Change through Total Quality Management (TQM).

TOTAL QUALITY MANAGEMENT Total - Made up of the whole Quality- Degree of excellence a product or service provides Management- Act, Art or manner of planning, organizing , directing controlling

and coordinating of affairs.

DEFINITION: 1. TQM is the management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction and benefits to all members of t h e organization and the society.- ISO 2. TQM is a people - focused management system that aims at continual increase in customer satisfaction at continually lower cost. TQM is a total system approach (not a separate area of program ), and an integral part of high level strategy. It works horizontally across functions and departments, involving all employees, top to bottom, and exceeds backwards and forward to include the supply chain and the customer chain - TOTAL QUALITY FORUM OF USA CHARACTERISTICS OF TQM. 1. 2. Customer Long termOriented. commitment for continuous improvement of all processes. 3. Team work. 4. Continuous involvement of top management. 5. Continuous improving at all levels and all areas of responsibility. OTHER CHARACTERISTICS 1. Continual Improvement: This is the philosophy that seeks to make never-ending improvement to the process of converting input into output. It covers equipment, methods, materials and people. Competitive Benchmarking: For learning how to improve your operations, you have to identify the companies or organizations that are the best. The company need not have the same line of business all the time. Example: Xerox used the mail order company, L.L. Bean to Benchmark order filling. Employee Empowerment: Giving workers the responsibility for improvements. This puts decision making into the hands of those who are closest to the job and have considerable insight into problems and solutions. Team Approach: The use of teams for problem solving and to achieve consensus takes advantages of group synergy, gets people involved and promotes a spirit of co- operation and shared values among employees.

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Decision based on facts rather than opinion.

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Knowledge of tools: Employees and managers are trained in the use of quality tools. 7. Supplier Quality: Suppliers must be included in the quality assurance and quality improvement efforts so that the processes are capable of delivering quality parts and materials in good time. BASIC CONCEPTS OF TQM: 1. management commitment 2. Top Focus on the customer - Both internal and external 3. Effective involvement and utilization of entire work force 4. Continuous improvement 5. Treating suppliers as partners 6. Establishing performance measures for the processes PRINCIPLES OF TQM: 1. Customers requirements - ( both internal & external) must be met first time & time every 2. 3. 4. 5. 6. 7. 8. 9. Everybody must be involved Regular two way communication must be promoted Identify the training needs and supply it to the employees Top management commitment Every job must add value Eliminate waste & reduce total cost Promote creativity Focus on team work.

BENEFITS OF TQM Tangible Benefits Improved product quality Improved productivity Reduced quality costs Increased market and customers Increased profitability Reduced employee grievances Intangible Benefits Improved employee participation Improved team work Improved working relationships Improved customer satisfaction Improved communication Enhancement of job interest

The Consequences of Poor Quality 1. 2. 3. 4. 5. Loss of business Liability Productivity Repair work, Rework and Scrap costs. Return goods, Warranty costs, Inspection costs and lost sales.-

Note: It is said that 30-35% of gross sales are used by the maximum companies for improving the quality.

CHANGETHROUGH BUSINESS PROCESS REENGINEERING.

Hammer (1990) defined Business Process Reengineering as "the fundamental rethinking and radical redesigning of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed". This definition comprises four keywords: fundamental, radical, dramatic and processes. Keyword1: Fundamental Understanding the fundamental operations of business is the first step prior to reengineering. Business people must ask the most basic questions about their companies and how they operate: "Why do we do what we do?" and "Why do we do it the way we do it?" Asking these basic questions lead people to understand the fundamental operations and to think why the old rules and assumptions exist. Often, these rules and assumptions are inappropriate and obsolete. Keyword2: Radical Radical redesigning means disregarding all existing structures and procedures, and inventing completely new ways of accomplishing work. Reengineering is about business reinvention, begins with no assumptions and takes nothing for granted. Keyword3: Dramatic Reengineering is not about making marginal improvements or modification but about achieving dramatic improvements in performance. There are three kinds of companies that undertake reengineering in general. First are companies that find themselves in deep trouble. They have no choice. Second are companies that foresee themselves in trouble because of changing economic environment. Third are companies that are in the peak conditions. They see reengineering as a chance to further their lead over their competitors. Keyword4: Processes The final keyword "Process", is the one that gives most corporate managers the greatest difficulty. Most business people are not process-oriented; they are focused on tasks, on jobs, on people, on structures, but not on processes. BPR is done by: 1. Companies at its declining stages. 2. Companies in its stable stages. 3. Companies in their peak stages.

Difference between continuous improvement TQM and BPR

Continuous improvement is an approach to improving the competitiveness, effectiveness and flexibility of a whole organization. It is essentially a way of planning, organizing and understanding each activity, and depends on each individual at each level. CONTINOUS IMPROVEMENT involves placing the customer as the focal point of operations. Its aim is to continuously improve process performance in order to satisfy customer requirements. At the center of TQM is the concept of the management of processes, and the existence of internal suppliers and customers within organizations. BPR is much more radical than CONTINOUS IMPROVEMENT. Quality approaches concentrate on improving existing processes; process reengineering starts from scratch to create new processes without the constraints of existing methods, people, technology, management systems, or organizational structures. The major differences between Quality Improvement and Process Reengineering approaches are provided by in the following table: Differences Between Quality Improvement (TQM) and Process Reengineering (BPR) Quality-Improvement Major Factor Seniormanagement involvement Intensity of teammember involvement Improvement goals Approach Hands-on and becoming more reinforcement-oriented Ongoing involvement on an as-needed, part-time basis Focus on incremental improvements over a period Implementation approach Magnitude organizational change Bread th of focus Use of benchmark data Dependence information systems on of of time Emphasis improving on initially, Reengineering Approach Hands-on, active involvement throughout the effort Ongoing involvement for a specified duration on a full-time basis Focus on dramatic improvements in a short time frame Emphasis on creating new ways of doing things changes to existing systems Radical and structures Addresses processes that span entire business units on front end, to assist with Used process selection Information systems used as a central enabler with on-line access

current work processes Limited disruption to existing systems and structures Addresses narrowly defined work processes Used after process improvement, to compare Information systems used for data collection and interpretation

Quality specialists tend to focus on incremental change and gradual improvement of processes, while proponents of reengineering often seek radical redesign and drastic improvement of processes. Planning the Change: Organisations must choose between evolutionary and revolutionary change. A firm that pursues revolutionary change adopts a top-down change strategy. The organisation waits until it believes that the costs of not changing exceeds the costs of overcoming organisational inertia and then introduces its master plan for change. Generally, a top-down strategy calls for intervention at the high level of an organisation. Winding up of divisions or departments and downsizing are examples of this type of change. A firm that adopts evolutionary change adopts a bottom-up change strategy. Managers believe that the uncertainty associated with organisational change is best managed through incremental processes in which they continually make adjustments to their strategy and structure. Firms opting for bottom-up strategy prepare the organisation for change by involving managers and employees at all levels. They discuss the need for change and diagnose the problems facing the organisation. TQM is a method of evolutionary change.