Some of the techniques of management are as follows: 1. Quality Circle 2. Total Quality Management 3. Business Process Reengineering 4. Six Sigma 5. Kaizen 6. Standardisation 7. Just-In-Time Production and Kanban Systems 8. Benchmarking 9. Learning Organisation.
Management Techniques: Quality Circle, Total Quality Management, Six Sigma, Kaizen, Benchmarking and More…
Management Techniques – 5 Modern Techniques (With Features, Objectives, Principles and Benefits)
Survival and growth of every business enterprise appear to be extremely difficult now-a-days. Global economy is characterised by cut-throat competition, growing customer expectations, increasing costs, expanding power of labour and fast changing technology.
In order to meet these challenges, new management techniques and practices are discovered by business leaders and academic leaders.
Some of the modern techniques in management are Quality Circle, Total Quality Management, Business Process Reengineering, Six Sigma and Kaizen:
1. Quality Circle:
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Quality Circle is a participative management concept that has been gaining more and more popularity. The concept of quality circle was emerged from quality control and was first introduced in the Japanese industries.
The quality circles developed in Japan in the 1960s were due to the efforts of two American experts Joseph Juran and Edward Demin. As part of their strategy to improve product quality, they made widespread use of employee problem-solving groups called quality control circles.
The Quality Circle (QC) in its present form was introduced by Dr. Ishikawa, a Japanese Chemical Engineer in 1962. In India, the quality circle was introduced first by Bharat Heavy Electricals Ltd. in 1980. QCs have become universal. They find application in almost all fields of human activities such as, industries, offices, hospitals, families, service organizations etc.
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Quality Circle Forum of India defines a quality circle as “a voluntary group of people who meet together on a regular basis to identify, analyze and solve quality, productivity, cost reduction, safety and other problems in their work area, leading to improvement in their total performance and enrichment of their work life”.
Edwin Flippo defines quality circle as a “well governing group of workers with or without their supervisors who voluntarily meet regularly to identify, analyze and solve problems of their work-field”.
Quality circles are, thus, groups of people, from the same organizational area, who meet regularly to solve problems affecting their work. Usually these groups consist of 6 to 12 members.
They meet for approximately one hour in a week with the objective of identifying and solving problems within their working area. Each quality circle is led by a supervisor or a senior worker.
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Features of Quality Circle (QC):
The following are the key features of quality circles:
1. A quality circle is a voluntary group of persons having a common cause.
2. It consists of a small group of people who normally work at the same place and do similar work.
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3. It represents a collective effort.
4. It intends to improve the quality of output.
5. It co-ordinates the activities of members for improving the quality of work in the workshop.
6. It facilitates frequent meetings and discussion of members for improving quality.
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7. It identifies the problems first and tries to find out the solutions.
8. All the efforts of it are directed towards quality improvement on a regular basis.
9. It has no discrimination against age, sex and position.
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The objectives of the quality circles are the following:
1. To improve human relations and workers morale.
2. To realize and satisfy people’s needs at the workplace.
3. To promote participative culture.
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4. To enhance job interest.
5. To make team work more effective.
6. To reduce defects and improve quality
7. To improve housekeeping, cost effectiveness, safety etc.
8. To increase productivity.
9. To enhance problem solving capacity.
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10. To encourage the attitude of problem prevention.
11. To improve communication
12. To promote personal and leadership development.
13. To develop changes in attitude.
14. To promote self-discipline, self-motivation, and mutual problem solving.
Organization Structure of Q.C:
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1. Top Management – The earnest support of the top management is essential for the quality circles.
2. Steering Committee – It consists of the heads of major departments of the organization. It sets the goals and objectives for the quality circle activities.
3. Facilitator – He is a senior official responsible for facilitating and guiding Q.C. activities in his area.
4. Leader – Each quality circle will have a leader. He encourages the members to have active participation in the circle activities.
5. Members – Members are the group of workers who have voluntarily formed Q.C. The members are the core of the quality circle.
Benefits of QCs:
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The beneficial effects of QC activities are numerous, both at the individual and organizational levels. QCs bring about both direct benefits and indirect benefits.
i. Direct Benefits:
They include the following:
1. Making work easier.
2. Creating awareness of the potential of the workers.
3. Providing opportunities for better understanding among the workers.
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4. Making work safer.
5. Improving quality of work life.
6. Increasing operational efficiency.
7. Increasing productivity.
8. Improving quality of products and services.
9. Minimizing wastages.
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10. Reducing costs.
11. Increasing customer satisfaction.
12. Increasing worker’s job satisfaction.
ii. Indirect Benefits:
Indirect benefits include the following:
1. Improving employee morale.
2. Developing personal capabilities.
3. Developing human relations.
4. Improving working conditions.
5. Solving work related problems.
6. Smoothening communication.
7. Making use of the bright ideas of workers.
Introduction of Quality Circle in an Organization:
QC is a philosophy and approach to solve quality related problems. It needs attitudinal change. It is a step-by-step process. Initially, it is applied to one area and then it is extended to other areas gradually.
