PROJECT

TOTAL QUALITY MANAGEMENT

 INTRODUCTION

COMPANY: MOTOROLA
In the economic climate of the past ten years, many successful companies have found their rates
of growth slowing and their profit margins shrinking. Their environment is characterized by
declining market prices, increasing competition, and growing customer demands for more quality
from the products they purchase. Internal audits in manufacturing companies typically reveal that
they spend 10 to 25 percent of sales dollars on repairing defects or reworking products before they
are shipped. Service firms often discover that they spend 30 to 40 percent of total operating costs
on poor quality. They may also certain that the best in-class companies which produce similar
goods and services do so with over 100 times fewer errors. Confronted by these facts, many
businesses believe that the way to restore their competitive edge is to institute a program of Total
Quality Management (TQM). This article describes the experience successful organizations to
implement a company-wide TQM program Motorola. Although this company is in the
manufacturing field, lessons of one of the most learned from its experiences are readily applicable
to service organizations, such as those commonly found in the area of health care.

DEFINITION OF TQM

A company often initiates its TQM efforts by adopting a philosophy us one of the major proponents
in the field. When Motorola originated its program, it followed this same procedure and found the
tactic unsatisfactory. Crosby's approach did not fit its culture and Deming's and Juran’s
recommendations were not relevant to all its activities. Instead of adopting one philosophy of
TQM, the company patterned its quality process after the best each expert offered. Some of these
authorities represented firms against which Motorola benchmarked its manufacturing process after
the Although Motorola is committed to the process of management by data, it believes that the
success of any TQM program relies more on psychological than statistical factors. In keeping with
this conviction, TQM for Motorola means: listening to the voice of the customer, adopting a
philosophy of continuous improvement, and getting everyone in the company involved in the
process. In 1987, they named their fundamental corporate objective Total Customer Satisfaction.
All activities are distilled into answering the two questions former chairman Robert Galvin used
to ask customers: “How well are we serving you?" and "How might we serve you better?”
TYPICAL APPROACHES TO TQM AND WHY THEY FALL

Typical corporate approaches to TQM are listed in Figure 1. Although these steps are all well-
intentioned, their execution often leads to dysfunctional programs. Two examples illustrate this
point. The first mistake many companies make is creating a separate quality steering com
establishing something special and apart from the rest of corporate operations. At Motorola, TQM
initiatives result from the actions of the senior management committee which sets general
corporate policy. Company-wide TQM efforts, therefore, form the framework for accomplishing
Motorola's strategic goals.

A second error committed by many companies is in the establishment of teams. Such groups are
often formed before top management changes the way they manage. Because they are not trained
properly, managers may lead committees to focus on the wrong issues, i.e., problems which, when
solved, do not add value to a particular process or the company as a whole. / An extreme, but true,
example of this situation is a company that spent one year naming all its TQM committees.

Figure 2 lists some common reasons why M efforts fail. The first reason is lack of management
involvement. Managers who have succeeded in these projects realize that it is axiomatic that TQM
is a "top down directed process. Empirical evidence suggests that although team formation and
individual empowerment are important components of successful TQM projects, they work best
when strong, committed leadership is guiding the process.

In starting TQM programs, management often forgets to explain to the workers why these efforts
are important to the company. Such reasons may include: company survival, enhanced
productivity, improved quality of work life, and/or augmented market share. TOM has often been
called "management by data." Although that description is only part of the picture, many
companies not only lack inadequate information system, but also fail to identify proper metrics for
measuring the progress of TQM efforts.

Although TQM is, by definition, a process of continuous improvement, efforts can fail because
companies do not set goals for the rate of improvement. Examples of questions teams should ask
are: When can we achieve a ten-fold reduction in defects? When can we achieve a hundred-fold
reduction in defects? A thousand-fold? These questions apply not only in manufacturing, but in
complex service organizations, such as hospitals, as well. One only needs to substitute the words
"errors" or "cycle time" for "defects.

Many companies that want to begin TQM programs concentrate the majority of their efforts on
training personnel about the philosophy of TOM, teaching them about TQM tools, and forming
teams. Although these activities are important for the successful implementation of such programs,
this narrow focus is often at the expense of the other items mentioned in this section. One reason
for this misplaced attention is that companies which implement TQM programs often do so with
the assistance of outside Consultants. Because these activities are easy to execute, they are the
ones with which consultants are most familiar, are likely to stress, and will advertise as
successfully implemented in other clients' organizations. Sec-and, because these operations are
easily learned, they can be copied by competitors. Focus on these areas alone will, therefore, not
give a company or organization a sustainable competitive advantage. Finally, while most firms
recognize the importance of customer satisfaction, they often do not identify the key factors which
affect it. Customer satisfaction is not solely dependent on the product or service itself, but also on
the activities that support it. In manufacturing, such activities may be the invoicing or delivery
systems. For a hospital, nursing response time and the quality of food may be important to the
patient.

