Total Quality management (TQM) and Core process reengineering

INTERNATIONAL STRATEGIC MANAGEMENT

             TQM (Total Quality management) and CPR (Core process reengineering)

Approaches to managing at the operations level:

TQM and CPR

TABLE OF CONTENTS

1.0 ABSTRACT

2.0 INTRODUCTION……………………………………………………………………………………………………...1

3.0 OVERVIEW……………………………………………………………………………………………………………..2

4.0 TRADITIONAL APPROACH TO QUALITY CONTROL.…………………………………………....….2

5.0 TOTAL QUALITY MANAGEMENT (TQM)……………………………………………………………..….4

5.1 Elements ofa Total Quality Management Program....................................................... 6

5.2 How to measure TQM success? ............................................................................................. 9

5.3 A TQM culture.........................................................................................................................................13

5.4 TQM implementation approaches....................................................................................................13

5.5 Strategies to develop TQM.................................................................................................................. 14

5.6 Advantages of total quality management......................................................................................14

5.7 Disadvantages of Total Quality Management: ............................................................................14

6.0 CORE PROCESS ENGINEERING (CPR)............................................................................................................ 15

      6.1 Major Steps in CPR.. ................................................................................................................................ 16

      6.2 Core Process Reengineering Cycle. ........................................................................................... 16

      6.3Basic elements of CPR………………………………………………………….………17

      6.4 Need for Re-Engineering: When and Why.............................................................................. 19

      6.5 Methodology............................................................................................................................................... 20

      6.6 How to implement a CPR project………………………………….……………..20

      6.7 Problems That Effect CPR. .................................................................................................................. 21

      6.8 Alternative techniques to CPR............................................................................................................ 23

      6.9 Application...................................................................................................................................................25

      6.10 Reengineering Recommendations ............................................................................................ 27

7.0 CONCLUSION.................................................................................................................................................................. 28

1.0 ABSTRACT

TQM (Total Quality management) and CPR (Core process reengineering) are two widely used complementary approaches to improving firms, process capabilities. TQM focuses on encouraging a continuous flow of incremental improvements from the bottom of organization’s hierarchy. CPR, on the other hand is generally more of atop down approach, aimed at more radical changes in how processes are designed. The principles of quality management are well developed and, from a practical standpoint, thoroughly implemented in the process industries of Japan. Although these principles are now applied to the U.S. manufacturing industry, and as a result, the steel industry, they have been largely ignored in the non-ferrous and precious metals industries. This paper presents the concepts and practical approaches to implement a total quality management program. Contrary to the beliefs of many managers, such a program increase yields, recoveries and output while it decreases unit costs. In fact, quality management incorporating statistical process control will be an essential ingredient for metallurgical plants to effectively compete in the future. Total Quality Management or TQM Management as sometimes it is called, is a very broad continuous improvement initiatives that many organizations have jumped into the band wagon aimed to drive their business into sustainable profitability. Many organizations started the Total Quality Management (TQM) journey with full Leadership commitment and total Employee involvement. They laid the foundation in continuous improvement culture and total quality, They provides various TQM Quality training in the use of TQM Tools, implemented the TQM tools in improvement projects. However, not many organization are able to sustain its continuous improvement momentum long enough to create an impact to mold the total quality culture in his organization. Core Process Reengineering involves changes in structures and in processes within the business environment. The entire technological, human, and organizational dimensions may be changed in CPR. Information Technology plays a major role in Core Process Reengineering as it provides office automation; it allows the business to be conducted in different locations, provides flexibility in manufacturing, permits quicker delivery to customers and supports rapid and paperless transactions. In general it allows an efficient and effective change in the manner in which work is performed.

