Quality at Gillette Argentina - Research Paper Example

Quality at Gillette Argentina Table of Contents Table of Contents 2 Executive Summary 3 Questions Addressed 4 Write a project plan for expanding TQM at Gillette 4 Identify the Rationale for Change at Gillette 5 Describe the Role of Upper and Middle Management in the Implementation of TQM 7 Identify the Change Management Aspects of the Implementation 9 What are Advantages and Disadvantages of Implementation (esp. in terms of cost) 10 Conclusion and/or Recommendations 13 References 14 Bibliography 15 Executive Summary The quality at Gillette Argentina was a phenomenon which was not provided with due importance in the previous times. The economic condition in Argentina forced Gillette to look for alternative and better ways in managing their resources more profitably. They implemented Total Quality Management program in to their business operations. The implementation needed a complete effort from not only the top management but also the entire hierarchy of organization. A change in organizational culture resulted in an effort of focusing more on team work and also on customer satisfaction. The main aim relating to TQM and also its success depended upon successfully implementing customer satisfaction, internal and external as well as removing the barriers that exists in between the departments. TQM implementation resulted in tremendous success in terms of growth and market share. Also, TQM leads to reduction of wastage. The product quality improvements also lead to reduction of competition as more customers are willing to take up the products. TQM has a lasting benefit for not only the organization but the entire hierarchy of people in the organization. Questions Addressed Write a project plan for expanding TQM at Gillette TQM (Total Quality Management) is a process for continuous improvement. To tackle the ever changing global business environment mere implementation of TQM in a company is not enough. They have look for ways to continuously upgrade and expand the way TQM has been implemented. TQM implementation requires a collaborated effort from entire organization. The cost of quality in implementing TQM is certainly a small matter when compared to the benefits that can be derived from TQM implementation and expansion. At Gillette, the customer satisfaction and collaborated effort from entire organizational support is given priority. Therefore to expand on the present TQM process, some tools of quality improvement can be implemented. A cause and effect analysis could be implemented to understand the customer view point and the effect it can generate to the company, if it is implemented. To tackle market competition a brainstorming session has to be practiced to understand the strengths and weaknesses of the competitors and devise the TQM accordingly. The employee and the customers are two main stakeholders of Gillette. So, to implement their viewpoint a focus group survey by interview and employee survey can be implemented. Value engineering method has to be used. This will help in improving the value of products and goods produced. Value engineering implementation can help the company to reduce cost in the TQM process. It can also help in improving the functioning of the TQM processes. Therefore, it can tremendously help the company to tackle any complicated scenario if it is implemented along with TQM process. Company also can take the view point of the stakeholders and use a sampling method to know the product usage rate by the customers. Thus, all this can help Gillette to further improve and grow and consolidate their position as a world leader in the consumer satisfaction chart (ODI, “Influence without Authority”). Identify the Rationale for Change at Gillette Gillette Argentina started its operation shortly after the end of the First World War. It was functioning as an importer and also as a distribution company until 1942. They started manufacturing in 1942 to leverage benefit out of the closure of a German blade manufacturing company. They utilized the opportunity to fill the void. From then on after the end of the War, the company started to grow and remain as a strong force as they kept on with their business while their competitors fled from the country due to economic and political instability that engulfed the country. In the mid 1940s, high tariffs were introduced in many business sectors and also the countries economy became closed. The country had to face scarcity and also high inflation. There was hyperinflation in the country in yearly 1980s. Due to such economic surrounding, the company required a change in way of doing the business. It required a constructive way of thinking and creating a rapport with the important suppliers. Gillette Argentina despite this troublesome situations; was able to generate profit in every year since the inflations except in 1989. The situation 1989 brought the management together as they decided on changing the business climate. The tariff laws disappeared and also regulations were changed tremendously. All of this meant an increase in competition as foreign companies were likely to start their business in the country. Gillette management became aware that they required moving beyond the approach which generally focused on financial aspects of the business. Therefore they required change in the way they were doing the business. To construct a change in approach Gillette management initially thought of using cross functional team to achieve the benefits derived from understanding the customers view point. Inventory management was given the primary focus. The Latin American management of Gillette became aware of the ever increasing chance of global competition due to change in economic condition. They understood that to keep up with the changing environment they also needed to implement a change in business and they turned their focus to Total Quality Management (TQM). The management went about implementing the TQM program by studying about the TQM. Then they went surveying their clients for collecting their opinion regarding the products produced by Gillette. The sales people were given this task. The Organizational Dynamics Inc. (ODI) was chosen to develop the quality initiative required by Gillette. The initiatives focused on certain aspects like giving importance to customers and their view points were given primary focus, systematic support, total participation, measuring the results and continuous improvement were all given importance. A quality structure was prepared by the recommendation of ODI. Also a quality council was formed that looked after the quality initiatives and also gave direction. For overseeing the implementation part a steering committee was enacted. And also a quality director was given the task of overseeing the entire program. The employees were given training on four phases for