Liberty Paint Works

Is there cause for alarm at Liberty about the flipside of TQM?

• Yes.  The environment has changed.  The paint industry has become more competitive.  There is an urgent need to improve quality, cut costs and move closer to the customer.
  The focus of quality improvement is to eliminate customer dissatisfaction.  That is not the same as creating customer satisfaction.  The former is reactive, the latter proactive.  Liberty has developed a "substitute" product (base colour + stainer) that ideally should result in customer satisfaction.
  Development of the substitute product should have followed the principles of quality planning.
  • Establish strategic goals
  • Identify customers
  • Determine customer needs
  • Translate needs into product features
  • Benchmark product features
  • Establish product goals
  • Develop a process to meet product goals
  • Benchmark the process
  • Establish process goals
  • Prove process capability.
  Cycle time reduction could have been a by-product of this exercise.  Since quality planning was not done, there was no participation by the marketing, sales, production and materials personnel.  Hence the alarm.
• The substitute product should be marketed using quality-integrated marketing: instead of the traditional 4 P's (product, place, promotion, price) the need of the hour is 6 P's (product, place, promotion, price, process, people).  In the absence of this approach, Mr Trilok Roy will continue to be consumed in process (change) and people related matters.
• Mr Lopa Mudra's concern about order size reduction should be corrected.  It is a temporary phenomenon.  Once the clients use up the traditional goods lying with them, the flow of business for the substitute product will pick up.  In absolute quantity, it will be much lower than the prevailing levels for traditional goods.
• Mr Santosh Chaturan has a genuine concern.  Since a substitute product has been introduced, the performance appraisal system, with respect to goals, needs to be recalibrated.
• Mr Murugan Swaminathan should recognize that the economics of production have improved.  Consequently, capacity has been created without any capital investment.  He needs to explore how to utilize that capacity for internal or external customers.
• Mr Purushottam Vyas should be pleased that stocks are down.  Obviously, the capability of processes has improved resulting in lesser stocks.  In terms of working capital, this is a clear gain.
• Mr Anil Sud has a very major concern.  The subject of customer-supplier partnership has been ignored.  While functions are vertical, work flows horizontally across the suppliers, processor and customers.  Also, work flows horizontally across all functions.  In the absence of a balance, the weakest link will dominate.

How should Mr Anant Seshadri ensure that the quality movement remains on course?

• The continuity of the CEO for four to five years is critical.
• The CEO should establish a quality council.  He should be the chairperson of the council.  Membership to the council should be restricted to all functional and profit centre heads.  The council should meet once a month on a fixed day at a fixed time at a fixed venue for three to four hours.
• The responsibilities of the council should include:
  • Create a working definition for quality such that all personnel understand that improving product features can benefit revenues, and reducing deficiencies in products and processes can reduce costs
  • Develop a strategic quality plan.  Integrate the quality goals into the business strategy
  • Review progress towards achievement of goals
  • Select pilot projects that have high visibility
  • Measure the quality of management performance.

How should the management of Liberty deal with the fears and apprehensions expressed by the employees over TQM?

• Involve employees in nominating, selecting and defining problems.
• The quality council should select the teams based on the problem.  In other words, the problem should select the team.  All impacted functions upstream and downstream should be recruited for problem solving.
• Train a select group of managers, who have companywide acceptability, as facilitators.
• Since resistance to change is a universal problem, some of the rules of the road are:
  • Seek participation in remedial actions
  • Introduce small doses of change
  • Allow time to digest the "social" consequences of technological change.

Is the threat of organization relapse real?

• Yes.  Liberty commenced with the toughest problem, which had no buy-in, from its employees.  Normally, TCT improvement should only be introduced at an advanced stage in the quality journey.  Perhaps three to four years down the line.  However, since effort has been invested in TCT, Liberty should build around this factor.
• Since Liberty was introducing a new and substitute product, TCT should have addressed all 3 time cycles: strategic thrust, design-development, make-market, in that order.  (Refer planning process in section I).
• Ideally, Liberty should have first conducted a baseline audit, using the International Quality Rating System.  This route would have provided a good prescription for the road to world-class quality.  A prescription that underlines economy of effort.