The steps in the introduction of quality circle are briefly described below:
1. Teaching QC Philosophy and Methodology:
The workers must be explained of the fundamentals of QC philosophy. The concept and the benefits of QC must be made popular to them. The workers should be allowed to clear their doubts about QC. Workers take interest and extend co-operation only when they believe that the concept is worthwhile to follow.
Once the employees are mentally prepared for QC methodology, they should be encouraged to form QCs consisting of members performing similar work. The membership of a QC should not exceed twelve members. Once a QC is constituted, it should be intimated to the top management.
3. Analysis of Quality Problems:
The members of a QC meet periodically. They collect data and analyze the same. Past records, employees suggestions, and customer’s suggestions are also very important. This helps to identify problem that hinder quality.
The members discuss the problems in detail and suitable methods are used for problem solving. Each member puts forth suggestions and final decisions are taken through consensus.
5. Presentations and Approval of Suggestions:
The QC members present their suggestions to management in different forms, like oral presentation, project report, or in any other suitable form. They try to convince the management and seek active involvement. Management approves the suggestions and prepares for implementation.
At this stage, management takes necessary actions to implement the suggestions made by the QC. Proper publicity should be given to the suggestions of QCs which are implemented. This will motivate the employees.
When QC process seems satisfactory in one area, the same is extended to other areas, one-by-one. Finally, all areas of the organisation have their QCs.
There are several pitfalls in quality circles. Despite their merits, they have failed in many companies.
The following are the general problems of quality circles:
1. Negative Attitude – The people, the employees and even the managers have a negative attitude towards the quality circle and so resist its implementation. They should be properly informed about the concept of quality circle and its utility.
2. Lack of Ability – The workers in India lack proper education and initiative. So Workers’ Education Programme should be initiated to educate the workers about Q.C.
3. Lack of Commitment of Management – The top management may not be committed to the concept of quality circle. So they do not allow the employees to hold periodical meetings of quality circles during the working hours.
4. Non-implementation of suggestions – The suggestions of each quality circle should be given due weightage. If they are likely to improve quality of products, they must be implemented. This will enthuse the members of the Q.C.
Requirements of Effective QCs:
The following guidelines should be followed to increase the effectiveness of quality circles:
(i) The employees should be encouraged to suggest ways and means to improve quality.
(ii) The QC members must be given adequate training in the areas of statistical analysis to facilitate information processing.
(iii) Since QC members have to work in groups they should be trained in group dynamics.
(iv) The members should feel independent to choose any problem and to implement and monitor the results.
(v) The management should allow the workers to hold QC meetings periodically during working hours.
(vi) Each QC should have a number of meetings and discussions.
(vii) The top management should extend full support to QCs.
2. Total Quality Management (TQM):
The evolution of the concepts and practices of TQM has taken several years of trials and tribulations in many organizations all over the world. According to Feigenbanum, “In the increasing competitive world the quality is no longer an optional extra, it is essentially a business strategy.” Without quality, an organization cannot survive.
The creation of quality products and services demands total commitment from the entire organization and hence it requires TQM. It is the continuous improvement in all parts of an organization with a view to satisfying customer needs.
“TQM is a corporate business management philosophy which recognizes that customer needs and business goals are inseparable. It is appropriate within both industry and commerce”.
Oakland defines Total Quality Management (TQM) as “An approach to improve the effectiveness and flexibility of business as a whole. It is essentially a way of organizing and involving the whole organization, every department, every activity, every single person at every level.”
Fred Luthans defines TQM as “An organizational strategy with accompanying techniques that deliver quality products and services to customers.”
Thus, TQM refers to the deep commitment of the organization to improve and maintain quality of product and service. Now, TQM has been implemented by many companies because of the importance of maintaining quality of products and services.
According to TQM concept, quality is a competitive strategy and must embrace all areas of the functioning of an enterprise. Quality does not refrain the concern of production department, but becomes an attitude of all people in the organization.
In TQM, it is the entire field of organisational activities which is involved.
The following are the important characteristics of TQM:
1. TQM is customer oriented. It focuses on customers’ requirements and their satisfaction.
2. TQM requires a long term commitment for continuous improvement of all processes.
3. The success of TQM depends on commitment, leadership and continuous involvement of the top level management.
4. The responsibility of establishment and improvement of systems lies with the management of an organization.
5. There should be good organisational structure to equip management and employees to meet customer requirements and satisfaction.
6. TQM is a strategy for continuously improving performance at all levels and in all areas of responsibility.
7. TQM requires involvement of everyone in the organization in continuous improvement.
8. TQM demands a structural, educational, and training programme for its success.
The new principles adopted by TQM are mentioned below:
1. Customers’ needs must be met in time, regularly and fully.
2. Employees must strive to do error-free work.
3. Management should aim at preventing the occurrence of errors and not at correcting them after they occur.
4. Cost of quality must be measured appropriately and relatively.
5. The management should establish standards in products, processes and people.
6. The management should ensure the involvement of everyone in the organization, from the Chief Executive to the laborer.
