Implementing TQM in foundries.
Foundries, by their nature, operate in a world marketplace. The increasing demand for ISO 9000 registration by industrial customers in Europe and other countries is a constant reminder of this fact.
The most successful foundries worldwide are those that anticipate market needs. They produce castings that their customers want to buy--at prices that generate the right level of profits.
They have a definite "customer mentality" and an overriding regard for the "right the first time--every time--on time" approach to quality.
Team spirit is evident at all levels, with strong personal commitments and loyalty to the company's success and public image. Successful foundries continually review their working practices to improve performance. Everybody knows what "best practices" are through formal documented procedures to at least meet the standards determined by ISO 9002.
Operating in this manner requires every department and employee to be fully aware of, and contribute to, the company's business objectives and quality ideals. A positive customer mentality will be promoted, and companies encourage this idea internally so departments or individuals have well-defined (internal) customers to satisfy.
These companies have a clear vision of what they want to achieve, and their aims, objectives and goals are communicated clearly to all concerned.
What is being described is not utopia--simply total quality management (TQM) in practice.
Suited for Foundries
The principles and practices of what is now called TQM have existed for at least 30 years, with ample evidence from Japan, U.S., Europe and U.K. of successful implementations in both manufacturing and service companies. TQM is particularly suited to the foundry industry, with dramatic gains in productivity, profits, quality and company image being widely reported.
TQM aims to harness the human and material resources of a company in the most effective way to achieve its objectives. It deliberately creates an environment where continual improvements in all things are the norm. Improvements may be targeted on customer satisfaction, business goals (such as growth, profit or market position), technical innovations and other worthwhile topics.
The TQM culture involves every department and employee--not just the manufacturing activities. In addition, customers and suppliers must be encouraged to participate actively.
The key is the complete commitment of the foundry's president and the entire management team. There can be no halfway house--management has to be passionately involved and supportive in all aspects of TQM.
TQM is a process and not a program, since it's an ongoing activity that will permeate all aspects of a company's operations and its approach to business. Nevertheless, experience has shown that successful implementations of TQM adopt traditional methodology--involving analysis, planning, training, implementation, monitoring and consolidation.
Analysis and planning will normally take place over a 3-6 month period and involve all members of the management team. Training and implementation will follow, with company-wide involvement. Depending on the size of the foundry, these phases could be spread over 1-3 years.
Monitoring involves assessing, in a quantitative way, the effectiveness of all quality improvement projects. Monitoring begins with the initial plot studies and will be an essential element thereafter.
Consolidation ensures that the new practices are adopted by every employee. The necessary formalization adopts the principles and practices laid down by ISO 9000--but extends throughout all areas of the business. The revised ways of working are then described in procedures and work instructions, and their routine use is ensured through regular audits. Continued improvement, a central theme in TQM, will be maintained by regular management reviews.
In short, everything and everybody will function as though they were part of a well-laid plan, and the philosophy of "right the first time--every time--on time--at cost" will prevail through all departments.
The first step in TQM has to be a clinical, far-reaching and detailed examination of the existing situation. Management must be prepared to start the process at the top through a detailed and exhaustive assessment of its own corporate activities and fully analyze foundry performance by determining where it has been, where it is now and where it is going.
These findings must be written down, since they are of crucial importance. They form the foundations for all future improvements in culture, performance, productivity and image--and, of course, the successful introduction of TQM.
The exercise needs to be instigated by the foundry president and involve all senior management officials. It is essential that the entire "management team" is involved from the start, since it is responsible for implementing the details of the "corporate plan" that will be developed from the examination.
Unless senior management officials are actively involved in forming ideas, they will be unlikely to give their whole-hearted support and enthusiasm to its implementation. While other staff may be involved, these major tasks can't be delegated.
The next step is a business environmental analysis using strengths-weakness-opportunities-threats (SWOT) analysis techniques. The strengths and weaknesses refer to the foundry's "internal" characteristics. The opportunities and threats deal with the external factors over which the foundry has little or no real control.
