UNIT II Leadership:

TQM PRINCIPLES

According to James Macgregor Burns, Leader is one who instills purposes, not the one who controls by brute forces. A leader strengthens and inspires the followers to accomplish shared goals. Shape the organizations values Promote the organizations values Protect the organizations values Exemplify the Organizations value The Malcolm Baldrige National Quality award has a more grounded definition of leadership in its core values Leaders Characteristics of Quality Leaders: 1. They give priority to external and internal customers 2. They empower rather than control subordinates 3. They Emphasize improvement rather than maintenance 4. They emphasize prevention 5. They encourage collaboration rather than competition 6. They train and coach, rather than direct and supervise 7. They learn from problems 8. They continually try to improve communications. 9. They continually demonstrate their commitment to quality 10. They choose suppliers on the basis of Quality, not price 11. They establish organizational systems to support the Quality effort 12. They encourage and recognize team effort.

Leadership concepts: Leadership requires an understanding of human nature basic needs, wants and abilities of people. Leaders need to give their employees independence and yet provide a secure environment. Also to be an effective, a leader understands that: 1. People, paradoxically, need security and independence at the same time. 2. People are sensitive to external rewards and punishments and yet are strongly motivated 3. People like to hear a kind word of praise 4. People can process only a few facts at a time; thus a leader needs to keep things simple 5. People trust their gut reaction more than statistical data. 6. People distrust a leaders rhetoric if the words are inconsistent with the leaders action

Habits of highly effective people: A habit is the intersection of knowledge, skill and desire. Knowledge is what to do and the why Skill is how to do Desire is the motivation or want to do

Seven Habits of highly integrated approach The first three deals with independence- the essence of character growth Habits 4, 5, 6 deal with interdependence Teamwork, cooperation and Communication Habit 7 is the habit of renewal

Habit 1: Be proactive Being proactive means taking responsibity for your life Proactive behavior is a product of conscious choice based on values rather than reactive behavior Reactive People let conditions circumstances or environment tell them how to respond Proactive People let carefully-thought about, selected and internalized values tell them how to respond

Habit 2: Begin with the end in Mind Begin each day with an image, picture or paradigm of the end of your life as your frame of reference Inorder to begin with end in mind ,develop a personal philosophy or creed For example: Never compromise with honesty Remember the people involved Maintain a positive attitude Exercise daily Keep a sense of humor Do not fear mistakes Facilitate the success of subordinates Seek the divine help Read a leadership book monthly

Habit 3: Put first things first Habit 1 says you are the creator, you are in charge Habit 2 is the first creation and is based on imagination Habit 3 is practicing self management and requires habit 1 and 2 as prerequisites Time management matrix

Urgent Important I Crises, fire fighting Pressing problems Deadline driven projects III Interruptions, pressing matters Some mail,calls,reports some meetings, proximate popular activities

Not Urgent II Prevention, PC Relationship building Recognizing new opportunities Planning, recreation IV Trivia, busy work, Time wasters,Pleasant activities

Not important

Habit 4: Think Win-Win Win-Win is a frame of mind and heart that constantly seeks mutual benefit in all human interactions Win-Win embraces five interdependent dimensions of life Win-Win survive in a system that supports it Inorder to obtain Win-Win four step process is needed See the problem from other view point Identify the key issues and concerns Determine the acceptable results Seek possible new options to achieve those results. Habit 5: Seek first to understand, then to be understood Empathic listening is the key to effective communication Listening is deep understanding Second part of this habit is to be understood. Covey uses three sequentially arranged Greek words Ethos character Pathos empathy with other persons communication Logos logic or reasoning part of your presentation

Habit 6: Synergy Synergy means Whole is greater than the parts It focuses the concept of win-win and skills of empathic communication Synergy occurs when people open themselves up to creative cooperation Habit 7: Sharpen the saw(renewal) Renewing four dimensions of nature-physical,mental,spiritual,social Physical dimension means following good nutrition, rest, relaxation and regular exercise Mental dimension means developing your intellect through reading, seminars and writing Spiritual dimension means commitment to your value system Social dimension means it also have connection with emotional dimension.

