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Managing the CIM-TQM partnership.

Introduction

Computer integrated manufacturing (CIM) is the integration of different entities within the production system through the use of information and automation technologies for efficient control and management of production and related functions (Francett, 1988; Gould, 1989; Groves, 1990; Sabbaghi, 1991). Some reported benefits of CIM (Aly, 1989, Chang and Wysk, 1985; Gaylord, 1987; Goldhar, 1985) are quicker release of new products, shorter production planning and development cycles, increased efficiency and flexibility, improved product quality, and serviceability.

Although many U.S. companies rely on the implementation of CIM technologies to regain or maintain competitive advantage (Doll and Vonderembske, 1987), a significant proportion have failed to realize the anticipated benefits (De Meyer, 1990). One reason for this failure is their dominant focus on the technological aspects of implementation while ignoring the critical success factors of competing for the customers (De Meyer, 1990).

The focus of total quality management (TQM) (Tobin, 1990) is continuous improvement of customer satisfaction. This includes all factors that affect customers' views or perceptions of the value they receive from doing business with any units of the organization (Evans and Lindsay, 1992; Mathers, 1991).

Recently some organizations (Ross, 1993) have embraced TQM as a long-term strategy for achieving competitive advantage. A basic premise of TQM is effective communication and translation of customers' needs into operational strategies across all functional areas and various management levels. Similarly, CIM requires enterprise-wide integration of information technologies for competitive advantage. Thus, when TQM is the focus of corporate strategy, effective CIM implementation can support and facilitate achieving TQM strategic goals. This paper proposes a framework for effective implementation of CIM in support of TQM.

CIM and TQM

* Computer integrated manufacturing

Computer integrated manufacturing is the integration of product design and engineering, process planning, and manufacturing by using automation and information technologies. CIM has many technological components (Doll and Vonderembske, 1987). Among these are Computer numerical control (CNC), computer aided manufacturing (CAM), computer aided process planning (CAPP), automated materials handling, automated guided vehicles (AGVS), and automated storage and retrieval system (AS/RS), computer aided design and engineering (CAD/CAE), flexible manufacturing system (FMS), cellular manufacturing, group technology, robotics, manufacturing requirements planning (MRP), distribution requirements planning and supplier communication systems.

Important CIM objectives (Doll and Voderembske, 1987) are: 1) increased flexibility, 2) enhanced integration, 3) the ability to manage complexity, and 4) improved control. As the rate of change in the business environment accelerates, flexibility, achievable through CIM, becomes a significant ingredient for a successful enterprise.

To respond to this dynamic customer-driven market environment, many firms have adopted an economy-of-scope approach (Doll and Voderembske, 1987). This new emphasis has spurred the development of flexible manufacturing systems that allow a firm to achieve high responsiveness while improving quality and small-lot size production. These systems mandate a need to integrate various functions within the production process as well as outside to achieve flexibility. This requirement for total system integration, however, increases organizational complexity. The planning and development of CIM must take into account this increased complexity and ensure that it does not hinder the crossfunctional communication essential to successful TQM deployment. A major design objective, therefore, is to ensure that CIM is designed with both internal and external users in mind, so that the objectives of increased flexibility, enhanced integration, ability to manage complexity, and improved control are realized.

* The TQM approach

While CIM focuses primarily on the process of doing things right - more efficiently, faster, with higher quality and more flexibility, TQM focuses on doing the right things (Tobin, 1990) during the process.

Many organizational components affect customer satisfaction including product delivery consistency and timeliness, packaging, billing, after-sales service, design quality, manufactured quality, order entry, and warranty service. The overall goal and driving force, both on the strategic and tactical levels of planning under TQM, is improving customer satisfaction or perception of value. This means going beyond expectations and requires a proactive view of continuous improvement in all areas of customer interface (Vasilish, 1992).

Since all functions eventually affect the final user's perceptions, directly or indirectly, all areas of the business must communicate and be empowered to take actions that will improve these perceptions (Maccoby, 1992). This requires breaking down departmental barriers to cooperation and communication and adopting a new attitude toward sharing authority and decision making (Blest et el, 1992; Patten, 1992).

