Total Quality Management (MGT 510) Assignment 03

Instructions:

Kindly read the following instructions carefully.

• This assignment is a case study.

• Last date for submission of assignment is 15/01/2008.

• Go through the case study carefully and answer the questions given at the
end.
• Try to reproduce the answers in your own words.
• Give the answer according to question, no mark will be given for
irrelevant material.
• Make sure that you upload the Assignment before due date. No
assignment will be accepted through E-mail after the due date.
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Case Study 20 Marks

Computer Products Asia-Pacific Ltd (trading as Power Conversion Asia-Pacific, PCAP)

was established in Hong Kong in 1981 as a manufacturer of power supplies for the
computer, telecommunication and equipment industries. When we progressed towards
the end of 1990s, the framework of our management system had been well established.
We were proud of our team of hard-working and dedicated employees. However, they
were constrained to the framed system and hesitated to suggest changes. In order that the
company could further upgrade itself and best meet the needs of the ever-changing
electronics market, we decided that we should rally our employees around a common
vision. Hence we promoted the concept of ‘3C’:

• charge
• change
• challenge

In order to achieve top-quality products and superior performance, PCAP encourages all
its staff to ‘charge’ themselves through attending in-house and external training seminars
and workshops designed to equip them with further knowledge and skills. Employees are
Total Quality Management (MGT 510) Assignment 03

expected to accept ‘challenge’ with responsibility and courage, and to have the ability to
manage ‘change’ in order to improve.

The ‘3C’ was not just a slogan to make it part of our company culture, we encouraged our
employees to visit other factories to see how they were managed. We invited experts
from outside to share with us their professional experience. We employed a professional
training manager to design and organize an integrated employee training and
development program. These series of actions realized our commitment to ‘charge’.

We encouraged our employees to air their suggestions for improvement and innovation.
In the past, our design centers were in the USA and Europe. The plant in Hong Kong was
a manufacturing center. We followed the instructions provided by the design centers.
Ideas for product improvement only occurred when there were serious manufacturing
difficulties. Encouraged by the concept of ‘challenge’, our employees started to challenge
themselves with a higher standard of product quality. Not only did they contribute on
improvement of production methods, but also initiated product design changes. We
aimed to develop products with high manufacturability, high production yield, lower
customer return rate, shorter cycle time and lower product cost. After only eight years of
operation the Hong Kong plant was upgraded to be a business division and Asia-Pacific
headquarters. Our engineering team formed a ‘concurrent engineering’ circle with their
counterparts in USA and Europe to develop products for the global power conversion
market. As a result, production yield and customer return rate were improved,
development cycle was reduced. Furthermore, our employees were more confident. They
were ready to face any challenge and to work out the solution. The third concept,
‘change’, was also shared among our employees. We accepted continuous improvement
(KAIZEN) as a way of life. A well-established company culture can intake new ideas to
fuse into its system for further improvement and continual renewal. However, changing
the culture is easier said than done. The company culture may have been there for a long
time. The beliefs of the founding members and the top management team are translated
into rules and systems, norms, style of managing and so on. These are passed on to
people who joined the company. Part of the culture may well complement the concepts of
Total Quality Management (TQM) or perhaps part may contradict it.

PCAP realized early that the success of TQM relies on the participation of all employees.
If the TQM activities are incompatible with the company culture, the implementation
would be difficult. Hence the management team had to change the company culture
deliberately to enable employees to contribute to the TQM program, and provide an
environment where involvement in problem-solving and decision making was the norm.
Any group norm opposing this principle was targeted for change. The most important
factor in this effort was leadership. Without the total commitment by our leader, it would
have been impossible to enlist the commitment of all employees to TQM.

The award of ISO 9001 Certificate also highlighted the importance of ‘change’ in the
development of our new and complete quality management system. In the first six weeks
of our ISO 9001 program, we worked together with our consultant to perform a detailed
analysis of our existing quality system. From this analysis, we constructed an
Total Quality Management (MGT 510) Assignment 03

improvement plan with detailed schedule of tasks and manpower allocation. The first step
of this project was to identify the scope of application for ISO 9001 which included the
types of product or services, and affected departments, sections and locations.