7. At all levels, managers need to be made conscious that they are role models for total quality.
8. There shall be a system of recognition and reward in the organization.
The popular techniques of TQM are the following:
1. Re-engineering – It includes a total revising of operations by making an analysis of jobs. It also seeks the measures to do the work more efficiently.
2. Bench marking – It involves the process of comparing work with the best practices. It aims at identifying the changes which will bring about higher quality output.
3. Empowerment – It refers to the authority to take decisions within one’s area of operation. This decision need not get the approval of anybody.
Benefits of TQM:
TQM offers a wide range of advantages or benefits to both consumers and the manufacturers. These benefits can be widely classified into tangible benefits and intangible benefits.
They include the following:
1. Better quality products.
2. Productivity improvement.
3. Reduced quality costs.
4. Increased market.
5. Higher profitability.
6. Reduced employee grievances.
7. Better returns to shareholders.
They consist of the following benefits:
1. Effective team work.
2. Enhancement of job interest.
3. Improvement in human relations and morale.
4. Customer satisfaction.
5. Improved communication.
6. Participative culture.
7. Enhanced problem solving capacity.
8. Improved corporate health and character of the company.
Fundamentals of TQM:
The important fundamentals of TQM are as follows:
The main fundamental of TQM is its focus on customer requirements and their satisfaction. TQM focuses on the theme “Customer is King”. Every business unit manufactures products for some type of customer. The business organisations should frame their processes and products which must satisfy the customer.
The concept of management by fact means that decisions should be based on facts. Facts here means the information which is essential for arriving at a decision and solving a problem. TQM will be successful only when decision making is based on facts of every case. The employees should be trained to use factual information for taking every decision.
The focus of TQM is on avoiding the recurrence of same problems. When a problem is solved, then the mechanism should be so designed that it is solved forever and it does not recur again. The companies should ensure that the recurrence of the solved problems is prevented.
The plan-do-check-act principle is also an essential tool for implementing TQM programme. This is the principle of continuous improvement. TQM will work successfully only if continuous effects are made for improvements.
TQM can be successfully, implemented if employees are fully involved in this programme. The company should recognize the importance of employees’ involvement and give weightage to their suggestions.
This principle will encourage employees to help management in solving various problems. Thus, the employee involvement is a precondition for the success of TQM.
TQM is possible only when the key activity areas of a company are identified.
The following are the usual key area activities:
1. Pre-production Quality Standards – Both the actual production activity and the product and process design are important in TQM system. The process and design should be so laid down that it will lead to the desired quality standards.
2. Quality planning – There should be proper planning of the activities so that they lead to the desired quality standards. The activities start from the purchase of raw materials. There should be a proper procedure to control the quality of purchased materials.
3. Quality Evaluation of Product and Process – This step involves the evaluation of the whole system designed for TQM. There should be quality checks by the staff to measure the desired quality standards. There should be a provision to maintain quality records.
4. Quality Information System – Information regarding the systems and equipment should be easily available. This information should be properly anlaysed and used to control quality activities. If information is readily available, remedial measures can be taken easily.
5. Quality Training and Orientation – Quality training and orientation should be given to personnel concerned with quality maintenance. They should know what is expected of them. The effectiveness of the training and orientation will be understood by the personnel capability developed out of this training.
6. Post-production Quality Service – It is part of ‘after sales service’. There should be provision for answering complaints and taking remedial measures so as to satisfy the customers.
3. Business Process Reengineering (BPR):
Business Process Reengineering is the rethinking and redesigning of the core business processes to gain radical improvements in performance. Michael Hammer and James Champy introduced the technique of BPR in mid-1980 in their book “Reengineering the Corporation”.
They have defined BPR as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed”. According to the Reengineering theory, complete processes from materials acquisition, to production, marketing and distribution should be looked at.
The main features of BPR are as follows:
Reengineering first determines what an organisation must do, then how to do it. It takes nothing for granted. It ignores what is and concentrates on what should be. In BPR, the outdated rules and fundamental assumptions that underlie the current business operations are identified and discarded.
It involves disregarding all existing structures and procedures and inventing completely new means of work. It means getting to the root of things. Reengineering is about reinvention of business, not improvement, modification or enhancement. Organisations and their employees should make organisation structures more innovative, flexible and customer-centred.
3. Dramatic Improvement:
BPR aims at dramatic improvements in performance rather than marginal improvements. The old ways of doing business should be replaced by new ways in order to meet the demands of customers, changing environment and growing competition. Organisations that are in deep trouble, those organisations which foresee trouble ahead and the ambitious organisations that are in peak condition undertake reengineering.