Most levels of management and supervision will be involved in the SWOT sessions. This is crucial because these same people are responsible for implementing the resulting actions.
The SWOT sessions, out of necessity, cover everything the foundry is involved with; therefore, all departments must participate. Meetings continue over several weeks and in some instances, it may prove useful to take groups off-site. The culmination will be a concise document focusing only on key issues.
After the SWOT analysis is completed, attention is next focused on establishing the company's "distinctive competence"--in other words, what the company is particularly good at. Both facilities and people must be taken into account. Current and future developments in appropriate technology and organizational techniques are also examined, along with trends in the customer base, the direct/indirect competition, and national, European and world markets.
At this point, it is now clear what the company is best at and what its special and unique capabilities are. Next, the firm must establish competitive advantages by selecting markets where its distinctive competence can provide a competitive edge. Such markets are selected on the basis that the company can either beat the competition--on things such as price, delivery, quality or being ISO 9000 registered--or avoid them.
Wherever possible, synergies are sought when establishing competitive advantages. A synergy occurs whenever a product-market posture is developed in which the combined performance is greater than the sum of its parts.
The establishment of competitive advantages, based wherever possible on synergies, usually gives rise to alternatives. From these alternatives, the management team needs to agree to concentrate on specific areas of business. For each area, an associate market standing decision must also be made.
Full attention must also be given to weaknesses within the organization. Facilities, systems and people must be included, along with suppliers and subcontractors. This step may call for tough decisions.
The basis of the company's mission statement should now be clear. The mission statement defines the business, the organization it is in and where it is going. The mission statement is fully agreed upon and supported by the president, vice presidents and all members of the management team.
The mission statement gives focus to the TQM program and helps define the company's strategic objectives.
An agreed answer to "Why are we in business?" will by now have emerged, leading to an overall business plan embodying all the major aims and ambitions of the company.
With the business policy agreed upon by the entire management team, everybody will have a uniform vision of what the company is trying to achieve. In addition, there will be a "common ownership" of the mission statement and a high level of personal commitment from the management team.
The resulting strategic objectives set out what action needs to be taken if the company is to achieve business success.
Next, a coordinated plan-for-change is developed that involves specific projects. Each project has an associate team and clearly defined objectives.
The projects are formed to achieve the strategic objectives.
Since the implementation of TQM usually takes 1-2 years to complete, the plan-for-change will have to cover the same period, although individual projects may be of shorter duration. All projects are directed at achieving common goals.
Progress is continuously monitored so individual project teams can receive immediate feedback on how they are doing. Participation and accountability go hand-in-hand with a company-wide commitment to continual improvement. The philosophy of "right the first time--every time--on time--at cost" applies in all departments along with the desire to get "close to the customer."
The key to successful TQM implementation lies with motivated and empowered people. Empowerment goes further than training because it involves "understanding why" as well as "knowing how."
While management and supervision are responsible for providing leadership for TQM, they too must be given the necessary motivation and coaching at a pace to allow their newly acquired skills to be applied immediately. It follows that the management team must receive a well-planned program of empowerment that ensures they fully understand each step involved in the implementation of TQM--including all the essential techniques and processes required.
Problem-solving, brainstorming, SWOT and simple statistical methods are always incorporated in the basic TQM training toolkit. Teamwork and participation are encouraged through small group seminars and coaching sessions for the project teams.
Key employees also need to be groomed as future instructors. Therefore, "training the trainers" is an essential ingredient in a TQM training program at all levels--from the president to the shop floor.
Selected individuals also have to learn how to apply a whole battery of more specialized techniques to their jobs, which commonly include SPC, Taguchi methods, just-in-time delivery, Kanban and other techniques.
On-the-job training is central to TQM. During the implementation period, most employees must be trained in some form in management, problem solving and quality. This training is always linked to the TQM plan-for-change. New techniques and skills are acquired as part of a coordinated plan so they can be used immediately in day-to-day work.
