GE8077 TOTAL QUALITY MANAGEMENT

UNIT II
TQM PRINCIPLES
Leadership - Quality Statements, Strategic quality planning, Quality Councils - Employee
involvement - Motivation, Empowerment, Team and Teamwork, Recognition and Reward,
Performance appraisal - Continuous process improvement - PDCA cycle, 5S, Kaizen -
Supplier partnership - Partnering, Supplier selection, Supplier Rating.

2.1 LEADERSHIP
2.1.1 DEFINITION
The process of influencing others towards the accomplishment of goals is termed as
leadership. Leader triggers the will to do, show the direction and guide the group members
towards the accomplishment of the company‘s goal.
A leader strengthens and inspires the followers to accomplish shared goals.
Leaders shape the organization‘s values, promote the organization‘s values, protect the
organization‘s values and exemplify the organization‘s values.
According to Narayana Murthy, Chairman and Chief Mentor of Infosys ―A great
leader is one who is not only good in creating vision, creating the big picture, but also
ensuring that he goes into the nitty-gritty, into the details of making sure that his vision is
actually translated into reality through excellence of execution. In other words, great leaders
have great vision, great imagination, great ideas but they also implement these ideas through
hard work, commitment and flawless execution. In doing so, they motivate thousands of
people.‖

2.1.2 CHARACTERISTICS OF QUALITY LEADERS

1. The Customers first: Quality leaders give primary importance to both internal and
external customers and their needs. Leaders should listen to customers; actively seek their
opinion on the value of the products/services; develop a close link with customers; seek joint
improvement activity; and lead the handling complaints.
2. Value people: Quality leaders take care of the development of people‟s skill and
capabilities. They enable people to be responsible for the result of their work. They monitor,
appraise and recognize people‟s performance.
3. Build supplier partnership: Quality leaders clarify quality to suppliers; audit their
capabilities; give feedback; discuss improvements; and support them where needed. They
recognize quality improvements made by suppliers and encourage joint improvement action.
4. Empower people: Quality leaders train and coach the people, rather than directing and
supervising them.
5. Strive for excellence: Quality leaders emphasize continuous improvement rather than
maintenance. They strictly believe the statement ‗There is always room for improvement‘.
6. Demonstrate involvement/commitment: Quality leaders continually demonstrate their
commitment to quality. Leaders walk their talk—their actions, rather than their words,
communicate their level of commitment. They let the quality statements be their decision-
making guide.
7. Explain & deploy policy: Quality leaders explain the quality policy to all involved. They
set stretching targets and deploy these to business processes, to the functions within the
organization, and to suppliers.

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8. Improve communication: Quality leaders continually improve communications. They

establish channels of communication, which are reliable and accessible to everyone in the
organization.
9. Promote teamwork: Quality leaders promote multidisciplinary team work; create
involvement; and active participation of everyone.
10. Benchmark continuously: Quality leaders learn from problems. They continuously do
benchmarking and create new learning effects through innovation.
11. Establish system: Quality leaders establish organizational systems to support the quality
effort. At the senior management level a quality council is provided, and at the first-line
supervisor level, work groups and project teams are organized to improve the process.
12. Encourage collaboration: Quality leaders encourage collaboration rather than
competition. They emphasize the importance of collaboration among and within functional
areas, departments or work centre.

2.1.3 LEADERSHIP STYLES FOR EFFECTIVE LEADERS

There are four primary leadership styles exist. They are
1. Directing style of leadership.
2. Consultative style of leadership.
3. Participative style of leadership.
4. Delegating style of leadership.

1. Directing style of leadership:

 This style of leadership is normally used when the leader must make a unilateral
decision that must be followed without comment or question from the workers.
 The leader should have more knowledge of the situation because the decision affects
the common goal of the organization.

2. Consultative style of leadership:

 This style of leadership is used when a leader is seeking input from those working
under him.
 This style of leadership encourages participation.
 When using this style of leadership, the leader seeks the advice, suggestions, and
input of those around him but the leader still remains the final decision maker.

3. Participative style of leadership:

 In participative style of leadership, a leader assigns work to the employees, provides
guidance during the work process, and makes a decision based on the conclusions
of the employees working on the task.
 Unlike the consultative style of leadership, in this situation the leader is more likely to
take the word or work of the employees as the final decision in the matter.

4. Delegating style of leadership:

 In delegating style of leadership, the leader tells the employee or team what needs to
be done, assigns the responsibility, and provides the individual or team with the
authority to get the job done.

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 The individual or team, having been given both the responsibility, and the
authority, completes the work with minimal input from the leader.
 In this style of leadership, the leader checks to verify the successful completion of
the assignment and participates only if necessary.

2.1.4 REQUIREMENTS OF EFFECTIVE LEADERSHIP

Five core leadership skills are required for effective leadership. They are:
(i)Vision
(ii) Empowerment
(iii) Intuition
(iv) Self-understanding and
(v) Value congruence.

(i) Vision: Vision is crucial for leaders during times of change. Leaders recognize the radical
organizational changes taking place today as opportunities to achieve total quality.
(ii) Empowerment: Leader empowers employees to assume ownership of problems or
opportunities and to be proactive in implementing improvements and making decisions in
the best interests of the organization.
(iii) Intuition: Leaders usually follow their intuition. They must be prepared to make
difficult decisions even in the face of uncertainty and change and anticipate the future.
(iv) Self-understanding: Self-understanding requires the ability to look at one‟s self and
then identify relationships with employees and within the organization. It requires an
examination of one‟s weaknesses as well as strengths.
(v) Value congruence: Value congruence occurs when leaders integrate their values into
the company‟s system. Values are basic assumptions and beliefs about the nature of the
business, mission, people and relationships of an organization. Values include trust and
respect of individuals, openness, teamwork, integrity and commitment to quality.

2.1.5 THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE

The 7 Habits of Highly Effective People by Stephen R. Covey is a self-improvement book. It
is written on Covey's belief that the way we see the world is entirely based on our own
perceptions. In order to change a given situation, we must change ourselves, and in order to
change ourselves, we must be able to change our perceptions.
The 7 Habits are a highly integrated approach that moves from dependency (you take
care of me) to independence (I take care of myself) to interdependence (we can do something
better together).
The first three habits deal with independence—the essence of character growth.
Habits 4, 5, and 6 deal with interdependence—teamwork, cooperation, and
communication.
Habit 7 is the habit of renewal.

Habit 1 - Be proactive
Take responsibility for your reaction to your experiences, take the initiative to respond
positively and improve the situation. Recognize your Circle of Influence and Circle of
Concern. Focus your responses and initiates on the center of your influence and constantly

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work to expand it. Don't sit and wait in a reactive mode, waiting for problems to happen
before taking action.

Habit 2 - Begin with the end in mind

Envision what you want in the future so you can work and plan towards it. Understand
how people make decisions in their life. To be effective you need to act based on principles
and constantly review your mission statements. Are you - right now - who you want to be?
What do I have to say about myself? How do you want to be remembered? If habit 1 advises
changing your life to act and be proactive, habit 2 advises that you are the programmer! Grow
and stay humble.
All things are created twice. Before we act, we should act in our minds first. Before we
create something, we measure twice. This is what the principle is about. Do not just act;
think first: Is this how I want it to go, and are these the correct consequences?

Habit 3 - First things first

Habit 1 says, ―You‟re the creator. You are in charge.‖ Habit 2 is the first creation and is
based on imagination—leadership based on values. Habit 3 is practicing self-management
and requires Habits 1 and 2 as prerequisites. It is the day-by-day, moment-by-moment
management of your time.
Matrix of importance vs urgency that Stephen Covey and Dwight D. Eisenhower used in
deciding where to invest their efforts.

