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Total Quality Management

Manufacturing in the 21st century. Trends

Until the end of the decade of the 70s, mass production was seen, especially in the USA as the strategy to follow for gaining competitiveness and world class manufacturing. Along the 80s, fast changes have in markets and in economy have made this model obsolete, and is no longer seen as a valid strategy. The new manufacturing environment’s characteristics are, among others, great flexibility, reduced design cycle time and reduced time to market. Goldhar et al (1983) mentioned, the relationship between flexibility and cost “…the same equipment can produce the multiple products in combination more cheaply than separately.”

A characteristic of the new manufacturing environment is global market. The capability of the companies to relocate their premises, and the availability of new more automated manufacturing techniques (flexible automation, CIM, Automated Assembly) means that the labour costs fall to a very small fraction of the total cost. The actual trends are heading for reducing labour force to a minimum in the factory of the future, and eventually unmanned factories. In this extreme case, labour cost will be eliminated. As Browne, J (1988 ) discuss some might think that the implementation of this unmanned (or less-manned) manufacturing techniques are not for free, and it will bring, “as it is evident a higher overhead cost that will be reflected in the total cost of manufacturing the product”. But it is also a trend that future factories will run round the clock for the high investment in technology pays for itself.

Not only new technologies are dropping the cost of manufacturing products. There have been also some revolutions in the executive and manager offices. Concepts and strategies like ‘just-in-time’ and ‘lean manufacturing’ have influenced this competition for the market. The ideas embedded in JIT touches every aspect of manufacturing, from design to delivery. But is the compulsory reduction of waste what directly is reflected in the total cost of the product. Among others, we can outline:

1. Reduction of stock, with associated reduction of stock cost and cost of premises.

2. Eliminating waste of making defective products and overproduction, for whose the customer doesn’t have to pay.

3. Continuous improvement (Kaizen), where the environment and process is improved once and again for a higher productivity.

Despite lean manufacturing is based, as JIT, in waste reduction, it addresses other areas, as more efficient work cells that produce less scrap (material cost reduction). Also these work cells can be relocated in different steps of the manufacturing process and carry different process, this involves less amount of machinery necessary (less overhead cost) as it is mention by Rehg, J. (2005).

The concept brought by Dr Edwards Deming of cease mass inspection (all the manufactured products were inspected one by one) and building quality into the product also has a reflection in the final cost of the product. Under this proposition companies spend resources in improving quality with an active attitude, preventing defects and improving process, instead of finding, fixing or reworking products. This leads to a significant cost reduction. Rehg, J. (2005)

New consumer electronic products

To add value to a product is the base of every manufacturing process. For this, a higher or lower level of energy is needed. During the last years, economies very dependent on oil prices have continued dropping prices in their products, despite some painful moments more connected with a wrong prediction than with the rise of the price itself. Once this threat has been identified, companies are moving to a more efficient use of energy and less dependency of oil (also governments). For this reason, it is more likely that prices continue to drop, at least until manufacturing value-adding process are reduced to a minimum cost. This means that manufacturing will become cheaper, but never the price will become less than the cost of the materials involved

References:

Rehg, J et al. (2005) Computer Integrated Manufacturing. Pearson Education, Inc. Upper Saddle River, New Jersey. USA.
Goldar, J. (1983). Plan for economies of scope on Harvard Business Review. Num 61. Pp141-148. Harvard Business School, Boston.

Implementing the TQM strategy

The clause number 5 is related with management responsibility. This doesn’t means that the only responsibility of Management (person or persons who take decision inside the company) is to formulate the Quality Policy, but they have to be involved and committed also with the Quality System and more specifically with the Quality Manual of the company. It is intended from Top Management to set and plan the route the company has to follow to achieve the expected quality. This must be documented in the quality manual, and must be subject to reviews. Top Management it is intended also to propose methods to control and monitor the process and its outputs.

Management should be in possession of documents where the needs and expectations of the customer are established (e.g. contracts), as well as copies of regulations and legal requirements or directives applicable to the company. This means, for instance, regional environmental regulations affecting the process being carried in the enterprise (e.g. BE/POL/009 for energy efficiency in manufacturing in England or EC nº 854/2004 related with the European Union where hygiene practices are detailed for handling foodstuffs).

Despite the quality commitment involves every individual in the company; management should identify a representative (an individual) responsible for the Quality System. It is expected some document where this individual is identified as responsible for the quality system (signatures). Job descriptions and responsibilities of the rest of the positions in the company have to be detailed.

management commitment is necessary for heading to quality

Evidence is expected on decisions taken by the management aiming to improve quality. There should be evidence on the implementation of decisions and tracking of its effectiveness (e.g. records before and records after the implementation, corrective and preventive actions). There must be also evidence of modifications implemented in the process because of customer requirements (e.g. modifications of the contract or change of the requirements signed by both parts). And evidence on controlling the Quality System outputs, products have to meet specifications, and they must be measured to ensure this (e.g. customer feedback, supplier records). The Quality System itself must be supervised for achieving the expected quality level. When changes are implemented in the process, because of customer specifications, or process effectiveness, all the parts involved in the process must be aware of these changes (e.g. suppliers must be aware if there has been a change of specs because of customer requirements)

There must be a defined structure of the organization from stakeholders to labour going through chairman and management. A document is expected where the chain of responsibilities and decision is properly defined and up to date. Everybody in the organization must have acknowledge if any change is done in this structure, there are many ways of doing this, from communication board announcements to internal personal notifications. It has to be defined how decisions and responsibilities flow from top to bottom in both directions (e.g. organization chats showing communication lines).