During this stage, we started to promote the spirit of ISO 9001 among the top and middle
management, to help them understand the role of every employee and every department
in the ISO 9001 system. We set up a task force with representatives from all departments.
The chairman of the taskforce was the quality system manager (acting as quality
manager) who directly reported to the managing director. No additional staff was hired
for the ISO 9001 program throughout the whole project.

In the second stage, we focused on rewriting the Company Operation Procedures (COP)
and Working Instructions (WI). Although there were many established procedures which
did not need dramatic changes, it was hard work to rewrite them in order to align these
with the ISO 9001 requirements. After the completion of the first draft of COP and WI,
they were discussed, checked and amended several times to make sure they were
practical. Moreover, the quality system manager and the consultant had compared the
documents carefully with the ISO 9001 standard to ensure that all the specified
requirements were met.

Since our colleagues had to take care of their day-to-day responsibilities, they spent extra
time and worked long hours to prepare the procedures. Nevertheless we were proud of
the dedicated documents which were delivered on time. Members of the task force not
only had to keep monitoring their departments’ operations to meet the new requirements,
but also had to perform internal audits to other departments. They provided
recommendations and served a monitoring role for the system. Through these exercises,
the cooperation among colleagues in different departments was improved because they
understood the problems other people faced.

In less than two years of starting our ‘3C’ initiative we had completely edited our quality
manual. PCAP’s quality policy statement was also finalized. The ‘3C’ principle was
incorporated in the statement, with the goal to ‘do it right the first time, and every time’.
Following the release of the quality manual, ‘Company Operation Procedures and
Working Instructions’, we entered the third stage - implementation of the new quality
system. The process involved a total mobilization of people. We organized the employees
into many units, provided training courses to them, made them familiar with the new
system, and ensured that what we were doing conformed with what we put down. At the
same time, we amended documents to eliminate the contradiction among the procedures.
Relevant data and records were collected in this stage to prove the system operated
effectively. In order to examine the execution of the new quality system internal audits
were also carried out. A team of trained internal quality system auditors was appointed to
find out any discrepancies between the documented system and the actual practices. At
the same time, our consultant also completed a quality system review for us. We also
invited the Hong Kong Quality Assurance Agency (HKQAA) to conduct the audit. The
audit revealed some deficiencies in our document control. Corrective actions were taken
immediately. Within four months time, not only did we successfully rectify all the defects
Total Quality Management (MGT 510) Assignment 03

but we also completed another detailed and comprehensive internal system audit. Finally,
we were full of confidence to invite the HKQAA to come again for the re-audit. HKQAA
conducted a three-day in-depth assessment on our quality system. All employees were
pleased when the HKQAA audit team announced on the third day that we had satisfied
the requirements for ISO 9001 certification, and became the first Hong Kong company to
be awarded with ISO 9001 certification.

The whole process for preparation and certification of ISO 9001 took only 12 months. It
was mainly achieved by a strong commitment of the top management team and the
participation of all employees. During the 12 months period, we had successfully
restructured and enhanced our quality system. Our ‘3C’ principle was a strong driving
force. Our employees were encouraged to ‘charge’ themselves through learning and
training, to accept the ISO 9001 ‘challenge’ and to build up the ability to manage
‘change’. Besides, the demands of the ISO 9001 quality management system are very
similar to our beliefs. Hence, we were able to obtain the certification smoothly and in a
comparatively short period of time. Company culture cannot be established overnight,
nor can it be changed immediately. The leader must become not only an advocate for the
culture but also a role model.

CASE QUESTIONS

Answer the following questions

QUESTION 1

Discuss the importance of the 3C concept in PCAP’s implementation of Total Quality

Management.

QUESTION 2

Discuss the impact of ISO 9001 certification on the company culture.

QUESTION 3

Explain why a ‘change’ mindset was important in creating a quality culture and how this
was achieved.

QUESTION 4

Discuss the importance of top management in implementation of Total Quality

Management with reference to this case study.