Discussion Board – coursefighter.com
Business Finance – coursefighter.com
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A comprehensive look at the journey toward quality improvement. by R. Michael Kirchner ________________________________________ Almost everyone has heard of total quality management and ISO 9000. Some companies that have tried to implement TQM have had experiences ranging from limited success to downright failure. Some companies and individuals think that ISO 9000 is just another name for TQM. To understand the relationship between the two, we need to look at them individually and then comparatively. In this way we can understand each and then explore their relationships, commonalities and differences. A good starting point is a definition of TQM: a well-planned, companywide process, integrated into the company’s business plan, that achieves the goal of never-ending continuous improvement of all business processes in order to satisfy customer requirements, both internal and external. The definition suggests that TQM is a process and a journey, not a destination. It is a philosophy, culture and way of doing business. If TQM is seen as “something else to do” rather than “this is our culture and way of doing business,” then the effort will probably not succeed. What signifies success with TQM? Performance excellence and customer delight. Critical success factors What are the critical success factors in implementing a TQM process? Joseph M. Juran analyzed Malcolm Baldrige National Quality Award winners and observed the following common characteristics: Strong support from management at all levels, but especially from the very top. Directions and priorities set by a quality council, which typically consists of the top manager and his or her staff. The right training at the right time for all employees. Good team facilitation. Employee empowerment. Decisions based on data (rather than intuition or guesswork). Fortune magazine (Oct. 18, 1993) did a survey of companies implementing TQM that identified the following successful implementation keys: The CEO must be visibly involved and committed. Customer focus is critical. TQM must be linked to a very few clearly defined strategic goals. Changes must be linked to a clear financial payback-and don’t wait forever. Don’t adopt an “off the shelf” quality process. Many companies fail in implementing TQM because they don’t consider the most critical cause-and-effect relationship. When talking to company CEOs about strategic objectives, they cite such items as: market share, profitability and return on investment. CEOs usually don’t realize that these metrics, while valuable, are only effects, which they cannot totally, or even mostly, control. A widely accepted axiom is that to control effects, you must identify and control the root causes. All of the above effects have a common root cause: total customer satisfaction. This axiom is true because satisfied customers keep coming back with more business. Therefore, the primary focus of any TQM implementation must, of necessity, be total customer satisfaction. Characteristics of successful TQM What common characteristics do successful companies share? A successfully functioning TQM process exhibits nine primary characteristics: Continuous, visible support by all levels of management. Decision making based on factual data rather than intuition, opinion or remembered experience. Continuous, objective measurement of and planned response to all key process parameters. Continuous planned training for all employees. Teamwork at all levels in the organization, at all times. Employee empowerment, i.e., clarifying responsibility and authority to act for all employees. Clear, unambiguous communication, vertically and horizontally, throughout the organization. Trust of and by all employees. Honesty in all actions; no hidden agendas. The above listing may seem impossible to achieve. While there will almost always be exceptions in any organization, a TQM organization will substantially exhibit all of these characteristics, with only occasional minor lapses or exceptions. Five phases of the TQM journey Most organizations on the TQM journey pass through five distinct phases. While these phases are not precise and perfectly distinct, all of the various elements will eventually be recognized and addressed. Organizations won’t attain perfection in all areas at all times, but they can continue to strive for perfection, even in the face of delays and setbacks. Pursuing TQM increasingly creates an attitude that says “mistakes are not acceptable.” Phase 0 is the usual beginning point. Product and service quality are not improving. At best, they are status quo and, at worst, are deteriorating. This phase is characterized by an inspection mentality: Find the problems and fix them. Phase 1 is the awakening. At this stage, top management begins visioning. They develop and document a vision of improved quality, along with a strategic quality plan. Total customer satisfaction becomes the new focus. Phase 2 is the progression toward quality improvement. Root-cause analysis, corrective action and process measurements and improvements begin. Quality improvement teams are first trained in statistical process control, problem solving and teamwork. These teams are