TQM in Indian public sector

R.P. Mohanty and R.R. Lakhe E-Mail: rmohanty@bom5.vsnl.net.in Abstract This paper discusses the reasons of failure of TQM Implementation in Indian Public Sector Undertakings. Based on the weaknesses observed in the existing systems and practices of implementation, a system structural model of TQM implementation is proposed. Based on the experiential learning through interaction with the executives of public sector undertakings, the model is a proposition to build Total Quality Management as a core competence. A case study is presented where the authors have been involved in advising a public sector undertaking relating to TQM implementation. Some of the significant learning points have been highlighted for enriching the professional practice. Key words: Service Business, Total Quality, Public Sector, India 1.0 Introduction: During the past one decade, considerable interest has grown in implementing T Q M in the Indian public sector companies. Such companies include both manufacturing and services. In India, the public sector companies have grown in number as well as in size and are considered as the engines of growth to serve the socio-economic needs of the developing nation. Due to liberalization and privatization of Indian economy, many Indian private as well as multi-national companies have entered into such businesses and are intensely competing with the public sector companies. It has become an imperative on the part of these public sector companies to deliver quality products and services at a competitive price. This paper is an attempt to: Diagnose the problems faced in implementing TQM Formulate a contingent model to overcome the impediments Demonstrate the applicability of the model through a case example Document and transfer the significant leanings to professionals.

2. An Assessment of TQM implementation in Indian Public Sector: Among both public and private companies across the globe, TQM movement is seen as an attempt for survival (Milakovich, 1991). Researchers and practicing professionals have confirmed that TQM efforts in general have failed primarily due to lack of a total system perspective and change management initiative. In order to assess the TQM implementation in the Indian public sector, a survey was conducted through a structured questionnaire being administered through personal interactions with to 181 senior executives representing 17 major public sector companies. The analysis revealed that 80% of the organizations have achieved the ISO9001: 2000 certification and are implementing TQM program. The TQM program in 90% of the organization is more than 3 years old. Table 1 is a summary view representing the reasons of failure: Table 1: Reasons of failure of TQM in Indian Public Sector Reasons in order of priority TQM is based on control and domination TQM is not viewed as a large-scale system change TQM is imposed from the top as a new solution for all problems There is a lack of buy-in Stakeholder involvement is narrow Appreciation of current reality is limited Organizational learning is restrictive Linear thinking is deployed The following explanations are worth noting:

% of response 91 88 87 78 67 59 56 45

TQM is based on control and domination Managers attempt to use a set of tools and techniques to control the various processes in the organisation to pursue TQM programs. Nevertheless, managers can control micro level However, TQM process changes, the macro-level changes remain beyond their control.

objectives are to be derived from customers requirements, which are practical to implement, easy to understand and at the same time able to drive the desired behaviors. 91% of executives surveyed expressed due to control and domination, the organizations do face problems like absenteeism, turnover, conflict, and lack of flexibility and goal consensus. Therefore, TQM programs become rituals and stifle creativity of people. Managers need to have a sound understanding of the roles played by key individuals in their organization. They require recognizing the important issues, individuals and decision points that relate to their areas of responsibility. They have to cultivate relationships with people and working groups throughout the extended organization that may facilitate the progress of TQM projects. 2

TQM is not viewed as a large-scale system change TQM is at first glance seen primarily as a change in an organization's management processes. In the business of providing quality products and services, this means the way customer orders are processed, the delivery methods are applied and associated organizational processes such as paperwork, documentation, and other procedures are used. But TQM is also a change in an organization's culture- its norms, values, and belief systems about how organizations function. It is a change in an organizations administrative system, decision-making processes and power bases. For substantive changes to occur, changes in these three dimensions must be aligned and correlated. TQM as a system change will not be successful unless cultural and political dimensions are attended (Tichey, 1983). Hyde, (1992); and (Chaudron, 1992) have noted that TQM results in a radical change in the culture and the way of work in an organization. A fundamental factor is the quality of leadership, including philosophy, style, and behavior, which must be congruent. Many enlightened leaders of Indian public sector undertakings espouse a participative style that is not, in fact, practiced to any appreciable degree. Any manager serious about embarking on a culture change such as TQM should reflect seriously on how she or he feels and behaves regarding these factors. For many managers, a personal program of leadership development (Bennis, 1989) may be a prerequisite to effective functioning as an internal change agent advocating TQM. Without an understanding of both the transformational nature of TQM on the management in the Indian public sector, any TQM transactional effort is likely to be only marginally effective in the short run. For long-term competitiveness, TQM implementation requires that work need to be done in a systematic, integrated, and consistent manner. TQM aims at results and results can be attained by integrating strategic planning with TQM processes i.e. preparing organizations to make appropriate transition to do the right things right the first time and every time. Indian public sector needs to accept TQM as a strategy, as a process, as a goal, and above all as a culture of continuous learning and must be able to act both quickly and reliably for survival. Value added service demands both speed and certainty of response from every level. The Indian public sector organizations must perceive processes, respond to the changing environments, and adapt by re-configuring internal structure to ensure total quality in thinking, action and behavior for survival. Every company is vitally concerned with its performance; this implies that to improve performance, participation should be inherent in its corporate culture. In the competitive era, performance improvement means creation of value through quality improvement. The process of creating value from resources is based on the interactions of people and depends upon the level and kind of knowledge base. This is because participation, in bringing together the existing competence and creating new knowledge, provides 3

