation in the process -So enhance the empowerment of the
-Weather affects output so poor years individual
understood -Weather should not affect output so a
-Market share (amount of land that can bad year not accepted
be developed) is paramount -Hunting skill (return on outings)
-Growth comes from extra market share paramount
(more land) and improving the process -Acquisitions are another form of hunting
-Growth from faster hunting
The Japanese have been farmers for 50 years , so easily one can understand their devotion
and discipline on continuous improvement way of thinking and living (11) .The implementation
of Kaizen principles has been viewed as one of the key factors to Japanese competitive
success. Kaizen then has emerged in the U.S. as a methodology leading to dramatic
increases in productivity by manufacturing companies
Process quality improvement needs the use of specific tools and techniques to be introduced and
supervisors and operators to be trained on. Appendix 2.1 contains examples of continuous
improvement tools, the ,so known as ‘9 Tools‘, such as : process flow charts, Pareto analysis , run
charts, data collection, histograms, scatter analysis,checklist ,a cause and effect diagram, control
charts, that used by the teams to detect problems , facilitate processes and implement
(12) . proposals
The role of visual management as a concept, practice or tool is promoted in Kaizen through
individuals or teams to help people identify problems or promote empowerment. The practice
of visual management involves the clear display of tangible objects (gembutsu), charts, lists,
records of performance, so that both management and workers are continuously reminded of
all the elements that make the Visual controls make it easy for everyone to identify the state of
a normal or abnormal condition, thus providing operators and management visibility into
performance (see Appendix2.2) Visual controls tracking performance should capture the team
effort rather than the individual. Visual controls usually lead to visual management, which can
be particularly efficient if it is used adequately to replace the bureaucratic monitoring systems
that many companies employ in order to maintain control and attempt to prevent anything from
going wrong. Visual controls must be relevant, easy to understand by the people performing
the task being measured, and must emphasize proactive actions, rather than blaming ,so the
visual workplace will: (13).
improve safety
make critical information available at a glance
gain immediate measurable results including: reduced floor space, decreased process
time and machine down time
keep everyone informed of production schedules, daily attendance, inventory levels,
etc.
reduce search time by as much as 50%
reduce inventory as much as 10% to 30%
raise morale and on-time delivery
introduce techniques that will allow significant reductions in lead time (10-25%)
build communication between shifts, work areas, and organization levels
improve quality 10-20% .
There are two elements that construct kaizen, improvement / change for the better and
ongoing / continuity. Lacking one of those elements would not be considered as kaizen. For
instance, the expression of “business as usual” contains the element of continuity without
improvement. On the other hand, the expression of “breakthrough” contains the element of
change or improvement without continuity. Kaizen contain both elements.
companies introduced quality circles by involving employees but most companies have
simply given up the idea of quality circle activities by now as a way to improve quality, cut cost
and speed products to market.The message of the Kaizen philosophy is that not one single
day should go by in the firm without some type of improvement being made in some process in
the company. Kaizen is everyone's job; it requires sophisticated problem-solving expertise as
well as professional and engineering knowledge and involves people from different
departments working together in teams to solve problems, as shown in Figure 3
Kaizen deals with the management of change and is a methodology in the right direction to
improve manufacturing operations, on a continual and incremental basis following the right
steps (14):
The starting point for improvement is to recognize the need. So Kaizen principles emphasis
problem-awareness and provide clues to identifying problems. When identified, problems must
be solved, so Kaizen is also a problem-solving process. But, most of all, Kaizen is a
management philosophy that forces higher standards at all levels of the organi zation by
encouraging continuous improvement in all processes. Professor Hitochi Kume of Tokyo
University compared quality control in the West and Japan:’’ I think that while control in the
West aims at ‘controlling’ the quality and conformance to standards and specifications, the
feature of the Japanese approach centers around improving (Kaizen) quality. In other words,
the Japanese approach is to do such Kaizen systematically and continually ‘‘ (15).. Kaizen
approach is based on the premise that there is no perfection in a process, because no
structure, product, or system ever achieves the ideal stage and where it can be improved by
further reducing waste .
2.1.1 Housekeeping
This is a process of managing the work place ,known as ‘’Gemba’’ (workplace ) in Japanese,
for improvement purposes .Imai introduced the word ’’Gemba ‘’, which means ‘’real place’’,
where value is added to the products or services before passing them to next process where
(16).
they are formed
For proper housekeeping a valuable tool or methodology is used , the 5S methodology. The
term “Five S” is derived from the first letters of Japanese words referred to five practices
leading to a clean and manageable work area: seiri (organization), seiton (tidiness), seiso
(purity), seiketsu (cleanliness), and shitsuke (discipline). The English words equivalent of the
5S's are sort, straighten, sweep, sanitize, and sustain. 5S evaluations provide measurable
insight into the orderliness of a work area and there are checklists for manufacturing and non-
manufacturing areas that cover an array of criteria as i.e. cleanliness, safety, and ergonomics.
