Boeing Aerospace Support - Essay Example

Quality Management Report 2 BOEING AEROSPACE SUPPORT A Case Study in Applied Quality Management Executive Summary Total Quality Management has become a much accepted concept since its introduction by Demings, Crosby and Juran more than fifty years ago. Today much of the attention of theorists and practitioners concerns the effective application of these theories. The principles of TQM are sound in theory; however, it is in the process of introducing these principles and incorporating them into effective plans for the existing business that particular difficulty is encountered. Boeing Aerospace Support (AS) is an organization that has met with much success in its TQM implementation. In the gradual process that led to its eventual improvement and landmark accomplishments, AS had to address the following challenges to its operations: (1) How to keep employees who are well-qualified technical experts and engineers from being pirated by competitors, and keep them motivated in Boeing Aerospace; (2) How to develop sound, long-term strategy and then actualize that strategy in terms of concrete action; and (3) How to ensure that their product quality meets customers’ expectations, considering that this is an industry with complicated requirements and high expectations. In finding solutions to the above problems, AS made effective use of quality strategic planning in linking its corporate objectives with customers’ needs. Guided by its long-term strategic goals, AS then modified its organizational structure, relying on teams to fuel productivity. Managerial support, sound incentive programs, and an over-all corporation culture of information sharing and integration has made AS succeed as a model in TQM application. Introduction Total Quality Management was formally introduced in the post-war era by W. Edwards Deming, Joseph M .Juran and Philip B. Crosby, with the theories they established on management for quality in manufacturing systems. Since then the tenets of TQM have been adopted for application in services and commercial operations. Companies have met with either success or failure, depending on the manner they have incorporated these principles in their processes. For the purposes of this study, focus will be drawn on Boeing Aerospace Support, a large multinational organization which, despite its size, complexity, and product technicality, has continued to serve its customers well, maintain excellent employee motivation, and enjoy a progressively robust performance. Main Discussion Boeing Aerospace Support (also known as AS) is a subsidiary of the Boeing Company, which in turn is the largest aerospace company in the world. Boeing Aerospace provides products and services, among them aircraft maintenance, modification and repair. It also undertakes training for aircrews and maintenance staff, in a bid to reduce life-cycle costs and improve the effectiveness and safety of their aircraft. A huge part – ninety-seven percent – of Aerospace’s business is for military customers. The company has a workforce of 13,000 employees; it has its headquarters in St. Louis, Missouri, and maintains nine major sites (eight in the US and one in Australia). In addition, it also has more than 129 secondary and smaller sites throughout the world. Aerospace’s products have met with consistently improving success, with new orders growing each year since 1999, at a rate much higher than the growth of its competitors combined. (Evans 2008). This paper will explore the quality management programs and techniques implemented by Boeing Aerospace Support. As a guide for this discussion and together with other theories, the analysis will mainly rely on Deming’s 14 points for Management, which was explored in the context of the first assignment. The 14 points are: 1. Create and publish to all employees a statement of the aims and purposes of the company or other organisation. The management must demonstrate constantly their commitment of this statement. 2. Learn the new philosophy, top management and everybody. 3. Understand the purpose of inspection, for improvement of processes and reduction of cost. 4. End the practice of awarding business on the basis of price tag alone. 5. Improve constantly and forever the system of production and service. 6. Institute training. 7. Teach and institute leadership. 8. Drive out fear. Create trust. Create a climate for innovation. 9. Optimize toward the aims and purposes of the company the efforts of teams, group, staff areas. 10. Eliminate exhortations for the workforce. 11. (a) Eliminate numerical quotas for production. Instead, learn and institute methods for improvement. (b) Eliminate MBO (Management by Objectives). Instead, learn the capabilities of processes and how to improve them. 12. Remove barriers that rob people of price of workmanship. 13. Encourage education and self-improvement for everyone. 14. Take action to accomplish the transformation. Quality challenges and issues in Boeing Aerospace Support (AS) From the nature of the business of AS, it is clear that there are extraordinary demands on its management and employees in terms of cost, productivity and quality. These are the three critical issues which are important to quality (Assignment 1). In a related study on these issues, Foo (2003) conducted a study which measure 27 corporate productivity improvement practices obtained from a sample of 70 companies. The extent of emphasis placed on each productivity practice variable were then ranked, then tabulated, controlling for charter, ownership and size (the bases for subgrouping). Similarities as well as interesting differences were found between the subgroups tested. Companies (except for those jointly-owned) tend to highly emphasize cost reduction and quality of product/service