a strategic focus so that everyone associated with the TQM movement understands and works towards the same super ordinate systemic goal.

TQM is imposed from the top as a new solution for all problems The employees of Indian public sector companies have not accepted most TQM programs that have been designed by external experts and imposed by top management. The designs of TQM programs often with the best of intentions demand that people implement their designs without modification, whereas the implementers usually want to adapt the designs to fit their individual situations and interests. This has led to an escalating pattern where the more the top management seeks compliance; the employees do their own thing or do nothing, ultimately resulting in the failure of the program. The quick-fix expectations of top management and shallow thinking of functional managers make TQM a total failure. 87% of the executives surveyed expressed that top management expects immediate financial gains through TQM. No attempt is made to build organizations capacity to sustain change and on-going improvements in the long term by investing in people development. As competition between firms will continue to increase, there will be a need for significant organizational change both the knowledge base within a firm and the way the firm uses its existing knowledge to compete more effectively. TQM is based on a system of values, which must be instilled in all members of the organization so that they have a simple set of ideas available, to look forward and back upon (Martin, 1993).

There is a lack of buy-in: Those who have to implement TQM action plans describe it as "great in theory" but are not able to get satisfactory answers to their questions about how it will really work in their particular areas and therefore do not change their behavior. These comments (78% of executives surveyed) are evidences of a lack of understanding, not as shortcomings of the design of TQM. In many cases, this is exacerbated because the vision for TQM does not value current practices and consequently communicates an attitude of superiority on the part of the change agents (top management). Full encouragement is essential and is given to group learning through dialogue generation, mutual emulation and reinforcement through collective cohesion (Hyde, 1992).

Stakeholder involvement is narrow TQM is primarily a change management initiative. Organizational power politics keep many genuine knowledgeable managers and multiple stakeholders away from the actual change efforts. Any change management practice should include the majority of internal stakeholders in the planning process. TQM is fundamentally based on the philosophy of participation at every level and in all tasks. 67% of executives expressed that the participative forums do not involve representatives from all the stakeholders. Nevertheless, executives very often claim that they 4

have many participative forums even then TQM does not yield results because departmental conflict is high and trust is low. TQM needs a framework of participation where all stakeholders affected by a change have a part in the decision process. However, the degree of participation, form of participation, content of participation, the groups involved and the stages where participation takes place may vary. Participative leadership draws on the full range of competencies to release innovative abilities not only for improving performance, but also for building a stronger corporate community to face the emerging competitive challenges. This was found to be lacking in Indian public sector.

Appreciation of current reality is limited As a consequent of failing to involve from the outset, an incomplete picture of current reality is created. The organizations do not have proper knowledge base or database to make intelligent strategic decisions. The implication is that only a limited number of managers get involved in preparing the agenda for myopic solutions by tactical shifts without strategic visioning. The organizations totally forget that a free market place is composed of people who will determine the strategy, design the processes, allocate resources and optimize service. 59% of executives mentioned that a proper gap analysis was not carried out before launching a TQM program. A preliminary step in TQM is to assess the organization's current reality: relevant preconditions have to do with the organization's history, its current needs, precipitating events leading to TQM, and the existing employees quality of working life. If the current reality does not include important preconditions, TQM implementation should be delayed until the organization is in a state in which TQM is likely to succeed. Managers help to achieve the vision of their organization by understanding and using it as a framework to guide the work of their unit. By showing their commitment to the vision, they serve as an effective role model in communicating and embracing necessary change and working towards the vision.