Talks about what is important and what is urgent. Priority should be given in the following
order (in brackets are the corresponding actions from the Eisenhower Matrix):
Quadrant I. Urgent and important (Do) – important deadlines and crises
Quadrant II. Not urgent but important (Plan) – long-term development
Quadrant III. Urgent but not important (Delegate) – distractions with deadlines
Quadrant IV. Not urgent and not important (Eliminate) – frivolous distractions
The order is important; after completing items in quadrant I, we should spend the
majority of our time on II, but many people spend too much time in III and IV. The calls to
delegate and eliminate are effective reminders of their relative priority.
If habit 2 advises that you are the programmer, habit 3 advises: write the
program, become a leader! Keep personal integrity: what you say vs what you do.
Habit 4 - Think win-win

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Genuine feelings for mutually beneficial solutions or agreements in your relationships.

Value and respect people by understanding a "win" for all is ultimately a better long-
term resolution than if only one person in the situation had gotten their way. Think Win-Win
isn't about being nice, nor is it a quick-fix technique. It is a character-based code for human
interaction and collaboration.

Habit 5 - Seek first to understand, then to be understood

When someone presents us with a problem, we often jump right to giving a solution. This is a
mistake. We should first take time to really listen to the other person and only then make
recommendations.

Habit 6 - Synergize!
Combine the strengths of people through positive teamwork, so as to achieve goals that no
one could have done alone.

Habit 7 - Sharpen the Saw; Growth

Balance and renew your resources, energy and health to create a sustainable, long-term,
effective lifestyle. It primarily emphasizes exercise for physical renewal, good prayer
(meditation, yoga, etc.) and good reading for mental renewal. It also mentions service to
society for spiritual renewal.

2.1.6 LEADERSHIP ROLES

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Effective teamwork requires effective leaders. Effective leaders are people who can
perform different roles. Quinn lists the following eight leadership roles:
 Producer role
 Director role
 Coordinator roles
 Checker role
 Stimulator role
 Mentor role
 Innovator role
 Negotiator role

2.2 QUALITY COUNCILS

In order to build quality into the culture, a quality council is established to provide overall
direction. It is the driver for the TQM engine.
A quality council is a team to provide overall direction for achieving the total quality
culture (TQC). The council is composed of
 Chief Executive Officer
 Senior Managers
 Coordinator or Consultant
 If there is a union, A representative from the Union

2.2.1 Duties of the Quality Council

 Develop the core values, vision statement, mission statement and quality policy
statement
 Develop the strategic long term plan with goals and Annual Quality improvement
Program with objectives
 Create the total education and training plan
 Determine and monitor the cost of poor quality
 Determine the performance measures for the organization, approve those for the
functional areas, and monitor them.
 Determine projects those improve the process
 Establish multifunctional project and work group teams
 Establish or Revise the recognition and rewards system

2.2.2 Responsibilities of the Quality Council Coordinator

The various responsibility of the quality council coordinator are:
(i) To develop two-way trust;
(ii) To prepare team requirements to the council;
(iii)To share council expectations with the team;
(iv)To empower the team; and
(v) To brief the council on team progress.
Once the TQM program is well established, a typical meeting agenda might have the
following items:

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 Progress report on teams.

 Customer satisfaction report.
 Progress on meeting goals.
 New project teams.
 Recognition dinner.
 Benchmarking report.
Eventually, within three to five years, the quality council activities will become so ingrained
in the culture of the organization that they will become a regular part of the executive
meetings. When this state is achieved, a separate quality council is no longer needed. Quality
becomes the first item on the executive meeting agenda.
.
2.3 QUALITY STATEMENTS
A quality statement lays out organizations working practices and commitment to
providing a good service. It should explain how effective and efficient your methods for
carrying out the project will be. There are four types of quality statements:

1. Mission statement
2. Vision statement
3. Quality policy statement and
4. Core Values

1. Mission Statement
• A mission statement concerns what an organization is all about.
• The mission is the primary overall purpose of an organization and its expressed reason
for existence.
• It provides the clear statement of purpose for the employees, customers and suppliers.
• The statement answers the questions such as:
– who we are, who are our customers, what do we do and how do we do it.
• This statement is usually one paragraph or less in length, easy to understand, and
describes the function of the organization.
Example:
Google‟s Mission is “to organize the world‟s information and make it universally
accessible and useful.”

2. Vision Statement
• A vision statement is a company's road map, indicating what the company wants to
become by setting a defined direction for the company's growth.
• It is like a destination dreamed up by the organization.
• Every decision made by the organization must be informed by its vision.
• An organization‘s vision must come from top management and must be well
articulated and understood by all.
• Vision statements undergo minimal revisions during the life of a business, unlike
operational goals which may be updated from year-to-year.
Example:

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Google‘s corporate vision is ―to provide access to the world’s information in one
click.‖

3. Quality Policy Statement

• It is a guide for everyone in the organization as to how they provide products and
services to the customer.
• It should be written by the CEO with feedback from the workforce and be approved by
the quality council.
• A quality policy is a requirement of ISO 9000.
Example: Quality Policy Statement of Toyota
• Create and nurture people of quality by continuous education and training.
• Maintain & improve standards of manufacturing.
• Establish a ―Total Quality‖ framework to continually improve the quality
Management System and realise challenging Quality objectives.
• Record and control the change points at each stage.
• Prevent defect outflow to next process, and feedback to previous process for enhanced
Quality Assurance.
• Strengthen supply chain by effective traceability system.

4. Core Values
• Core values are the fundamental beliefs of an organization.
• These guiding principles dictate behavior and can help people understand the
difference between right and wrong.
• Core values also help companies to determine if they are on the right path and
fulfilling their goals by creating an unwavering guide.
• Companies core values are the guiding principles that help to define how the
corporation should behave in business and perhaps beyond, if they have an additional
mission to serve the community.
• Core values are usually expressed in the corporation's mission statement.
Examples:
• A commitment to innovation and excellence. Apple Computer is perhaps best known
for having a commitment to innovation as a core value. This is embodied by their
"Think Different" motto.
• A commitment to doing good for the whole. Google, for example, believes in making
a great search engine and building a great company without being evil.
• A commitment to building strong communities. Shell oil company donates millions of
dollars to the University of Texas to improve student education and to match
employee charitable donations.

2.4 STRATEGIC QUALITY PLANNING

Strategic quality planning is the systematic process by which an organization defines
its long-term goals with respect to quality and customers, and integrates them into a cohesive
business plan.

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To achieve a vision it is necessary to align the annual goals to your major change
initiatives or quality programs and integrate them into the strategic plan. This will ensure the
new focus becomes part of the plan and sustainable.

The time horizon for strategic planning is for three to ten years, and short-term planning is for
one year or less.
The potential benefits of strategic quality planning and deployment include:
• Clarification of goals
• Achievability of goals
• Scheduled reduction of chronic wastes and improved quality of products and services
• Better or new focus on customers

Goals and Objectives:

Goals and objectives have basically the same meaning. However, it is possible to
differentiate:
Goals– Long term planning (Eg : Win the war)
Objectives– Short term planning (Eg : Capture the bridge)
Goals should
 Improve customer satisfaction, employee satisfaction and process.
 force changes in leadership style from reward and punishment to identifying and
improving system problems
 be based on statistical evidence
 be measurable
 have a plan or method for its achievement
 have a time frame for achieving the goal
 finally, it should be challenging yet achievable

Seven Steps to Strategic Planning

In order to integrate quality with the strategic planning process, a systematic and sequential
procedure has to be adopted. There are seven basic steps to strategic process planning. They
are

Step 1: Customer Needs

The basic step is the identification of customers and their wants and needs. An
organization must seek its customers‘ requirements, expectations and assess future trends
before developing a strategic plan.i.e. The first step is to discover the future needs of the
customers. Who will they be? Will your customer base change? What will they want?
How will they want? How will the organization meet and exceed expectations?