Continuous improvement is the critical lifeblood of TQM (Tenner et al, 1992; Tobin, 1990). A continuous improvement approach implies that no level of achievement is satisfactory. People close to customers must be empowered to make timely and critical decisions where customers are concerned and to make meaningful suggestions and changes in system design and operations. This authority must be delegated and supported by top management.

Framework for TQM-CIM Synergy

Figure 1 proposes a framework for achieving this synergy. Three basic processes are involved: TQM strategic planning; Strategic CIM planning and design; and measurement, analysis and feedback. The purpose of TQM strategic planning is to determine the organizational direction and activities for attaining improved customer satisfaction. Strategic CIM planning and design involves developing and integrating production and related functions to support the overall customer focus. Measurement and analysis determine the progress of the CIM system development particularly toward improving customer satisfaction, and feeds this information back to the overall strategic planning process.

TQM Strategic Planning

The TQM strategic planning process consists of the following steps: (1) identification of potential customer satisfaction variables (CSV); (2) categorization of the CSV into critical and noncritical subsets using the ABC analysis; (3) translation of relevant CSV to firm response variables (FRV); (4) organizational benchmarking to provide a point of reference [TABULAR DATA FOR TABLE 1 OMITTED] for measuring progress of CIM development and continuous improvement efforts toward improved customer satisfaction; and (5) TQM strategic plan formulation.

* Identifying customer satisfaction variables

Many environmental factors influence customer satisfaction and expectations. These constantly evolve and change. Some are driven by competitive conditions or technology; others are culturally based or dependent on economic conditions. The variables identified in this process are generic competitive factors customers use to determine the overall value of doing business with a firm. Some examples are listed in the lefthand column of Table 1.

While customer expectations along each variable change in time, the variables themselves remain relatively stable. For example, price is a customer satisfaction variable, important for some firms and not so important for others. Customer expectations regarding price and change, but the variable does not. It is often difficult to measure specific values of these variables, which represent customer expectations at a point in time. For example, how would we measure customer expectations in the area of maintainability? We know that for many product markets, such a variable is vital. However, each customer has his or her own definition of what maintainability means - the availability of parts, the price of parts, the number of dealerships and service centers, the ease of maintenance operations, the availability of technical service representatives, and so on. However, it might be realized that maintainability as a whole is a vital competitive quality factor.

* ABC analysis

ABC analysis is a simple tool that can be used to categorize and rank customer satisfaction variables. For example, a firm may determine that price, availability, and breadth of product selection are the most important variables. These CSVs can be classified as 'A' variables. The firm may also decide that after-sales service and reliability are desirable but not critical. These would be categorized as 'B' variables. The remainder of the CSVs would fall into the 'C' or non-critical category.

'A' variables, therefore, must be the major focus of organizational planning. There are several ways to obtain information to help in this categorization process. For small service firms, customer comments or complaint cards may be used. Other techniques include telephone surveys, commonly accepted quality measurement variables, market research, and sales. For industrial products, feedback from the sales force is crucial.

Since the relative importance of any one variable may change over time, it is essential to reevaluate the status of each variable in the CSV list quite often. This means that an organization must alter its strategic planning process to respond to this dynamic environmental factor. Traditionally, firms may review strategic plans annually or even biannually. If CSVs are changing more often, then strategic plans to improve performance along critical variables must be adopted or altered more frequently.

* Translation of CSV to Firm Response Variables

Once the critical CSVs have been identified, the firm must define performance criterion against which it can measure its current performance and the results of strategic planning and continuous improvement activities. These are the specific firm response variables (FRV) that become the focus of strategic plan formulation. For example, a firm may determine that its ability to bring technologically innovative products to the marketplace is a critical or 'A' category CSV. This variable may be measured as time from conception to market, time from conception to production, or the number of product patents applied for. An example mapping of CSVs and FRVs is shown in Table 1.

