Success and Failure

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Total Quality Management Success and Failure

Rick Wagoner

Information Education and Technology 600, Section 002 Professor Dr. A. Zargari November 14, 2004

Success and Failure Total Quality Management Success and Failure Total Quality Manager (TQM) has become a key philosophy to assist organizations in becoming the most efficient, the most competitive, and the most

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successful that it can be. TQM is defined as (Besterfield, 2003) the art of managing the whole to achieve excellence. Considering this we can easily see that Total Quality Management can be extremely subjective in its implementation, monitoring, and success or failure. Most information discussing Total Quality Management heralds is success but there is very little information about its failures. Is this because there are no failures or because the general topic is subjective and greatly influenced by personal perception. This paper will discuss this very topic. Total Quality Management is obviously a useful philosophy for management if properly used and implemented. SGL Carbon is an organization who appears to have done just that. They have implemented a philosophy of Total Quality Management and have both increased market share as well as saved large amounts of money. SGL Carbon is an organization that (Annual, 2002) produces carbon and graphite products including electrodes, semiconductors, brake discs, fuel cell components, furnace linings, and many other products. In 2002 SGL Carbon began looking at implementing a management approach of Total Quality Management while using Six Sigma as the statistical control methodology. Six Sigma is a tool used for process capability analysis and primarily used to control process variability. By controlling variability process variability and thus product variability can be maintained within +- 3 sigma or 3 standard

Success and Failure deviations of process normal. Six Sigma ensures that nonconforming parts will be no more than 2 parts per billion. SGL Carbons goal was to implement the Six Sigma

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projects throughout the organization in 2003 with expected savings of 10 million euro. SGL carbon had a very successful roll out of their Six Sigma project called SGL Excellence. In 2003 (Milestones, 2005) they were able complete their implementation of SGL Excellence which included an actual savings of 19 million euro. Following the continuous use of SGL Excellence SGL Carbon has increased market share to 40%. Now the interesting point to consider is why SGL Excellence was so successful and is Total Quality Management going to be this successful for all other organizations that say they follow this philosophy. Total Quality Management failures are quite difficult to find. I did not readily find any organizations that stated they tried Total Quality Management and failed. Nobody likes to admit to failure while everyone likes to shout their successes. One interesting point that I did find concerning organizations that considered the use of Total Quality Management a failure concerned the users perception of what constituted success and failure as described by (Dooley, 1998). Another key point was that in most instances of organizations reporting failure (Dooley, 1998) the organizations commitment to Total Quality Management could be questioned when considering a total analysis of the implementation of their quality management program. This was the one item that stood out when reviewing the programs used and implemented by SGL Carbon. They were totally committed to following the quality management path and proceeded with their implementation based on that commitment.

Success and Failure Looking at SGL Carbons web site shows that their program SGL Excellence

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explicitly defined this commitment. To take a quote from SGL Carbons web site we can see the commitment they have made (Excellence 2005): SGL Excellence is intended to continuously create customer value by strengthening the competitiveness of the Company. SGL Excellence standardizes both methods and tools supporting the evolution of a culture of continuous improvement at SGL Carbon. The SGL Excellence initiative will therefore take over and incorporate the Total Quality Management (TQM) approach implemented so far throughout the Company. SGL Excellence focuses on three areas: People Excellence - Operational Excellence - Commercial Excellence Operational Excellence strives at improvements in manufacturing, such as costs, productivity, working capital and throughput times. Commercial Excellence is geared towards administration and marketing with continuous improvements in servicing customers, logistics, pricing, supply chain management as well as product portfolio. In order to achieve operational and commercial improvements, SGL Excellence will use SIX SIGMA as the core methodology. SIX SIGMA is a significant extension to the existing methods at SGL Carbon. It focuses on tasks that will increase the benefit to our customer, can objectively be measured and will directly improve our results. People Excellence is the key precondition for success in Operational and Commercial Excellence. The Executive Committee and the Management of our Business Units are fully committed to providing the resources and support for necessary skill development to encourage a culture of change and improvement. In return, it is the responsibility of every employee to play an active role in our SGL Excellence process.

Success and Failure SQL Carbon was committed and their implementation and use of Total Quality Management was successful.

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SGL Carbon provides us with a prime example of a successful implement of Total Quality Management. I do not list an instance of a failure implementing Total Quality Management in this paper because I have to wonder if any listed failure is valid. The few articles reviewed and the information listed here indicates that the failure occurred because management did not make the proper commitment to Total Quality Management and this was listed early in our text as the number one concept required for Total Quality Management to be successful.

Success and Failure References Annual (2002). Annual Report 2002. Retrieved on August 27, 2006 from http://www.sglcarbon.com/IR/public/annual/pdf/annual_02.pdf.

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Besterfield, Dale H., Besterfield-Michna, Carol, Besterfield, Glen H., and BesterfieldSacre, Mary. (2003). Total Quality Management. Prentice Hall, Columbus, Ohio. Dooley, K., and R. Flor (1998). Perceptions of Success and Failure in Total Quality Management Initiatives. J. of Quality Management. Retrieved on August 27, 2006 from http://www.public.asu.edu/~kdooley/papers/tqmchange.pdf. Excellence (2005). SGL Excellence. Retrieved on August 27, 2006 from http://www.sglcarbon.com/company/excellence.html. Milestones (2005). Milestones. Retrieved on August 27, 2006 from http://www.sglcarbon.com/company/milestones.html.