Strat egic Quality planning: Strategic planning set the long term direction of the organization in which it wants to proceed in future

Definition: It can be defined as the process of deciding on objectives of the organization, on changes on these objectives, on the resource used to attain these objectives and on the policies that are to govern the acquisition, use and disposition of these resources. Seven steps to strategic planning: 1. Customer needs 2. Customer positioning 3. Predict the future 4. Gap analysis 5. Closing the gaps 6. Alignment 7. Implementation

Customer needs 1.

Customer positioning

Predict the future

Gap analysis

Closing the gap

Alignment

Implementation

Reevaluate and review 1. Customer needs: The first step is to discover the future needs of the customer. Who will they be? Will your customer base change? What will they want? How will the organization meet and exceed expectations? 2. Customer positioning: Planners determine where the organization wants to be in relation to the customer. Products or services with poor Quality performance should be targeted for break-through or eliminated The organization needs to concentrate its efforts on areas of excellence 3. Predict the future: Planners must look into the future conditions that affect their products or services Demographics, economic forecasts, and technical assessments or projections are tools that help to predict the future Organizations products become obsolete because they failed to foresee the changing technology Note that rate of change is continually increasing

4. Gap analysis: Planners must identify the gaps between the present state and future state of the organization Analysis of core values and concepts given earlier is an excellent technique for pinpointing gaps 5. Closing the gap: Developed plans can be closed by establishing Goals and responsibilities All stake holders should be included in the development of the plan 6. Alignment: After the plan is developed, it must be aligned with mission, vision, core values and concepts of the organization. Without this alignment, the plan will have a little chance of success 7. Implementation: Resources must be allocated to collecting data, designing changes, and overcoming resistance to change. It is the monitoring activity to ensure that progress is being made The planning group should meet atleast once a year to assess progress and take any corrective action Quality statements: Quality statements include vision statement, mission statement and quality policy statements. Once these statements are developed, they are occasionally reviewed and updated. This statement utilization differs from organization to organization. Vision statement: It is a short declaration of what an organization aspires to be tomorrow. It is the ideal state that might never be reached The vision statement is coined in such a way that the leaders and employees working in the organization should work towards the achievements of the vision statement Mission statement: This statement is usually one paragraph or less in length, easy to understand and describe the function of the organization Mission statement answers the following Question 1. Who we are? 2. Who are the customers? 3. What we do? 4. How we do? Quality policy statement: The Quality policy is a guide for everyone in the organization They should provide products and service to the customers.

Common characteristics are, 1. Quality is first among equals 2. Meet the needs of internal and external customers 3. Equal or exceed the competition 4. Continually improve the quality 5. Include business and production practices 6. Utilize the entire work force Customer focus: The customer is the judge of quality. Understanding customer needs, both current and future, and keeping pace with changing markets requires effective strategies for listening to and learning from customers, measuring their satisfaction relative to competitors, and building relationships, Customer needsparticularly differences among key customer groups must be linked closely to an organizations strategic planning, product design, process improvement, and workforce training activities. Satisfaction and dissatisfaction information are important because understanding them leads to the right improvements that can create satisfied customers who reward the company with loyalty, repeat business, and positive referrals. Creating satisfied customers includes prompt and effective response and solutions to their needs and desires as well as building and maintaining good relationships. A business can achieve success only by understanding and fulfilling the needs of customers. From a total quality perspective, all strategic decisions a company makes are customerdriven. In other words, the company shows constant sensitivity to emerging customer and market requirements. This requires an awareness of developments in technology and rapid and flexible response to customer and market needs. Customer focus extends beyond the consumer and internal relationships, however. Society represents an important customer of business. A world-class company, by definition, is an exemplary corporate citizen. Business ethics, public health and safety measures, concern for the environment, and sharing quality-related information in the company' business and geographic communities are required. In addition, company supportwithin reasonable limits of its resourcesof national, industry, trade, and community activities and the sharing of nonproprietary quality-related information demonstrate far reaching benefits. Customers may be of following types: 1. External Customer 2. Internal Customer 3. Investor Customer 4. Social or Society Customer External Customer: The one outside the company walls or office/department walls or the next one in chain who receives your product, service or idea. Internal Customers: Staff members, employees or any one who works for the interest of a company or office or boss and expects a reward or salary or benefit from the company or office or boss.