4. Key Business Processes:
Reengineering focuses on business processes. A business process is a collection of activities that takes one or more inputs and creates a customer focused output. Developing goals and strategy, emphasizing the commitment of top management, creating a sense of urgency among members, recreating the organisation and optimizing perspectives are the important aspects of BPR Process.
Thus, reengineering involves breakthroughs by discarding the existing process.
The objectives of BPR are as follows:
1. To redesign the key business processes, in order to improve quality and reduce cost.
2. To apply a holistic approach to principles and process of businesses.
3. To flatten the organisation and to encourage team work.
4. To train and develop human resources.
5. To improve information technology.
6. To develop competitive strength with a clear view on the goals to be achieved.
7. To encourage constant learning.
The main principles of BPR are as follows:
1. To organise the new jobs around outcome so as to improve speed productivity and customer responsiveness.
2. To plan the work in such a way that it is closest to those who use the output of the process.
3. To make the person collecting the information responsible for processing it so as to reduce the errors.
4. To maintain the individual flexibility and responsiveness to customers of separate units of an organisation.
5. To link and co-ordinate parallel activities that will come together during the process.
6. To make decision-making part of the process.
7. To collect and capture information in the organisation only once at the source.
Phases:
The phases of reengineering process are the following:
1. Preparing for change – Everybody in the organisation should understand the need for change. The employees should be informed of their roles in the upcoming process of change and be prepared for a cultural shift.
2. Planning for Changes – In a constantly changing economic environment, the management has to foresee the future changes and make an active plan for achieving the desired results in future.
3. Designing Changes – It involves identifying current business process, assessing the process, creating the ideal process, testing the new process and implementing it.
4. Evaluating Changes – It includes evaluating past activities and developing objectives and priorities for the coming year. In this evaluation, feedback from all the reengineering activities along with a review of organisational performance are used. Periodical evaluation should be done to assess whether reengineered process is consistent with the operational plan and is on the right track.
Requirements for Success in BPR:
1. Clarity of Purpose – The purpose should be clearly defined in the reengineering process. It means that the process should be well-defined and well- designed. Process provides the structure into which practice fits. Reengineering in fact focuses on optimising efforts and getting rid of non-value added activities.
2. Top Management Support – BPR must begin from the top. The leader must develop a core team of competent people from different departments to plan and implement the programme.
3. Choice of right processes – Suitable business processes should be chosen for reengineering.
It should be based on three criteria:
a) Most troublesome processes;
b) Processes having the maximum impact on customers; and
c) Processes most receptive to successful redesign.
4. Customer’s angle – Things should be seen from customer’s angle. Staff can be convinced of the need for reengineering by explaining the impact on customer satisfaction.
5. Sense of Urgency – A time frame should be developed for achieving results through reengineering.
6. Proper Climate – Environment suitable for change must be created. Involvement and participation of people are helpful in overcoming resistance to change.
4. Six Sigma:
Six Sigma is a set of techniques and tools for improving the capability of business process. It was introduced by engineers Bill Smith and Mikel J Harry while working at Motorola, USA in 1986. Jack Welch made it central to his business strategy at General Electric in 1995.
Now, it is widely used by various organisations with the aim of reducing costs and improving quality. Its focus on variation and design aims at promoting business and operational excellence.
In order to improve the quality of process outputs, Six Sigma tries to identify and remove the causes of defects. It also seeks to minimize variability in manufacturing and business process. It makes use of a set of quality management methods, mainly statistical methods, and creates a special infrastructure of experts within the organisation.
Each six sigma project follows a sequence of steps and has specific value targets like reducing costs, increasing customer satisfaction and increasing profits. Its focus is on eliminating defects and reducing variability.
The term “Six Sigma” registered as trademark of Motorola, originated from the terminology associated with statistical modelling of manufacturing process. The maturity of manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates.
A six sigma process is one in which 99.99966% of the products are statistically expected to be free of defects (3.4 defective features per million). Motorola set a goal of “Six Sigma” for all of its manufacturing operations and this goal became a by word for the management and engineering practices used to achieve it.
According to Jack Welch, “Six Sigma is a quality programme that, when all is said and done, improves your customer’s experience, lowers your costs, and builds better leaders”.
Six sigma is based on the following principles:
1. In order to attain success in business, continuous efforts to achieve stable and predictable results are of vital importance.
2. Manufacturing processes have characteristics that can be defined, measured, analysed, improved and controlled.
3. Commitment from the entire organisation is required for achieving sustained quality improvement.
4. Quality becomes a tangible and measurable product, applicable to all processes.
5. To improve customer satisfaction by reducing defects in any process, from manufacturing to transactional, and from product to service.
The features of Six Sigma are as follows:
1. If focuses on achieving measurable and quantifiable financial returns from any project.
2. It emphasizes strong and passionate management leadership and support.
3. It is committed to make decisions on the basis of verifiable data and statistical methods, rather than assumptions and guesswork.
4. It changes the way a company works by pulling it into the cycle of culture change. It changes the behaviour of the people, who translate this into better results for the projects they work on. That, in turn changes the corporate culture.