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Step 2: Customer Position

The second step requires the planners to determine its positioning with
regards to its customers. Various alternatives such as whether the organization should give
up, maintain or expand market position should be considered. In order to become
successful, the organizations should concentrate and consolidate its position in its areas of
excellence. i.e. The planners determine where organization wants to be in relation to the
customers. Do they want to retain, reduce, or expand the customer base? Product or services
with poor quality performance should be targeted for breakthrough or eliminated. The
organization‘s needs to concentrate its efforts on areas of excellence.

Step 3: Predict the Future

Next, the planners must predict future conditions that will affect their product or
service. To help predicting the future, the tools such as demographics, economic forecasts,
and technical assessments or projections may be used.

Step 4: Gap Analysis

In this step, the planners must identify the gaps between the current state and the future
state of the organization. This concept is also known as Value Stream Mapping. For
identifying the gaps, an analysis of the core values and concepts and other techniques may
be used.

Step 5: Closing the Gaps

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The plan can now be developed to close the gap by establishing goals and responsibilities.
All stakeholders should be included in the development of the plan. This process is also
termed as Process Improvement.

Step 6: Alignment
As the plan is developed, it must be aligned with the mission, vision, and core values and
concepts of the organization. Without this alignment, the plan will have little chance of
success.

Step 7: Implementation
This last step is frequently the most difficult. Resources must be allocated for collecting
data, designing changes, and overcoming resistance to change. Also part of this step is the
monitoring activity to ensure that progress is being made. The planning group should meet
at least once a year to assess progress and take any corrective action.
Since quality is a continuous improvement process, one has to reassess and renew the
strategic plans periodically. So it is a cyclic process as shown in the fig.

2.5 EMPLOYEE INVOLVEMENT

Employee involvement is one approach to improving quality and productivity. It is a
means to better meet the organization‘s goals for quality and productivity at all levels of an
organization.
Aspects of Employee Involvement:
1. Employee motivation
2. Employee Empowerment
3. Teams and Team work
4. Recognition and Reward Schemes
5. Performance Appraisal

2.5.1 EMPLOYEE MOTIVATION

It is the process of stimulating people or attempting to influence other to do your will
or accomplish desire goals through the possibility of reward.
The importance of motivation are:
 Motivation improves employee involvement
 Promotes job satisfaction and thus reduces absenteeism and turn over
 Motivation helps in securing a high level of performance and hence enhances
efficiency and productivity.
 It promotes interpersonal cooperation

THEORIES OF MOTIVATION
Though there are many theories of motivation, the Maslow‘s hierarchy of needs theory
and Herzberg‘s two factor theories are more important.

MASLOW‟S HIERARCHY OF NEEDS

One of the first and most popular motivational theories was developed by Abraham Maslow.
He stated that motivation could best be explained in terms of a hierarchy of needs and that
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there were five levels. These levels are survival, security, social, esteem, and self-
actualization.

1. Physiological or Survival Needs

Physiological needs are the biological needs required to preserve human life. These needs
include needs for food, clothing and shelter. In the workplace, Level 1 needs include proper
lighting, heating/air conditioning, ventilation, phone system, data/voice access, and
computer information system. These needs must be met first before higher level needs
emerge.

2. Safety Needs
Level 2 (security) can mean a safe place to work and job security, which are very important
to employees. When the organization demonstrates an interest in the personal well-being of
employees, it is a motivating factor. A threat of losing one‘s job certainly does not enhance
motivation. Level 2 is not limited to job security. It also includes having privacy on the job
such as being able to lock one‟s office door or having lockable storage for personal items,
as well as having a safe work environment that may include ergonomic (designed for comfort)
adjustable furniture.

3. Social Needs
Level 3 (social) relates to our need to belong. It has been said that cutting someone out of
the group is devastating to that individual. Isolation is an effective punishment. Conversely,
giving an individual the opportunity to be part of the group by feeling important and
needed will motivate that person. If possible, employees should be provided with both

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formal social areas such as a cafeteria and conference rooms and informal areas such as
water coolers and bulletin boards(like computers). Being a member of a team is a good
way to bring employees into the group.

4. Esteem Needs
Level 4 (esteem) relates to pride(self respect) and self-worth. Everyone, regardless of position
or job assignment, wants to be recognized as a person of value to the organization. Where
possible, employees should be given offices or personal spaces with aesthetics. Business
cards(ID card), workspace size, and office protocols also provide employees with a
certain level of self-esteem within an organization. Seeking advice or input into business or
production processes is a good way of telling employees that they are of value. This activity
requires giving employees control and freedom of their jobs by providing trust.

5. Self-Actualization Needs
Level 5 (self-actualization) says that individuals must be given the opportunity to go as far
as their abilities will take them. Many organizations have a policy of promoting from
within. It is true that some employees do not want to move up the corporate ladder, which is
understandable. However, those who do want to move up must know that it is possible.
It is important to note that as employees move up the hierarchy, they will immediately
revert back to the previous level if they feel threatened. For example, if an employee is
satisfied in Level 3, a rumor of downsizing may cause an immediate return to Level 2.

HERZBERG‟S TWO FACTOR THEORY

It is also called Motivation-hygiene theory. This theory is based on two factors;
1. Motivation Factor: People are motivated by recognition, responsibility, achievement,
advancement and the work itself. These are called as motivators
2. Dissatisfies or Hygiene Factor: Low salary, minimal fringe benefits, poor working
conditions, ill defined organizational policy, mediocre(poor) technical supervision are
dissatisfies which implies they are preventable.

Motivation Factors Hygiene Factors

 Achievement  Quality of Supervision
 Recognition  Physical Working conditions
 The work itself  Interpersonal relationships
 Responsibility  Pay and Job security
 Advancement and growth  Company policy and administration

According to Herzberg, maintenance or hygiene factors are necessary to maintain a

reasonable level of satisfaction among employees. These factors do not provide satisfaction
to the employees but their absence will dissatisfy them. Therefore these factors are called
dissatisfiers. On the other hand, motivational factors creates satisfaction to the workers at
the time of presence but their absence does not cause dissatisfaction.
It can be noted that Herzberg‘s dissatisfiers are roughly equivalent to Maslow‟s
lower levels, and the motivations are similar to the Maslow‟s upper levels. Thus the

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knowledge of motivation is required for any organization to understand the utilization of

employee involvement.

EMPLOYEE WANTS
1. Good pay factor is normally in the middle of ranking.
2. Normal Wants are interesting work, appreciation, involvement job security, Good pay,
Promotion/growth, Good working conditions, Loyalty to employees, Help with personal
problems arid Tactful Discipline.

ACHIEVING A MOTIVATED WORK FORCE BY THE MANAGERS

1. Know thyself. Managers must understand their own motivations, strengths, and
weaknesses. This understanding can best be obtained by having peers and employees
anonymously appraise the manager‘s performance. Some organizations like Cummins India
Ltd. have implemented 360 degree feedback system for the managers. Motivating
managers know that the most valuable resource is people and that their success largely
depends on employees achieving their goals.

2. Know your employees. Most people like to talk about themselves; therefore, the
motivating manager will ask questions and listen to answers. With a knowledge of the
employees‘ interests, the manager can help achieve them within the business context. As the
manager learns more about the employee, he/she can assist the employee in directing their
efforts toward satisfying their goals and well-being. This knowledge will also enable the
manager to utilize their strengths.

3. Establish a positive attitude. A positive action-oriented attitude permeates the work unit.
Managers are responsible for generating attitudes that lead to positive actions. Feedback
should, for the most part (say, 87%), be positive and constructive. Respect and sensitivity
toward others is essential to the development of positive attitudes. Asking employees for
their opinions concerning job-related problems is an effective way to build a cooperative
atmosphere. Managers should treat ideas and suggestions as price-less treasures and
implement them immediately whenever possible.