then set to work to achieve the vision and strategic quality plan. Phase 3 is the point at which business and manufacturing processes are under control; only randomly caused variations remain within processes. Procedures and work instructions have been developed and effectively implemented. Control charts are routinely used for critical processes and parameters, and the concept of process capability is universally understood and measured as needed. Training and education are ongoing. Phase 4 is the designing of products and processes to the requirements of customers, both internal and external. Business process reengineering frequently bridges phases 3 and 4. Concepts such as quality function deployment, design for manufacturability, failure-mode-and-effect analysis, value engineering and reliability engineering are being implemented. This is the design-for-quality phase. Phase 5 is the new corporate (or business unit) quality culture. All employees have a “do it right the first time” attitude. The culture is oriented toward defect and problem prevention rather than toward corrective action. Management support is continuous and visible, and decisions are generally based upon facts-the results of routine process measurements and analyses. The TQM paradigm The TQM paradigm has 15 elements, all of which are interwoven rather than separately distinct: There is a clearly defined and documented quality policy. Documented quality plans are an integral part of the strategic business plan. The organization focus is customer satisfaction, both internal and external. The organization’s culture is teamwork-oriented at all levels. Senior managers actively demonstrate and are committed to quality in all their actions. Everyone knows their role in causing quality to happen. Education and training are planned and perpetual activities. There is an effective and documented quality management system. There is a well-developed cost-of-quality system that is actively used to measure quality performance and direct improvement efforts. All organization functions are viewed as an integrated system of interdependent processes. There is a documented, formal system for achieving, controlling and improving quality in all aspects of the organization’s functions. There is a general attitude of continuous effort to reduce errors and defects, discover and eliminate waste, and simplify all processes. There is a general attitude that defects and errors are not acceptable, and their prevention must be designed into all processes. There is a continual effort to reduce variation in routine operations. Quality is what the customer says it is. To achieve the TQM paradigm, most organizations must make a major paradigm shift. In many situations, the conventional wisdom is, “solving a crisis is success.” However, the TQM wisdom is, “not having a crisis is success.” The latter is much harder to measure (you can count crises), but in successful organizations, prevention is the established culture and philosophy. TQM, teamwork and SPC Most people agree that successful organizations have two primary objectives: performance excellence and customer delight. To achieve those objectives, three structural elements are needed: TQM (philosophy and goal), teamwork (execution vehicle) and SPC (implementation tools). Many organizations select one or two of the three elements and think that they will achieve the two primary objectives. To best understand the relationship, visualize a three-legged stool. The top (or seat) of the stool is formed by the two primary objectives. The three structural elements each form a leg of the stool. It doesn’t take a physics degree to know what happens to a three-legged stool if one leg breaks. Anyone standing on such a stool when one or more of the legs breaks is in for a nasty fall. This analogy fits organizations failing to realize that the two primary objectives can only be achieved by effectively utilizing all three structural elements. They cannot attain the desired results by just looking like they’re implementing these three elements; only by really doing it will they achieve success. Statistical process control So what, then, is SPC? Technically (and narrowly) it is the application of statistical methods to the measurement and analysis of variation in any process. More broadly, SPC is an integrated system of tools and techniques to provide objective insight into problems, which leads to the determination of root causes of problems. Using these tools, we can then take objective corrective action to alleviate root causes. Then, control systems and/or process revisions can be installed to prevent recurrence. ISO 9000 ISO 9000 is a set of five guideline standards that define the requirements for an effective quality management system. Of the five, only three are certification standards (ISO 9001, 9002 and 9003); both ISO 9000 and 9004 are guidelines for the other three. When seeking ISO 9000 certification, consider that ISO 9000: Establishes a minimalist quality management system that facilitates consistent quality. Specifies what processes need to be in place. Is a process standard, not a product standard. Is not a TQM process but does contain many TQM elements. Is site-specific-uniquely designed and implemented for each location. Requires ongoing audits (internal and external), plus recertification. Is not inexpensive. Requires you to document what you do and do what you document. While not explicitly stated, five overriding themes are woven throughout ISO 9000. These connections have been greatly amplified and strengthened in the 1994 revisions to the standards. These themes are: integration of process steps across functional boundaries, consistency of application and execution, effectiveness of implementation, adequacy of processes to meet standards, and compliance to documented procedures and work instructions. ISO 9000-1 states that the standards have five quality objectives: Achieve, maintain and seek to continuously improve product quality (the standards define “product” as the output of any process. Hence, this term also applies to “services,” whether internal or external to the organization). Improve quality of operations to continually meet all customers’ and other stakeholders’ stated and implied needs. Provide confidence to internal management and other employees that requirements for quality are being fulfilled and maintained, and that quality improvement is taking place. Provide confidence to customers and stakeholders that requirements for quality are being, or will be, achieved in the delivered product. Provide confidence that quality system requirements are fulfilled. Reading the standards, particularly ISO 9000-1 and 9004-1, in conjunction with the most comprehensive of the three certifying standards, 9001, and an analysis of all the relationships, leads to understanding the essence of the standards: Run the business in a controlled and disciplined manner. Management must plan what should be done. Clearly communicate the plan to the work force. Monitor plan performance. Produce records of plan performance. Prove that the plan is working. If nonconformances occur, the cause can be determined and eliminated to prevent recurrences. If we read section 1.0 (Scope) of all three of the certifying standards (ISO 9001, 9002 or 9003), we find two keys: Prevent problems (nonconformances) before they occur and detect problems (nonconformances) if they do occur. From ISO 9000 to TQM Having looked at TQM and ISO 9000 separately, we will now look at them together and comparatively. First visualize two circles, one about the size of a soccer ball and one about the size of a tennis ball. Now overlay the two circles so that the smaller is about 95 percent inside the larger one. The large circle represents TQM and the small one ISO 9000. TQM is a larger, more comprehensive system, but almost everything in ISO 9000 is also in TQM. The above analogy leads us to another one. When building a house, it needs a solid foundation to prevent collapse. In building a “quality” house, we can visualize the roof as the two primary objectives (performance excellence and customer delight). Before we can build a solid frame to support the roof of this “house of quality,” we need a solid foundation. In many organizations, the necessary foundation is discipline and control-precisely the foundation ISO 9000 provides. TQM provides the necessary framework to support the roof. What we see when we analyze organizations that have attempted to implement TQM and were not successful is that the culture was not ready for TQM. The unsuccessful organizations almost always lacked discipline and control of their business processes. People essentially did their own thing with little or no consideration for interdepartmental interfaces, i.e., the impact that an action in one area had on another area. These problems are exactly what ISO 9000 focuses on eliminating, while keeping customer satisfaction as the goal. In short, ISO 9000 is the process that typically shifts an organization’s culture to allow successful TQM implementation. To better understand this transformation process, we need to look at the areas of commonality between TQM and ISO 9000. These areas are: Top management leadership, commitment and involvement. Prevention of errors and defects. Detection and correction of errors and defects. Dependency and integration of processes. Customer focus, internal and external. Root-cause corrective action process. Training. Control of product and process design. SPC. Effective implementation. External customer service. There are only two areas in ISO 9000 not explicitly in TQM, but they are implicitly there. They are customer-supplied product control and quality records. Conclusions An analysis of both ISO 9000 and TQM lead to the following conclusions: For most organizations, ISO 9000 establishes necessary process discipline and control, which is typically a prerequisite to the broader demands of TQM. ISO 9000’s requirements are minimum success requirements for almost any business. ISO 9000 is a minimalist quality management system. ISO 9000 is the primary stepping stone toward TQM for most organizations. For those companies who have implemented, plan to implement or are in the process of implementing ISO 9000, by all means, continue to do so. Even when your organization successfully achieves and maintains ISO 9000 certification, it is only the first step, albeit a clearly defined and focused one. Successful organizations will maintain their ISO 9000 certification while working on the next quantum leap: the journey to TQM.