Quality Managment and Control - Essay Example

?Quality Management and Control: The IBM Approach Introduction Everyone has the experience of getting poor quality products or services from organizations at one time or another. This situation may range from losing ones baggage on flight, purchasing a defect electronic item, getting the wrong pizza delivered, and so on. In fact, successful companies have well understood the importance of having quality control. In fact, companies like Ford, and Honda have already started focusing on quality; and Ford has introduced the Six Sigma. The high level interest in quality started in the 1970s. Presently, almost all companies are well aware about the importance of quality management and control, and the ones that do not care will not survive. The concept of quality management changed significantly over the past century; according to the old concept that existed till 1970s, companies had to inspect for quality of their products and services after production (The evolution of total quality management). However, the years beyond 1980s witnessed a considerable shift. According to the new concept of quality management, quality is to be built during the process of production, and the causes of quality problems are to be identified and corrected in the course of action (ibid). The company in concern here is IBM. This paper intends to analyze how IBM applies quality management principles in its business operations. The IBM Approach to Quality Assurance The company claims that it has a strong commitment to quality of products and services. The company states that IBM leaders are dedicated to establishing objectives and using strategies to ensure continual improvement in quality and customer satisfaction. In addition, the company has independent Risk Management representatives. Furthermore, there are various quality assurance discipline review projects and different points of production and service to avoid any risks that would affect the quality of their services. In total, the company’s commitment to quality is evident in the specific certifications held by the ones in management and quality assurance roles, external quality certifications, awards, the thorough internal quality assurance processes, the customer satisfaction programs, and the continuous improvement stipulations set by the company (Approach to Quality Assurance). How the company implemented quality management In fact, the company, at first, tried to analyze how its customers evaluate their products. To the utter surprise of the company, the customers were only partially satisfied. As illustrated in Champman and Hall (1991, p. 160), when the company probed further into the issue, it was found that there were problems regarding packaging, installation, labeling, and integration with other products; and these findings created a wave of shock in the company, and as a result, various strategies were developed in the plant. At first, the company set up a steering committee that consisted of all the senior management. As a part of it, a strategy was set up by the company that was to be implemented from below was started. This strategy clearly identified what each employee had to do to achieve the company goals. As a part of it, the company introduced ‘Just-in-time’, a strategy for quality management, was introduced in the year 1984 (ibid). It started with providing education to all the employees. Once they found the program effective among the employees, it was spread to the IBM suppliers. As a part of it, senior managements of supplier chains were provided extensive classes. It was followed by supplier certification program which is based on BS5750 that covered everything ranging from process qualification, project management and statistical techniques (ibid). Following this, in 1985, the company introduced the techniques known as ‘process quality management’ and ‘departmental purpose analysis’ (DPA) (ibid). DPA aimed at finding and eliminating the non-value-added services conducted by a department. From the analysis, it became evident that some 25% of the activities were non-value added and were eventually removed (ibid). In addition, the company developed small multi-skilled groups aimed at improving the relationship between manufacturing and design, thus improving the design of product and process. Another initiative was to introduce ‘problem solving’ teams. In addition, the best projects were awarded by a steering committee, and the award was known as the ‘Directors Award’ (ibid). This award was granted quarterly, and at a private luncheon by the plant director. In addition, another recognition program known as the ‘company visits’ was introduced which was meant to encourage those who took part in the improvement projects for long and could not win the Director’s Award. Yet another step was to arrange exchange visits of people to and from other companies which possess a well known quality reputation. In its effort to achieve quality, the company got certified to AQAP 1 and BS5750. Changes brought about by the quality management program Now, it is necessary to see how these changes affected the overall performance of the company. As Champman and Hall (1991,p.161) states, the manufacturing cycle time in the Havant plant of the company was reduced by 80% as a result of the program. Furthermore, inventory value was reduced by 66% and inventory turnover increased threefold. Moreover, there was an eightfold increase in revenue per person. There were more benefits in the pipeline. The program recorded 90% employee participation. According to the company records, the savings in a year goes well above $ 10 million (ibid). The management of the company and quality management A look into the ‘Our Strategy’ section of the company website is essential to analyze how the company incorporates the concept of quality management in its strategies. The company claims that its model is to support two major purposes; helping clients succeed in delivering business value by becoming more innovative, efficient and competitive through the use of business insight and information technology solutions. In addition, the company aims to focus on high growth, high value segments of the IT industry. In fact, the company views itself as a knowledge company and hence skills and knowledge are very vital for the company. So, the quality control of the company starts from the moment it decides to select employees. According to the company, a global supply chain with thousands of partners faces increased risks of