solving the problem related to quality issue. The phases were described as FADE i.e. Focus, Analyze, Develop and Execute. This effort also required initiatives like basic tools of quality, brainstorming, cost befit analysis, force field analysis. All of these were needed to be collaborated to successfully implement the change in Gillette Argentina’s business structure. Describe the Role of Upper and Middle Management in the Implementation of TQM Total Quality Management is a management term which denotes continuous improvement in the process of doing business. The main focus of TQM philosophy is on quality. In the present day context, TQM is very important deciding the success and failure of any business. The leadership as well as the management plays a vital role in the implementation part of the total quality management. The upper and middle level managers have the role to look after the proper implementation of the various processes that are involved in TQM. The decision regarding implementation of TQM is done by the upper level managers like the CEO. The management has to have a proper understanding of the key elements of TQM to make it a success. TQM can be very much subjective in nature and also its monitoring, success or failure and implementation. Any lack of understanding or vision by the management part can prove to be damaging in case of TQM implementation. Upper management has the main responsibility of deciding when the needed to go for implementing TQM. They have to conduct a primary research for selecting the path that the company chooses to implement TQM. In Gillette Argentina, the focus shift towards implementing TQM came from top management in late 1980s. The director of Gillette first brought to light the need for quality management in Gillette. Upper management takes the decision on implementing TQM. Then they delegated the task of conducting the required tasks for implementation to the middle managers. The middle managers are required to be properly trained and made aware of the steps that are to be followed in implementation of TQM. They have to provide with necessary resources by upper management to successfully do the needful. For successfully implementing TQM a technical and also social re-engineering of business structure, processes that are operational has to take place. The upper managers have the task of looking after it. In Gillette Argentina, also they implemented an action team approach. The upper managers implemented the ideas proposed by the total quality manager. Here, they eliminated any prevailing departmental barriers and focused on team approach. For proper implementation of TQM, upper management has to understand that there are certain aspects which will help them to guide the business through the volatile times when TQM is implemented. They have to undergo quality related training; they have to commit to the implementation of TQM. The upper managers has to provide support with money and time, assist in developing principles, vision, mission related and guide all of this towards achieving the objectives. They have to work towards eliminating the fear from the organization. The upper managers has to look for creating an organizational culture under which TQM can be implemented and also flourish. They have to gain the full support of the subordinates and staffs before implementing total quality management. Middle management has to get the required support from the upper management to properly implement the necessary tasks. Middle managers are provided with training relating to judging the necessary quality standard of the products. Middle managers have to be aware of all the developments to implement them properly as and when required. A successful TQM implementation is dependent upon healthy participation from middle level managers. Their work has become more demanding after the beginning of TQM. They have the task of managing people like the subordinates, workers, also implement technical knowledge and put an emphasis on team work for successfully dealing with TQM (Psychogios & Priporas, “Understanding Total Quality Management in Context: Qualitative Research on Managers’ Awareness of TQM Aspects in the Greek Service Industry”). Identify the Change Management Aspects of the Implementation Total quality management is a management tool that demands continuous constructive effort. The effort has to be a combined effort from not only the management of the organization but the entire hierarchy of people like the subordinates and staff members. The TQM process requires for a complete change of view from not only entire management but also among the other members who are responsible for implementing the TQM tools. TQM focuses on aligning management activities with people and organizational goals. It mainly requires a complete change of mindset from the top management. The top management has to focus on changing the way, a business is run. Even sometimes, they need to change the organizational structure by de-layering the existing hierarchical level of management. As can be seen in case of Gillette Argentina, the designated total quality manager, Victor Walker brought with him certain radical new ideas. It focused on customer prospective of doing a business. The customers were considered one of the main lifeblood of business. Their opinion was taken by the sales people to understand the customers’ point of view. The view was later put in practice by the management of Gillette in their manufacturing of the product. Victor Walker also found out that contract approach regarding quality required change. Here, the quality was given the top most priority as the customers view point suggested that customers didn’t want to compromise on quality. They were happy to pay extra money to get a quality product. In Gillette, the earlier bureaucratic approach was changed for more dynamic approach regarding called action team. This change in the management brought with it more dynamism and also commitment towards achieving a success. This also worked as an integration tool by breaking the departmental barriers. A culture of teamwork was trusted upon to succeed in the volatile and dynamic environment. As the change management approach requires structured efforts towards transition. Therefore, a commitment from the top management is essential in implementing the change and getting the desired result from the implementation (Larsen, “TQM and Organizational Performance Improvement”). Change management, in order to be successful requires a proper communication of the facts from top management to the lower level participants of the TQM process. TQM process requires the understanding of the fact regarding the way a task is to be accomplished, but doesn’t require what task are being accomplished. The TQM approach calls for a continuous endeavor for change and improvement in quality of products and also in