5. It is a problem solving methodology for some companies, while others see it as a way of managing. Each company has to figure out where it will fit in.
Methodology of Six Sigma:
Six Sigma projects follow two project methodologies inspired by Deming. These methodologies composed of five phases each, bear the acronyms DMAIC and DMADV. While DMAIC is used for projects aimed at improving an existing business process, DMAD is used for projects aimed at creating new product or process designs.
This project methodology has five phases:
1. Define the system, the voice of the customers and their requirements, and the project goals specifically.
2. Measure key aspects of the current process and collect relevant data.
3. Analyze the data to investigate and verify cause and effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out the root cause of the defect under investigation.
4. Improve or optimize the current process based upon data analysis to create a new future state process. Set up pilot runs to establish process capability.
5. Control the future state process to ensure that any deviations from the target are corrected before they result in defects. Implement control systems and continuously monitor the process. This process is repeated until the desired quality level is obtained.
This method, also known as DFSS (Design for Six Sigma) features five phases:
1. Define design goals that are consistent with customer demands and the enterprise strategy.
2. Measure and identify characteristics that are Critical to Quality (CTQs), measure product capabilities, production process capability and measure risks.
3. Analyze to develop and design alternatives.
4. Design an improved alternative, best suited per analysis in the previous step.
5. Verify the design, set up pilot runs, implement the production process and hand it over to the process owners.
Key Roles for Implementing Six Sigma:
Six Sigma identifies several key roles for its successful implementation:
It includes the CEO (Chief Executive Officer) and other members of top management. They have to set up the vision for six sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements.
They take the responsibility for six sigma implementation across the organisation in an integrated manner. While the Executive leadership draws them from upper management, Champions act as mentors to Black Belts.
They are identified by Champions and devote 100% of their time to six sigma. They assist champions and guide Black Belts and Green Belts. Apart from statistical tasks, they spend their time on ensuring consistent application of six sigma across various functions and departments.
They operate under Master Black Belts to apply six sigma methodology to specific projects. They devote 100% of their valued time to six sigma. They primarily focus on six sigma project execution and special leadership with special tasks. Champions and Master Black Belts focus on identifying projects for six sigma.
v. Green Belts:
They are the employees who take up six sigma implementation along with other job responsibilities and operate under the guidance of Black Belts.
Special training is needed for all of these practitioners to ensure that they follow the methodology and use the six sigma approach correctly. Some organizations use “Yellow Belts” for employees that have basic training in six sigma tools and generally participate in projects. “White Belts” are those who are locally trained in the concepts but do not participate in the project team. “Orange Belts” are also used for special cases.
5. Kaizen:
Kaizen is a Japanese business philosophy of continuous improvement of working practices, personal efficiency etc. Kaizen was originally introduced to the west by Masaaki Imai in his book “Kaizen – The key to Japan’s Competitive Success” in 1986. Today, Kaizen is recognized worldwide as an important pillar of an organization’s long-term competitive strategy.
When applied to the work place, Kaizen activities can improve every function of a business, from manufacturing to marketing and from the CEO to the assembly line workers. It is used to describe a company culture where everyone regularly evaluates his work and thinks of ways to improve it.
The concept is that small steps on a regular basis will lead to large improvements over time. It is a slow but ongoing process of improvement, not a quickly implemented set of changes.
Continuous improvement may be made in the quality of product or service, or work cycles with greater flexibility and lower costs and lesser wastage.
Kaizen is based on certain guiding principles as follows:
1. Good processes bring good results.
2. See for yourself to grasp the current situation.
3. Speak with data, and manage by facts.
4. Take action to contain and correct root causes of problems.
5. Work as a team.
6. Kaizen is everybody’s business.
The continuous cycle of Kaizen activity has seven phases:
1. Identify an opportunity.
2. Analyse the process
3. Develop an optional solution
4. Implement the solution
5. Study the result
6. Standardize the solution
Elements of Kaizen:
The elements of Kaizen are the following:
1. Team work
2. Personal discipline
3. Improved morale
4. Quality circles
5. Suggestions for improvement
Division of Kaizen Programme:
Kaizen programme can be divided into three segments:
1. Management – Oriented Kaizen
2. Group – oriented Kaizen
3. Individual – oriented Kaizen
1. Management – oriented Kaizen – It concentrates on the most strategic and logistic issues and provides the momentum to keep up progress and morale. Managers must spend at least 50 percent time on improving their jobs.
2. Group-oriented Kaizen – It is a permanent approach and is represented by quality circles and other small group activities.
3. Individual-oriented Kaizen – It is manifested in the form of suggestions. It is a morale booster.
The Basic Tips for Doing Kaizen:
The following are some basic tips for doing Kaizen:
1. Replace conventional fixed ideas with fresh ones.
2. Start by questioning current practices and standards.
3. Seek the advice of many associates before starting a Kaizen activity.
4. Think of how to do something, not why it cannot be done.
5. Don’t make excess. Make execution happen.
6. Don’t seek projection. Implement a solution right away, even if it covers only 50 percent of the target.
7. Correct something right away if a mistake is made.
Kaizen activities cover improvement in a number of areas.