Five S evaluation contributes to how employees feel about product, company, and their selves
and today it has become essential for any company, engaged in manufacturing, to practice the
5S's in order to be recognized as a manufacturer of world-class status.
On the following table the 5S approach is presented briefly for each one from the five activities
(17):
Seiri SORT what is not needed. Use the red tag system of tagging items
considered not needed, then give everyone a chance to indicate if the
items really are needed. Any red tagged item for which no one identifies a
need is eliminated (sell to employee, sell to scrap dealer, give away, put
into trash.
Seiton STRAIGHTEN what must be kept. Make things visible. Put tools on peg
board and outline the tool so its location can be readily identified. Apply the
saying "a place for everything, and everything a place’’.
Seiso SCRUB everything that remains. Clean and paint to provide a pleasing
appearance.
Seiketsu SPREAD the clean/check routine. When others see the improvements in
the Kaizen area, give them the training and the time to improve their work
area.
Shitsuke STANDARDIZA TION and self-discipline. Established a cleaning schedule.
Use downtime to clean and straighten area.
Tab le 3: 5S Activities
As some of the benefits of employees of practicing the five S could be referred to as follows:
Creates cleanliness, sanitary, pleasant, and safe working environments; it revitalizes Gemba
and greatly improves employee morale and motivation; it eliminates various kinds of waste by
minimizing the need to search for tools, making the operators' jobs easier, reducing physically
strenuous work, and freeing up space; it creates a sense of belonging and love for the place of
work for the employees (18) .
Muda in Japanese means waste. The resources at each process — people and machines —
either add value or do not add value and therefore ,any non-value adding activity is classified
as muda in Japan. Work is a series of value-adding activities, from raw materials ,ending to a
final product. Muda is any non-value-added task. To give some examples ,there are presented
here Muda in both manufacturing and office settings described below on Table 2.4:
In Kaizen philosophy, the aim is to eliminate the seven types of waste (7 deadly wastes ) caused
by overproduction, waiting, transportation, unnecessary stock, over processing ,motion, and a
defective part, and presented on the following table ,in summary (19):
1.Overproduction – Production more than production schedule
2. Inventory – Too much material ahead of process hides problems
3.Defects – Material and labor are wasted; capacity is lost at
bottleneck 4.Motion – Walking to get parts because of space taken by
high WIP 5.Processing – Protecting parts for transport to another
process 6.Waiting – Poor balance of work; operator attention time
7. Transportation – Long moves; re-stacking; pick up/put down
Tab le 5 : 7 deadly wastes
Muda of overproduction. Overproduction may arises from fear of a machine's failure, rejects,
and employee absenteeism. Unfortunately, trying to get ahead of production can result in :
tremendous waste, consumption of raw materials before they are needed, wasteful input of
manpower and utilities, additions of machinery, increased burdens in interest, additional space
to store excess inventory, and added transportation and administrative costs.
Muda of inventory. Final products, semi finished products, or part supplies kept in inventory do
not add any value. Rather, they add cost of operations by occupying space, requiring
additional equipment and facilities such as warehouses, forklifts, and computerized conveyer
systems .Also the products deteriorate in quality and may even become obsolete overnight
when market changes or competitors introduce a new product or customers change their taste
and needs. Warehouses further require additional manpower for operation and administration.
Excess items stay in inventory and gather dust (no value added), and their quality deteriorates
over time. They are even at risk of damage through fire or disaster. Just-in-time (JIT)
production system helps to solve this problem .
Muda of defects (repair or rejects). Rejects, interrupt production and require rework and a
great waste of resources and effort .Rejects will increase inspection work, require additional
time to repair, require workers to always stand by to stop the machines, and increase of
course paperwork.
Muda of motion. Any motion of a persons not directly related to adding value is unproductive.
Workers should avoid walking, lifting or carrying heavy objects that require great physical
exertion because it is difficult, risky, and represents non-value added activities. Rearranging
the workplace would eliminate unnecessary human movement and eliminate the requirement
of another operator to lift the heavy objects. Analysis of operators' or workers leg and hand
motions in performing their work will help companies to understand what needs to be done.
Muda of processing. There are many ways that muda can happen in processing. For example,
failure to synchronize processes and bottlenecks create muda and can be eliminated by
redesigning the assembly lines so, utilizing less input to produce the same output. Input here
refers to resources, utilities, and materials.
Output means items such as products, services, yield, and added value. Reduce the number
of people on the line; the fewer line employees the better. Fewer employees will reduce
potential mistakes, and thus create fewer quality problems. This does not mean that we need
to dismiss our employees. There are many ways to use former line employees on Kaizen
activities, i.e., on value-adding activities. When productivity goes up, costs will go down. In
manufacturing, a longer production line requires more workers, more work-in-process and a
longer lead-time. More workers also means a higher possibility of making mistakes, which
leads to quality problems. More workers and a longer lead-time will also increase cost of
operations.