services. Therefore, TQM demands a complete commitment and implementations of necessary changes to succeed in this competitive environment. What are Advantages and Disadvantages of Implementation (esp. in terms of cost) TQM as a process requires a company to undergo a complete change of method from their existing way of working. This method in the initial stages requires huge investment of money and time from the top level management and all the supporting members of the organizational hierarchy. In the initial stage implementing TQM might cost huge sum but the resulting improvement will ensure that all the investment made comes back with far more benefit and success in business front. If a company fails to implement TQM then it leads to lack of improvement in quality of the manufactured products. Therefore, the company loses out to its competitors regarding market share. The reputation of the company also takes a beating as most of the consumers will desert the company and shift to other competing companies. TQM leads to reduction in unnecessary costs related to any business. This improvement also shows in the balance sheet of the company, where the profit margin gains over the loss margin. TQM relates to cost of quality which is function of cost related to non-conformances like that of accidents, errors, omissions, poor quality of product, and also being late in production. Cost of quality also relates to cost prevention. The nonconformance leads to rework, expending, recalls, and time extensions, removal of punch list items, litigation costs and also damages, increase in insurance costs, penalties and damages caused by liquidation. These all are costs which increases the cost of quality. The cost can be reduced by implementing TQM. The areas like review of drawing related to shops, safety and training costs, meetings related to steering committee and also quality improvement team, inspection of hire work on a direct basis can all provide savings of a certain amount to the TQM program. The cost related to TQM is of a certain importance to the business, but the cost of producing poor quality products is very high. Cost of poor quality product can take the shape of losing a customer. A loss of a customer can increase in no time as other customers will know the consequences of using a certain product from the abandoning of the customer. Therefore, the entire business suffers a tremendous loss. Tangible costs related to poor quality consists of accidents, missed schedules, rework, liability and insurance, unused labor and also scrapped material. Intangible costs of poor quality includes loss of customer, loss of never had customers who abandoned the companies product after getting input from the lost customer also the loss of moral and confidence among the stakeholders and employees of the company. There are four types of costs related to quality like appraisal cost, prevention cost, internal and external failure cost (PHCC Educational Foundation, “Total Quality Management: A Continuous Improvement Process”). The benefits related to TQM implementation were found out in Gillette Argentina also. They found both tangible and intangible benefits related to TQM. The most important areas were observed to be understanding of the fact that people participation is of most important and any change can be implemented with the active participation of people. The other aspect was creation of a climate which encouraged team work. The idea of working together towards solving a problem was understood in Gillette as a benefit of implementation. They also understood that as a cost of TQM spending time in meeting was necessary for planning purpose. The focus of the organization shifted towards customer satisfaction (Kurtus, “Basic Principles of Total Quality management”). The benefit of TQM implementation was evident when in 1998, Gillette conducted a research program. The results showed that in terms of customer satisfaction, Gillette moved from a rating of 6.5 out of 10 in 1991 to a jump to 8.0 in 1994. They were judged as the best in the market in 1998. Gillette Argentina also realized the financial benefit out of implementing TQM. Their annual sales soared up by a margin of 19% in 5 years. Profit margin also increased by 22% in the same period of time. Return on invest went up by 60%, inventory turnover increased from 4.8 to 8.7. The TQM implementation resulted for profitable business amounting to $ 17.8 million. Also, there were non - monetary benefits like that of internal improvements in process and relating to external clients. Conclusion and/or Recommendations The total quality management process deals with devising processes to satisfy external customers with quality goods and services. This process leads to continuous improvement in all aspects. TQM process should be made mandatory in all business concerns. The quality aspect of business should be made the most important part. Meeting owners or customer requirements is the main objective of TQM. Proper implementation of total quality management requires a consolidated effort from entire organizational hierarchy. In Gillette Argentina also they had a total support of the organizational hierarchy. They were able to tackle a difficult political and economic condition with the help a strong management and also use of TQM. When other companies offering similar products like them left the country, Gillette stayed on and became one of the most successful companies in not only Argentina but throughout the world. They reaped the reward of putting the customer first and also using a collaborated effort towards gaining success. References Kurtus, R. “Basic Principles of Total Quality Management”. May 28, 2010. School for Champions. 2001. Larsen, M. A. “TQM and Organizational Performance Improvement” .May 28, 2010. University of Houston. 2005. ODI. “Influence without Authority” May 28, 2010. Total Quality and Continuous Improvement. 1996. Psychogios, A. G. & Priporas, C.V. “Understanding Total Quality Management in Context: Qualitative Research on Managers’ Awareness of TQM Aspects in the Greek Service Industry” May 28, 2010. Nova Southeastern University. 2007. PHCC Educational Foundation. “Total Quality Management: A Continuous Improvement Process” May 28, 2010. Library. 1996. Bibliography Beer, M. “Why Total Quality Management Programs Do Not Persist: The Role of Management Quality and Implications for Leading a TQM Transformation” May 28, 2010. All Business. 2003. Hakes, C. Total Quality Management: The Key to Business Improvement. Springer, 1991. Paton, R. & McCalman, J. Change Management: A Guide to Effective Implementation. SAGE Publications Ltd, 2008. Rogers, R. E. Implementation of Total Quality Management: A Comprehensive Training Program Routledge, 1996. Sirvanci, M. B. “Critical issues for TQM Implementation in Higher Education” May 28, 2010. Emerald Sight. 2004. Read More