They are as follows:
1. Quality – Bettering products, service, work environment, practice and processes.
2. Cost – Reducing expenses, manpower, and use of material, energy and resources.
3. Delivery – Cutting delivery time, movement and non-value added activities.
4. Management – Improving procedure, training, morale, administration, planning, flow, information systems, documentation and reporting.
5. Safety – Decreasing hazardous situations, unsafe working conditions, chances of resource depletion and damage to the environment.
To generate a Kaizen, everyone involved must begin thinking about their work in a new way in terms of now, next and new, present condition, desired state, and how to reach that state.
Implementation of Kaizen occurs in three stages in any organization – encourage participation, training and education, and quality level improvement.
There should be awareness training sessions for all employees. To further encourage employee involvement, promote specific Kaizen activities, and consider distributing monetary or tangible benefits after solutions from Kaizen activities are implemented.
Focused training of associates is required for understanding what is and is not – the essence of Kaizen. Team leaders should be trained to understand Kaizen in an organisational vision context, which needs to be followed thoroughly in order to achieve desired business objectives.
They also must be taught about the necessity of impartial evaluation and strategy for improving participation.
After the training stage is completed, practitioners should continue to focus on long-term implication, widespread application, alignment with organizational objectives and planning objectives. Management should form a core department to carry out evaluation and implementation of Kaizen.
Steps for Implementing Kaizen:
The steps required for implementing Kaizen are as follows:
1. Standardization of operation and activities.
2. Measuring the standard operation.
3. Gauge measurements against requirements.
4. Innovating to meet requirement and increasing productivity.
5. Standardize the operations.
6. Continue the cycle.
The Toyota production system is known for using Kaizen. Kaizen was first practiced in Japanese businesses after the Second World War. It was influenced by American business and quality management teachers, most notably as part of the Toyota way.
Management Techniques – Six Sigma, Quality Assurance, Standardisation, Kaizen, Just-In-Time Production and Kanban Systems and More…
1. Six Sigma:
Six sigma is often related to Motorola, the company that invented it. In the eighth decade of the 20th century, Motorola’s significantly changed the discussion of quality from one where quality levels were measured in percentages (parts per hundred) to parts per million or even parts per billion. It pointed out that modern technology was so complex that old ideas about acceptable quality levels are no longer acceptable.
The success of Motorola effectively changed the focus of quality worldwide. Many giants like Xerox, Boeing, GE, Kodak followed Motorola’s lead. In India also Tata’s, WIPRO and Bharti’s and others are effectively reaping the benefits of six- sigma.
Human quest for better quality is unending. With the help of technology and newer tools organisations enhance quality of their products that are seemingly of very good quality. Quality refers to the degree of excellence and standard. Better quality is often correlated with superior processes and products.
Strategically, a product of good quality should be able to meet the specifications of customer and should be able to satisfy him. If battery of a wristwatch lasts for eight months, but is expected to last for a year by the customer, then the product battery is not of desired quality. Good quality should not always be associated with good products.
Another dimension of quality is that it should not be restricted to satisfying the existing desires of customers. It should not put a boundary on quality by limiting it to the current information and perspective of customers. Rather it should be futuristic, i.e., in addition to meeting customer’s present expectations, it should be able to improve them.
Six Sigma implies maintenance of the desired quality in processes and end- products. It means taking systemic and integrated efforts toward improving quality and reducing cost. Six Sigma is a highly disciplined process that helps in developing and delivering near-perfect products and services. It strives to meet and improve organisational goals on quality, cost, scheduling, manpower, new products and so on. It works continuously towards revising the current standards and establishing higher ones.
Six Sigma has its base in the concept of probability and normal distribution in statistics. Six Sigma strives that 99.99966% of products manufactured are defect free. Six Sigma is a smarter way to manage a business or a department. Six Sigma puts the customer first and uses facts and data to drive better solutions.
2. Quality Assurance:
Quality assurance engineering deals with the assuring of the desired quality, reliability, service and other aspects in the manufactured product through various scientific techniques. The job of evaluating the company’s activities with respect to quality, reporting the results of evaluation to all concerned for information and necessary action and the subsequent action taken is called quality assurance.
There are three stages in consideration of total quality of product.
The quality of design combined with the quality of performance is termed as ‘reliability’ whereas the field covering quality of manufacturing according to design is termed as quality control.
Many quality assurance activities protection against quality problems through early warnings of trouble ahead. The assurance comes from evidence—a set of facts. For simple products, the evidence is usually some form of inspection or testing of the product. For complex products, the evidence is not only inspection and test data but also reviews of plans and audits of the execution of plans. A family of assurance techniques is available to cover a wide variety of needs.