Organizational learning is restrictive TQM programs are not merely problem solving. TQM is an integrated systems approach to achieving and sustaining organizational performance, focusing on the maintenance and continuous improvement of all processes and elimination of errors / defects at all level and in all functions of the organization in order to meet or exceed customer expectations. Through TQM, attempts are made to generate energy, enthusiasm, optimism and high commitment and finally change. The foundation of TQM rests on high quality education to promote innovations in the work place, to build intellectual capital for the enterprise and above all to network all stakeholders symbiotically. The era of managing by dictate is being replaced by an emerging era of managing by knowledge and inspirational learning and the work system is evolving now as a 5

space filled by many ideas generic from the pluralistic stakeholders. More than 75% of executives of surveyed companies expressed that learning by employees is totally absent. Companies that have sporadically stressed the use of teams for shared learning; TQM implementation at every level of the organization is bound to fail. When working with others, managers need to display a collaborative approach to learning and action that place the needs of the organization ahead of the interest of their own interest. Employees of successful TQM companies work effectively with colleagues within and outside of their own unit. They build effective teams of people with diverse talents, perspectives, backgrounds and abilities.

Linear thinking is deployed Linear thinking usually leads to ineffective change strategies for two reasons; first it produces a program with a predetermined sequence of steps leading the organization towards a fixed goal. Rarely there are opportunities for the goal to be reviewed and if necessary to be redefined. Nevertheless, in the real world changes in the external and internal operating environments may render the original goal obsolete. Second, the issues are not viewed in a broad enough context. If the complex web of causes and effects is not properly understood and delayed, and reactions are not taken into account, then there is a strong likelihood that the changed program will help to achieve its objective. In many cases, it will set the organization back even further. 85% of the executives opined that the focus is on performing rituals rather than on continuous improvement. Factors driving a TQM project can include improving customer service, streamlining processes to cut costs, or addressing inefficiencies in other high impact areas. For example, customers frustrated with having to speak to multiple individuals regarding an insurance claim may switch to the competition. To address this problem, an insurance service provider determines that service functions must be consolidated to one point of contact. The underlying systems that manage claims handling do not support single point of contact processing. In this case, legacy systems become a barrier to the success of the TQM initiative. Ritualistic pattern of actions become dysfunctional in the relativistic era of globalization (Mohanty, 1992)

3. A System-Structural Model for TQM Adoption: The concept of the organization as a system is not new (Forrester, 1961). However, there has been a lack of understanding in the application of TQM principles to organizational systems. Public sector organizations in India today are suffering from a lack of inherent strength in deploying quality inside the structure in a systemic manner. It is not that the management does not have the education or skills to manage such large organizations, but the collective mind-sets to eventuate transformation in order to attain excellence and thereby satisfy customers have not been cultivated as a corporate discipline over the years. Employees have been consciously molded or patterned to become 6

consciously incompetent. The role today is one of fine-tuning the structure as well as the processes according to the exigencies that confront dynamically. Currently, the quality problem is being driven by external factors such as customer demands, competitive pressures, and governmental regulations relating to economic reforms and globalization. Viewed from the weaknesses discussed earlier, it is proposed here a model TQM, which may be characterized by a simple 4-stage process as shown in Fig.1:

Stage I: Accepting TQM s a Core Competence and Defining a TQM Strategy Stage II: Stage III: Stage IV: Defining Organizational Quality Context Determining Organizational change needs Developing Organizational Responsiveness to ensure Effectiveness.

Fig. 1: A System-Structural Model of TQM

The purpose of this model is how to create value for the customer and become the strategic leadership star in TQM movement. These four stages are interconnected. They are four specific themes for path finding and culture building with the over-riding concern of delivering value to the customers. There exists a Quality Performance Feedback loop, connecting stage IV to stage I. This loop should facilitate in perpetually identifying problems, formulating them in an appropriate quality context, developing solutions for value innovations, shaping strategies for change and designing interventions for organizational response and finally leading to actions, generating outcomes and delivering values. More specifically, the loop must find answers to: What do we do to create value in the future? What changes in our strategy would make our enterprise competitive? How do we measure up to the best? Which processes within our enterprise are critical to remain alive in competition? How do we identify such core processes? 7