waste, inefficiency, environment impact, and cost. So, it becomes necessary to continuously improve business performance and sustainability and this should reach the supply chains. The inability in this step can lead to higher use of energy, and other natural resources resulting in severe environmental damage. In addition, there will be problems like poor quality products and services, safety concerns, and poor labor practices. This will result in the detachment of stakeholders like customers, shareholders, partners and employees. IBM has developed extensive guidelines ensuring quality in its supplier operations. The Sustainable Supplier Information Management of the company is designed to help in; Strategy Aim Part number management easing part and product traceability Process change management to improve response and reduce costs associated with changing requirements Supplier audit management to ensure compliance on issues ranging from cost and quality to business ethics and environmental practices Qualification management to vet new suppliers for performance and sustainability standards Supplier problem management ensuring quick response when problems arise Real time quality management to reduce cost, improve quality and ensure continuity of supply Predictive quality management Using automated systems and virtual supplier auditing to head off problems before they occur (Source: Armonk , 2009). In the year 2002, the company management decided that it should be transformed and well prepared to keep its clients ‘on demand’ companies. Thus, the company realized the fact that there is the need to develop a new set of leadership who are well aware about the latest trends in the market. As a part of this initiative, the company sought the help of Hay Group, a consultancy that specializes in executive development. Thus, the new leadership took birth. There was a considerable shift in the attitude of the company towards its customers. Instead of viewing its customers as ‘customers’, there were considered ‘clients’. As the company points out, a customer is transactional, while a client has a long-lasting relationship with the company. So, the intention was to give IBM the face of a long-term trusted partner. As a part of this, the company introduced ‘collaborative influence’ instead of command and control leadership. It is seen that this horizontal, collaborative networks are much better than rigid hierarchies. As this strategy is found effective, the company is training its many more executives to take their new role. This system has already proved useful. The cross-functional teams from IBM have helped Mobil Travel Guides to become a real-time customized travel-planning service from a travel content provider. Considering the changing business environment where quality is of premium concern, the company trains its leaders to have skills in the following fields: Innovation: The Company acknowledges that being innovative is utmost necessary in the present business climate. It is necessary to keep the company afloat, and to keep its clients ‘on demand’. Horizontal thinking: necessary to enhance the company’s capability to identify market opportunities and to solve client issues. Informed judgment: Enables the employee to synthesize disparate sources of data and make strategic decisions having both long term and short term effects. Strategic risk taking: Resulting in innovation leading to exponential growth with the use of resources in and around IBM. Building client partnerships: This helps employees develop strong and mutually beneficial relationships with clients in the long term. Collaborative influence: This helps develop interdependence, and genuine commitment towards company goals. Embracing challenge: This provides each executive the belief that they can innovate and develop the business. Earning trust: Employees are trained to do what is right considering the long-term benefit of the relationships inside IBM and also with clients. Passion for IBM’s future: Enables employees to make others realize IBM’s power and uniqueness. Developing IBM people and community: Makes employees accountable for investing in the future leadership of IBM. (Source: Tischler, IBM’s management makeover, November 1, 2004). As the company says, it conducts thorough online assessment to analyze the skills of its new recruits. And once the candidates are selected, there is extensive training to retain quality. The company, in its white paper ‘the value of training’ (n.d.) points out that an untrained employee costs significantly much higher than a well-trained employee; and according to this, the additional cost might include increased down time, co-worker distraction, rework, and IT support. In addition, it is pointed out that while companies that provide extensive training to its employees have 12% of their employees leaving every year, for the companies where there is no training, the percentage is much higher, that is 41% (ibid).The companies that provide proper training gain an average of 24% more profit than other companies. In addition, to ensure quality of its products and services, the company has made extensive guidelines covering production and supply. The Manufacturing and Supply Process Control As a part of its design to ensure buyer satisfaction, the company introduced ‘Manufacturing process approval plan’ (IBM Supplier quality requirements document (SQRD), 2007). According to the company stipulations, the production of every product must have a well-documented qualification plan. Both the buyer and supplier should agree on this before qualification testing. This is a step introduced by the company to make sure that the products meet the customer expectations. In addition, there is extensive manufacturing process documentation which is aimed at ensuring quality in the process of developing a product; not after its production. The company insists that there should be a manufacturing process documentation that should be made available to the buyer of the product on request. This documentation should necessarily include; i) receipt and checking of incoming parts and materials, ii) fabrication and assembly operations, iii) process work instructions, iv) in-process inspections and tests, v) final inspections and tests, vi) packaging, handling and shipment of products, vii) in-line fall out/rework, and viii) failure analysis and the corrective action. (Source: IBM Supplier quality requirements document (SQRD), 2007). In addition, there are provisions to ensure that the suppliers are ensuring proper