Principles of Total Quality Management (1)

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Total Quality Management

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TQM in AUTOMOTIVE INDUSTRY

[Year]TQM in AUTOMOTIVE INDUSTRY

ContentsINTRODUCTION3PRINCIPLES OF TOTAL QUALITY MANAGEMENT3Customer Focus3Executive Management4METHODOLOGY AND TOOLS5DECISION MAKING5CONTINOUS IMPROVEMENT6THE QUALITY STANDARD FOR THE AUTOMOTIVE INDUSTRY7ISO/TS 169497ISO 140018QUALITY AWARDS8Demings Prize8CII-EXIM Bank Award For Excellence9Six Sigma in Automotive Industry10Implementation of Six Sigma at Ford10CONCLUSION12CASE STUDY13MAHINDRA AND MAHINDRA LIMITED FARM EQUIPMENT SECTOR13REFERENCES19

INTRODUCTIONTotal Quality management involves efforts by an organization to install and make permanent an environment in which an organization continuously improves its ability to deliver high-quality products and services to customers. TQM became popular in late 1980s and early 1990s.Some of the automotive companies implementing TQM are Ford Motor Company, ToyotaMotor Corporation, Honda Motor Co. Some of the advantages of applying TQM in Automotive industry are: Effective use of organizations resources so as to achieve maximum client Satisfaction. Increase in Revenue and market share which is achieved by quickly reacting to market opportunities. Improvement in product quality and service leads to increase in customer loyalty which results in repetitive buying process. Effectively measuring clients needs and requirements and accordingly working towards obtaining the desired results. Gaining competitive advantage over other firms.PRINCIPLES OF TOTAL QUALITY MANAGEMENTTotal Quality Management is a business approach to improving the efficiency, competitiveness and elasticity of an organization which is beneficial for all stakeholders of an organization. Customer FocusCustomer is the king for every company. The automotive industry also depends on their customers and strives to meet their needs and also exceed their expectations (ISO) by providing a perfect product. It is never easy to determine what a client desires due to their changing tastes and preferences for cars. The automotive companies must constantly gather information constantly, by research groups, market studies, and meetings with clients, in order to remain close to clients tastes.Customer Focus indicates how a customer can be satisfied by having the product or service of a company. For this, the company has to improve the quality of the product or service so that people willing to pay for it and want to buy more and more. If the customers get satisfied it will lead the company to create more profit as well as to gram the market. Taking the example of Maruti Suzuki in India, customers relate to a company in multiple ways. They expect the company to serve them with care, offer products that give them best value and fulfill their desires including unstated ones . When a company is able to do this over time, through repeated instructions, a relationship is born. In the three decades Maruti Suzuki has been in existence, the passenger car landscape has changed considerably. Today, the companys relationships with customers go beyond just transactions. Maruti have connected with the millions of families through trust and faith .This truth and faith is contingent upon the company continuing to deliver better service, superior products and unmatched value. Maruti Suzuki is Indias largest passenger vehicle company with a market share close to 40%. Founded in 1891, with the Maruti 800 as its first product offering, the company today offers 14 models with over 200 variant across the Industry segment like Passenger cars , Utility vehicles and Vans . 5 plants in the Gurgaon and Manesar areas of Haryana equip Maruti Suzuki with a production capability of 1.55 million units per annum. Maruti is of the opinion When performance is not negotiable. There are those who like their cars and There are those who love them.