Muda of waiting. Muda of waiting occurs when the hands of the operator are idle; when an
operator's work is put on hold because of line imbalances, a lack of parts, or machine
downtime; or when the operator is simply monitoring a machine as the machine performs a
value-adding job. Watching the machine, and waiting for parts to arrive, are both muda and
waste seconds and minutes. Lead time begins when the company pays for its raw materials
and supplies, and ends when the company receives payment from customers for products
sold. Thus, lead time represents the turnover of money. A shorter lead time means better use
of resources, more flexibility in meeting customer needs, and a lower cost of operations. Muda
elimination in this area presents a golden opportunity for Kaizen. There are many ways to cut
lead time. This can be done through improving and speeding up feedback from customer
orders, having closer communications with suppliers, and by streamlining and increasing the
flexibility of Gemba operations .
Another common type of muda in this category is time. Materials, products, information, and
documentation sit in one place without adding value. On the production floor, temporary muda
takes the form of inventory. In office work, it happens when documents or pieces of information
sit on a desk or in trays or inside computer disks waiting to be analysed, or for a decision or a
signature.
Muda of transortation In workplace ,gemba, one notices all sorts of transport by such means as
trucks, forklifts, and conveyors. Transportation is an essential part of operations, but moving
materials or products adds no value. Even worse, damage often occurs during transport. To
avoid muda, any process that is physically distant from the main line should be incorporated
into the line as much as possible,
Because eliminating muda costs nothing, muda elimination is one of the easiest ways for a
company to improve its Gemba's operations (20) .
2.1.3 Standardization
Figure 4: PDCA cycleemployees will review the standards and either correct the deviation or
advise management on changing and improving the standard. It is a never-ending process and
is better explained and presented by the PDCA
Standardization process is a very important one that has few key features, presented below:
Represent the best, easiest, and safest way to do the job,
Offer the best way to preserve know-how and expertise,
Provide a way to measure performance,
Show the relationship between cause and effect,
Provide a basis for both maintenance and improvement,
Provide objectives and indicate training goals,
Provide a basis for training,
Create a basis for auditing or diagnosis, and
Provide a means for preventing recurrence of errors and minimizing variability.
2.2 Kaizen and innovation
Kaizen practices improves the status quo by bringing added value to it. Kaizen does not
replace or preclude innovation. Rather, the two are complementary. After Kaizen has been
exhausted, ideally, innovation should take off, and Kaizen should follow as soon as innovation
is initiated. Kaizen will support the improvement of existing activities, but it wi ll not provide the
giant step forward. It is important for the firm to maintain a balance between innovation and a
Kaizen strategy that focuses on improvement (23).It is top management's job to maintain this
balance between Kaizen and innovation, and it should never forget to look for innovative
opportunities
If efforts are continued toward a clearly defined goal , it is bound for Kaizen to yield positive
results. However, Kaizen is limited in that it does not replace or fundamentally change the
status quo. As soon as Kaizen's marginal value starts declining, one should turn to the
challenge of innovation. Kaizen signifies small improvements made in the status quo as a
result of ongoing efforts .Innovation involves a drastic improvement in the status quo as a
result of a large investment in new technology and/or equipment or a totally re-engineered
product/process (25) . On the following table are classified according to some important factors
According Imai are shown on Figure 6 also reflects how conventional western management
perceives job functions (28) :
Top Management Innovation
Middle Management
Supervisors Maintenance
Workers
Figure 6 : Job functions as perceived b y western management
From that figure is apparent that there is little room in the Western managers' perception for a
Kaizen approach because they depend largely on maintenance of the standards and operating
procedures at the working level. Also, they depend on upper management to provide
innovation at a very high level, where change is forced on management by market conditions
and competition. As shown in Figure 7, divides improvement into Kaizen and Innovation on
(27) .
following sectors
Supervisors Maintenance
Workers
Figure 7: Kaizen and the role of management
In this model top management introduces Kaizen as a corporate strategy, middle management
uses Kaizen practices in improving functional capabilities and helps employees develop proper
skills for problem solving. Supervisors improve communication with the workers, formulate
plans for Kaizen and provide guidance to workers. Workers engage in Kaizen through small
group and team activities and practice the tools for continuous improvement.
Breakthroughs are essential for improvement, but continuous incremental improvement is the
key to quality leadership. True breakthroughs are hard to predict. The Japanese place a high
priority on continuous incremental improvements (Kaizen) that, over time, leave behind the
competitors who are depending on the ‘magic idea’ for success. Workers, supported by
managers, are a major source of these improvements. Taken together, infrequent innovations
and continuous improvement result superior productivity gains .
Applying Kaizen to routine work is the key to success. Working on special projects is
important, but in the long run, it is the day-to-day application of Kaizen practices to routine
work that gets results. Figure 8 , shows the relationship between Kaizen and innovation while
pursuing a continuous improvement philosophy.
New Standard
Kaizen
Innovation
New Standard
Innovation Kaizen
It is true that Kaizen practices alone cannot "reinvent a better way of doing business." But a
better way of doing business can be improved through Kaizen principles, as shown earlier.
Another benefit of utilizing Kaizen practices to supplement innovation is that the Kaizen
mindset of teamwork and a "can do attitude" will eventually absorb easily a radical change
introduced by innovation.