management of sub-contractors. According to the company, the supplier has the responsibility to supervise the sub-contractors. The company insists that the supplier should conduct supplier audits, supplier selection, performance monitoring, and quality issues management (ibid). In addition, the company insists that the supplier is responsible for a minimum of 10% improvement in quality performance. To achieve this end, the company provides certain techniques like Fault Tree Analysis, Failure Modes and Effects Analysis, Gage Repeatability and Reproducibility Studies, Capability Analysis, and Affinity Diagrams (ibid). In addition, the company guidelines state that the suppliers of the company should be ISO 9000 certified. Six Sigma and the Company Six Sigma is a measure of quality that strives to achieve near perfection. According to Six Sigma, a process must not produce more than 3.4 defects per million opportunities (What is Six Sigma?, April, 2011). In fact, Six Sigma works through eliminating defects by striving towards six standard deviations in any process from product to service. The Six Sigma has got two sub-methodologies, DMAIC and DMADV (ibid). The former stands for define, measure, analyze, improve, and control, and the latter stands for define, measure, analyze, design, and verify. DMAIC is used for the improvement of an existing process that falls short of specification and requires improvement. On the other hand, DMADV is used to develop new processes and products at Six Sigma quality levels (ibid). Introducing Six Sigma in IBM refers to training a number of employees for this purpose. First of all, the company will have to develop a team in line with the ‘problem solving’ teams it developed earlier. These employees will lead a process improvement team and will spend about 25-50% of their time on Six Sigma projects. There are three essential elements of quality in Six Sigma approach; they are customer, process and employee; the first preference is given to delighting customers (What is Six Sigma? The road map to customer impact). As a part of satisfying customers, performance, reliability, price, timely delivery, service, and transaction processing are all improved. Secondly, understanding what the customers expect, the company tries to improve its process so that high quality products and services are provided. Thirdly, the Six Sigma realizes the importance of employees in achieving Six Sigma standards. So, employees are provided opportunities and incentives to focus on their talents and energies in satisfying the clients. As a part of this effort, the company will have to introduce quality overview seminars, special training to understand the way Six Sigma works, and training to Master Black Belt, Black Belt, and Green Belt employees. The key concepts of Six Sigma are Quality, Defect, Process capability, Variation, Stable Operations, and Design for Six Sigma. In addition, there are certain essential quality tools to be introduced as a part of Six Sigma. Now, it is necessary to analyze how these various tools will be of benefit to IBM. Control Chart: These control charts are used to observe variance in a process over a period of time and it will alert the company about unexpected variance which may cause defects. This tool will be of huge benefit to IBM. As the company deals with thousands of suppliers and clients, this will help foresee issues. Defect measurement: This measures the number or frequency of defects. The company can utilize it for various purposes. First of all, it can be used to observe its suppliers. In addition, this can be used to observe the service and products of IBM and the level of customer satisfaction. Pareto Diagram: This diagram provides the list of problems in a bar graph according to their relative frequency, thus makes it easy for the company to understand what problems are easy to solve. This will help the company not only to identify the problems, but also prioritize them according to their importance and frequency. Process mapping: This process mapping illustrates how things are done. This will help the participants realize the various stages of the project and will help easily understand the strengths and weaknesses at each stage. This will help the company reduce cycle time and defects. In addition, it will help identify the value of individual contribution. Root Cause Analysis: This is meant to identify the basic reason behind the noncompliance with a specific standard. The issue is identified and solved, thus eliminating nonconformance. Statistical process control: This is used to analyze the data collected, and to monitor process capability and performance. Tree diagram: This is the graphical representation of the goals of the organization which is divided into different levels of detailed actions. This enables the team members to widen their thinking when identifying solution as each stage can be considered separately. Conclusion In total, it becomes evident that the company introduced quality management and control measures as early as 1980s and the measures adopted by IBM were in no way inferior to the strategies of other companies. In fact, the company holds a proven record of effective quality management and control that ranges from senior management to sub-contractors. Furthermore, it is evident that adopting Six Sigma in their quality control will further sharpen their strategies and will make it flawless and more effective. References Armonk, NY October 2009, IBM: new IBM sustainable supplier information management consulting offering. 4-Traders, viewed 5 April 2011 “Approach to quality assurance”, viewed 5 April 2011< http://www-304.ibm.com/easyaccess3/fileserve?contentid=104374> Champman & Hall (Eds) 1991, Total Quality Management: The Key to Business Improvement. Kluwer: The language of science, UK. “The evolution of total quality management”, Total Quality Management, viewed 5 April 2011 IBM Supplier quality requirements document (SQRD) Dec 18, 2007, IBM Engeneering Specifications, viewed 5 April 2011 IBM Supplier quality requirements document (SQRD) Dec 18, 2007, IBM Engeneering Specifications, viewed 5 April 2011 Tischler, L November 2004, IBM’s management makeover. Fast Company, viewed 5 April 2011 “The value of training”, IBM Training White paper, Viewed 5 April 2011< https://www-304.ibm.com/jct03001c/services/learning/za/pdfs/ibm_white_paper-value_of_training.pdf> “What is six sigma?”April 2011, Six Sigma, viewed 5 April 2011 “What is six sigma?: The roadmap to customer impact”, viewed 5 April 2011 Read More