In the field of industrial management, the following activities are related with quality assurance:
(i) Processing of field complaints.
(ii) Quality rating of outgoing product.
(iii) Quality audit.
(iv) Preparation of reports.
(v) Setting up quality level.
(vi) Inspection planning.
(vii) Measuring and reporting reliability.
The following benefits could be expected from quality assurance:
(i) Reduced scrap and defects makes production economical.
(ii) Fewer complaints in product and service are reported.
(iii) Good relations with customers are attained by supplying them quality products.
(iv) Higher efficiency and productivity is obtained.
3. Standardisation:
Standardisation is an important management tool for improving quality and productivity. Quality and standardisation are the two essential pre-requisites for a company to market its products and services in the competitive business environment. Quality begins with standards.
Quality encompares safety, reliability, durability, performance and acceptability of products by consumers. Hence quality standards are to be built in the product during research, design, development and production. The foundation on which quality is built is the standards.
4. Kaizen:
Dynamic organisations make continuous improvement a way of life. The Japanese word for continuous improvement is kaizen, which means improving the overall system by constantly improving the little details. TQM managers dedicated to Kaizen are never totally happy with things. Kaizen practitioners view quality as an endless journey, not a final destination.
They are always experimenting, measuring, adjusting, and improving. Rather than naively assuming that zero defects means perfection, they search for potential and actual trouble spots for improvement of product design and processes.
There are four general avenues for continuous improvement for any organisation.
These include:
(i) Improved and more consistent product and service quality.
(ii) Faster cycle times (in cycles ranging from product development to order processing to payroll processing).
(iii) Greater flexibility (for example, faster response to changing customer demands and new technology).
(iv) Lower costs and less waste (for example, eliminating needless steps, scrap, rework, and non-value-adding activities).
International attention is being focused on the outstanding performance of the Japanese economy and the success of management practices being adopted by Japanese firms. Interest in Japanese management system has rapidly increased in the western and other countries of the world. ‘Quality improvement’ is central to the Japanese system along with life time employment, seniority based promotion, group participation, etc. In Japanese system, quality is expressed is relation to continuous improvement known as kaizen.
Though lifetime commitment and seniority systems have proved difficult for Western organisations to absorb, yet quality and flexibility have been taken up as the processes which have demonstrated the greatest transferability from Japan. This is particularly the case where Japanese transplant companies in the West have not only set up their own procedures but have also encouraged or required Western suppliers and subcontractors to follow suit.
Perhaps the most significant work organisation innovations that have been adopted in the West are the group of operations which are variously known as JIT (just-in-time) and Kanban. Each of these is different, and represents a variation on tighter and more controlled supply and manufacturing systems.
5. Just-In-Time Production and Kanban Systems:
Just-in-time (JIT) production is defined as “a philosophy that focuses attention on eliminating waste by purchasing or manufacturing just enough of the right time just in time”. Some observers have called JIT a hand-to-mouth approach to production. Thus, JIT attacks the problem of bloated inventories that historically have hampered productivity and profitability.
However, JIT involves much more, in pursuit of the JIT ideal, managers do varying combinations of the following:
(i) Purchase and produce goods in smaller but higher-quality lots.
(ii) Design more efficient workflows by eliminating costly bottlenecks.
(iii) Reduce scrap and rework.
(iv) Prevent disruptive machine breakdowns.
(v) Enhance employee motivation through genuine participation or empowerment.
The concept of JIT is extended to the whole system of production, i.e., to produce and deliver finished goods just in time to be sold, sub-assemblies just in time to be assembled into finished goods, fabricated parts just in time to go into sub-assemblies, and purchase materials just in time to be transformed into fabricated parts. Thus, JIT stands for ‘producing necessary units in necessary quantities at the necessary time.’
The purpose of JIT is to produce product in such a way that there is minimum work-in-process and minimum stock of finished goods in inventories. Therefore, unnecessary inventories which are a ‘collection of troubles and bad causes’ are eliminated.
In practice, managers employ combinations of several elements which include smoothing of production, providing for process flexibility and versatility, standardisation of jobs, and utilisation of an ordering and delivery system called kanban. Smoothing production can be achieved by reducing set up time and thereby lowering lot size.
With reduced set up time and lot size, there will be a significant improvement in quality, scrap, and worker motivation, along with reduced need for storage space, material handling equipment, inventory control and support personnel.
Multi-skilled workers are a key factor in designing of streamlined process. The processes are designed in such a way that each worker can handle two or more machines and move from one work centre to another. Multifunction workers also perform maintenance, quality inspection and cleanup operations and participate in work improvement projects. Development of multifunction workers not only decreases the number of workers and increases productivity, but also increases team work and morale among the workers.
Standardisation of job is also important along with process flexibility in a JIT system. This includes standard cycle times, standard routings and standard quantities in containers holding work-in-process. Standardisation of jobs leads to a more uniform output rate.