Management must be able to communicate the Quality Strategy to the workforce, and what objectives the organisation wants to achieve. Workforce must be aware on what actions they can take in order to contribute to achieve these goals. Workforce should be encouraged for achieving these objectives. Evidence of this can be found as in-house journals, magazines, organisational meetings, internal communications, etc.

Management leads the company to targets

Managing the work force

Things are changing fast in developed societies. The society itself has changed in the past 15-25 years. While some might call it post-industrial society (this term admits both, that our society is the result of a period where industrialization originated many capital changes in its structure, and that this period is finished now) some others call this the ‘information society’. This new social organization implies great adaptability, from individuals, families, education, policies and governments.

At the end the XIX^th century, an American economist and mechanical engineer set the concepts of what it was going to be the predominant strategy in manufacturing along the next century. Taylorism brought specialization to work, minimize time waste, and increased productivity. With the posterior development of the production line, and the concepts of Fordism 50 years after, the path was set for mass production. This trend, predominant during the XX^th century brought increased productivity, managed by hierarchical configuration of companies. But also the alienation of the worker, who became just a part more of the machine, thus a replaceable part not required thinking or showing initiative.

High competitivity and an extremely changing market resulting from globalization have set mass-production aside, and new manufacturing systems arise on the late XX^th Century. Lower volume production and the need of dynamism (just in time) and proactive change altogether with the development of technologies as the advent of the microprocessor, robotics and automation changed the manufacturing environment. As Gerber, R (2000) reflects in his book training for a smart workforce, “Employers had to adopt the new technology, which involved the expense of increasing worker skills and reducing overall costs in the medium term…and accentuate the growing diversity of choice for consumers” This ‘worker skills’ go from technical, social, analytical and communication skills and are applied from marketing and sales to shop floor roles.

It is a general direction in manufacturing to replace workforce for machinery, which does the same work as the labours. In UK, this trend has shown its presence from the early 90s. It is clearly identified that more skilled workforce is needed in the industry. Gilbert, R (1989) mentions in his book the growth of employment for scientist and technologists, while management and clerks reflect a lower demand. “The majority of employees in engineering are actually involved in less-skilled clerical activities and in the much higher skilled technician class”

Under a TQM approach, improvements on quality should come from all the employees, not only from the management. The command of “checking your brain at the time clock” is not valid anymore, since the intelligence and expertise from the workforce is necessary for improving quality, TQM implementation and the introduction of quality cycles. Rehg, J. (2005)

Changing productive procedures: as Syan, Ch. (1994) says in his book concurrent engineering, “Organizations usually have an abundance of specialized knowledge, but a lack convergent knowledge. …convergence involves taking specialized knowledge from multiple sources and forming a new collective mindset that allows people to work together at a much deeper level”. It is here where labour literacy is important to understand not only their role in the manufacturing process, but also have a wider view of the company, and be able to see and understand the manufacturing environment further than their work places. For achieving this approach, is necessary that the labour are literate enough not only to develop their functions, but also to understand the tasks carried in other departments and the interrelation with their own.

Changing uses of the force: in the new manufacturing environment that has been discussed before, the presence of automated facilities is more ubiquitous. This affects the workforce skills from different viewpoints, for instance, the old manual machines are replaced with computer-controlled process, and the ability for integrating a process in the whole production system. “…Demand has switched increasingly towards service-providing products –computers, CAD, CAM, databases- and away from service staff, particularly where the work is routine and easy to automate” Gilbert, R (1989)

Even in the UK, where the industrial revolution germinated, there is the feeling that things are changing. Financial Times, a daily newspaper publishes periodically a section named ‘Understanding the skills gap’. The overview that is given by Boone, J. on July the 16th 2007 is hopeless. It alerts about the danger of loosing dynamic workforces in behalf of more competitive regions, and the risk this will suppose for the UK economy role. “The sheer size of Chine and its ability to ‘compete right across the value chain’ makes it much more of a strategic threat than any other competitor in the past” and releasing the antidote “In this fast changing world, an economy like ours can only prosper if we move up the value chain, produce more high value added goods and services, which are more sophisticated and of higher quality”.

Skilled workers are like key pieces

The education of the workforce is vital for a country to maintain its competitiveness in the world market. In other case, UK will be forced to import high quality goods, which require high skilled labour to be produced from abroad, while workforce changes gradually from manufacturing industry to services. Day after day we see that top managerial roles are filled with backgrounds in economics, laws, etc, but there are less and less individuals with engineering backgrounds ruling the directions of the companies. This change of culture can lead to a lack in bracing the technological implementations needed for keep competing in the market.