Executive ManagementAnother important aspect for successful TQM implementation is employee participation promoted at all levels. Individual responsibility can be discharged only if power is delegated in different degree at all levels across the organization. Also the mission, vision and policies of a company should be consistent with those of TQM. Visionary leadership of the top management and complete involvement of the middle management along with the support of employees results in TQM being a successful endeavour in the company.It is has been found out that 62% of the Indian automotive sector believes to follow TQM as a guiding philosophy while 38% has still not adopted TQM as a guiding philosophy. It is estimated that 70 % of the India automotive sector promises on time delivery more than 80 % of times. According to the world standards, Indian automotive industry is lagging behind. Only 52 % of the automotive companies are working towards achieving a cost reduction of more than 5% while shockingly still 48% of the organizations do not consider cost reduction as an important aspect.Unfortunately only 10-15% Indian automotive companies are using quality cost as measure of their quality performance thereby loosing an opportunity to spot critical areas for improvement. In an organization the administration department or top management has to control the total quality management as a main manager. Training is an essential factor in total quality management to get success. The employees should get training about the concept and methods to maintain the quality or quality control.METHODOLOGY AND TOOLSThere have to be use appropriate methodology and tools to find out the problems which are responsible for low quality. Once the problems are short out, the company has to try to solve the entire problem by using appropriate methods and tools. It will reduce time to solve the problems.TQM requires the employees to identify and correct quality problems using certain graphical and statistical methods to plan work activities, collect data, analyse results, monitor progress, and solve. These are also known as the seven means for quality control which are:1. Cause and effect diagrams2. Scatter diagram3. Flowcharts4. Pareto chart5. Histogram6. Control charts7. ChecklistDECISION MAKING Decision making is very important to every company. It is not only helping the company to maintain the quality but also the overall performance depend upon it. A good decision can lead the company to higher position whereas a bad decision can make the company worst. There have to be made quality decisions based on measurement, in terms of total quality management.A classic example is the poor quality of Skoda cars. In the 80's and early 90's Skoda was known for it poor quality and this in turn affected both the brand image and also sales of the company. Once the Volkswagen Group overtook it in 1994, strategies have been implemented to put quality back into the product.CONTINOUS IMPROVEMENT Maintaining the quality is not a short time job for a company. To get success in long run, the organization has to do work continuously to improve the quality and performance.Maruti Suzuki has continued its energy conservation drive more prominently through various energy saving activities and adaptation of new technology. Energy saving initiatives throughout the plant helped the company in reducing energy consumption by 2 per cent in most of the areas. Some of the activities carried out during the year towards environment, energy and water conservation are mentioned under: Fluidized bed type incinerator was installed in Manesar plant for cleaning of paint booth gratings instead of direct burning type incinerator to reduce emission. The Companys R&D team has been working with the following vision - Build on our engineering skills to design and develop cars to delight the Indian consumer and establish Maruti as the R&D hub of Suzuki Motor Corporation (SMC) in Asia outside Japan. The Company has envisioned the path of achieving the vision through: New model and minor change design and development; and Engineering capability development for design and development of full body change. The Company has taken every possible step to scale up its R&D strength and infrastructure. Skilled manpower is the key for achieving the goals of any company. The Company has increased the strength of R&D manpower from 1070 numbers in 2010-11 to 1210 numbers in 2011-12. The Company has a plan of increasing this manpower from 1210 numbers to more than 1400 numbers in 2012-13.EMPLOYEE INVOLVEMENTEmployee should be encouraged to be pro-active in recognize and addressing quality related difficulty. Without employee involvement the total quality management will not be successful for what it stands for. Ultimately, the affects will reflect on the performance of the company. Tata Motors believe in a well-engaged workforce which is the key driver to achieve business goals and make our operations more sustainable. A well engaged employee is a valuable asset to organization. Tata Motors aims at unifying workforce with a common charge and energizing culture, dramatically enhance employee engagement and bring in operational architecture changes to enable the new culture of Accountability, Customer Focus, Excellence and Speed. They have a bouquet of engagement initiatives introduced for their employees at all levels and functions owing to the motto,We are a Peoples Place!THE QUALITY STANDARD FOR THE AUTOMOTIVE INDUSTRYStandards address the needs of organizations in training, quality auditing and quality-management systems. The ISO 9000 Series, for example, is a set of international standards for quality management and quality assurance. The standards were developed to help companies effectively document the elements they need to maintain an efficient quality system. They are not specific to any one industry.The global automotive industry demands world class levels of product quality, productivity and competitiveness as well as continual improvement. To achieve this goal many vehicle manufacturers insist that suppliers are certified to the quality management standard for suppliers to the automotive sector.The standard presents the qualitative structure defining the special requirements in the supply relationship in order that the process itself appears to guarantee the specific requirements in terms of repeatability and compliance. This approach allows to direct the organization toward an evolutionary path aimed at eliminating the defects and the common recognition of such standards, capable of providing automotive warranty in the process.There are two popular standards used in the automotive industry: ISO/TS 16949, developed by the International Automotive Task Force, aligns existing American, German, French and Italian automotive quality standards within the global automotive industry. ISO 14001 environmental standards are being applied by automotive suppliers as a requirement from Ford and General Motors.ISO/TS 16949The ISO/TS16949 is an ISO technical specification aiming to the development of a quality management system that provides for continual improvement, emphasizing defect prevention and the reduction of variation and waste in the supply chain. It is based on the ISO 9001 and the first edition was published in March 2002 as ISO/TS 16949:2002.It was prepared by the International Automotive Task Force (IATF) and the "Technical Committee" of ISO. It harmonizes the country-specific regulations of Quality-Management-Systems.About 30 percent of the more than 100 existing automotive manufacturers affiliate the requirements of the norm but especially the large Asian manufacturers have differentiated, own requirements for the quality management systems of their corporate group and their suppliers.TS16949 applies to the design/development, production and, when relevant, installation and servicing of automotive-related products.ISO 14001Released in 1996 as part of the ISO 14000 series of environmental management standards, the ISO 14001 Environmental Management System(EMS) Standard is aimed at providing organizations with an effective EMS that can be integrated with other management requirements, and assisting organizations in achieving their environmental and economic goals.Honda,TVS , Maruti Suzuki and Honda Siel Cars India are some of the automotive companies that follow ISO 14001 Standards.QUALITY AWARDS Indian companies were able to win some notable TQM awards in recent times. Some of the awards won by companies in Indian Automotive sector have been covered below:Demings PrizeDeming Prize is one of the highest awards given for TQM initiatives. It was established by Japanese Union of Scientists and Engineers (JUSE) in December 1950. Any company in the world is allowed to participate and get recognized. It is annually awarded. For the Demings Prize, the following is the checklist for application by any company: Outline of the organization Organization and management TQM promotion Policy management Human resource development Information management Implementation status of quality control Overall defects Future plan