* Benchmarking

An important part of the TQM strategic planning process is benchmarking (Camp, 1989). This process begins with internal measurements of performance along the defined quality dimensions of FRVs. This process is especially important across functions within a division and across multi-divisional boundaries. Additionally, measurement systems must collect this information continually. Benchmarking also must occur on the competitive level, meaning the performance of competitors along each FRV must be determined. While such information is in most cases difficult to obtain, the payoff from this step is very high.

Thirdly, benchmarking occurs at the inter-industry level. At this level, performance of leaders in dissimilar industries is measured along FRV for similar practices. For example, suppose a customer requests a design change in a computer chip. The CSV may be "quickness to respond to request." The translated FRV may be "time from reception of the request to delivery." Inter-industry benchmarking would determine how quickly leaders in other industries respond to customer design change requests. The activity (design response time) across industries is similar while the industries are not.

Lastly, benchmarking occurs on the generic level. This is an attempt to identify the best-of-the best practices of recognized leaders in customer satisfaction. The activities may not be similar and the industries vastly dissimilar. The focus here is finding windows of opportunity for improvement which may not have been discernible previously.

An important result of the CSV/FRV/ABC analysis/benchmarking process is identifying focal points for attention during the development of TQM strategic plans. In Figure 2, these focal points are identified on a two axis grid (Tenner et al, 1992). FRVs which relate to important 'A' customer satisfaction variables demand more attention and focus during strategic plan formulation (quadrants 1 and 2). Those 'A' CSVs with low assessments of current performance will clearly dominate the planning process (quadrant 2). Those variables with low importance and high current performance in terms of customer satisfaction may be de-emphasized (quadrant 4).

* Developing TQM strategic plans

When goals and standards for quality achievement have been specified, strategic plans must be developed to attain them. TQM is primarily a behavioral approach. Therefore, business strategy formulation, while addressing conventional issues such as product markets and expansion or growth directions, must define the parameters of competitiveness in terms of customer quality dimensions. The critical role of human resource development and empowerment is highlighted throughout the process.

Often in conventional strategy development, broad goals and objectives are set which are then translated to strategies for the operations, finance, research and development and human resource management functions. However, under TQM the human resource management strategy is an integral part of business and functional strategy. For example, the role of training in achieving customer responsiveness or in reducing research and development, engineering, and manufacturing cycle time would be specified. Another example would be the development of participative management and effective crossfunctional communication.

TQM strategic planning must also determine which customer satisfaction dimensions need the most improvement, which are the most critical, and which can the company affect quickly and efficiently. Specifically, the dimensions that are to be driving forces or requirements for CIM development must be identified.

CIM Strategic Development and Design

Because CIM is a methodology for integrating functions through information technology, its development must be directed by the more comprehensive TQM philosophy. The question then becomes: How do we design CIM so that the flexibility to respond to changing market and customer requirements can be achieved and enhanced? The heart of this problem is that once hardware and software for systems and communications are selected and installed, the system's flexibility is very limited. Therefore, flexibility to respond to changes in the external environment must be built in during design.

This brings up the dual notion of design [TABULAR DATA FOR TABLE 2 OMITTED] flexibility and response flexibility. The design of a flexible manufacturing cell is an example. The design itself, when installed, may be very inflexible - the machines cannot be easily moved, the material handling robots capabilities are fixed, the method of programming is predetermined. Machine and component arrangements are set. Yet the entire cell, while not easily redesigned, may have a high level of response flexibility if the tooling was designed for it. The robot may be able to handle a wide assortment of parts if this need was accounted for in the equipment selection process and in material handling system design.

Table 2, which-depicts the design flexibility of some CIM components, shows that most components have low to medium flexibility. However, it is important that the initial design of CIM components and subsequent integration should emphasize response flexibility, which is critical under TQM.

Since customer satisfaction is the key to organizational survival, the process of enhancing CIM design must identify the relevant firm response variables and quickly incorporate them into the production process.