Kaizen concept and strategy and its embraced tools emphasizes and revolves around
teamwork activities. So it is worthwhile to present from bibliography types of teamwork with
their characteristics that used in specific circumstances and can be adjusted or modified to any
company to promote kaizen activities.
Teamworks principles
One of the most compelling reasons for the movement toward implementing empowered work
teams is the fact that teams work . The basic rationale is that the use of teams allows an
organization to take advantage of the diverse, backgrounds, and interests of team members.
The team effort and cooperation often result in a motivated and entrepreneurial workforce .
Motivated employees take their team tasks very seriously, plan how they can complete them in
their jobs, take pride and have satisfaction in their achievements. They put effort to accomplish
objectives and reach company goals. Strong personal commitments to one another’s growth
and success are the key that distinguishes these high-performance work teams. The opposite
holds true for many non-team employees. These tend to be unmotivated employees who try to
do as little as possible (29).
An idea program can work well with teams, since everyone can participate on a team. The
idea program allows those individuals to still have a voice in the organization. Additionally, a
team member may have an idea that doesn't fit the current team's mission. This idea could get
lost without a process to track team ideas. Team efforts normally have management input into
their activities or focus whereas a suggestion system process taps any creative idea.
According to Laureau and Orsburn et al (30), a work team is a group of employees that is
responsible for activities on a "whole" work process that delivers a product or service to
internal or external customers. The product could be a chair or a service, such as a fully
analysis on a company’s health and safety claims. Work team members are people who have
the power to manage the work they do on daily basis . A work team typically consists of two to
ten highly trained workers
The philosophy underlying the creation of teams calls for a well-defined, planned process for
giving responsibility to a group of people who know how to do their job well at their level and
when to get other people involved.
Work teams consist of people who perform different and/or specific jobs that relate to the daily
work of the company. Sometimes is confusing to find a specific reason why a team forms and
the task it performs. The most common trouble with teams, in any form, is that many
companies rush out and form the wrong kind of team for the job. For example, in the early
1980s ,Quality Circles were formed. Members of these teams took a few hours each week to
discuss very specific problems. These teams were cross-functional (a representative from of
various departments in a company who had a stake in the outcome) in nature and were
primarily responsible for solving problems. While these teams provided gains in productivity,
as evidenced by many studies, companies were looking for did not happen (31).
There are many different types of teams that can be found in organizations: however, the most
common that will be presented here are:
1.intact work groups,
2.problem-solving,
3.cross-functional, and
4.proactive or implementation teams.
5 small group as used in Japanese companies.
Any of these five teams types can contribute on continuous improvement (Kaizen) activities
and are presented in Table 7 through Table 11. On small group activities will be mentioned
especially the cross-functional teams and the quality circles as developed with their different
types shapes .Each team type has a definition, a purpose/function, member characteristics,
process/tools used and reward environment .
Tab le 7:: The Purpose,Characteristics,Process, and Reward System Defined for Intact Work Groups/Teams
Problem-Solving Teams
Tab le 8 : The Purpose. Characteristics. Process, and Reward System Defined for Prob lem -Solving Teams.
Problem-Functional Teams
Proactive/Implementation Teams
Tab le10 : The Purpose. Characteristics. Process, and Reward System Defined for Proactive/Implementation Teams.
Table 11: The Purpose, C ha ract erist ics, P roce ss, a nd Reward Syst em Define d for Small Group Activities.
Small group activities are activities developed on Japanese companies and could be any kind
of team activities in order to improve business process , give solutions on problems , or do
proactively. The most known small groups are the cross-functional teams or quality circles with
characteristics as developed in Japan and then transferred elsewhere.
Cross-functional teams are formed to conduct Kaizen events. A Kaizen event is a project in
which a specific area or manufacturing process has been identified as the target for
improvement, and a team has been assembled to undertake the project. A team leader is
more concerned with "how" his or her team works rather than "what” the team produces.
Solutions are sought as a team, even if a problem has to do with only one member, which
reflects the Kaizen process-oriented approach.
In such an organizational culture, the role of the manager is to improve the processes and to
facilitate people's roles in achieving such improvements. A Kaizen team leader will be primarily
a coach. A process-oriented manager who has genuine concern for process-oriented criteria
will be interested in:
Discipline,
Time management,
Skill development,
Participation and involvement,
Morale, and Communication.
Researchers like Robinson (32) and Liker (33) assert that the concept of establishing cross-
functional teams to examine the processes and improve them depends on several factors that
"empower" the teams to seek change.
There are many ways to achieve the same level of performance:
Jobs are broadly defined and skill sets diverse to assure quick adaptation to change
and effective resource utilization,
Work teams control work design and functional responsibilities,
The human/machine interface is designed to be optimal,
Rewards are based on contributions made to the effectiveness of the team, and
Training and development are considered life-long endeavors.