Kanban is an integral part of a JIT system. Kanban is a ‘pull’ inventory system aimed at part feeder stages of production. It employs manual cards instead of computers for planning and controlling parts movements. There are two types of kanbans—withdrawal kanban and production- ordering kanban. The quantity to be withdrawn by the subsequent process is written on the withdrawal kanban, while the quantity that should be produced by the preceding process in shown on the production kanban.
Because of JIT, production operations are lean and flexible. Leanness is achieved by keeping work-in-process inventories to a minimum. Flexibility is achieved by reducing machine setup times so that single units or small batches of different products can be produced in rapid succession. Furthermore, JIT places more emphasis on feed forward control than is typically found in traditional factories. For instance, preventive maintenance is the personal responsibility of machine operators in factories pursuing the JIT system.
The potential benefits of JIT include quality improvement, higher productivity, lower cost, less work-in-process, less inventory of raw materials, finished goods, saved space, increased teamwork, higher workers’ morale and motivation. However, implementation of JIT requires considerable cooperation between the management and the workers.
6. Benchmarking:
Any business house seeking some improvement in business affairs needs to know the standard it will use to set its goals and assess its progress. This explains the need for benchmarking for better results. Benchmarking is the practice of identifying, studying and building upon the best practices in the industry or in the world. For instance, in 1992, Ford Motor Company delivered a knock down punch to Honda.
Thanks to extensive fleet sales and aggressive discounting (practices Honda avoided), Ford’s Taurus pulled ahead of Honda’s Accord for the first time in four years to earn the title of best-selling passenger car in the United States. The symbolic marketing value of Ford’s achievement was immense. To the person on the street, the event signalled the return of America’s industrial competitiveness. Much more than bragging rights were involved, though. Ford’s achievement was a strong endorsement for benchmarking.
Learning from the experiences and best practices of others is essential to survive and grow in the turbulent market environment. Dynamic companies are constantly monitoring information from the external environment to compare their process, products and services with the best industry practices known as ‘benchmarking’. Such comparisons help establish quality targets which lead to a competitive advantage.
The concept of benchmarking was developed and used extensively by Xerox. When Xerox was attempting to regain market share that had been lost to Japanese copier manufacturers in the late 1970s and early 1980s, Xerox undertook a study of competitors’ products in terms of quality, features, and costs in comparison with Xerox’s products.
The company was shocked to learn that its unit manufacturing costs were equal to the best Japanese maker’s selling price in the United States, the number of suppliers used by Xerox was nine times the number used by the competitors, assembly line rejects were ten times higher, product lead times were two times longer, and defects per 100 machines were seven times higher.
After second benchmarking study confirmed the results of the first one, the company assembled its top 25 managers to begin planning their human resource system and total quality management efforts that eventually brought about the turnaround.
Ford used benchmarking to make the Taurus a world class automobile in the nineteen eighties. Ford started with the customer; it compiled a list of some 400 features its customers said were the most important, then set about finding the car with the best of each. Then it tried to match or top the best of the competition. The result was the hot-selling Taurus.
7. Learning Organisation:
Learning Organisations are these which can create, acquire and transfer knowledge and also modify their behaviours to reflect new knowledge and insights. Building learning organisations is now recognized as the focus for top managements wanting to remain significant players in an ever- changing business environment. New ideas are essential if learning is to take place. Emphasis is not on just creating and acquiring new ideas, but more importantly on modifying behaviour.
For example, many leading business houses in India are now teaching their employees the philosophy of Total Quality Management (TQM) but that does not automatically qualify them to be certified as learning organisations. They have to use TQM to guide their decisions and actions before one would categorise them as learning organisations.
It should also be remembered that modifying behaviour must result in enhancing organisation’s performance in achieving high order of customer satisfactions, employee satisfaction and other stake-holders satisfaction.
In the turbulent environment, the learning organisations alone will survive because of their competence to learn, create, codify, and use knowledge faster than their rivals. The organisations must, therefore, be built of, around, for, and by people. The people must constantly enhance their abilities to produce extraordinary results, nurture innovative patterns of thinking, set free their collective aspirations, and continually learn how to learn together, overcoming the learning disabilities that plague corporation.
The future organisation must be refined as a complex institution in which thinking, learning, and knowledge-creation takes place, constantly generating ideas that will permit the transformation of the organisation by its people.
8. Quality Circle:
The concept of Quality Circle emerged from quality control. Quality circles are quite popular in Japan. Looking at their success, many organisations in U.S.A. and India have also attempted to implement quality circles. It should be observed that quality circles provide a future-oriented approach. They seek high quality products in the current production run and in the future.
A quality circle is a small group of employees doing similar or related work who meet regularly to identify, analyse and solve product-quality problems and to improve general operations.
The quality circles are relatively autonomous units (ideally about 10 workers), usually led by a supervisor or a senior worker and organised as work units. The workers, who have a shared area of responsibility, meet periodically to discuss, analyse, and propose solutions to on-going problems.