When the management team is fully trained and confident with the principles and practices of TQM, it should hold a series of orientation seminars for all key personnel. It is advisable to eventually include every employee. These presentations must be tailored to the needs and experience of the audiences. Where possible, teaching should include practical examples, and a good deal of hands-on exercises must be incorporated.
The next task for the management team is to develop tactical plans to address all the strategic objectives through a combination of companywide and departmental projects. The refining of the company's policy on TQM and its translation into detailed departmental aims and goals necessitates regular brainstorming sessions.
The tactical plans will also identify all human and financial resources required to carry out the necessary implementation tasks. While the training and development of existing employees have the highest priority, recruitment may also be necessary. Priorities are decided and resources are allocated.
While not essential, the full-scale launch of the TQM program can be preceded by one or more pilot exercises. By adopting such an approach, it is possible to identify and resolve organizational, attitude and training problems on a small scale before the companywide implementation of TQM.
It is always advisable to find quick successes early in the TQM process. Consequently, try to isolate and identify a few areas in which significant benefits can be won in 2-4 months to generate enthusiasm and use as models for the future. Quick successes also help overcome skepticism and convince everyone of the effectiveness of the TQM approach.
The companywide plan can now be executed. It is essential that all functional managers and supervisors be given clear quantified objectives. The objectives should be mutually arrived at and agreed upon as goals. These goals must be achievable, but they should push individuals "out of the comfort zone." All TQM projects must be explicitly defined this way.
Empowerment, which involves both education and training, must be fully integrated with implementation--education to explain why and training to show how.
To monitor changes, it is necessary to record real evidence at all times. TQM is concerned with continually improving business effectiveness, which means increased bottom-line profits. If TQM demonstrates such benefits, the effects of reducing the costs of "nonquality" must be shown directly. Consequently, accurate, simple and timely reporting systems are needed so that the appropriate "metrics" can be identified and tracked on a routine basis.
Equally important, functional managers and supervisors must be fully informed as to how they are performing by providing relevant, accurate and timely information.
Instead of checking right after the event and trying to be a "firefighter," TQM shifts the focus of control to ensure that things are done "right the first time--every time--on time--at cost." The objectives is to make everyone accountable for his own performance and become committed to attaining quality in a highly motivated fashion.
Each project in the TQM process needs its own reporting system. Obviously, the details of each project will be different. For example, a project concerned with improving the throughput time for work would be likely to track the number of days individual orders were delivered after the customer required date. A project concerned with scrap reduction would measure things like manufacturing output, rework and customer returns.
The inevitable improvements in working practices that result from the successful application of the TQM philosophy will be of lasting value only if they are routinely used and maintained.
To ensure that these best practices become customary, it is essential that everyone who needs to know does know. The discipline of working to formal, documented procedures and work instructions is central to quality assurance systems based on ISO 9000.
For this reason, it is highly recommended that any foundry planning to introduce TQM should also seek assessment to ISO 9002. The synergy created by simultaneously adopting TQM and ISO 9000 may be viewed as a never-ending search for improvement in which TQM provides the innovation and culture, and ISO 9000 guarantees the consolidation and discipline.
Being an ISO 9000-registered firm will also ensure the necessary formality and provide integration of the systems used in different departments.
Impact of TQM
The introduction of TQM involves a cultural change--a change in management style and in the way people and systems operate.
If properly implemented, TQM assures optimum overall effectiveness in every functional department. All activities will be aligned with the organization's prime objectives as expressed in the mission statement.
Customers' needs and expectations will always be met without any form of waste by using the full potential of everybody. While investment in plant and machinery is an established management practice in the foundry industry, a similar view to investing in time and people is less common.
TQM demands such commitments, especially the resources and time to empower people. It also takes time--time to implement new concepts/systems; time for the real benefits to become manifest; and time for people to accept the new company culture.
The TQM payoff is substantial. When compared to the dramatic gains in productivity and success, the actual cost of introducing and operating TQM is negligible. In addition, improvements start immediately and build progressively as TQM spreads through the organization.
Once TQM is established, the added bonus is a motivated and empowered work force, well versed in the latest management techniques.