4. Share the goals. A motivated work force needs well-defined goals that address both
individual and organizational needs. Information on goal setting is given in Chapter 2.

5. Monitor progress. The process of goal-setting should include a road map detailing the
journey with periodic milestones and individual assignments. Managers should periodically
review performance.

6. Develop interesting work. Managers should consider altering the employees‟ assignments
by means of job rotation, job enlargement, and job enrichment.
Job rotation permits employees to switch jobs within a work unit for a prescribed
period of time. This activity reduces boredom and provides knowledge of the entire process
and the affect of the sub-process. Thus, quality consciousness is raised, which may lead to
process improvement.
Job enlargement combines tasks horizontally so that the employee performs a
number of jobs sequentially. Thus, the employee is responsible for a greater portion of the
product or service, which may also lead to process improvement.

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Job enrichment combines tasks vertically by adding managerial elements such as

planning, scheduling, and inspection. This contributes to the employees‘ sense of autonomy
and control over their work, which may lead to process improvement.
7. Communicate effectively. Effective communication provides employees with knowledge
about their work unit and the organization rather than ―grapevine‖ information.
Communication is covered in greater detail in Chapter 2.

8. Celebrate success. Recognizing employee achievements is the most powerful tool in the
manager‘s toolbox. Additional information is given in the recognition and reward section of
this chapter.
These eight concepts can be used at all managerial levels of the organization.

2.5.2 EMPLOYEE EMPOWERMENT

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.

GENERAL PRINCIPLES FOR EMPOWERING EMPLOYEES

1. Tell people what their responsibilities are.
2. Given them authority equal to the responsibility assigned to them.
3. Set standards of excellence.
4. Give them knowledge information and feedback.
5. Trust them and treat them with dignity and respect.
6. Provide them with training that will enable them to maintain standards.
7. Allow them to fail but guide them and counsel them when needed.

CONDITIONS TO CREATE THE EMPOWERED ENVIRONMENT

1. Everyone must understand the need for change. People fear change. The effective
communication of why the organization needs to change is critical to success. In addition,
people need to understand the role they will play in the change process. Senior
management must understand that people change for their own reasons, not for reasons of
the organization. People who are older, well educated, highly skilled, and experienced are
more likely to accept increased demands and expectations associated with empowerment. In
addition, one‘s perceived internal control (locus of control) contributes to whether or not an
employee is receptive to an empowered environment.

2. The system needs to change to the new paradigm. The system needs to change to
reinforce and motivate individual and group accomplishments. Individuals and groups
must understand that freedom to act and (sometimes to fail) is not only OK but is
encouraged. Other contextual factors need to be considered if empowerment is to be
successful, such as the role of unions and the type of industry (service or manufacturing). If
the union environment is not willing to engage employees in an empowerment culture,
success will be difficult.

3. The organization must enable its employees. Enablement means providing information,
education, and skill. To ask people to change work habits without providing them with the
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tools for change only increases resistance to the change process. Additional factors that
should be considered before determining if organization can enable its employees are strategy
and technology.16 Companies that have a business strategy and technology focus of
customization are more likely to embrace empowerment compared to companies whose
strategy is that of low-cost and high volume.

CHARACTERISTICS OF EMPOWERED EMPLOYEES

1. They feel responsible for their own task.
2. They are given a free hand in their work.
3. They balance their own goals with those of the organization.
4. They are well trained, equipped, creative, and customer oriented.
5. They are critical, have self-esteem, and are motivated.
6. They are challenged and encouraged.
7. They monitor and improve their work continuously.
8. They find new goals and change challenges.
Therefore, it is important to empower individuals and teams at all levels of the
organization to achieve the continuous improvement process.

2.5.3 TEAMS AND TEAM WORKS

A team can be defined as a group of people working together to achieve common objectives
or goals.
Team work is the cumulative actions of the team during which each member of the
team subordinates his individual interests and opinions to fulfill the objectives or goals of the
group.
Why Teams Work
 Teams work because many heads are more knowledgeable than one. Each member of
the team has special abilities that can be used to solve problems. Many processes are
so complex that one person cannot be knowledgeable concerning the entire process.
 Second, the whole is greater than the sum of its members. The interaction within the
team produces results that exceed the contributions of each member.
 Third, team members develop a rapport with each other that allows them to do a better
job.
 Finally, teams provide the vehicle for improved communication, thereby increasing
the likelihood of a successful solution.

Types of Teams
Teams can be classified into four major groups. They are:
1. Process improvement team
2. Cross functional team
3. Natural work teams
4. Self directed / self managed work team
1. Process improvement team:
 Process improvement team focuses its attention on improvements of a process which
is already operating to a satisfactory level with agreed to tolerances.

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 They are meant for each operation of the process or sub-process. The scope of the team
is limited to work unit. Team comprises of 6 to 10 members from the work unit.
 Depending upon the location of the sub-process, the internal or external supplier as
well as internal or external customer is also included in the team. The life cycle of the
team is temporary, because whenever the objective is reached, the team is disbanded.

2. Cross functional team:

 These teams are formed by certain organizations which are very successful in solving
complex problems involving functions of various departments.
 6-10 members are selected from various functional areas of management such as
engineering, marketing, accounting, production, quality, and human resources. It
may also include the customer and supplier.
 A design review team is a good example of a cross-functional team.
 Cross-functional teams may discuss the complex problems and break down into
smaller parts and refer these to various departmental teams for further solution.

3. Natural work teams:

 Team comprises of all the members of the work unit and the team members are not
volunteer; they are selected by management. Manager is also a part of the team and
he is selecting the projects to be improved.
 Some employees may not cooperate in team work for variety of reasons. So that the
manager is in a position to motivate the employees in a proper direction and make
them to feel comfortable with each other.

4. Self directed / self managed work team:

 Extension of natural work teams but here the group of individuals is empowered not
only to do work but manage it.
 No manger will present but a coordinator (Which will be normally rotated among
members) will be appointed. Additional responsibilities of the team are hiring /
dismissal, performance evaluation, customer relations, supplier relations,
recognition/rewards and training.

Characteristics of Successful Teams

1. Sponsor: In order to have effective liaison (communication between groups) with
quality council, there should be a sponsor. The sponsor is a person from the quality
council, he is to provide support to the organization.
2. Team Charter: A team charter is a document that defines the team‘s mission,
boundaries, the background of the problem, the team‘s authority and duties, and
resources. It also identifies the members and their assigned roles – leader, recorder,
time keeper and facilitator.
3. Team Composition: Not exceeding 10 members except natural work team and self
managed teams. Teams should be diversed by having members with different skills,
perspectives and potential. Whenever needed, the internal and external customers and
suppliers should be included as a team member.

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4. Training: The team members should be trained in the problem solving techniques,
team dynamics and communication skills.
5. Ground Rules: The team should have separate rules of operation and conduct.
Ground rules should be discussed with the members, whenever needed it should be
reviewed and revised.
6. Clear objectives: The objective of the team should be stated clearly. Without the clear
objective, the team functions are not to be effective.
7. Accountability: The team performance is accountable. Periodic status report should
be submitted to quality council for review to determine possible team process
weakness and make improvements.
8. Well defined decision procedure: The decision should be made clearly at the right
time by the team.
9. Resources: The team cannot be expected to perform successfully without the
necessary tools and data's.
10. Trust: Management must trust the team to perform the task effectively. There must
also be trust among the members and a belief in each other.
11. Effective problems solving: Problem- solving methods are used to make the
effective decision.
12. Open communication: Open communication should be encouraged i.e, everyone
feels free to speak in the team whatever they are thinking, without any interruptions.
13. Appropriate Leadership: Leadership is important in all the team. Leader is a person
who leads the team, motivates the team and guides the team in a proper direction.
14. Balanced participation: Everyone in a team should be involved in the team‟s
activities by voicing their opinions lending their knowledge and encouraging
other members to take part.
15. Cohesiveness: Members should be comfortable working with each other and act as
a single unit, not as individuals or subgroups.

