Productivity and Quality Improvement
2.9 Other Variations of the TQM Theme
Thequality improvement process(QIP) is a variation on TQM developed in the mid-1980s by the Florida Power & Light Company, the first company outside of Japan to win the Deming Award. This approach builds on three basic elements:
1. Problem-solving teams established at various levels within the orga- nization;
2. Formal mechanisms for the systematic identification and deployment of policy; and
3. Application of plan-do-check-act procedures to involve workers at all levels in quality improvement on a day-by-day basis (see Table 5.12.) Like other quality improvement approaches, QIP requires a top-down commit- ment to the principles and techniques, and a willingness to permit manage-
TABLE5.12 Quality Improvement Process
I. Teams: various group dynamic and problem solving techniques used by lead teams, functional teams, cross-functional teams, and task teams to improve quality, develop employee skills, promote communications, and enhance the quality of work life.
II. Quality improvement story identifies: (1) reason for improvement, (2) current situa- tion, (3) situation analysis, (4) countermeasures—alternative approaches to improve the current situation, (5) results achieved, (6) mechanisms for standardization, and (7) future plans.
III. Policy deployment.
A. Establish policy: (1) create the vision, (2) analyze present and future customer needs, (3) analyze the environment (benchmarking), (4) establish critical success factors, (5) analyze performance and year-end results, and (6) establish long-term and short-term plans.
B. Deploy policy: (1) select short-term plan co-ordinating executive, (2) announce short-term plan indicators and negotiated target, (3) develop business plans to achieve short-term plan, and (4) utilize teams and QIDW to achieve breakthrough.
C. Review policy: (1) line management reviews, (2) cross-functional committee reviews, and (3) presidential and executive reviews.
IV. Quality in daily work (QIDW).
A. Application of plan-do-check-act (PDCA) to all activities necessary to meet customer needs and reasonable expectations on a daily basis.
1. Plan: identify (a) top priority job(s), (b) objectives, (c) customers, and (d) quality indicators.
2. Do: identify (a) targets or limits, and (b) control system.
3. Check: implement control system and check results.
4. Act: standardize and/or take countermeasures.
V. Results.
1. Maintains gains achieved.
2. Promotes consistency in operations.
3. Clarifies individual contributions to meeting customer needs.
4. Improves daily operations.
5. Identifies and controls all critical accountabilities required to meet customers needs.
6. Can be used as a tool to teach employees.
Source: Adapted from a presentation by Bear Baila, Vice President, Division of Quality Services, QUALTEC, Inc., an FPL Group Company, at the University of Michigan, February, 1993.
ment personnel and field staff to devote extensive time and effort to its imple- mentation.
Thelanguage processing(LP) methodis another approach that facilitates the social model of management. The LP method consists of three phases [18].
In the first phase, each participant states their own views about a particular situation. Each participant is then asked to elaborate upon their views until each
perspective is clear to the other participants, without anyone taking exception to the person’s initial views. This second phase should be one of explanation and clarification, not argument. In the third phase, the participants work together to group similar views and to state what is common about them [19]. The LP method helps people to investigate complex situations collectively, to bring to bear the insights of all, and to prevent conclusions from being based on comparative positions in the organization’s power hierarchy.
Concept engineering(CE) was developed by Gary Burchill in response to what he perceived as a lack of explicit methods within TQM for creating new products and services [20]. CE attempts to reveal, analyze, and draw conclusions based on the tacit knowledge that is available within the organization and across the marketplace regarding the need for new products or services. The CE process starts with team members asking open-ended questions and observing the technology that currently is being used in the marketplace. The team then develops a picture of potential marketplace needs stated in objective terms. These tentative market needs are then tested through market surveys. With the needs validated, the team develops a variety of product concepts and then selects the best available product solution (or hybrid concept).
Productivity gainsharing addresses a number of significant issues regard- ing traditional compensation systems by tying employee motivation directly to productivity efforts (see Table 5.13). “Shared savings plans” have been adopted by both private and public organizations, whereby a portion of the savings cre- ated by productivity improvements is returned to employees in the form of bonuses. Some critics have noted that these programs have relatively short life spans, especially if the participation of the workforce has not been firmly estab- lished.
It has been suggested that TQM could be strengthened through integration with other management methods [21]. A number of interesting management systems are available from which to choose. Situations involving complex, interlinked cause-and-effect relations are addressed through systems thinking, as formulated by Peter Senge. The language/action perspective of Fernando
TABLE5.13 Productivity Gainsharing
Links a portion of the employee’s pay to increased productivity and shares organizational savings with employees.
First used in the private sector in the 1890s by Henry Towne as part of his company’s indirect incentive system.
Many variations on gainsharing have been adopted in the past ten years.
The Japanese compensation method pays nearly 25% of worker’s wages in two yearly bonuses that are determined by the firm’s current economic performance.
Flores provided a way to improve the day-to-day coordination of interactions among people. An approach for dealing with the individual and organizational defensive routines that prevent beneficial change was provided by the action science ideas of Chris Argyris. Both Argyris and Flores placed emphasis on language or conversation as a way of generating action—not just as a way of describing things. These approaches provide a foundation for the fundamental management functions of planning, operations, and change management with which all organizations must be concerned.
Theinteractive managementapproach of Russell Ackoff offered a method for creating the future rather than merely predicting it [22]. A key aspect of interactive management is the planning technique known as “idealized design,”
which seeks to make explicit all the weakness of the existing management system, including the concerns of all participants. Ackoff emphasized that a primary benefit of idealized design is the involvement of the participants’ broad knowledge of the state of the organization which helps foster a feeling of ownership of both the problems and the new plans. This method enables the organization to design a new management system consistent with the principles of interactive management. Rather than attempting to predict and plan for a future environment, the ideal system is envisioned to deal with today’s environment.
3 INTERNATIONAL QUALITY ASSURANCE SYSTEMS
The International Organization for Standardization (ISO) has promulgated a set of five universal standards for a quality assurance system that is accepted around the world. Currently 90 countries have adopted ISO 9000 as national standards. The standards apply uniformly to companies in any industry and of any size. When a company is registered to the appropriate ISO 9000 standard, the consumer has important assurances that the quality of the product or service purchased will be as expected. There is evidence of increasing interest in the development of public sector quality assurance systems that reflect ISO 9000 standards because of the need to control the quality of public services, to reduce the costs associated with poor quality, and to become more responsive to community needs and requirements.