 Investor Customer: The one who has invested his fortune and finance to build a company and expects a good return on his/her financial capital or fortune. Shareholders, Stockholders Social Customer: The society at large. Customer Orientation Customer retention represents the activities that produce the necessary customer satisfaction which in turn creates the customer loyalty. Customer retention moves customer satisfaction to the next level by determining what is truly important to the customers and making sure that the customer satisfaction system focuses valuble resources on things that are important to the customer. Customer rettention is the connection between customer satisfaction and the bottom line. World-class companies know that continuous improvement and customer satisfaction should go hand-in-hand. Improved service to the customer is a costlier affair, so an organization must determine its return on the service investment. For this the important service elements that significantly improve revenues and market share should be determined. One survey indicates, it requires five times of effort to win a new customer than retaining a present customer. In this context customer retention is important for organizational success. Customer satisfaction Customers are important asset to the organization, satisfied customers will buy more, and buy more frequently, and pay their bill promptly. In a manufacturing and service organization, customer satisfaction is considered as a measure of quality. TQM implies an organizational drive with meeting or exceeding customer needs. Understanding the customer's needs and expectations is essential to winning new business. To attain this level, the organization should examine their quality system to respond to their ever changing customer's needs.

A simple definition of customer satisfaction is illustrated below Teboul model

Characteristics of customer Satisfaction. 1. It is far from simple. 2. It is not an objective statistic, but more of feeling and attitude. 3. Therefore like people's opinion and feeling, it is subjective by nature. 4. Because of this subjective nature, it is difficult to measure. 5. The measurement of customer satisfaction is not precise. 6. The customer satisfaction should not be viewed in vacuum i.e., it should be compared with the level of satisfaction they have with competitor's product or service. Customer complaints: From many statistical analysis of customer satisfaction, the following conclusions were made. A totally satisfied customer contributes 2.6 times as much revenue to a company as somewhat satisfied customer. A totally satisfied customer contributes 17 times as much revenue as a somewhat dissatisfied customer A totally dissatisfied customer decreases revenue at a rate equal to 1.8 times of what a totally satisfied customer contributes to business Thus the number of dissatisfied customers should be reduced as much as possible. In order to do so, customer feedback must be continuously solicited and monitored. Necessity of customer complaints: To discover customer dissatisfaction To identify customers needs

 To discover relative priorities of quality To compare performance with competition To determine opportunities, for improvement Handling the customer complaints: Investigate customer's experiences by actively receiving the customer feedback and then acting promptly. Develop procedures for complaint resolution that include empowering front-line employee. Analyze complaints; try to put them in a category for speedy response. Work to identify process and material variations and then eliminate the root cause. More inspection' is not a corrective action. After receiving the response, a senior manager should contact the customer and strive top resolve the concern. Establish customer satisfaction measures and constantly monitor them Communicate complaint information, as well as the results of all inquiries and solutions, to all people in the organization. Provide a monthly complaint report to the quality council for their evaluation and if needed, the assignment of process improvement teams. Identify customer's expectations in advance rather than afterward through complaint analysis. Tools used for customer complaints: 1. Customer card 2. Customer questionnaire 3. Focus groups 4. Toll-free phone numbers 5. Customer visits 6. Report cards 7. Internet and computer 8. Employee feedback Customer retention Customer retention is the process of retaining the existing customers. Customer care can be defined as every activity which occurs within an organization that ensures that a customer is not only satisfied but also retained. Customer satisfaction creates customer loyalty Employee involvement Employee involvement is to improve Quality and productivity Employee involvement is a means to better meet the organizations goals for Quality and productivity at all levels of an organization