Team Member Roles and Responsibilities

Teams are usually selected or authorized by the quality council. A team will consist of a team
leader, facilitator, recorder, timekeeper, and members. All team members have clearly defined
roles and responsibilities.

Team Leader:
The team leader, who is selected by the quality council, sponsor, or the team itself, has the
following roles.
1. Ensures the smooth and effective operation of the team, handling and assigning record
keeping, orchestrating activities, and overseeing preparation of reports and presentations.
2. Facilitates the team process, ensures that all members participate during the meetings,
prevents other members from dominating, actively participates when appropriate, guides
without domineering, and uses positive interpersonal behavior.
3. Serves as a contact point between the team and the sponsor or quality council.
4. Orchestrates the implementation of the changes recommended by the team within
organizational constraints and team boundaries.
5. Monitors the status and accomplishments of members, assuring timely completion of
assignments.

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6. Prepares the meeting agenda, including time, date, and location; sticks to the agenda or
modifies it where appropriate; and ensures the necessary resources are available for the
meeting.
7. Ensures that team decisions are made by consensus where appropriate, rather than by
unilateral decision, handclasp decision, majority-rule decision, or minority-rule decision.

Facilitator:
The facilitator is not a member of the team; he/she is a neutral assistant and may not be
needed with a mature team. This person does not get involved in the meeting content or
evaluation of the team‘s ideas. Roles are as follows:
1. Supports the leader in facilitating the team during the initial stages of the team.
2. Focuses on the team process; is concerned more with how decisions are made rather than
the decision itself.
3. Acts as resource to the team by intervening when necessary to keep the team on track.
4. Does not perform activities that the team can do.
5. Provides feedback to the team concerning the effectiveness of the team process.

Recorder:
The team recorder, who is selected by the leader or by the team and may be rotated on a
periodic basis, has the following roles:
1. Documents the main ideas of the team‘s discussion, the issues raised, decisions made,
action items, and future agenda items.
2. Presents the documents for the team to review during the meeting and distributes them as
minutes after the meeting in a timely manner.
3. Participates as a team member.

Timekeeper:
The timekeeper, who is selected by the leader or by the team and may be rotated on a periodic
basis, has the following roles:
1. Monitors the time to ensure that the team maintains the schedule as determined by the
agenda.
2. Participates as a team member.

Team Member:
The team member, who is selected by the leader, sponsor, or quality council or is a member of
a natural work team, has the following responsibilities:
1. Contributes best, without reservation, by actively participating in meetings and sharing
knowledge,
2. Expertise, ideas, and information.
3. Respects other people‘s contributions—doesn‘t criticize, complain, or condemn.
4. Listens carefully and asks questions.
5. Is enthusiastic—it‘s contagious and helps galvanize the entire team.
6. Works for consensus on decisions and is prepared to negotiate important points.
7. Supports the decisions of the team—badmouthing a decision or a member reduces the
effectiveness of the team.
8. Trusts, supports, and has genuine concern for other team members.
9. Understands and is committed to team objectives.
10. Respects and is tolerant of individual differences.
11. Encourages feedback on own behavior.
12. Acknowledges and works through conflict openly.

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13. Carries out assignments between meetings such as collecting data, observing processes,
charting data, and writing reports.
14. Gives honest, sincere appreciation.

Stages of Team Development

Forming stage- Initial stage with only group of individuals and no team work. Team‘s
purpose, roles are created.
Storming Stage -Initial agreement and role allocations are challenged. At this stage,
hostilities and personal needs often emerge which may be resolved
Norming Stage-Formal and informal relationships get established among team members.
Performing Stage -Team operates in a successful manner with trust, openness, healthy
conflict and decisiveness among the members.
Adjourning is a stage that is reserved for temporary teams. The team needs to evaluate its
performance and determine lessons learned. This information can be transferred by members
when they participate on future teams. There also needs to be a celebration to recognize the
team‘s contribution to the organization.

Ten Common People Problems

Floundering, overbearing participants, Dominating participants, reluctant participants,
unquestioned acceptance of opinions as facts, rush to accomplish, Attribution, Discounts and
plops, Wanderlust, Feuding team members.

1. Floundering (great difficulty) occurs when the team has trouble starting or ending a
project or different stages of the project. Solutions to this state are to look critically at the
improvement plan, review the mission statement, determine the cause of the holdup, and
have each member write down reasons and discuss them at the next meeting.

2. Overbearing(unquestioning obedience)participants have an unusual amount of influence

in the team. They usually have a position of authority or a particular expertise. Teams
need these abilities; however, it becomes detrimental when they discourage discussion on
their expertise and discount other members‟ ideas. Solutions are to reinforce the ground
rules, talk to the person off-line and ask for cooperation, and enforce the importance of data
and the problem-solving method.

3. Dominating participants like to hear themselves talk, use overlong anecdotes, and
dominate the meeting. Members get discouraged and find excuses for missing meetings.
Solutions are to structure discussion on key issues for equal participation, talk to the
offending person off-line, and have the team agree on the need for limits and a balanced
participation. In addition, the leader may act as a gatekeeper by asking questions such as
―Gupta, we heard from you; what do the others think?‖

4. Reluctant(Unwillingness) participants feel shy or unsure of themselves and must be

encouraged to contribute. Problems develop when there are no built-in activities that
encourage introverts to participate and extroverts to listen.
In addition to structured activities, solutions include dividing the task into individual
assignments and acting as a gatekeeper by asking questions such as, ―Sanjeev, what is your
experience in this area?‖

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5. Unquestioned acceptance of opinions as facts occurs when members assert personal beliefs
with such confidence that other members think they are facts. Solutions are to request data
and to follow the problem solving method.

6. Rush to accomplish is common to teams being pushed by one or more members who are
impatient for results. Teams must realize that improvements do not come easily and rarely
overnight. Solutions are to remind members that the ground rules call for the problem-solving
method or to confront the rusher off-line and explain the effects of impatience.

7. Attribution(Assigning some quality or character to a person or thing) is the activity of

guessing at a person‘s motives when we disagree or don‟t understand his or her opinion or
behavior. Solutions are to reaffirm the importance of the problem-solving method, question
whether this opinion is based on data, and find out the real meaning of the problem.

8. Discounts and “plops” arise when members fail to give credit to another‟s opinions or
no one responds to a statement that ―plops.‖ Every member deserves the respect and
attention from the team. Solutions are to reinforce active listening as a team behavior,
support the discounted member, or talk off-line with members who frequently discount, put
down, or ignore.

9. Wanderlust: digression and tangents happen when members lose track of the meeting‟s
purpose or want to avoid a sensitive topic. Discussions then wander off in many directions
at once. Solutions are to use a written agenda with time estimates, write meeting topics on
flip charts, or redirect the conversation back to the agenda.

10. Feuding(fighting) team members can disrupt an entire team with their disagreements.
Usually these feuds predate the team and are best dealt with outside the team meetings.
Solutions are to get the adversaries to discuss the issues off-line, offer to facilitate the
discussion, and encourage them to form some contract about their behavior.

Barriers to Team Progress

 Insufficient training,
 Incompatible rewards and compensation,
 First-line supervisor resistance,
 Lack of planning;
 Lack of management support,
 Access to information systems,
 Lack of union support,
 Project scope too large,
 Project objectives are not significant,
 No clear measures of success and No time to do improvement work.

Training
• Training is essential for an effective team.
• The quality council must take an active role in establishing training programs.