3.1. TQM as core competence: Why do some companies fail, while others succeed in global competition? Many companies in the world have exemplified the real answer to this question. Researchers like (Hamel and Prahalad, 1990) ;( Nonaka and Takeuchi, 1995); (Mohanty, 1999) and many others (McClelland, 1993; Spencer and Spencer, 1993; Michellone and Zollo, 2000) have explained that companies those have competence, knowledge assets, and innovation potentials are the winners in the corporate Olympic games. We have seen that Indian public sector companies lack competencies in managing the affairs of TQM. What we postulate here is that TQM is a core competency of the improvement driven world-class organization. The core competence of an organization is a unique combination of business and human skills that give expression to the organizations typical character. Core competences are the companys characteristic areas of expertise and consist of the synergy of resources such as motivation, employee effort, technological and professional expertise, and ideas about collaboration and management. Working systematically and structurally with core competence gives the organization considerable strategic power. The content and form of the core competence is created through the connections between the organizations objectives, strategy, structure and culture, as well as its management concepts, the expertise of its employees and the degree to which the employees are appreciated by the management. The skills and motivation of the employees are important strategic aids in the realization of the companys objectives. To derive the maximum benefit from an organizations core competence, it is extremely important not only to recognizing the expertise and skills of employees but also to pay attention to the underlying motives and qualities of the employees (Lawler, 1993). Fig. 2 presents a model. The model may fulfill ensuring the sharing and diffusing knowledge associated with each of the competencies and each of the level. TQM will be successful if and only if all these competencies are combined, integrated and absorbed across all levels and all activities and transferred and diffused from one strategic business unit to another. Therefore, an organization aspiring to become a TQM organization to take competitive advantages needs a sense of identity and purpose- a mind set, a dominant logic, and above all a culture.

Top Level Cross-functional competencies

Middle level

Organizational competencies

Functional competencies

Lower

level Specialized competencies Individual competencies

Fig.2 System structure of competence building for TQM

Absorptive capability Combinative Capability Integrative Capability

Core competences are the companys characteristic areas of expertise and consist of the synergy of resources such as motivation, employee effort, technological and professional expertise, and ideas about collaboration and management. Working systematically and structurally with core competence gives the organization considerable strategic power. The content and form of the core competence is created through the connections between the organizations objectives, strategy, structure and culture, as well as its management concepts, the expertise of its employees and the 9

degree to which the employees are appreciated by the management. The skills and motivation of the employees are important strategic aids in the realization of the companys objectives. To derive the maximum benefit from an organizations core competence, it is extremely important not only to recognizing the expertise and skills of employees but also to pay attention to the underlying motives and qualities of the employees (Lawier, 1993) Fig.2 presents a model. The model may fulfill ensuring the sharing and diffusing knowledge associated with each of the competencies and each of the level. TQM will be successful if and only if all these competencies are combined, integrated and absorbed across all levels and all activities and transferred and diffused from one strategic business unit to another. Therefore, an organization aspiring to become a TQM organization to take competitive advantages needs a sense of identity and purpose a mind set, a dominant logic, and above all a culture.

10

We present the essential attributes of leadership in implementing TQM: Table 2: Essential Attributes of Leaders in TQM movement Commitment: skills at sharing intense learning experiences; working toward ideals; collaborating on needed tasks; jointly facing adversity; and bringing forth the spirit, resources, and energy that create involvement in providing service. Contribution: skills at contributing personal gifts (love, affection, good will etc.) as an organizational/community resource through individual action on a daily basis. Conscience: skills at embodying or involving guiding principles, ethics, and values in concrete actions and decisions, and developing a "bill of rights and responsibilities" for stakeholders. Conversation: skills at using dialogue as a medium for evolving collective action, and using personal and electronic conversation to enable members to share learning, create innovative products and services, and collaborate on continuous improvement Collaboration: skills at providing reliable interdependence, supporting a web of information that flows in all directions, acting autonomously for the common good, meeting and communicating face to face, and creating a web of trust through personal relationships. Continuity: skills at developing organizational image and diversifying new services, customers, and practices.

3.2 Defining a TQM Strategy: An effective strategy requires a comprehensive understanding of the environment in which the organization is positioned and knowledge of customers requirements and expectations. The strategy provides the desired future state from both the customers and the organizations perspective and documents what the organization wants to do. This stage requires the following tasks to be carried out:

Environmental scanning:

In the Indian public sector, external issues include: customer requirements (type of service), customer expectations (quality of service), customer complaints and appreciation, current and proposed legislation, political and social factors, technological futures, customer and employee demographics, economic factors, supplier performance etc. A review of internal organizational issues should include: product and service quality as perceived by the customer, effectiveness of delivery systems, costs, customer and employee safety, employee satisfaction and commitment, adaptability of service delivery infrastructure (people, automation, facility, procedures, etc.), management processes, prior objectives etc. The most critical element in environmental scanning is the organizations knowledge of its internal and external customers. It is important to identify and prioritize the most valuable constituencies or customer groups. Their current and future requirements and expectations must be determined through surveys, focus groups, frontline contact, or other means. Where requirements conflict, it is necessary to determine the primary requirement(s) and measure how the service delivery system is meeting them. Customer 11

expectations are influenced by the performance of other organizations performing similar functions. One excellent way to heighten awareness of the external environment is to undertake benchmarking studies. Identifying the gap between current performance and world-class performance and understanding what new or improved service is possible can mobilize managements commitment to change.