Motivation: Knowledge of motivation helps us to understand the utilization of employee involvement to achieve process improvement Maslows Hierarchy of needs The most popular motivational theories was developed by Abraham Maslow. He stated motivation interms of hierarchy of needs. Five levels of Hierarchy of needs 1. Survival 2. Security 3. Social 4. Esteem 5. Self-actualization Once a given level is satisfied, it can no longer motivate a person. Relating these needs to motivation, we know Self-actualization

Esteem

Social

Security

Survival Survival Needs: Physiological needs are the biological needs required to preserve human life. These needs include needs for food, clothing and shelter. These needs must be met first and it can be provided by a job. In workplace, Proper lighting, heating and air conditioning, ventilation phone system, data/voice access and computer information system Security needs: It means a safe place to wok and job security to employees Motivating the employees is necessary It includes privacy on the job

Social needs: After the needs of the body and security are satisfied then a sense of belonging and acceptance becomes predominant in motivating behaviour Employee should provided with formal social areas such as cafeteria Esteem needs: Esteem relates to pride and self-worth Everyone wants to be recognized as a person of value to the organization Business cards, workspace size and office protocols provide employees with certain level of self-esteem within an organization Self-Actualisation Needs: This is the ultimate need which dominates a persons behaviour when all lower needs are satisfied Self-actualisation called self-realisation needs Higher level needs can be satisfied through participation in decisionmaking process, delegation of authority and responsibility, more freedom, self-development etc. Herzbergs two factor theory: Herzberg extended the work of Maslow and developed two factors 1. motivators 2. Disatisfiers or hygiene factors 1. Motivators: Herzberg found people are motivated by recognition, responsibility, achievement, advancement and work. These factors called motivators. The motivators are intrinsic in nature. 2. Disatisfiers or hygiene factors: His research showed bad feeling associated with low salary, minimal fringe benefits, poor working conditions, ill-defined organizational policies and mediocre technical supervision. The dissatisfiers are extrinsic in nature. They are preventable.0 Empowerment The dictionary meaning of the term empowerment is to invest people with authority. Its purpose is to tap the enormous potential that lies within every worker. Empowerment is nothing unusual; people generally want to be more in charge of their own jobs and carriers. After all, they do that successfully in their personal lives every day. Most people appreciate and value the trust and responsibility. This empowerment helps greatly in eliminating rsistance to changes. Empowerment is different from delegation or job enrichment, which means distributing or entrusting work to others. In empowerment employee is held responsible for accomplishing a whole task.i.e. Employee becomes process owner, thus not only responsible but also accountable.

Definition: Empowerment is an environment in which people have the ability, the confidence, and the commitment to take the responsibility and ownership to improve the process and initiate the necessary steps to satisfy customer requirements within well defined boundaries in order to achieve organizational values and goals. Three conditions for empowering employees: 1. Everyone must understand the need for change 2. The system needs to change to the new paradigm (model/standard) 3. The organization must enable its employees.

Team and teamwork Teams are very effective in solving all quality and productivity problems. Team is defined as a group of people working together to achieve common objectives or goals. Teamwork is the cumulative actions of the team during which each member of the team subordinates his interests and opinions to fulfill the objectives or goals of the group. Many heads are better than one, especially in meeting ever-changing customer needs. Each member of the team has special ability that can be used for the problem. Many processes are so complex that one person cannot able solve completely. Based on the synergic effect, whole is greater than sum of its parts. Team work is better than sum of its member contribution. Team builds a rapport with each other that allows everyone to do a better job. Teams provide the vehicle for improved communication.

Types of teams

Process improvement team cross-functional teams Natural work teams self-directed/ self managed teams

Characteristics of successful teams Sponsor Team charter

Team competition Training ground rules Clear objectives Accountability Well-defined decision procedures Resources Trust Effective problem solving Open communication Appropriate leadership Balanced participation Cohesiveness.

Recognition and reward Recognition is a form of employee motivation in which the organization publicly acknowledges the positive contributions An individual or team has made to the success of the organization. Reward is something tangible to promote desirable behavior. Recognition and reward go together to form a system for letting people know they are valuable members of the organization.