2.0 INTRODUCTION 

As noted by Deming (1982), in 1950 Japan’s net worth was negative; it had no significant natural resources and had a reputation for producing cheap, shoddy consumer goods. Their management, however, was open to new ideas and they accepted that quality was the only way to turn their economy around. Forty years later Japan’s manufactured products are the envy of the world and are of the highest quality. Their approach to management of resources is completely different from the traditional American approach. Total quality management (TQM), having been established in the manufacturing industries, has continued to grow and is now pervasive throughout enterprise in the country. American industry continues to lose ground in world markets at the expense of Japanese companies. Belatedly, some American manufacturing companies, notably Ford Motor Company, have begun to implement the types of quality management approaches used in the transformation of Japan’s industry. These manufacturing companies are demanding that their suppliers use these same management approaches. Therefore, there is a tendency for the quality concepts to move "upstream" in the supplier chain. This has mostly occurred in the steel industry, with some influence in base metals supplied to the steel industry. Unfortunately, the influence of quality management concepts has not been felt in most American companies in the base metals and precious metals industries. A large majority of senior management personnel in these industries is unfamiliar with essential quality management concepts such as statistical process control (SPC). Based on the thrashing American manufactured products have taken in world markets, one must expect that products from the chemical and metals process industries will be next unless the change to "Total Quality Management" is made soon. Core Processes are simply a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools. We all do them, and at one time or another play the role of customer or supplier. You may see Core Processes pictured as a set of triangles as shown below. The purpose of this model is to define the supplier and process inputs, your process, and the customer and associated outputs. Also shown is the feedback loop from customers. Core Process reengineering (CPR) is a management approach aiming at improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations. The key to CPR is for organizations to look at their Core Processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business. Core Process reengineering is also known as CPR, Core Process Redesign, Business Transformation, or Core Process ChangeManagement.CPR relies on a different school of thought than continuous process improvement. In the extreme, reengineering assumes the current process is irrelevant - it doesn't work, it's broke, forget it. Start over. Such a clean slate perspective enables the designers of Core Processes to disassociate themselves from today's process, and focus on a new process. In a manner of speaking, it is like projecting yourself into the future and asking yourself: what should the process look like? What do my customers want it to look like? What do other employees want it to look like? How do best-in-class companies do it? What might we be able to do with new technology?

Such an approach is pictured below. It begins with defining the scope and objectives of your reengineering project, then going through a learning process (with your customers, your employees, your competitors and non-competitors, and with new technology). Given this knowledge base, you can create a vision for the future and design new Core Processes. Given the definition of the "to be" state, you can then create a plan of action based on the gap between your current processes, technologies and structures, and where you want to go. It is then a matter of implementing your solution. In summary, the extreme contrast between continuous process improvement and Core Process reengineering lies in where we start (with today's process, or with a clean slate), with the magnitude and rate of resulting changes.

3.0 OVERVIEW

This assignment provides a description of Total Quality Management (TQM) and Core process reengineering (CPR) which are both usually managed as broad-based, multifaceted improvement efforts that entail a variety of initiatives and activities. Initially we depict the picture of TQM and then CPR and find their similarities and differences on approaches to process improvement.

4.0 TRADITIONAL APPROACH TO QUALITY CONTROL

Quality control has been an important function in organizations producing goods for sale where product specifications are important. Quality control has generally not been an important function where product specifications are not important at the point of sale. This is many times the case for commodities early in the production chain, for example, the shipment of concentrates. The approach to quality control has usually followed this sequence:

     Produce the product with major emphasis on cost and quantity.

     Measure the product after it is produced to determine whether it meets product specifications.

     Ship products meeting specifications and reject products not meeting the specifications. 

This sequence is almost universally followed by arguments between the production department and quality control department over the amount of product rejected. In operations where quality is not a concern at the point of sale, the sequence generally skips step numbers two and three in the list above. In the traditional management approach, quality control is generally thought to result in higher marginal costs of production. Tighter control requires more scrutiny, which requires more inspectors. Tighter controls also result in additional production costs because productivity is decreased as a result of additional controls in the production process. Where quality control is not practiced, costs would be the least since these controls would not be required. For this reason, operating managers, quite naturally, are most interested in avoiding additional emphasis on quality. This is particularly true when there is no requirement for quality control at the point of sale. As was initially postulated by American quality pioneers, such as Walter A. Stewart and W. Edwards Deming, and amply proved in practice by Japanese heavy industry, the traditional American approach to quality management is almost entirely wrong.

5.0 TOTAL QUALITY MANAGEMENT (TQM)

To maximize quality, variation must be minimized. Variation is sometimes called the fundamental cause of poor quality (Evans, 1989).Variation can also be called the fundamental cause of high unit costs.  For instance, low cyanide concentration in a leach circuit will result in lower recoveries. High cyanide concentration will result in excessive cyanide consumption. In either case, unit production costs are increased. Examples of the impact of variation on unit production costs are endless. Whether one talks about the flux control in smelting, reagent control in flotation, or density control in grinding, variation from design parameters will increase unit production costs; the more the variation the higher the costs. The total quality management approach concentrates on reducing variation in the production process. To the degree this is successful it improves quality and unit costs at the same time. Therefore, the total quality management approach is essential not only to improve quality, but to optimize production costs. To survive in the increasingly competitive world market these approaches are essential whether or not the quality control of product is important in the traditional sense.