Because of these attitudes, the cross-functional teams are motivated to assure that the
organization is continuously improving its performance through the redesign of work,
experimentation, and risk-taking. This research deals with the role of training in Kaizen
practices
Quality Circles
Quality circle are typically said to have originated in Japan in the 1960s but others argue that
the practice started with the United States Army soon after 1945 with the Japanese then
adopted and adapting the concept and its application. Quality circles are not a panacea for
quality improvement but given the right top management commitment, organisation and
resources they can support continuous quality improvement at shop-floor level.
What is a quality circle? a group of staff who meet regularly to discuss quality related work
problems so that they may examine and generate solutions to these. The circle is empowered
to promote and bring the quality improvements through to fruition. Thus the adoption of quality
circles (quality improvement team) has a social focus. There must be commitment from senior
management, unit management and supervision, other staff and of course the circle members.
A team of 3-9 people need to participate freely together, to challenge assumptions and existing
methods, examine data and explore possibilities. They need to be able to call in expertise and
ask for training. The quality circle needs a budget so that members can be responsible for
tests and possible pilots. The need a skilled team leader who works as a facilitator of team
efforts not a dominator.
The circle needs to have a very good approach to analyzing the context of the problem and its
situation defining just exactly what the problem is and the relationship between its component
parts. how it identifies and verifies that the causes are indeed the causes. These must be
understood otherwise solutions as developed may fail to address the real problem.
We must recognise also that there are tensions between resource constraints and solutions
and the imagining processes of solution development. These must then be elaborated and
grounded in detailed planning and operational implementation. such implementation planning
and management of the change/operational programme involves scheduling, work allocation,
capacity management, communicating, development of information monitoring systems and
overall coordination and control of the solution programme.
Quality Circles, in the 1970's, was the first big push to mimic Japan's success with a team
based work culture. Although there were success stories, and some organizations still use
them, most saw them as a failure. Some of the reasons for failure included:
Inadequate measurements of results.
Management understanding of process.
Team members not right for the problem.
Management dominated the process.
Lack of training with problem solving tools.
Teams, often called Quality Improvement Teams (QIT), Process Improvement Teams or a
wide array of other names, are now in-place in many private and public sector organizations.
They may be management or self directed. A well managed team process, tied with other
quality programs can make an organization more viable while empowering employees to find
solutions and opportunities .Management has to believe in the quality team process, listen to
proposals and enable feasible solutions to be progressed through pilot stages and into full
operation. Open-mindedness and a desire to avoid blocking is essential. It is a useful
philosophy to realize that experimentation enables learning.
More modern team processes did learn from many of the mistakes of Quality Circles. Still
there is much improvement that can be made.. Measurement of the overall team process is
weak, if nonexistent, in many organizations. This can lead management to be misinformed
about the effectiveness of "teams" and since a large amount of company time is spent by
teams, it is a significant. Most organizations have limited resources to insure teams are
operating effectively. Not everyone can be involved on a team. Those people often feel "left
out". The ability of everyone to be able to participate on a team or in another quality process is
important.
If the most skilled team of individuals is established, but the culture remains conventional and
the structure of the systems in place remains rigid, the team is set up for failure and defeat The
consequence of such a failure could be catastrophic for the survival of innovation and change,
because the results would condemn the process, without taking into consideration that the
process was faulty because of the constraints imposed on the team . In a Kaizen approach,
there is no gray line. Teams must be effectively empowered and management must be willing
and able to cope with change, as well as some loss of control for the bigger benefit of the
organization.
Since the benefits of Kaizen principles come gradually and its effects are felt usually on a long-
term basis, it is obvious that Kaizen can thrive only under top management that has a genuine
concern for the long-term health of the company. It has often been pointed out that one of the
major differences between Japanese and Western management styles is their timeframes. In
general, Japanese managers have a long-term perspective, while Western managers tend to
look more for short-term results. This difference is also reflected in the way each management
style approaches improvement. Western management is usually reluctant to introduce
improvement gradually and tends to favour innovation, which is more visible and provides an
immediate return . If management makes positive use of the process-oriented way of thinking
to support innovation and further reinforces it with a Kaizen approach, it will find that the
company's overall competitiveness will be improved in the long run .
Corporate culture has several essential components — corporate values, leadership, and the
reward and recognition structure of the organization (34) .The reward system reflects the
corporate philosophy, democratic and innovative or autocratic and bureaucratic. Promotion
and rewards reinforces employee commitment to corporate values and to the corporate
culture.
Reward and recognition (R&R) have various functions and can be valuable tool at
organizations on their road for TQM as for example:
1.They improve the reinforcement of quality-related behavior and achievements.
2.They show organizational values, and they show how the organization appreciates efforts .
3. They indicate achievement, and R&R activities provide feedback which is an element of
continuous improvement ( Kaizen ). Recognition is also a form of feedback about the result of
individual or team efforts. It shows the individuals or the teams that they are on the right track
toward continuous improvement. Recognition as feedback can come from supervisors, other
teams, internal customers in the organization, or external customers in the marketplace.