The following Indian companies from automotive sector have won the Demings prize: Sundaram-Clayton Limited, Brakes Division (1998) TVS Motor Company Limited (2002) Mahindra and Mahindra Limited, Farm Equipment Sector (2003) Sona Koya Steering Systems Limited (2003) Rane Brake Lining Limited (2003)

CII-EXIM Bank Award For ExcellenceThe CII (Confederation of Indian Industry) and Export Import Bank of India give this award in collaboration with each other. It is an award for Business Excellence with an aim to improve the Competitiveness of India globally. It is based on the internationally recognized European Quality Award given by the European Foundation for Quality Management (EFQM).The model has 500 points. The points are awarded as follows:- Leadership (100) Strategy (100) People (100) Partnerships and Resources (100) Processes, products and Services (100)The following Indian companies from Automotive sector have won the CII-EXIM Bank Award For Excellence: Bosch Ltd, Diesel Systems Business-Nashik (2013) Tata Motors Ltd (2005) Maruti Udyog Ltd. (1998)\

Six Sigma in Automotive Industry

Both Lean Manufacturing and Six Sigma originated in the automotive industry. Not only larger companies, but also more and more small and medium size companies are exploring Lean Six Sigma and realising the benefits.Lean Six Sigma combines of all of these philosophies and helps you select and implement the best tools and methods.Six sigma studies in Automotive sector is an innovative idea. Studies in automotive sector during the course of Six sigma (certificate awarded by ASSOCHAM & QCI)revealed that almost every automotive industry is widely using six sigma tools and techniquesfor control of their products defects, but, without focusing on environmental hazards.They are adopting the environmental factors only to make their factory neat and clean by using 5S or 6 S, TPM programs and not looking outside factors whe...

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