in their productivity improvement efforts. The use of consultants, special project studies, functional specialization by way of a ‘productivity manager’ and productivity indicators are given little emphasis. In addressing the implementation of a proper TQM approach, the following issues needed to be resolved in the case of AS: (1) How to keep employees who are well-qualified technical experts and engineers from being pirated by competitors, and keep them motivated in Boeing Aerospace. Boeing Aerospace has organized its workforce into “Teams” of employees who “Own” and maintain responsibility for the company’s complex processes and operations. This is the central strategy in Aerospace’s success in maintaining a high-performance work environment in a highly specialized and competitive industry. Its strength is in the “AS People System”, a highly structure process that ensures that employees comprising the teams: a. understand priorities and expectations; b. have the knowledge, training and tools they need to do the job and to assess performance against goals and objectives; and c. are rewarded and recognized for their accomplishments. As ways of motivating their employees, AS has undertaken programs that include cash awards and stock options for employees who have contributed innovative solutions to problems, and the Atlas Award for teams who have excelled in their performance. It was noted that cash awards, both to individuals and teams, have tripled in the past three years, pointing to the affectivity of these program in generating enthusiastic response and exceptional performance. The effective use of teams and stress on team performance is an application of Demings’ ninth point, which is to “optimize toward the aims and purposes of the company the efforts of teams, group, staff areas.” The fact that the team is made to “own” a particular process invests a degree of stewardship in the team for that process. The team then views their work with added commitment, a “calling” that transcends a mere job. The dedication to meeting organizations’ and customers’ expectations, with a high level of motivation, keeps the employees within the company and thus maintains a proportionately high level of Quality Assurance born of expertise and commitment. (2) How to develop sound, long-term strategy and then actualize that strategy in terms of concrete action The creation of goods and services for the aerospace industry, particularly where a major part of its orders are to comply with military requirements, is a difficult business to plan for. Firstly, military applications are quite complicated, and there is a particular challenge in planning long-term for a customer whose plans are themselves steeped in secrecy. Secondly, the large capital outlays and sizeable investment in research and design must be made available when needed, and since forecasting for this market is quite tricky, management will have to tread the line between available finances and the “bells and whistles” (the special features) the military will want included in the products and services. In the case of AS, in order to meet the need to develop long-term strategy, the organization has come up with its Enterprise Planning Process (EPP) which is comprised of four process elements: d. Key Data Factors – In this step, the organization identifies those data variables that are critical in developing long-term strategy in the production and delivery of their goods and services e. Strategies – AS then determines which long-term goal the company should seek to achieve, and what directions to take in the next few years. f. Plans – AS involves the various levels of its management hierarchy to formulate action plans and intermediate objectives leading to the organization’s long-term goals. g. Execution – AS teams and personnel actualize the plans. The process also calls for the accomplishment of AS’s “Ten Defined Steps”, which include the verbalization of lessons learned and initiation of process improvements, in order to plan and execute key strategies. In the developing and execution of the EPP, senior leaders and business, strategic planning, and functional councils – in other words, participants from every tier and division of the organizational hierarchy – are involved, to ensure that the plans are integrated and aligned to the overall strategic plan. Fostering cooperation among the vertical and horizontal units in an organization dispels fear, creates trust and a climate conducive to innovation, in line with Deming’s eighth point. Thus is Quality Improvement assured on a continuing basis because of the initiative that fosters creativity. (3) How to ensure that their product quality meets customers’ expectations, considering that this is an industry with complicated requirements and high expectations. Boeing AS focuses on high-quality delivery of goods and services to meet customers’ expectations. Since 1998, instances in which the organization was rated “Exceptional” and “Very Good” by its government customers has gone up 23%, the figure nearly doubling between 2002 and 2003. (Evans 2008). Aerospace attributes their success in customer satisfaction to their culture that encourages knowledge sharing and working together. AS has developed a seven-step approach for defining, managing, stabilizing and improving processes. The approach, known as the Process-Based Management (PBM) methodology, is also used to set goals and performance metrics, and necessitates the agreement among process owners (teams), users, suppliers, and customers, which ensures the company’s commitment to Quality Assurance. As to knowledge use, employees are encouraged to “shamelessly share” information across businesses, sites, and functions. Meetings, roundtable discussions, on-line newsletters, and functional