4.Kaizen philosophy and TQM processes demand empowered employees, team players and
cross-functional activities. R&R can motivate these individuals and groups to continue their
active participation in the organization. It will also create a positive environment for various
teams to compete against each other and these give a 'win-win' situation between the
organization and employees. Employees can also be motivated to utilize various TQM tools,
solve problems, and to interact with internal and external customers.
5.The R&R system will increase the awareness among 'workers that management is prepared
to reward them if they are serious in applying critical TQM values, such as quality, customer
satisfaction, and continuous improvement. Employees will have higher motivation if they work
in organizations that are consistent in their R&R process and the workers will perceive
management initiative as a fair effort by management. .This will extend the feeling of trust, and
create a strong sense of belonging in the organization. According to Deming's views, R&R can
help transform the organization toward a philosophy of quality.
6.Some forms of recognition, such as awards and plaques, show publicly that the individual or
team has achieved some degree of success within TQM frame . They are a visible indicator,
both to the team and to outsiders, of a job well done. So recognition highlights employees and
teams who make a definite contribution to the continuous improvement or TQM effort. Such
recognition stimulates additional effort in employees.
The researcher believes that recognition should not be of high monetary value. There are
some variations between the Japanese and Western methods of rewarding the worker. Imai
on his influential book “ Gemba kaizen a common sense, low cost approach to management “,
mentioned that the Japanese method does not encourage large monetary rewards. To them,
monetary gain demeans the process. They do recognize the workers' efforts. Rewards for
suggestion ideas from the workers are given on the basis of the number of ideas they
contribute, and it does not really matter if it saves the company $ 1 or $100,000. Each
suggestion will receive a point that later can be converted into products or services, such as a
holiday trip, or $5 worth of merchandise (depending on the accumulated points).
Oliver, cited on book on Imai“ Gemba kaizen a common sense, low cost approach to
management “,has given some examples of rewards . There it is stated that rewards as much
as possible, it should be given to team members rather than being based on individual
participation. Recognition, ceremonies, and symbols are important underpinnings to the
successful functioning of system or the TQM process. An expression of appreciation for a job
well done can be as formal as a written "thank you." or a plaque, or a certificate. An informal
verbal "thank you" can also encourage morale., such as a holiday trip, or $5 worth of
merchandise (depending on the accumulated points). For example, managers are encouraged
to know their workers by name, only effective in big corporations. This process not only
increases the manager's awareness of the worker's name, but it also increases the motivation
of the worker to be recognized by performing well and by receiving the token .To make this
plan workable, the company gives 25 tokens to hand out during the coming year for every 100
workers in the department. The manager will give a token to the worker who did an exceptional
job, whether the work was consistent or incidental. A bag may be given for the second year,
and a company T-shirt may be the reward for the third year. A manager for exceptional
performance must single out workers who receive this token.
Kaizen as explained earlier is a kind of umbrella concept that includes initiatives and activities
like TQM, suggestion systems , to mention those we think are the most important ones ( and
are the most interest issues faced by organization A, that we focus later on).
The importance of people in the total process is emphasized on TQM journey. Considerations
such as culture, incentives, teamwork, training, and work involvement are typical. The optimum
effectiveness of TQM results from an appropriate mix of the social and technical systems. It is
common practice to emphasize the technical aspects of improvements, such as machine or
computer-related, with less emphasis on people and their roles in the process. Improving
quality and productivity to achieve competitiveness emphasizes the need for an enterprise to
capture the potential inherent in the workforce by enabling each employee to do his or her job
right the first time. This requires that top management to demonstrate to all employees that it is
personally committed and continuously pursuing efforts to improve quality .
The organization must provide an environment in which all employees will voluntarily
cooperate to achieve the organizational objectives. This requires that management accept the
idea that employees can and want to contribute. Management thus flows down ideas and
goals and encourages the flow of ideas upward. The TQM philosophy provides a
comprehensive way to improve quality by examining the way work gets done from a
systematic, integrated, consistent, organization-wide perspective .
On TQM journey the focus is to:
Emphasize continuous improvement of processes (kaizen), not compliance to
standards,
Involve all functional units, not just the Quality Control/Assurance function,
Motivate and involve employees to become the driving force behind improvement,
Satisfy the internal and external customers,
Understand the effects of variation on processes and their implications for process
improvement.
So it is self-evident that employee involvement and a process-oriented approach to
manufacturing are cornerstones on journey to TQM. The team-based structures and activities
fulfil both requirements by fostering greater individual participation and enhancing the
organization's ability to pursue processes across functional boundaries.
The TQM journey needs patience otherwise there will be frustration and disappointment. A
study conducted by Pfau and Gross for Conference Board Inc., (36) found that those looking to
TQM for a quick fix were likely to be disappointed. “Patience, leadership, and the ability to
nurture a long – term commitment to TQM is crucial to promoting and the buy – in process” .It
was further reported on journey to TQM of 20 companies that their approach to quality divided
into two categories: Little Q and Big Q. The Little Q approach emphasizes training and other
tools, but lacks an overall strategy and top management support. The Big Q approach, led by
management, has a well – articulated strategy, and is fully integrated in the companies. The
Big Q strategy requires fundamental changes in a company’s culture, structures, and
processes.