Performance appraisal The purpose of performance appraisals is to let employees know how they are doing, and provide a basis for promotions, salary increases, counseling and other purposes related to an employees future. There should be a good relation between employee and the appraiser .Performance appraisal may be for the team or individuals. Key factor in a successful performance appraisal is employee involvement. The performance must be based on standards that are developed and agreed upon by the appraiser and the employees. The appraisals should point out strengths and weaknesses as well as how performance can be improved. Appraisal format:

Type

Description

Ranking

Compare employees by ranking from highest to lowest

Narrative Graphic Forced choice

Written description of employees strength and weakness Indicates major duties performed by the employees Places each employee in a category with predetermined percentage

Some improvement suggestions for performance appraisal: 1. 2. 3. 4. 5. 6. 7. Use rating scales that have few rating categories Require work team or group evaluations that are atleast equal in emphasis to individual-focused evaluations Require more frequent performance reviews where such reviews will have a dominant emphasis on future performance planning Promotion decisions should be made by an independent administrative process that draws on current job information and potential for new job. Include indexes of external customer satisfaction Use peer and subordinate feedback as an index of internal customer satisfaction Include evaluation for process improvement in addition to results

Continuous process improvement Quality based organizations should strive to achieve perfection by continuously improving the business and production processes. Of course, perfection is impossible because the race is never over, however we must continually strive for its attainment Basic ways for a continuous process improvement: Reduce resources. Reduce errors. Meet or exceed expectations of downstream customers. Make the process safer. Make the process more satisfying to the person doing it. Phases of a Continuous Process Improvement Cycle: a) Identify the opportunity b) Analyze the process c) Develop the optimal solutions d) Implement e) Study the results f) Standardize the solution g) Plan for the future Jurans Ten Steps to Quality Improvement Examining Jurans Ten Steps to Quality Improvement, you will see some overlap between them and Demings Fourteen Points. They also mesh well with the philosophy of other quality experts. 1. Build awareness of both the need for improvement and opportunities for improvement. 2. Set goals for improvement. 3. Organize to meet the goals that have been set.

4. Provide training. 5. Implement projects aimed at solving problems. 6. Report progress. 7. Give recognition. 8. Communicate results. 9. Keep score. 10. Maintain momentum by building improvement into the companys regular systems The Juran Trilogy Jurans prescriptions focus on three major aspects of quality called the Quality Trilogy. Quality planning the process for preparing to met quality goals, Quality control the process for meeting quality goals during operations, Quality improvement the process for breaking through to unprecedented levels of performance. Quality Planning: Jurans program for quality improvement involves demonstrating the need for improvement, identifying specific projects for improvement, organizing to guide the projects, diagnosing the causes, providing remedies for the causes, proving that the remedies are effective under operating conditions, and Providing control to hold improvements. Quality planning involves developing the products, systems, and process needed to meet or exceed customer expectations. The following steps are required: 1. Determine who the customers are. 2. Identify customers needs. 3. Develop products with features that respond to customer needs. 4. Develop systems and processes that allow the organization to produce these features. 5. Deploy the plans to operational levels. Quality Control: Quality control involves determining what to control, establishing units of measurement so that data may be objectively evaluated, establishing standards of performance, measuring actual performance, interpreting the difference between actual performance and the standard, and taking action on the difference. The control of quality involves the following processes: 1. Assess actual quality performance. 2. Compare performance with goals. 3. Act on differences between performance and goals. Quality Improvement: The improvement of quality should be ongoing continual: 1. Develop the infrastructure necessary to make improvements. 2. Identify specific areas in need of improvement 3. Implement improvement projects. 4. Establish a project team with responsibility for completing Project 5. .Provide teams with what they need to be able to diagnose problems to determine root Causes develop solutions, and establish control that will maintain gains made.

PDSA cycle

The basic Plan-Do-Study-Act is an effective improvement technique. Plan carefully what is to be done Carry out the plan Study the results Act on the results by identifying what worked as planned and what didnt.