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• Large organizations spend lakhs of rupees in team training.

o Maruti Suzuki‘s annual expendi ture on employee training was Rs. 13 crore
during the year 2008. This large investment has its payoffs.
o Motorola, Inc. estimates that it earns $30 for every dollar invested in employee
training.
• A recent study of small to mid-sized manufacturing firms found a significant positive
relationship between company performance, as measured by profitability, and quality
management training.

2.5.4 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.
 This acknowledgment is delivered using verbal and written praise and may include
symbolic items such as certificates and plaques.
 Other forms of recognition include pictures on the bulletin board, articles in
newsletters or newspapers, letters to families, making a presentation to management,
passing along compliments from others, personal phone calls or notes, placing positive
notes in folders, and increased responsibility.
 Supervisors can also informally use the power of recognition by giving on-the-spot
praise for a job well done whenever it is earned.

Reward is something tangible such as theater tickets, dinner for two, or a cash award to
promote desirable behavior.
 There are many different forms of individual and team rewards. Individual rewards
include a better parking space, dinner out, gift certificates, gift to charity in the name
of the recipient, washing an employee‘s car during the lunch hour, trips, and event
tickets, to name a few.
 Group rewards are similar and can also include an outing such as a ball game,
bowling, and movies; group lunch or dinner; allowing the team to make some
decisions affecting their work or allowing the team to spend their reward ―earnings‖ to
improve their work environment.
 Cash awards are also effective motivators for individual and team awards.

TYPES OF REWARDS
Broadly, one can classify the rewarding systems into two groups. They are:
1. Intrinsic rewards : These are related to feelings of accomplishment or self-worth.
2. Extrinsic rewards : These are related to pay or compensation issues.

INTRINSIC VS EXTRINSIC REWARDS

INTRINSIC REWARDS EXTRINSIC REWARDS
1. Non monetary (Cashless) forms of 1. Profit sharing
recognition to acknowledge achievement of 2. Gain sharing
quality improvement goals. 3. Employment security
2. Celebrations to acknowledge achievement 4. Compensation time
of quality improvement goals

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3. Regular expression of appreciation by 5. Individual based performance systems

managers and leaders to employees to 6. Quality based performance appraisals
acknowledge achievement of quality
improvement goals
4. 360o performance appraisals feedback from
co-workers, subordinates or customers is
incorporated into performance appraisal
5. Formal suggestion system available for
individuals to make quality improvement
suggestions.
6. Developmental based performance
appraisals
7. Quality based promotions.

Recognition and reward go together to form a system for letting people know they are
valuable members of the organization.

Recognition and Reward Program:

 Employees should be involved in the planning and implementation of the recognition
and reward program.
 This activity should be performed by a cross-functional team that represents all areas
of the organization.
 Employees should be involved with the manager and sometimes the customer and
supplier in the nomination and selection of the individuals and teams to be recognized
and rewarded.
 The system that is developed by the team must have clear recognition criteria.
 The system should be structured to avoid ranking individuals, because ranking fosters
(encourage the development) the counterproductive notion that there are winners and
losers.
 Recognition should be valid, genuine, and meaningful for the giver and the recipient;
it should not be used to manipulate people.

Gainsharing
Gainsharing is a financial reward and recognition system that results from improved
organizational performance.
It is different than profit sharing, in which the stockholders share a portion of the year-end
profits with salaried and occasionally hourly employees.
Gainsharing is based on the philosophy that people and teamwork are the keys to success.
Because organizational success is dependent on team effort, the team shares in the rewards of
success. Thus, gainsharing is a measurement of organizational productivity and a method to
share productivity gains.

Basic Approach:
• This particular method utilizes labor costs and potential sales income for the
calculations and is based on four-week periods; however, calculations are made on a
weekly basis.
• At the end of the week, the team performance is calculated based on potential sales
income from the week‘s production less rejections and outsourcing costs.

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•Financial data shows that labor costs are a certain percentage of sales income, and this
value multiplied by the income gives the team goal.
• Team cost is the sum of all labor costs for the week including fringe benefits. The gain
or loss is the difference between the team cost and the team goal.
For example:
Potential income = $ 535,000
Labor cost as a percent of sales = 27%
Team goal = $ 5,35000 * 0.27 = $ 144,450
Actual team cost = $ 138,365
Gain = $ 144,450 – 138,365 = $ 6,085

• Payments are usually made every four weeks, thereby providing motivational
reinforcement. They are separate from the regular paycheck.
• Every four weeks gainsharing meetings are held to review the calculations, evaluate the
performance, and discuss ways to make additional gains.
• Gain sharing is a widely used policy in software and engineering service industry in
India.
• For HCL Technologies, which adopted the revenue/gain share model in 2005, less than
5% of revenue currently comes from such contracts.
• HCL has a revenue sharing arrangement with Cisco.
• Gainsharing is an excellent motivational tool that improves quality, productivity, and, of
course, the bottom line.

2.5.5 PERFORMANCE APPRAISAL

Performance Appraisal is the systematic evaluation of the performance of employees
and to understand the abilities of a person for further growth and development.
Needs of Performance appraisals are:
 Identifying employees for salary revision, promotion, transfer, demotion, lay off.
 To determine training and development needs of the employees.
 To take an organizational of inventory people, skills and potential for comparing it
with its needs.
 To motivate employees by providing feedback on their performance levels.
 To know personal strengths and weaknesses of different individuals
 To guide the individual to plan job and personal objectives and to help him in career
planning.
 To validate the selection procedures.
 To improve communication in an organization.
 To make the supervisors and executives more observant of their subordinates.

Appraisal Formats:
Employees should be made aware of the appraisal process, what is evaluated, and how often.
Employees should be told how they are doing on a continuous basis, not just at appraisal time.
The appraisal should point out strengths and weaknesses as well as how performance can be
improved. Common appraisal formats are shown in Table.

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Appraisal Process:

Benefits of Performance Appraisal

1. Provides a feedback to the employee, supervisor and personnel specialists and allows
them to take corrective measures to improve performance further.
2. Helps in determining the pay adjustments, increments and bonuses as it rates the merit
of the employee.
3. Provides basis for employee promotion, transfer of demotion.
4. Helps in determining individual‘s training and development needs and in designing
training programmes accordingly.

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5. It helps the employee to plan their career.

6. Helps to evaluate personal strength and weakness of individuals
7. Helps to validate the selection procedure.
8. It may provide some information on external factors like family circumstances, health,
financial or personal matters that may be affecting the performance

2.6 CONTINUOUS PROCESS IMPROVEMENT (CPI)

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.
Improvement is made by
• Viewing all work as a process, whether it is associated with production or business
activities.
• Making all processes effective, efficient, and adaptable.
• Anticipating changing customer needs.
• Controlling in-process performance using measures such as scrap reduction, cycle time,
control charts, and so forth.
• Maintaining constructive dissatisfaction with the present level of performance.
• Eliminating waste and rework wherever it occurs.
• Investigating activities that do not add value to the product or service, with the aim of
eliminating those activities.
• Eliminating nonconformities in all phases of everyone‘s work, even if the increment of
improvement is small.
• Innovating to achieve breakthroughs.
• Incorporating lessons learned into future activities.
• Using technical tools such as statistical process control (SPC), experimental design,
benchmarking, quality function deployment (QFD), and so forth.
To do CPI, we have different approaches such as Juran Trilogy, PDSA cycle, Kaizen and 5S
concept.
Input / Output Process Model

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Process refers to business and production activities of an organization. Business processes

such as purchasing, engineering, accounting, and marketing are areas where nonconformance
can represent an opportunity for substantial improvement. Figure shows a process model.

Basic Ways to Improve Process

 To reduce resources
 To reduce errors
 To meet exceed customer needs
 To make process safer
 To make process more satisfying to the person doing it.