TQM as a system that drives improvement is very analogous to a Kaizen approach. The
elements and characteristics are considerably supportive of each other, and the two
philosophies mandate a similar organizational mindset. Consequently on the road of a
company to TQM, a Kaizen approach and any of its tools under its umbrella in practice, is a
compatible valuable tool to TQM.
Companies that implement TQM as a comprehensive integrated initiative, report results in the
areas of operational efficiency (such as cycle-time reduction, unproved productivity, and fewer
defects), in customer satisfaction, and in organizational values such as lower turn over and
higher morale
During 70s many Western business persons visited Japan to see suggestion systems in
progress as part of kaizen umbrella-concept and when returned home started efforts on their
companies by initiating and establishing systems like that . But the process of obtaining ideas
from employees is not a new one also in the West. Kodak company started such a program
around the turn of the century in the United States. British Royal Navy had a suggestion
scheme in 1772. Since their inception, suggestion systems have gone through significant
evolution and new forms include: continuous improvement and employee driven idea systems
(EDIS). Although some quality experts agree that idea processes (or suggestion programs) are
dead, a well designed idea program will significantly add to an organization's quality arsenal
while helping it cut costs and improve its performance (38).
It is management’s main target to move organization’s status on level 4 and level 5 , so a kind
of suggestion or proposal system should help on this direction.
(40). Teian systems work on Kaizen environment where the process counts significantly as well
, so have to be evaluated by process oriented criteria and below are presented some as taken
from bibliography :
Number of meetings
Participate rate
Number of intermediate reports
Use of 7 tools
The extent that company policy was used in selecting projects
Originality of approach
Standardization and prevention of a problem’s recurrence
On each on element could be assigned a certain number of points and then the system
evaluation can easily be accomplished.
There are two quite different directions in idea submitting and management systems ,the
proposal systems that developed in Japan and the Western-style suggestion systems. The
concept of proposals system differs from the concept of suggestions system as Kaizen differs
from that of improvement. On Teian-system the financial aspect is not be highlighted instead of
a suggestion system where there is a reward per suggestion, a business like transaction
between the company and whoever comes up with a suggestion.
Tab le 12: Teian- Systems differ from Western type suggestions system
The Japanese think it is important to promote small improvements that focus on improving
one’s work area, targeting area A on figure2.9 and as Imai estimates as much as 99% of
suggestions do not have much economic impact on their own, by they do effectively.
Evaluation of any idea irrespective of the employee level on hierarchy that should include a
balance set of financially approved procedures and standards. Any idea must provide a net
benefit versus as i.e. saving costs in one operation phase. As B. Sanders states (44), the
financial benefits from a suggestion can be broken into 2 categories: 1) savings and
2)revenues. The suggestion programs historically cover the saving category. Looking at
international statistics there can be seen that the majority of employee ideas, over 95% have
focused on making improvements to existed situation rather having look at new services,
products, opportunities markets etc, so the revenue generating ideas, category 2.
Level 1-Participation
Meaning developing and activating all the people of the organization pointing our problems .
Level 2-Development of skills
Improving the on the job performance, by encouragement for further skill development .
Level 3-Implementation effects
Looking at the results by aiming at targets with economic impact.
On Table 13 are presented the 4 levels with the objectives and evaluated items for each one
(46) .
For each one level that an organization is developed the quality of proposals is evaluated on
how they serve and fulfill different objectives as, to promote participation, developing of skills
and effectiveness. Firstly has to be encouraged people to submit low-level proposals through
participation bonus, secondly to work towards tuning low level proposals into medium level
ones. Then encourage people to be given chances to practice creative improvement activities
every day on their job and to end up with to submit proposals But what gets to be a good (high
level) proposal ?
On most types of proposal system there is a kind of bonus award, but the concept of an award
depends on the system used. According some Japanese managers such an award might has
with three meanings(47):
compensation given to communicate a proposal’s effect
an incentive for encouragement for further development
awards that expresses appreciation for participation
On the classic suggestion system or suggestion scheme used by Western companies takes
employee ideas and passes them on to an expert (evaluator) for review. If the idea is feasible,
it is then passed on for final review and implementation. The employee then often receives a
cash award for their efforts, based on actual savings calculations (typically with a top award in
the $10,000 to $20,000 range). These programs are still in effect in many organizations. They
can be effective, if properly managed and promoted.
More modern idea processes directly involve the employee(s) with the solution and
implementation process. The method of rewarding their efforts may be based more on
recognition than actual cash awards.
Ιn a market economy, the customer is king, and satisfying customers' expectations for
products and services in terms of Quality, Cost, and Delivery (QCD) should be the ultimate
goal of every business So the ultimate goal of Kaizen strategy and activities aim at
(48).
improving Quality, Cost, and Delivery (QCD), thus QCD target has become a top priority for
survival in business.
A market sensitive company must have a strong dissatisfaction with its status quo on existed
QCD status. It should review its current competitive position on that and its strengths and
weaknesses and take into account the changing environments and consumer behaviours. A
company that is happy with the status quo is not qualified to stay on market, so it should
answer the following questions the soonest possible:
What are the targets to be achieved in terms of QCD?