Sharing the TQM vision:

Once management understands future requirements and expectations and has evaluated current performance, it must share the vision of the future state. New and enhanced service delivery systems can be conceptualized as mission. New standards for customer service performance can be envisaged. Clear vision for customer services facilitates decisions on needed changes and identifies improvement opportunities. New support systems, organizational behaviors, and employee and management skills must be developed to achieve the needed changes. New information systems will be required to evaluate customer needs, current service quality, and comparative benchmarks and to identify improvement opportunities. New planning processes to bring the voice of the customer into design and delivery of products and services will be necessary. A quality improvement process must be developed to manage the improvement of todays delivery systems. Developing skills such as effective customer service behaviors, executive leadership, team working, participation, quality improvement, and supervisory coaching will be required, and aligning the selection, recruitment, hiring, development, performance evaluation and feedback, and reward and recognition systems with quality metrics will be necessary. 3.3. Defining the organizational quality context: Quality management involves directing and controlling such factors as employee training, supplier quality management, and product/service design. Saraph et.al. (1989) identified eight critical factors of quality management. Mohanty and Lakhe (1997) have also tested factors affecting TQM implementation in Indian organizations and have identified the critical success factors. Table-3 describes the context variables: Table 3: Organizational Quality Context Variables Managerial Knowledge Corporate Support for Quality Product/Process Contextual Variables (a) Rate of Product/Process Change (b) Proportion of Products/Services Purchased Outside (c) Degree of Manufacturing Content 12

(d) Extent of Batch vs. Continuous Process (e) Product Complexity Past Quality Performance (a) Past 3 Years Quality Performance (b) Degree of Customer Satisfaction for Past 3 Years

Marketplace Contextual Variables

(a) Degree of Competition (b) Extent of Entry Barriers (c) Extent of Customer Quality Demands (d) Extent of Regulatory Quality Demands Company Size (Large, Medium, Small) Company Type (Manufacturing or Service) Manager Type (General Manager or Quality Manager)

In addition to the above listed variables, there are a few markets related contextual variables such as: the degree of competition, the extent of barriers to entry, the extent of quality demands by the market, the extent of quality regulations that may affect TQM: 3.4 Determining the organizational change needs: For organizational processes, it is important to work on issues that:

Affect the beliefs and behaviors of those in the organization, Affect the organizations ability to deliver world class service, Enable the organization to identify and capitalize on opportunities for improvement.

Selecting these issues focuses the attention of the organization on those areas in need of improvement and change. These are the areas in which innovation and continuous improvement activities are concentrated. 3.5. Developing organizational responsiveness: TQM requires a change in organizational culture, a fundamental change in the manner individuals and groups approach their work and their roles. The following transitions are necessary in the Indian public sector: From Environment of distrust and fear of reprisal Working as an individual To Environment of openness and trust Working as teams 13

Protection of organization turfs Autocratic management style Power concentration at the top Focus on results Top down decision making

Breakdown of departmental barriers Leader and coach Power shared with employees Focus on continuous improvement Fact based decision-making

Vision, mission, strategy etc are the guiding posts for transformation. However, without appropriate responsiveness they have no meaning. Responsiveness is a dynamic action plan to direct the transformation. Responsiveness is an effective and well- articulated intervention to bring inside-in changes. It is proposed here to have two types of responsiveness namely; technical and behavioral. Technical responsiveness includes proficiency in the use of quality tools and techniques, scientific management principles, benchmarking etc. Behavioral responsiveness includes critical factors of intangible nature such as, communication, leadership, team working, empowerment etc. The role of top management is to make interventions in technical and behavioral fronts that reflect current strategic demands. 4.0 A case study: In the following section, we intend to present an example organisation where we have demonstrated the applicability of our proposed model. This study relates to Major Stores an organisation established in the year 1969. This store performs activities like; receipt, forwarding, warehousing, order processing, logistic services etc.to cater to the material requirements of thermal power stations (Public Sector Undertakings) located across the state of Maharastra, generating electrical power and transmitting to the national power grid of India. In the initial phase of the study (in the year, 2001), we interacted and interviewed with a large number of employees across the Major Stores and all thermal power stations. We could identify the following specific issues that confront the Major Stores:

Organisational image Customer Service Employee Satisfaction Cycle Time Management

In the next phase, an awareness campaign entitled why, what and how of TQM was launched across the Major Stores and all thermal power stations. At the heart of such an approach will be the satisfaction level of the customers with the service, which itself will define the effectiveness of the service. The objectives were: 14

To communicate the potentials of TQM and build the core knowledge base of all the organizations members. To create a set of team leaders who can champion the TQM movement. To promote a quality focused environment, recognizing customer satisfaction as a key indicator of quality services, and changing systems, attitudes and processes in order to bring about step-by-step and continuous improvement in the goods and services provided that will address the clients' needs and requirements at a reasonable cost.

