Question You are a project management consultant assigned to a small manufacturing firm that has been experiencing a myriad of problems. After conducting interviews and fact-finding with key managers, you have observed the following:
•Company revenues and profits have fallen dramatically over the previous 12 months, along with a drop in market share •Customer complaints have reached an all time high •Employee morale is at an all time low •The company has no formal quality program in place •No employee training program exists •High employee turnover continues unabated •Non-conformance costs are skyrocketing
After analyzing your data, you are now prepared to present your findings to the company CEO. Discuss ten quality management improvement initiatives you would recommend, including quality tools to improve company poor performance.
Note: To receive maximum credit, your response must be comprehensive.
Company revenues and profits have fallen dramatically over the previous 12 months, along with a drop in market share
First of all, it`s necessary to identify customers. Once it`s done, customer feedback needs to be gathered. Furthermore, customers` requirements must be collected, analyzed, and understood. The company must acknowledge their apparent customers such as the intermediate customers in upper management that make decisions on “X”`s future direction, the internal customers who are functional managers and employees interacting along the assembly, i.e. The next person in the process, and the external customers who buy its product. It must also recognize each of its invisible customers such as the governmental and environmental agencies that have fined the company for non-compliance so frequently in the past year. Ignoring them will continue to negatively impact revenue.
Internally, “X” must interview all stakeholders as part of all project, program and portfolio planning to ensure undertakings are crafted to meet their expectations and the objectives of the company. External customer requirements may be gathered and transformed into specific, actionable process improvements using quality function deployment, a well- structured product development process which dictates what the market requires into a program to create, manufacture, and deliver it. However, teams should collaborate to arrive at a common understanding of the customer needs and determine the appropriate technical requirement of each stage. As soon as customer expectations are met, customer satisfaction will improve, resulting in a take-back of market share and an increase in revenue.
Customer complaints have reached an all time high
Solution: At first “X” company has to conduct a SWOT analysis, which provides data for an organization to create strategic plans, appropriating resources and developing tools or actions to bring about continued success to analyze the organization. Once the SWOT analysis has been completed, the organization is able to create the mission and vision statements. In addition to what was said before, customer satisfaction should be one of if not the main objectives. To understand the level of customers’ satisfaction, and desires “X” should implement surveys called “customer satisfaction survey.”
These surveys will be sent to new and old customers during certain times a year. E-mail surveys also have to be provided for all customers. The surveys will be voluntary and, however many passionate customers gladly initiate the completion to offer their opinion. “X” also shall offer customer feedback options through different sources such as email, phone, mail, store, and social networks such as Facebook. With the different means of contact the organization will be able to bring in many opinions, complaints, and suggestions from their most prized company position, their customers.
These different tools and methods of contact have to be established to constantly measure the company’s success, by measuring their customers’ satisfaction. When their customers are not satisfied the company is not succeeding. So with the use of these tools, they have access to areas that need to be addressed for the benefit of the customer. With the tools “X” could also further their quality planning for the company and future products. Alternatively, the organization might introduce ISO 9000. By doing so “X” may gauge fulfillment of its customer’s quality requirements and applicable regulatory requirements while aiming to enhance customer satisfaction and achieve continual improvement of its performance.
Employee morale is at an all time low
Solution: To start with, “X” company has to provide its workers a productive environment, in order to help them give their best. “X”`s management must act as true leaders who aim to help people and machines do their best. According to W.E. Deming, rather than criticize performance, supervisors should act as mentors to their workers and create an environment of trust and encouragement so workers experience a sense of pride in their work and the satisfaction of a job well done. Furthermore, workers who fear their bosses seek to meet the minimal expected standards rather than strive to give their best. Quality is neglected and respect for management is diminished. Conversely, people are at their best and are less likely to leave their jobs when they feel secure enough to ask questions and share ideas.
The company has no formal quality program in place
Solution: First of all “X” company shall start with measuring errors and defects. Then, when customer requirements are fully identified and processes are adjusted to meet them, processes must be monitored and measured to ensure the fewest errors and highest level of productivity. By utilizing statistical process control, “X” can apply statistical methods like control charts (Pareto diagrams, cause and effect diagrams) and designed experiments to monitor and control processes to operate predictably to produce the highest grade product with the least possible waste. Variations in a process that may affect the quality of the end product can be corrected, reducing the likelihood that problems will be passed on to customers. Second of all “X” needs to apply “adopt a zero tolerance policy for errors”.
All products manufactured by this company must be durable and good quality. Moreover, a zero defect tolerance should be implemented to reduce and minimize the number of defects and errors in all processes. Therefore, the six sigma quality methodology, which aims to reduce process output variation so that on a long term basis it will result in no more than 3.4 defect parts or defects per mln opportunities, may be instituted to objectively measure and guide efforts toward zero defects. This must be combined with a policy “to do the right thing right the first time” for each process at every level/stage.
If everything possible is done to eliminate the likelihood of errors and defects occurring, the need for inspection can be virtually eliminated, customer satisfaction will be greater, and profitability will be maximized. Anyhow, “X” company has to make a commitment to total quality. Another words, with the financial benefit of cost of quality to “X”’s bottom line understood, the company as a whole must declare total quality to be its first and most important priority. All its employees must not only be made aware of this new commitment to excellence and customer satisfaction, each must understand that he/she is responsible for achieving excellence by maintaining it within his/her area. Create a formal draft of the company’s quality policy, establishing quality as the driving standard for all its activities.
No employee training program exists
Solution: It`s very important to create an institutionalized training program. “X” company must create a formal training program conducted by qualified teachers in order for its workers to improve their skills for their current jobs as well as be amply prepared for the inevitable changes required of their positions in the future. Training sessions should be offered during work hours as well as outside of them for those who wish to attend night and weekend courses. A generous tuition reimbursement plan should be offered for all relevant training pursued externally by employees. Although, to broad the education of its workforce, “X” will allow its employees to contribute to the company in a more intelligent way, adding to its productivity and market adaptability.
High employee turnover continues unabated
Solution: Compensation is one of the most powerful motivator. Although not always possible, good performance should be rewarded. Making employees feel like the company success is their own. Though to celebrate each success, milestone, keep the updated on all company activities and let be the key participants in growth strategy meetings, give bonuses.
Non-conformance costs are skyrocketing
Solution: The organization has to understand what poor quality is costing. “X” must assess and understand the true financial impact of its continued non-compliance and low customer satisfaction versus the costs associated with process and product reform. Using a cost of quality approach, the costs incurred in maintaining acceptable quality levels is added to the cost of failure to maintain that level and meet customer requirements. Given the costs associated with reworks, delays, customer complaints, returns, and non-conformance fines, analysis clearly indicates that “X”’s internal and external costs resulting from failure to meet requirements and expectations far outweigh investing in the prevention of non-conformance to requirements and appraising its products for conformance. The cost savings from increased process efficiency and productivity alone will offset the cost of the necessary quality monitoring and control measures.