What will be the deadline for achieving such targets?
To do the above, one of the best ways is to motivate and challenge its employees ,to set clear
targets with numerical values and a deadline to achieving such a target. On the targets must
be involved activities improving quality during each process in terms of organization's internal
customers until the process ends with external customers.
Quality runs throughout the process from purchasing, developing, designing, producing,
selling, distributing, and servicing the products or services. According to Imai (49) ,jobs of
developing a new product or service, or designing a new process, always start with paperwork
or blueprints. Bugs or malfunctions can be rectified quite easily, instead of malfunctions that
are identified later and can will be very expensive to be corrected. The Japanese management
team uses the quality assurance system diagram or Quality Function Deployment (QFD) as a
powerful tool.
Quality is followed by cost effectiveness, which refers to the overall cost of designing,
producing, selling, and servicing the product or service. According to Imai, cost reduction in
work place does not mean cost cutting. It is about cost management. The cost management
teams oversee the process of developing, producing, and selling products or services of good
quality while retaining a lower cost. A huge waste of resources can happen in the way a
product is designed, made, and sold. The current business competition for quality and cost is
intensifying. Thus, improving quality while reducing cost is the only option for survival . Cost
reduction should come as a result of better cost management. The key is to build a
management system that reduces cost while achieving quality. Cost management
encompasses a wide spectrum of activities including: cost planning to maximize the margin
between costs and revenues, overall cost reduction in Gemba by eliminating muda (waste).
Cost reduction through waste elimination can be done with the methodologies based on waste
elimination discussed before. Cost reduction is not synonymous with cost cutting. Reducing
cost by firing employees, restructuring, and harassing suppliers will invariably disrupt the
process of quality and usually ends in quality deterioration.
Delivery on the other hand, means delivering the requested volume in time, such as practicing
a just-in-time production system. Delivery could be part of quality of product or service. So any
diverge from prescribed standards can hurt the quality as well.
(50).These gains were achieved through a series of Kaizen programs that searched out
improvements that cut time by as little as half a second. The programs, initiated within three to
six months of one another, formed a staircase that each step was secured before the next to
rise
Kaizen practices can deliver breakthrough improvements in the range of 40-60% (51).But what
about Kaizen application elsewhere than in Japan ? In U.S.A. some managers even now do
not recognize the tremendous value that Kaizen can bring. Kaizen became a buzzword in U.S.
industry in the 1980s when American companies tried to copy the quality assurance programs
used by Toyota Motor Corp. and other Japanese manufacturing companies. However, to adapt
its dramatic potential to the more creative and self-directed American and also European
culture, it was developed a participative approach, customized for the circumstances , allows
the team itself, and not the "Sensai" (Kaizen expert/facilitator) to problem-solve and decide on
the solutions that are appropriate for the process. This puts more pressure on the facilitator to
teach, coach and guide, rather than direct the team. The results of the participative Kaizen
American Style (52) approach are that the results are better sustained because the people
themselves make the key decisions, and the learning process is thus better reinforced,
because it is active rather than passive . Some leading manufacturers in USA are now utilizing
the process known as "Kaizen American Style" which results that companies are expanding its
use to transform their businesses from end to end, becoming lean manufacturers. Kaizen
American Style is the umbrella methodology that successfully embraces JIT, TQM, self-
directed work teams, and modern industrial engineering approaches into a working system
that achieves dramatic and sustainable breakthrough process improvements. Kaizen American
Style’s major tools are: Concepts of ‘Takt’, One-Piece-Flow, Standard Work, 5 S, Visual
Systems, Kanban, 8 Wastes and Set-Up Reduction. Masaaki Imai, chairman of Japan’s
Kaizen Institute in Tokyo and author of the 1986 book Kaizen: The Key to Japan’s Competitive
Success, said in an interview that kaizen applied in American companies today in isolated
instances, such as within one plant, instead of company-wide. Also continues that kaizen
appears in only one form, such as total quality management or just-in-time production. “The
problem in most American companies is that the impetus for change is taken by middle
management and often top management is not involved,” he said. “But middle management
does not have enough resources.” Imai says top executives are to blame. He also warns that
intensifying global competition will only make kaizen even more important. “In today’s world,
competition is so tough that if you don’t have this kaizen spirit, you won’t survive,” Imai said.
“This is a tough world. The customers are more and more demanding.”
In western style Kaizen a lot of researchers argue that the following elements must be
included:
Highly committed top management, to both rapid improvement and new ideas.
Highly trained and experienced facilitators for the assessment phase, the event, and the
follow-up.
Specific goals and objectives with a well-developed and clear mandate.
A balanced, multi-disciplinary team for the event and to sustain the momentum.
Professional team education and preparation.
Clearly defined roles of the participants; process owner, team leader and co-leader and
Kaizen consultant.
Commitment to follow-up and sustain the improvements made.
Fundamentals of Total Quality Management By R.C.Panda