2.7 PDSA (or) PDCA CYCLE

It is also called as Deming Cycle or Deming Wheel. Developed by Walter A. Shewart
and popularized by Edward Deming. It is an effective continuous improvement technique.
What is PDSA Cycle?
 PDSA stands for Plan-Do-Study-Act . It is a model for testing ideas that you think
may create improvement.
 It can be used to test ideas for improvement quickly and easily based on existing
ideas, research, feedback, theory, review, audit, etc.,
 It encourages starting with small changes, which can build into large
improvements in the service through successive quick cycles of change.

Phases of PDSA Cycle

Phases Description
 Plan  Define the problem
 Analyze the causes and draft an action plan for solving the
problem.
 Determine the quality objectives and the critical factors.
 Define the performance indicators.
 Collect and analyze the necessary process data.
 Generate possible solutions.
 Select the most feasible solution; and work it out.

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 Do  First, implement the plan on a limited scale or conduct an

experiment to test the proposed improvement. Collection data is
hereby essential.
 Train all involved employees in the use of quality improvement
methods and techniques.
 Describe the process which is considered for improvement and
form project teams to lead the process.
 Check  Evaluate the trial project with the performance indicators.
 Verify whether the improvement has been successful or not.
 Act  Act to implement proven improvements. The choices are:
introduce the plan, adjust or reject it.
 The improvements are documented in standard procedures so
all employees are well-informed on how to handle in future.
 Usually, the cycle will be repeated under the different
circumstances and conditions to test how consistent the results
are.

Continuous Process Improvement Cycle Using PDCA

The relationship between the PDSA cycle and eleven steps to continuous process
improvements are given below. Each phase of the PDCA cycle must undergo its own PDCA
cycle for further improvements.
o Identify the problem and plan.
o Observe and analyze.
o Isolate the real causes
o Determine corrective actions
o Prepare
o Apply
o Check application
o Check results.
o Compare with goals.
o Standardize and consolidate
o Prepare next stage of planning

Benefits of the PDSA Cycle

 Daily routine management for the individual and or the team
 Problem solving process
 Project management
 Continuous development
 Vendor development
 Human resources development
 New product development
 Process trials

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2.8 5S HOUSE KEEPING

 This is a house keeping technique used to establish and maintain a productive and
quality environment in an organization.
 This method was invented in Japan which will give safer, more efficient and more
productive operation results in boosting the morale of workers, job involvement and
satisfaction and ownership of their responsibilities.
 It stands for five Japanese words that start with the letter ‗S‘: SEIRI, SEITON, SEISO,
SEIKETSU, and SHITSUKE

Cleaning – Throw away all rubbish and unrelated

1S SORT
materials in the work place
Arranging – Set everything in proper place for quick
2S SET IN ORDER
retrieval and storage
Sweeping – Clean the work place, every thing without
3S SHINE
fail
Maintaining Cleanliness – Standardizing the way of
4S STANDARDIZE
maintaining cleanliness
Practice ‗5S‘ daily. Make it a way or life. This also
5S SUSTAIN
means commitment
5S is an easy way to restore and sustain an ideal environment at work place.

THE OBJECTIVES OF 5S are:

1. To create a neat and clean work place
2. To create systemize day to day working
3. To improve work efficiency
4. To standardize work practices.
5. To improve work discipline
6. To improve the quality of work and products

FACTORS IN IMPLEMENTING 5S
The following factors are required for any organization to implement 5S concept
successfully.
 Participation by all – 5S programme should be understood and practiced by all
employees. Linkage with productivity, quality, cost, delivery, safety, and customer
satisfaction should be clear to everyone.
 Top management commitment – The CEO along with senior management team
needs personally committed practice and supervise the programme. Without their deep
commitment, no 5S can be successful.
 Should be self sustaining – Banners, slogan posters and new tutors should be fully
utilized to draw attention of everyone in the company. Basic in-house training and
introduction to model companies would provide them the necessary skills.

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 Review the programme – Every month, a group of people selected from different
areas of responsibilities should tour the plant, and evaluate each zone according to
certain criteria of house keeping principles.

BENEFITS IN IMPLEMENTING 5S
1. Work place becomes clean and better organized. It becomes proud place to work
2. Results in good company image and- generates more business
3. Operations become easier and safer in work place
4. People become disciplined
5. Improve productivity' and morality
6. Better quality awareness
7. More usable floor space
8. Lesser time wasted in material handling
9. Less production cost
10. Better preventive maintenance
11. High employee involvement
12. Lesser accidents
13. More time for improvement activities.

2.9 KAIZEN
Kaizen is a Japanese word which means continuous improvement or improvement
over improvement .It is the process of continuous improvements in small increments that
make the process more efficient, effective, controllable and adequate.
KAIRYO
Western philosophy – describes improvements through innovation, i.e., improvement
in one or two great jumps. Kairyo does not allow constant improvement. Both Kaizen and
Kairyo are famous quality improvement approaches.
Figure compares the Kaizen and Kairyo,From fig,it can be seen that Kaizen proceeds
slowly, through gradual yet constant changes, whereas Kairyo proceeds in spurts, through
major but irregular changes.

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DIFFERENCES BETWEEN KAIZEN AND KAIRYO

KAIZEN KAIRYO
It is achieved through conventional know
It is obtained by technological or
how and PDCA
organizational breakthrough
It is employee oriented
It is technology oriented
It requires little investment but great effort
It requires large investment but little effort
to maintain
to maintain
It involves everybody in the company It involves a selected few experts and
researchers
It requires recognition of effort before
results It is motivated by expected results

KAIZEN Cycle for Continuous Improvement

KAIZEN Improvement Focus on:

1. Value- added and non –value- added work activities
2. Muda, which refers to the seven classes of wastes. Wastes are over production,
delay, transportation, processing, inventory, wasted motion, and defective parts
3. Principles of motion study and the use of cell technology
4. Principles of materials handling and use of one piece flow
5. Documentation of standard operating procedures

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6. The 5S for workplace organization, which are five Japanese words that mean
proper arrangement (SEIRI), Orderliness (SEITON), Personal cleanliness
(SEISO), Standardization (SEIKETSU) and Discipline (SHITSUKE)
7. Visual management by means of visual displays that everyone in the plant can use
for better communication
8. Just in time principles to produce only the units in the right quantities, at the right
time, and with the right resources
9. Poka-Yoke to prevent or detect errors
10. Team dynamics, which include problem solving, communication skills and
conflict resolution

ROLE OF PEOPLE IN IMPLEMENTING KAIZEN

1. Top management must be committed to introducing Kaizen as a company strategy
2. The executives just below top management must formulate and carry out Kaizen
goals according to guidelines from top management
3. Supervisors like everyone else must use Kaizen in their activities.
4. Workers must be involved in Kaizen through the suggestions systems and small
group activities.

2.10 SUPPLIER PARTNERSHIP

Supplier partnership is the discipline of strategically planning and managing all interactions
with third party organizations that supply good / services to organization.

Introduction:

An organization (or customer) purchases its requirements, raw materials, components, and
services, from supplier.

Better supplier‘s quality  Better product‘s quality

A partnership between customer and supplier is one of the keys to obtaining high
quality products and services. Customers and suppliers have the same goal –to satisfy the
end user. They must work together as partners to maximize the return on investment
because they have limited resources.

REASONS FOR PARTNERSHIP

 Quality and Timely Delivery.

 JIT(Just In Time) Concept: It calls for raw materials and components to reach the
production operation in small quantities when they are needed and not before.
 Practice of Continuous Process Improvement: The practice of continuous process
improvement has also caused many suppliers to develop partnerships with their
customer.