An example would be when field service or market research has determined that this year car buyers want more comfort in the driver's seat. This customer expectation can be considered as one variable of the multi-dimensional quality definition under TQM. Can the CIM system facilitate the translation of this need to changes in design and implementation on the shop floor? This may be accomplished if CIM systems design incorporates high response flexibility under TQM direction.

Once CIM components are in place, they must constantly be refined. Often refinement is technology driven. For example, we may want to find a more efficient way to link part movements on the shop floor to inventory records in the MRP system. However, CIM operational improvements should be customer driven. The unswayed user in the system may need a change in the way data is processed or presented. Can the system respond quickly to this requirement?

TQM enhancement of CIM will ensure that both the design of the system and ongoing changes in the way it functions will be directed toward enhancing responsiveness to customer's changing needs.

Measurement, Analysis, and Feedback of Organizational Performance

As CIM development evolves, the organization's performance in meeting customer expectations must be measured (Tenner et al, 1992; Tobin, 1990). The focal point of measurement efforts will be those FRVs that correspond to CSVs identified as 'A' and strong 'B' variables during ABC analysis. Strong 'B' variables may become more important over time while currently playing a secondary role in fulfilling customer expectations.

For example, if rapid product innovation is a key CSV, then cycle time from research to production may be the corresponding FRV. In this case, constant monitoring and measurement of times involved in steps of the product development cycle must be conducted to determine the effects of improvement plans on actual responsiveness. Several characteristics of the measurement process are important. First, the persons responsible for the process must take the measurement or design and operate the systems which will collect the measurement data. They must also perform the analysis to determine end results of improvement efforts. Second, the measurements must be simple and meaningful and directly related to identified FRV. Third, the number of different measurements must be minimized so that people can concentrate on the improvement process itself.

In Figure 1, a feedback loop highlights the need to relate performance characteristics to the quality measurement and benchmarking process. What improvements have been made? Have the priorities of strategic goals changed? What new factors have emerged? Making decisions in these areas requires timely feedback of current performance measurements. This underscores the requirements of a carefully planned IS system, which facilitates the collection and analysis of statistical performance and enhances their use in planning.

Conclusions

CIM is the enterprise-wide integration of production and production-related functions to achieve competitive advantage. CIM provides technological integration of different functional areas in the organization by providing a shared database (Bullers, 1991), database management capability, a communications network to link the various information systems within as well as outside the company. This allows sharing of information throughout the organization, which helps it to be more responsive to customer needs.

TQM is a strategic competitive philosophy with significant implications for CIM design and management. The basis of TQM is customer satisfaction, so it is important that all entities within the organization synchronize their operations to achieve this objective. CIM is a major tool for achieving competitive advantage should be synergized with TQM philosophy to attain this ultimate goal.

This paper has proposed a conceptual framework for linking the customer satisfaction variables to CIM design variables and the implementation of CIM. This framework consists of identifying customer satisfaction variables and translating them into useful operational requirements. The role of this conversion as a link between customer expectations and strategic planning is also explained. It is our view that if CIM design effort is melded with TQM goals in this manner, the competitive capabilities of CIM will be realized.

REFERENCES

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Evans, James R. and William M. Lindsay, The Management and Control of Quality, 2nd ed., West Publishing Co., St. Paul, Minnesota, 1992.

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Gaylord, John, Factory Information Systems: Design and Implementation for CIM Management and Control, Marcel Decker, Inc., New York, 1987.

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Gould, Lawrence, CIM is Easier Than Ever, Systems Integration, (December, 1989): 54-59.

Groves, Chris, Hands off Manufacturing Transcends Limits of CIM, Industrial Engineering, (August, 1990): 29-31.

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Dr. Ahmed, professor of management at Ball State, has published in numerous journals, including the Journal of Business Research, the Journal of Operations Management, and the International Journal of Production Research. Dr. Maddux, who teaches in Sanford's School of Business, pursues research on total quality management, computer integrated manufacturing, and operations strategy.
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Title Annotation:computer integrated manufacturing; total quality management
Author:Ahmed, Nazim U.; Maddox, Henry S., III
Publication:SAM Advanced Management Journal
Date:Jun 22, 1995
Words:3454
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