The Chief Engineer of Major Stores emerged as the natural leader for taking forward the TQM movement. The following tasks were undertaken under the leadership of the Chief Engineer:

Establishing a quality improvement steering committee involving all functions. The steering committees first task was to formulate the basic strategies and policies for TQM. The committee proposed a formal organization structure catering to the needs of the customers and also defining their roles, responsibilities and accountabilities.

The steering committee, to provide direction to Major Stores formed the vision, mission and quality policy as outlined below: VISION: Building a continuously improving organisation adaptable to quick changes to provide value to the customer. MISSION: Provide zero defect warehousing services to cultivate longstanding between customers and us. QUALITY POLICY: 1. We shall excel in offering services that will more than satisfy our customer needs and expectations on a continuous basis. 2. We shall achieve this by involvement of every team member working on continuous basis for improvement and contributing the best. 3. We shall systemize our work and adhere to laid down systems and controls. relationship

The quality policy is translated into the following quality objectives: 1. 2. 3. 4. 5. To reduce customer complaints and enhance customer satisfaction. To provide quality services at optimum costs. To ensure safety in all areas. To impart training to all employees to improve competence. To improve housekeeping. 15

6.

To control resource consumption by waste minimization. A framework for process improvement was formulated as shown in Fig.3. A quality council constituting employees from each warehouses and principal functional areas was formed to co-ordinate interfunctional quality improvement projects and to further facilitate the efforts.

Quality improvement teams were formed in each warehouse with the responsibility for identifying problems and improvement opportunities and analyzing the details and implement the required changes.

Quality improvement task forces consisting of knowledgeable people were engaged to train the staff, present proposals to the steering committee, facilitate implementation of the approved strategies and help to keep the process on track.

With the involvement of each warehouse, they also prepared the quality objectives of Major Stores. Using these objectives, with a specific target, it was decided to monitor the performance. Furthermore, the quality objectives for each of the warehouse were also set. Strategies for transforming policy into functional practice is as indicated in Table 4.As an initiative towards TQM, the Major Stores obtained the ISO 9001:2000 certificate. To promote social welfare the community programs were undertaken. Training to all the employees was viewed as of utmost importance at Major Stores. The training programmes encouraged the employees to share their perceptions and experiences as they arrived at a common definition of quality and agenda for TQM. The areas on which the training focused are: 1. 2. 3. 4. Discussion of customer-supplier relationship Identification of needs of internal and external customers Cost of quality Tools and techniques of data collection, charting and analysis.

Review of Process

* Yearly Review * Continuous review through Kaizen * Continuous review through MRM Identification of improvement * Competitors

Need of - Employees

16

- Customers - Society * * * * Problems faced Audit feedback Driven by policy and strategy Previous results achieved

Opportunities (Incremental and Breakthrough) Improvement opportunity are prioritized Improvement are Implemented Results checked

* Input/feedback from customers * Creative thinking of Employees * New Standards

Fig 3: A Framework for Process Improvement In order to involve the employees, each warehouse was assigned a high priority quality improvement project early in the process. The benefits derived from these projects include development of quality award and recognition program, the standardization of many processes, improved handling of customer enquiries and complaints and the development of quality measures. More than 10 projects were initiated in the first six months. These projects focused on ways to: 1. Improve the efficiency and effectiveness of internal operations to serve all types of customers better; 2. Reduce / eliminate errors on all types of transactions; 3. Ensure timeliness of all operations. 4. Eliminate unnecessary paperwork and bottlenecks 5. Acquire capability for quick handling of enquiries.

The effectiveness of training enhanced the performance. Through the use of an interactive video system, analysis of feedback became more meaningful. Each training programme concluded with a presentation of commitment to TQM. The group took the questions and listened to the comments of employees. Such an effort has enhanced the employee involvement, has bridged the communication gap and has helped in overcoming resistance to change.

In order to improve and measure the customer satisfaction, Major Stores carried out customer satisfaction surveys and also held customer meets. The customer requirement analysis was carried out so as to develop detailed internal process specifications against which quality of service can be measured.