Variation

There are two types of variation: random and non-random. Random variation results from inherent characteristics of the production process. A reagent metering feeder will vary the quantity of reagent metered per unit time around some mean value. The amount of the random variation will be a function of the type of feeder, clearances in its construction, stability of the control loop, type of variable speed drive, etc. Non-random variation results from influences from outside the process system, which are generally under the operator’s control. Such non-random variation might result from equipment disrepair, changes in feed characteristic without appropriate adjustment to the system by the operator, or other influences on the process. The first requirement for improving quality (and costs) is an understanding of the nature of variation, and the means to determine the degree of random and non-random variation in the production process. The second requirement is to take appropriate action to reduce non-random variation. The third requirement is to take appropriate action to reduce the random variation. Actions effective in minimizing non-random variation are useless and counterproductive when used to reduce random variation.

5.1 ELEMENTS OF A TOTAL QUALITY MANAGEMENT PROGRAM

 The following elements are essential in any successful quality management program:

     Management commitment to total quality management.

     Training in simple statistical techniques, the nature of samples, collecting data, variation and the program to be implemented.

     Organization structure emphasizing work group authority and accountability for results.

     Statistical process Control (SPC) system to monitor and control process variable variation.

     Formal performance reports based on output from the SPC system.

     Systemized team approach to problem solving.

     Continuing emphasis on reducing variation in the product process.

Management commitment

To be effective the total quality management program must be executed by front line shift personnel. For this to work, however, top management must be totally committed to the program. There have been many instances where senior managers gave lip service to implementing quality programs simply to keep customers happy, or where managers wanted to go with the latest management fad. In these cases the program is doomed to failure. The system, when implemented, will cause problems to surface. Many of these problems will require decisions and actions by senior management. If such actions are not forthcoming, employees quickly become disillusioned with the program. We recommend that a quality management manual is produced with the company’s commitment to quality spelled out in the introduction and signed by the senior site executive. This commitment must include sufficient participation and training for site personnel to ensure their understanding of the program.

Training and participation

Statistical process control will require operators, using charts prepared by engineering personnel, to compute means and ranges based on measurements of groups of data. These data will then be plotted on control charts and used to assess variation in the process. The plotted data will indicate the degree of random and non-random variation. Following initial training in using the SPC approach, work teams consisting of operators, foreman, and metallurgists, working together as a team, establish the control methods for each plant area.

Organization structure

While the traditional organization must remain intact, the quality management system will be driven from the bottom up. The primary responsibility of foremen will be to train operators, provide technical advice on data collected, and ensure non-random variation is acted upon immediately and to work with more senior management personnel in the continuing effort to reduce random variation. The primary responsibility of more senior managers will be to provide employees with a process control system and necessary training in its use. Senior management is also responsible to participate in problem solving teams and to make improvements to the process, where necessary, to reduce random variation. Accountability for results will be pushed to the lowest possible level. Control charts will be used by the operators to assess performance over the short term. Summary performance reports prepared from the statistical process control system will be used to assess performance over the longer term. Operators must be given the necessary authority and latitude to make required adjustments to reduce non-random variation indicated by the control charts. Operators, close to the work, are also likely to have good suggestions for process system modifications necessary to reduce random variation.

Statistical process control (SPC)

The objective of SPC is to identify non-random variation in a critical process variable as soon after it occurs as possible. It also allows for identifying the degree of random variation that is an inherent part of the process itself.

The following steps are used to construct an SPC program:

     Divide the production operation into major process areas. A major process area usually has the following characteristics:

       A major function with measurable output,

       Contains equipment dedicated to a single task, and

       Has an assigned regular work crew. Examples might include a grinding circuit, smelting furnace or flotation circuit.

     Identify each unit operation in the process control area. A unit operation normally has the following characteristics:

       A specific operation performed in the process area, and

       Usually results in a physical or chemical change to the feed or product material. Examples might include a ball mill, cyclone or filter.

     Identify the critical process variables for each unit operation. A critical process variable usually has the following characteristics:

       A parameter significantly affecting the performance of the unit operation, and

       A measurable and controllable quantity for which someone can be held accountable. Examples of process variables might include temperature, density, size, or flow rate.

A process control chart illustrating the process areas, unit operation sand variables are included in the quality management manual. Accountabilities are also shown for control of each unit operation.

