Total Quality Management

The case talks about the implementation of TQM initiatives at an automotive spare parts manufacturing company in the late 1990s. The actual process of the implementation of the TQM was started in the year 2000-01.

The implementation of the TQM in the organization is explained in detail in this case along with the relevant benefits realized by the organization. As the group comprises multiple companies with multiple plants, a three-tiered promotion structure was formed.

At the tier 1, group level TQM Apex Council was formed comprising of the group chairman, vice chairman, presidents and the total quality (TQ) coordinators of group companies and group TQM coordinator. Tier 2, which is at the company level, is called TQM Promotion Committee. This consisted of the president, senior management group of the company and plant and head office TQM coordinators. Tier 3 is at the plant level and is known as TQM Promotion Team. This team consisted of plant and head office functional heads, plant functional heads, head office department heads and TQ coordinators for the plants and the head office.

The company had a TQ Coordinator to monitor implementation and provide necessary alerts to senior management. Each plant of the company had a plant TQ coordinator who was responsible for facilitating TQ practices in the plant. The company and plant TQ coordinators worked closely to ensure that the practices were spread uniformly across plants.

Challenges encountered were mainly to change the basic outlook and orientation of the employees and the top management for the successful implementation of various TQM activities and the basic TQM philosophy in the organization.

The major challenge was to change the mindset of the employees to help them appreciate the TQM philosophy. Training programs were organized for the employees to create awareness about the utility of TOM. This enhanced their motivation to embrace
manufacturing functions. Slowly, the company realized that standard operating procedures (SOP) and Kaizen were as much applicable to processes in functions like finance, marketing, materials as they were for the manufacturing process. It realized the need for writing SOPs for these processes to insulate them from human error. The organization implemented company wide TQM activities embracing all the functions and every employee in the organization.

The benefits derived by the organization from the TQM activities were phenomenal. During the initiation period of the TQM activities in the year 2000-01 and post ‘TQM’ implemented era in 2004-05, the organization’s sales figured jumped three times. There was a lot of focus on customer satisfaction. This led to the development of a number of customer-oriented products and services. Compared to the 5% contribution to total sales by the newly developed products in the year 2000-01, in 2004–05 the contribution of the new product sales were nearly 30% of the total sales. The customer line rejection dropped from the percentage (%) level to the ppm. The energy cost vis-à-vis the net sales came down from around 3% to 1.86. The intangible benefits include the company becoming more customer-focused with improvements in business processes, system-orientation and cross-functional working along with the total involvement of the employees.

Questions

1. Discuss the high points of the case.

2. What benefits did the organization derive from the implementation of total qualitymanagement?

3. Based on this case, discuss the critical points for the implementation TQM and itsvarious aspects.

4. What have you learned from this case study?

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