PRINCIPLES OF CUSTOMER / SUPPLIER RELATION

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 Both the customer and the supplier are fully responsible for the control of quality.
 Both the customer and the supplier should be independent of each other and respect
each other‘s independence.
 The customer is responsible for providing the supplier with clear and sufficient
requirements so that the supplier can know precisely what to produce.
 Both the customer and the supplier should enter into a non adversarial (non
opposition) contract with respect to quality, quantity, price, delivery method and
terms of payments.
 The supplier is responsible for providing the quality that will satisfy the customer
and submitting necessary data upon the customer‘s request.
 Both the customer and the supplier should decide the methods to evaluate the quality
of the product or service to the satisfaction of both parties.
 Both the customer and the supplier should continually exchange information,
sometimes using multifunctional teams, in order to improve the product or service
quality.
 Both the customer and the supplier should perform business activities such as
procurement, production and inventory planning, clerical work and system so that an
amicable and satisfactory relationship is maintained.
 When dealing with business transactions, both the customer and the supplier should
always have the best interest of the end user in mind.
 Both the customer and the supplier should establish in the contract, the method by
which they can reach an amicable (friendly) settlement of any disputes that may
arise.

SUPPLIER PARTNERING

It is defined as a continuing relationship, between a buying firm and supplying firm,

involving a commitment over an extended time period, an exchange of information, and
acknowledgement of the risks and rewards of the relationship.

BENEFITS OF SUPPLIER PARTNERING

 Improved Quality
 Reduced cost
 Increased Productivity
 Increased efficiency
 Increased market share
 Increased opportunity for innovation
 Continuous improvement of products/services. .

JAPANES REVIEW OF PARTNERING

The Japanese partnering concept is KEIRESTU. The key point of Keirestu is developing long
term relationships with a few key suppliers rather than having short term relationship with
many suppliers.

KEY ELEMENTS TO PARTNERING

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 Long term Commitment: Long-term commitment provides both customer and

supplier the much needed environment to achieve the planned objectives. Because to
set up and solve the problem of continuous improvement, both parties may
require the sufficient time.
 Trust: Mutual trust between two parties forms the basis for a strong working
relationship. Trust enables the partners to effectively combine their resources and
knowledge. It results in a „win-win‟ situation for both partners.
 Shared vision: Both the customers and suppliers have the common goal i.e., to satisfy
the end user. In order to ensure this goal, both parties should share and understand
their goals and objectives. This concept is also known as mutual strategic planning.

SUPPLIER SOURCING

Three types of supplier sourcing are:

1. Sole sourcing – It is the use of only one supplier for the entire organization. The
organization does not have any choice. It is forced to use only one supplier. This forced
situation is because of the following factors: patents, technical specifications, raw material
location, and monopolistic supplier.

2. Multiple sourcing – It is the use of two or more suppliers for an item, resulting in better
quality, and better service at lower cost.

3. Single sourcing- It is the use of one supplier to one item when several sources are
available leading to long-term partnering relationship.

2.11 SUPPLIER SELECTION

Before performing supplier selection, Organization must be decided whether to produce or

outsource a particular item.

The following three questions need to be answered:

1. How critical is the item to the design of the product or service?

2. Does the organization have the technical knowledge to produce the items internally? If
not, should that knowledge be develop?
3. Are there suppliers who specialize in producing the item? If not, is the organization
willing to develop such a specialized supplier?

Usually suppliers are selected based on their performance in terms of Cost, Quality, Delivery,
Reliability, Management compatibility, Goal congruence and Strategic direction of the
supplier firm.

STAGE IN SUPPLIER SELECTION & EVALUATION

There are four stages in supplier selection and evaluation.

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1. Survey Stage: In survey stage, based on the information available through catalogues,
advertisements, brochures, etc., a list is drawn up for further investigation.

2. Enquiry stage: In enquiry stage, a detailed analysis is made after obtaining required
information.

3. Negotiation and selection stage: During this stage itself, many of the vendors might have
been dropped from the original list as unsatisfactory. The remaining vendors may be called
for direct negotiations to discuss various terms and conditions like payment terms,
discounts, supply procedures, quality control procedures, etc.

4. Experience Stage: In this stage, the performance of the supplier is evaluated mainly on
basis of quality and promptness in delivery.

CONDITIONS FOR SELECTION AND EVALUATION OF SUPPLIERS

Dr. Kaoru Ishikawa has suggested ten conditions for selection and evaluation of suppliers.

1. The supplier should understand and appreciate the management philosophy of the
organization
2. The supplier should have a stable management system
3. The supplier should maintain high technical standards and have the capability of
dealing with future technological innovations.
4. The supplier should provide those raw materials and parts required by the purchaser
and those supplied meet the quality specifications
5. The supplier should have the capability to produce the amount of production needed.
6. The supplier should not breach the corporate secrets
7. The supplier should be easily accessible in terms of transportation and communication
8. The supplier should be sincere in implementing the contract provisions
9. The supplier should have an effective quality system and improvement program such
as ISO / QS 9000
10. The supplier should have a track record of customer satisfaction and organization
credibility

2.12 SUPPLIER RATING

Also referred as score card system, is used to obtain and overall rating of supplier
performance based on quality, price, performance and production capability.

OBJECTIVES OF SUPPLIER RATING

The customer rates supplier in order to :

 Obtain an overall rating of supplier performance

 ensure complete communication with suppliers
 provide each supplier about the details of problems for corrective action

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 maintain and improve the partnering relationship between the customer and the
supplier.

EXAMPLE SUPPLIER SCORECARD

THREE BASIC FACTORS FOR SUCCESSFUL SUPPLIER RATING SYSTEM

1. An internal structure to implement and sustain the rating program

2. A regular and formal review process
3. A standard measurement for all the suppliers

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Part – A

1. What do you mean by the term leadership?

2. What are the roles of team facilitator?
3. What is a quality council? Who are all the members in the quality council?
4. What are quality statements?
5. What is quality planning?
6. Distinguish between internal customer and external customer.
7. What is customer feedback?
8. List the various tools used for collecting customer complaints.
9. Differences between Kaizen and Kairyo.
10. What is customer satisfaction?
11. Define Customer retention.
12. Define Employee Empowerment.
13. List the benefits of team work.
14. What is 5S?
15. Explain service Quality.
16. List the key elements of Supplier partnering.
17. What is Kaizen?
Part –B

1) Explain the following (i) PDSA Cycle. (ii) Performance appraisal.

2) What are the 7 steps to strategic planning?
3) What is a team? Describe the characteristics of a successful team.
4) Explain the various techniques of performance measures.
5) Write a note on quality Planning or Explain in detail the road map of Quality
Planning.
6) Discuss the continuous process improvement cycle with an illustration.
7) Explain about quality council and quality planning.
8) Discuss the function of quality Council.
9) Explain the following. (i) Juran Trilogy (ii) PDSA Cycle (iii) Maslow‘s theory of
need hierarchy.
10) What are the areas of focus of Kaizen?
11) What are the ways by which an organisation can make use of customer feedback?

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12) How is a motivated work force achieved in a company?

13) Describe the importance of customer retention in an organization.
14) What are the characteristics of successful teams?
15) Explain the role of Team leader and a Facilitator.
16) What are the major benefits of 5S implementation? Explain how are they
achieved? Or explain all the elements of 5S principles in detail.
17) What are the principles of customer/supplier relations?
18) Discuss about Maslow‘s hierarchy of needs theory and Herzberg‘s 2 factor theory for
motivation.
19) Write about the system of recognition and reward followed in an organization.
20) What are the types of supplier sourcing?
21) Discuss about the Supplier Partnership procedures.
22) Explain the steps in forming a performance appraisal system. What are the benefits?

23) Discuss the roles to be played by the employees for an effective implementation of
KAIZEN.
24) Explain the key elements of Customer-Supplier partnership.

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