Major Stores redesigned its employee performance evaluation process to emphasize the importance of quality work. Major Stores intends its employees to see that they can make a difference, that their suggestions can become reality and that they will be rewarded and 17

recognized. For these achievements, a formal programme of immediate reward and recognition provided an opportunity for all at all levels to recommend substantial cash rewards for quality achievers. In one year, since the inception of the programme, over 25 awards have been given out and have created a real enthusiasm. A Six-step service strategy was adopted to further strengthen TQM: 1. Define service as a tangible product that has utility to customers. 2. Identify and differentiate the customers in terms of their roles, specific characteristics and needs. 3. Determine customers prioritized expectations related to service attributes. 4. Continuously measure the degree to which expectations are met. Manage the customers needs by actively soliciting feedbacks and acting upon them with proper analysis. 5. Maintain a current description of service creation and delivery process with charts, texts and measures. 6. Establish and maintain service quality measures. Table 4:Cascading of Policy and Strategy Across the Company Policy & Strategy Formulated in various areas to Support the goal of OBJECTIVE
Improve Quality Service

Customer Satisfaction FUNCTION STRATEGIES FORUMALATED

Materials / Quality High level Quality Improvement visits to Vendors. Improving awareness of employee about customer requirements Quality up gradation meetings for improving quality. Fool-proofing to improving quality. To bring in improved / latest technology. Up gradation of existing facilities . Mid week joint review of problems Training on Quality Improvement areas. Capturing, analysis and easy availability of quality related data to facilitate prompt corrective actions. Customer satisfaction study started be conducted as a regular track every year. Improvement in Information channels with Customers. To solicit customer complaints and resolving them Information Technology Installation of Web based network. Unique software system designed to improve response to customer complaints / grievances. Frequent customer meets at office, to get customer feedback on functioning of dealerships / products / customer needs and expectations from Major Stores TPS. Simultaneous information of customer complaints for quicker action. To improve Service quality

Personal Getting Feedback From customers for better understanding Service

To Solicit customer complaints & resolving them

Service

Information Technology

18

To improve Service quality

Service

Expansion of network. Recognition of Best Managers, Supervisor through awards, etc. Customer Care Practice Strengthening the front office. Improving productivity of employees.

Improve customer orientation among the employees Improve Communication with better information to Customers Finance

Personal

Special training programs on Customer, Orientation, Product Knowledge, etc. Special training for employees in marketing areas

Information Technology Finance

Customer brought on E-mail. Variety of information given to all for more informed communication to customers. Allocation of finances for execution of all above strategies.

Some tangible results With the adoption of these steps, TQM has been viewed by Major Stores, as a set of guiding principles to attempt continuous improvement. The efforts created an atmosphere for continual improvement and the top management initiative played a significant role in providing the leadership to keep the enthusiasm always in top gear by practicing open management and fair evaluation of employees performance and providing ample opportunities for training. Some of the tangible results due to implementation of TQM over the last four years is shown in Table 5. Table 5: SOME TANGIBLE RESULTS Factors affecting TQM Implementation in Major Stores Internal Support Top management support Employee Relation Compatibility & coordination Customer interaction Recognition & Reward systems Customer Satisfaction Customer Complaints Customer Satisfaction Human Resource Employee satisfaction Quality of work life Multi-skilled Workforce Labor Efficiency Participatory Orientation Communication Team Building Approach 5. Significant leanings from the case: We have outlined the basic steps in managing a transition to TQM: identifying tasks to be done, creating necessary management structures, developing strategies for building commitment, 19 2001 75% 60% 30% 70% 50% 77% 55% 40% 45% 10% 48% 35% 10% 2002 89% 67% 45% 79% 65% 30% 65% 50% 65% 30% 57% 65% 25% 2003 98% 77% 75% 85% 81% 15% 75% 61% 79% 45% 69% 89% 65% 2004 99% 95.5% 85% 95% 98% 2% 98% 97% 98.5% 69% 85% 100% 80%

designing mechanisms to communicate the change, and assigning resources. Cohen and Brand (1993) recommended finding and nurturing a core group, which is interested in organizational change. They also emphasized the importance of personal leadership. Managers need to apply TQM in their daily work and to get people to think about and use the concepts and tools. Ongoing monitoring, and action research to make changes as needed, will be required. We could identify the following leanings: The systems perspective must be articulated in the early stage Leaders should expect a long-term process, including a transition period. They need to be persistent, using constant reinforcement, for example, through continuous training. TQM should eventually be made an "invisible" part of the organization, permeating psycho spheres of all people and sociospheres surrounding the organisation. There are two critical issues in implementing TQM: 1. Organizational learning; 2. Managing the transition. Organizational learning will facilitate managing the transition process. Organization can learn by action, provided upper-echelon executives cultivate a bias for action throughout the company, beginning with themselves. This is what we term here as pragmatic acculturation. If all the employees can be indoctrinated with such a culture, it will eventually become a corporate discipline. Corporate discipline molds the way employees see the world. invariably perceive environmental changes differently. Employees who belong to different ethnic cultures, professional cultures, departments, and other corporate subcultures Not only are top managers favored responses to ongoing changes likely to differ, but so are employees understandings likely to vary and so are their abilities to conceive and their willingness to go along with a strategic change like TQM implementation. Managing diversity through TQM, it challenges entrenched values held by employees. To reform established firms as Indian public sector organizations is therefore to run up against the practices, rituals, and norms to which employees have grown accustomed. That means managers must reengineer the interpretations employees will make of their initiatives, and so pave the way for a new vision of how work should be done in the future in a diversified pluralistic societal domain. Action and experimental learning have the most formidable face validity and credibility for the practicing managers. Managers achieve success in learning in three ways: 1. They cooperate and confront to resolve real problems, which hamper their real achievements.

