As leading world-class manufacturers raise their standards of quality, the level of quality expected by customers continues to increase. In response, a number of firms worldwide are adopting new management practices, which are often referred to as “Total Quality Management”.
TQM seeks to improve product quality and increase customer satisfaction by restructuring traditional management practices. The application of TQM is unique to each organization. However, over the past four years, several companies in the US have built their TQM model around the criteria used in the Malcolm Baldrige National Quality Award, with rewarding results.
The award is presented annually to six companies - two each in three categories: manufacturing, service and small business. Increasingly, companies view the criteria outlined in the Baldrige Award application as useful diagnostic tools for evaluating the effectiveness of their own management practices. Xerox uses the criteria for their international operations. Hence, Modi Xerox is already subject to the same. Likewise, Goodyear Tyres.
Leadership: To the dismay of many chief executives, heroic acts are not enough to ensure a successful quality programme. It takes day-to-day leadership as well. This can take many forms: the CEO and senior managers may help teach in quality training classes; they may lead or belong to quality improvement teams; they may personally conduct quality systems reviews; or they may meet individually with customers and employees. One way judges separate rhetoric and reality is by reviewing log books and calendars of chief executives.
Information and analysis: The company’s information base must be comprehensive, accessible and well validated. This is more important than its point total would suggest. The information base must cover all critical areas - customers, competitors, employees, suppliers, and processes.
Unfortunately, most applicants for the Baldrige Award score poorly in this category. This should be no consolation to Indian companies. It is encouraging to discover that some pioneering effort is being made by companies such as Mafatlal Fine and Marico in the area of benchmarking.
Strategic quality planning: The best quality plans incorporate the findings of benchmarking visits, use customer data to drive goal setting and improvement activities, dovetail neatly with the business planning process, and provide an umbrella for a constellation of quality initiatives and projects. At the winning companies, they also include aggressive “stretch” goals: staggering rates of improvement - ten or hundred-fold reductions in defects over a five or ten year period - that cannot be accomplished without massive changes.
Human resource utilization: To see if empowerment really exists, examiners look at the ability of frontline employees to act in the interest of customers without getting prior approval. There are other more tangible tests of empowerment and involvement. The number of employee teams is one; another is the number of employee suggestions. In both cases, effectiveness matters: the volume is less important than the percentage that is implemented. Otis India and Modi Rubber have a relatively high implementation rate.
Quality assurance of products and services: Companies that have received the ISO 9000 certificate are likely to satisfy the requirements of this category. Most Indian companies experience a voyage of discovery when flowcharting their hundreds of processes.
Quality results: Examiners look for “meaningful trends”; they are not impressed by a single year of stellar performance, or improvements in areas of no strategic significance.
Customer satisfaction: This is the most heavily weighted category, and the one that many examiners turn to first. Companies must show that they possess customer information from a wide range of sources - focus groups, surveys, one-on-one meetings, letters to the chairman, sales visits - and that their measures are objective. A common failing is to assess only current customers, ignoring those that have been lost or are still being pursued. Lost customers have a great deal to share about their sources of dissatisfaction; a competitor’s customers can help pinpoint vulnerabilities.
This is the category that is the heart of TQM. Customer driven quality. Yet, this is the category that is the most difficult to implement....owing to frozen mindsets. Can Indian companies set standards based on changing customer needs? Are our processes flexible enough to accept change?
CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.