A control standard is then developed for each process variable. The control standard establishes the method and accountability for control. The format for a control standard can be flexible, but might include the following:

     Variable to be controlled

     Accountability

     Definitions

     Process Standard

     Reason for Control

     Measurement

     Reporting

     Control Chart

     Operating Procedure

     Corrective Action

     Disposition of non-compliant product

The control standard is included in the quality management manual. Ideally, the control standards would be a part of an overall set of manuals for the plant which would also include a process description, safe job procedures, etc.

5.2 HOW TO MEASURE TQM SUCCESS?

Implementing TQM is an initiative many organizations wanted to embark on. Assuming that you are a leader of this organization, a common question you probably asked would be: “How do I know whether my organization is successful in implementing TQM?” TQM implementation has been in my mind for a long time and I wondered how to measure the success of TQM implementation in an organization. If we take organizations who are winners of the Baldrige Award, then my question is whether taking an assessment based on Baldrige Criteria an appropriate measure to gage the success of TQM in an organization. There is no doubt that measuring TQM implementation is success rate is of interest with all if not most leaders. Otherwise, how would you as a leader know the effort put into implementing TQM is really worthwhile, more so when a lot of resources such a money, man power etc are deployed to support the implementation of a TQM initiative. So, would you ask a similar question before the TQM initiative is started? Or you would ask half way during its implementation? How would you like to measure the success of the TQM implementation? Do you accept the opinion of your management comment alone or you rather based on some form of evaluation result? One of the ways to evaluate the TQM success is to adopt a holistic approach of assessing your organization. One of the examples of such a holistic approach is the Malcolm Baldrige National Quality Award assessment approach. This is a national level award system in the United States to recognize organizations for achieving an excellent in their respective business. To prepare for an assessment, you need to understand the Baldrige criteria which are used a reference for the assessment. Once you have understood the Baldrige Criteria, you would start to conduct an assessment based on these criteria. You may perform a self assessment guided by the Baldrige Self Assessment criteria to ascertain your level of performance with reference to the Baldrige Criteria. For a self assessment, it takes must lesser time. Alternatively, you can go for a full scale assessment. This mode of assessment maybe conducted by your management team or a 3rd party Baldrige Assessors. To help you to adopt the Baldrige Criteria, there are eleven core values and concepts used by the Baldrige Criteria. To jump start your assessment effort, perhaps you start with the understanding of these core values and concepts.

Customer-driven quality

TQM has a customer-first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company's highest priority. The company believes it will only be successful if customers are satisfied. The TQM Company is sensitive to customer requirements and responds rapidly to them. In the TQM context, `being sensitive to customer requirements' goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints. The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage. Each part of the company is involved in Total Quality, operating as a customer to some functions and as a supplier to others. The Engineering Department is a supplier to downstream functions such as Manufacturing and Field Service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers.

TQM leadership from top management

TQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed -instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals. These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration.

Continuous improvement

Continuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. As well as recognizing the link between product quality and customer satisfaction, TQM also recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality, and to an increase in customer satisfaction. Improvement cycles are encouraged for all the company's activities such as product development, use of EDM/PDM, and the way customer relationships are managed. This implies that all activities include measurement and monitoring of cycle time and responsiveness as a basis for seeking opportunities for improvement. Elimination of waste is a major component of the continuous improvement approach. There is also a strong emphasis on prevention rather than detection, and an emphasis on quality at the design stage. The customer-driven approach helps to prevent errors and achieve defect-free production. When problems do occur within the product development process, they are generally discovered and resolved before they can get to the next internal customer.

Customer-driven quality

TQM has a customer-first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company's highest priority. The company believes it will only be successful if customers are satisfied. The TQM Company is sensitive to customer requirements and responds rapidly to them. In the TQM context, `being sensitive to customer requirements' goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints. The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage. Each part of the company is involved in Total Quality, operating as a customer to some functions and as a supplier to others. The Engineering Department is a supplier to downstream functions such as Manufacturing and Field Service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers.

TQM leadership from top management

TQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed -instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals. These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration.

Continuous improvement

Continuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. As well as recognizing the link between product quality and customer satisfaction, TQM also recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality, and to an increase in customer satisfaction. Improvement cycles are encouraged for all the company's activities such as product development, use of EDM/PDM, and the way customer relationships are managed. This implies that all activities include measurement and monitoring of cycle time and responsiveness as a basis for seeking opportunities for improvement. Elimination of waste is a major component of the continuous improvement approach. There is also a strong emphasis on prevention rather than detection, and an emphasis on quality at the design stage. The customer-driven approach helps to prevent errors and achieve defect-free production. When problems do occur within the product development process, they are generally discovered and resolved before they can get to the next internal customer.