and business councils further enhance a continuous flow of information throughout all segments of the organization. The stress on internal competency, which is obviously present in AS, is one of the defining parameters in the success of any TQM program. Ghobadian (2001) discovered that “although, conceptually, ‘customer orientation’ is perhaps the central tenet of an established TQM approach, the planned implementation of TQM was primarily concerned with gearing up the ‘internal competency’ of the organisation to effect change and to cope with change, in readiness for a shift in focus to customer orientation later in the TQM development.” Information availability, knowledge and skill, and logistical support and training are determinative of the internal competency that TQM aims to develop in an organization. Conclusion The actualization of a TQM plan or strategy has become a topic of constant study, probably because TQM itself, while not a new concept, finds revolutionary application in the context of modern business. In several studies, it is agreed that critical to the long-term success of TQM directions in organizations is the implementation process itself. Reasons for failure of quality initiatives are spawned by faults in organizational approaches and systems (Evans, 2008). This fact is also conclusive in separate studies conducted by Reger (1994), Port (1992), Ahire (1995), Motwani (1997) and Shin (1998). Motwani opined that TQM is a certainty when proper methods to execute it are employed. Shin, et al. contended that the failure of TQM, if ever there was one, is not because of fundamental defects in the principles of TQM, but it is due to the failure to create an effective system necessary to execute these principles properly. Reger likewise found out that weaknesses in TQM application are not due to basic flaws in the theory but mistakes in implementation. In a study of eight UK-based companies, Newall and Dale (1991) concluded that an important reason for the failures was poor planning in the introduction stages. A company embarking on a total quality shift must carefully detail the plans; failure to do so in the companies under study had a “knock-on” effect throughout the program’s development and subsequent advancement. Ghobadian (2001) notes: “These views indicate that the introduction of a TQM approach is not without difficulty. It may be argued that the sheer scale of the change inherent in moving away from the conventional management model towards TQM contributes heavily to this difficulty.” It is noteworthy that AS had placed high priority on its customers’ needs, with good reason. Almost all of AS business has to do with military purposes. The exacting requirements imposed upon AS’s production methods necessitates close coordination between customer and company. Garvin (1998) has identified five different approaches to quality, as mentioned in Assignment 1, which are: the transcendent approach, the products based approach, the user based approach, the manufacturing based approach. And the value based approach. Of these, the approach most appropriately adopted by AS is the user-based approach, because of the specialized requirements and exacting quality standards necessary for military purposes. Recommendations Concerning AS’s structure and operations, the present success of its TQM programs must include provisions for continuing improvement and innovation. AS should continue to explore its strengths in its AS People System, its EPP (Enterprise Planning Process), and its PBM (Process-Based Management) methodology. Certainly more prospects for TQM application will be presenting itself, as AS is in an industry that thrives on technical innovation and constantly changing directions. However, what should remain constant is AS’s main thrusts toward meeting its market by strengthening and supporting its employees, yielding exceptional productivity as a necessary and natural consequence. References Ahire, S.L. and Rana, D.S. (1995) “Selection of TWM pilot projects using an MCDM approach”, International Journal of Quality and Reliability Management Benson P.G., Saraph J.V., and Schroeder R.G. (1991) “The Effects of Organizational Context on Quality Management: An Empirical Investigation” Management Science, Vol. 37 Evans, J. (2008) Quality and Performance Excellence: Management, Organization, and Strategy, Fifth Ed. Thomson South-Western, Mason OH [Reprinted material from Out of the Crisis by W. Edwards Deming by permission of MIT and W. Edward Demings. Foo, F.G. (2003) “Perceptions of corporate productivity practices”, Nanyang Technological Institute, Singapore Ghobadian A. and Gallear D. (2001) “TQM implementation: an empirical examination and proposed generic model”, Business School, Middlesex University, The Burroughs, London Keegan R. and O’Kelly E. (2006) Applied Benchmarking for Competitiveness: A Guide for Owners and Managers, Jaico Publishing, Cork, Ireland. Motwani, J. (1997) “Viewpoint: total quality management or totalled quality management”, International Journal of Quality and Reliability Management. Newall D. and Dale B. (1991) “The introduction and development of a quality improvement process: a study”, International Journal of Production Research Port O. and Smith G. (1992), “Quality: small and mid size companies seize the challenge—not a moment too soon”, Business Week Reger R., Gustafson L., DeMarie S. and Mullane J., (1994) “Reframing the organisation: why implementing total quality is easier said than done”, Academy of Management Review Tricker, R. (1997) ISO 9000 for Small Businesses: A Guide to Cost-Effective Compliance, Reed Educational, London, England. Shin D., Kalinowski J. and El-Enein G. (1998) “Critical implementation issues in total quality management”, SAM Advanced Management Journal. Read More