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2. The realities of the work system force managers to address application, innovation and evaluation. 3. The requirement for reflection of the future makes managers more conscious of their behavior. Therefore, we submit that to make the TQM movement a success in the Indian sector, a new initiative has to be generated across the nation. implemented in four phases: 1. To identify the most vital areas of quality improvements. 2. To describe them in objective terms which are measurable. 3. To turn the project associated with the objective into a precise working plan. 4. To fix up accountability centers for performance. Johnson (1993) has suggested transformational leadership is a necessity for TQM implementation. However our learning suggests that the typology of leadership for the effectiveness of TQM may be as follows: 1. Instrumental: it is a particular characteristic of the leader, which provides on-the-job learning and influences the behavior of employees. 2. Regulatory: it is required to control the behavior of people to ensure compliance with the quality policies of the organization to bring corporate discipline. 3. Developmental: which takes the initiative to continually develop all the people to understand and practice the fundamentals of TQM, and inculcates the spirit of learning organisation. 4. Symbolic: it is an exclusive characteristic of the leader who shows concern for embodying the values that define the organizations identity and culture, while articulating a vision of total quality service for the welfare of the human system. 6. Summary Quality is extremely important for the survival of Indian public sector service systems at the present juncture of the economy. Its importance is growing and those organizations that will adopt quality as a norm and take careful considerations to its planning and implementation will have an increased probability of success. With the higher success rate, they will be able to forge ahead of their competitors. The TQM strategy must be included in the strategic planning process from the customer's perspective. It should be the mission. Therefore, there is an urgent need for reexamining the mission, redefining the business processes, and reengineering them to deliver value. The organization structure, roles, and responsibilities are required to be reevaluated for their adequacy and appropriateness in the scenario of increasing domestic and global competition. We suggest that Indian public sector be structured around the following 4 phases for TQM implementation:

public

This initiative has to be

Initiation 21

Involvement Implementation Sustenance.

In summary, we conclude that Indian companies will succeed in TQM implementation, if the following learning are adopted and diffused:

Employee ownership of the means of productions Institutionalized democratic decision making procedures Sharing organizational level information throughout the membership Diffusion of relevant expertise through the learning of the whole and related tasks ensuring participative conditions.

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Bennis, W. (1989) On Becoming a Leader. Reading, MA: Addison Wesley. Chaudron, D. (1992). "How OD can help TQM." OD Practitioner. 24(1), 1418. Cohen, S. and Brand, R. (1993). Total Quality Management in Government. San Francisco: Jossey Bass, Inc.

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Forrester, J.W. (1961). Industrial Dynamics, Portland, Oregon: Productivity Press. Hamel, G. and Prahalad, C.K., The core competence of the corporation, Harvard Business Review, Vol. 68 No. 3, May-June 1990.

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Hyde, A. (1992). "The Proverbs of Total Quality Management: Recharting the Path to Quality Improvement in the Public Sector," Public Productivity and Management Review. 16(1), 25-37.

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Lakhe, R.R. and Mohanty, R.P., Understanding TQM in service systems, International Journal of Quality and Reliability Management, Vol.12, No.9, 1995, pp.139 153.

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Martin, L. (1993). "Total Quality Management: The New Managerial Wave." Administration in Social Work. 17(2), 1-15.

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Empowerment-- An International Journal, Vol.7, No.4, 1999. 16. Nonaka, I; and Takeuchi, H., (1995), The Knowledge-Creating Company. New York, Oxford: Oxford University Press 17. Saraph J.W. P.G. Benson & R.G. Schroeder, An Instrument for Measuring the Critical Factors of Quality Management, Decision Sciences, Vol.20, No.4, 1989 18. 19. Spencer, L.M. and Spencer, S.M., Competence at Work, John Wiley & Sons, New York, NY, 1993. Tichey, N. (1983). Managing Strategic Change. New York: John Wiley & Sons.

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