Principle of 5S: The Japanese concept of 5S is a natural outcome of lack of adequate physical space on one hand and technology which keeps demanding the sanitary conditions for process of manufacture on the other. Many have confused 5S with just cleanliness. The concept however is far more dynamic. Japanese word Meaning

SEIRI

Sort out Waste (Eliminate Waste) Systematic Arrangement (Place for everything and everything in place) Shine the place (Cleanliness) Self care (Proper maintenance of machines, tools and workplace) Self Discipline (Stick to rules and make it a habit)

SEITION

SEISO

SEIKETSU

SHITSUKE

 5S Philosophy focuses on effective work place organization and standardized work procedures. 5S simplifies your work environment, reduces waste and non-value activity while improving quality efficiency and safety. Sort (Seiri) the first S focuses on eliminating unnecessary items from the workplace. Set In Order (Seiton) is the second of the 5Ss and focuses on efficient and effective storage methods. Shine: (Seiso) once you have eliminated the clutter and junk that has been clogging your work areas and identified and located the necessary item, the next step is to thoroughly clean the work area. Standardize: (Seiketsu) Once the first three 5Ss have been implemented, you should concentrate on standardizing best practice in your work area. Sustain: (Shitsuke) This is by far the most difficult S to implement and achieve. Once fully implemented, the 5S process can increase morale, create positive impressions on customers, and increase efficiency and organization.

Kaizen Kai = Change Zen = for the better Kaizen = Continuous Improvement Process: Total Quality Control Quality Circle Suggestion scheme Automation TPM JIT Zero defects Kaizen is a Japanese word for the philosophy that defines managements role in continuously encouraging and implementing small improvements involving everyone. It is the process of continuous improvement in small increments that make the process more efficient, effective, under control and adaptable. Supplier partnership Organizations can benefit from establishing relationships with suppliers and partners to promote and facilitate clear and open communication and to improve the processes that create value. There are various opportunities for organizations to increase value through working with their suppliers and partners such as Optimizing the number of suppliers and partners.

 Establishing two-way communication at the most appropriate level in both organizations to facilitate rapid solution of problems, and to avoid costly delays or disputes. Cooperation with suppliers in validation of the capability of their processes, .monitoring of supplier ability to deliver confon"l1ing products, Encouraging suppliers to implement continual improvement programmes and to participate in joint improvement initiatives, involving suppliers in the organization's design and/or development activities to share knowledge and improve the realization and delivery of conforming products, Involving partners in identification of purchasing needs and joint strategy development, evaluating, recognizing and rewarding efforts achieved by suppliers and partners. Partnering Three key elements to a partnering relationship 1. Long-term commitment 2. Trust 3. Shared vision Supplier selection The ten conditions for the selection and evaluation of suppliers 1. The supplier understands and appreciates the management philosophy of the organization. 2. The supplier has a stable management system. 3. The supplier maintains high technical standards and has the capability of dealing with future technological innovations. 4. The supplier can supply precisely those raw materials and parts required by the purchaser, and those supplied meet the quality specifications. 5. The supplier has the capability to produce the amount of production needed or can attain that capability. 6. There is no danger of the supplier breaching corporate secrets. 7. The price is right and the delivery dates can be met. In addition, the supplier is easily accessible in terms of transportation and communication. 8. The supplier is sincere in implementing the contract provisions. 9. The supplier has an effective quality system and improvement program such as ISO/QS 9000. 10. The supplier has a track record of customer satisfaction and organization credibility. Supplier rating The quality of goods and services received from suppliers, the upstream potion of the supply chain, has a significant effect on the quality of goods and services that downstream customers receive.

 Suppliers are those companies that provide the organization with goods and services that help them to satisfy the needs of their own customers. If a suppliers performance is of consistently high quality; its customer can decrease or eliminate costly incoming inspections that add no value to the product. Many organizations have increasingly demanded tangible progress in quality from all their suppliers. Companies that do not accept this requirement are dropped from supplier lists. The importance of suppliers is at least as great when they provide training, software, or other goods or services that do not physically become part of the final product Suppliers play a vital role throughout the product development process, from design through distribution. Suppliers can provide technology or production processes not internally available, early design advice, and increased capacity, which can result in lower costs, faster time-to-market, and improved quality for their customers. In turn, they are assured of stable and long-term business.