MOTOROLA'S TQM PROGRAM

In 1987, Motorola first stated its guiding fundamental objective as Total Customer Satisfaction,
which it views as everyone's overriding responsibility. The supporting principles which comprise
this philosophy are listed in Figure3. When beginning its efforts, Motorola found it important to
identify which customers to ask about its performance. In 1985, Robert Galvin began
questioning his peers at other companies about Motorola products and services. He found that
they had no better understanding of his products and services than he did about those of his
suppliers. He and others in the company then started talking to the people who actually bought,
used, or serviced their products or paid their invoices. Once Motorola obtained this true picture
of its customers, it was able to develop the meaningful TQM program described below:

The first principle supporting the fundamental objective is Key Beliefs Motorola built its
management process on trust and respect for the individual. By trusting employees, it has been
able to empower them, making team efforts effective. One way management shows this
commitment is through the corporate policy that employee’s with10 or more years of service
cannot be terminated without the approval of the chairman. The second principle is Key Goals.
They are listed in order of importance in Figure 3. Before 1992, increased global market share was
listed first. An important point is that the desire to be best in class extends beyond the product to
the other key factors mentioned in the figure, the third principle is Key Initiatives. Two of the most
important TQM initiatives are aggressive quality improvement (which Motorola calls "Six Sigma
Quality") and reduction in cycle time (the time it takes for completion of a task). One must
recognize that these two initiatives are inseparable.

Key Beliefs

 Constant Respect for People

 Uncompromising Integrity

Key Goals

 Best in Class:

 People

 Marketing

 Technology

 Product: Hardware, Software, and Systems

 Manufacturing

 Service

 Increased Global Market Share

 Superior Financial Results

Key Initiatives

 Six Sigma Quality

 Total Cycle Time Reduction

  Product, Manufacturing. and Environmental Leadership

 Profit Improvement

 Empowerment for All, in a Participative, Cooperative, and Creative Workplace

Cycle time is a major driver for quality improvement, and quality improvement yields reduced
cycle times. Examples of this linkage occur when cycle time reductions lead to increased customer
satisfaction through elimination of non-value-added activities. Because the term most closely
identified with Motorola's TQM efforts is the "Six Sigma Program," it is highlighted below.

SIX SIGMA PROGRAM

The term "Six Sigma Quality" is derived from the statistical computation of defects in a normally
distributed population of manufactured goods or delivered services. Although examples of the
former are obvious, service airline baggage handling. A process which yields a normally
distributed output of products is usually designed to have tolerances of plus or minus three standard
deviations from the mean (+36). This process w be 99.73 percent defect-free. The mean of a normal
distribution, however, depends on the population of items being studied. In manufacturing, this
concept translates to the mean value of a production batch is valid only for that batch. Over the
long term, however, even well-designed manufacturing processes can experience a shift of the
mean to +1.56. Figure 4 illustrates this concept. This change can cause a reduction in yield to 99.32
percent. Motorola's goal is to take into account this shifting and design a production process robust
enough to produce no more than 3.4 defects per million, ie.,6o-

To the casual observer, moving from 68 defects per hundred to 3.4 per million would seem to be
imprudent given the apparent costs involved. The reason Motorola is driven to this level of quality
is that its products do not contain single components, but are assembled from many parts. The
chance of a defect occurring in the finished goods is, therefore, the product of the rate of defects
in each component. A typical example illustrates this concept. Motorola is the world's largest
producer of pagers. Each pager has about 100 parts. For this number of components, at a t3ó level
of quality, only.10 percent of the finished products will go through the manufacturing process
without a defect. At a +6ó level of quality, the yield will be 99.966 percent. Achievement of such
levels of quality are not only important for reducing production costs, but also for competing
successfully in the global markets. Japanese firms are now attaining close to six sigma quality in
their watches (which have about 100 components) and televisions (which have about 1,200 parts)

Figure: Six sigma capability

Motorola found three generic reasons for defects in the manufacturing process. First, a company
may have insufficient process controls. By working on this area internally, Motorola has been able
to make significant improvements. Second, problems in the design may exist. One place for
improvement in the design process is reduction of the number of components in a product. For
example, a pager which has 60 parts instead of 100 will be 99.9796 percent defect free at the six
sigma level. Finally, bad material can have a significant impact on production quality. This area is
one in which Motorola works closely with its suppliers. For example, Motorola is an electronics
company which relies on its plastic suppliers for innovative ideas in the materials it uses for pagers
and cellular phones. In its desire to make its suppliers an integral part of the quality improvement
process, Motorola significantly reduced their numbers in order to give each partner more business.
This action raised the level of supplier expectation and made each more willing to cooperate in the
product design process. In implementing the Six Sigma Program, Motorola also found that a
common error which many companies make is not setting aggressive, realistic time frames for
achieving their quality goals. In 1981, it set a goal of ten-fold quality improvement in five years.
Those divisions which started their initiatives immediately were able to reach that target in two or
three years. The company achieved two subsequent targets of a ten-fold and a hundred-fold
improvement on schedule in 1989 and 1991, respectively

The process Motorola is following in its quest toward Six Sigma Quality is listed in Figure 5. Three
points are particularly noteworthy. First, the top three activities are meant to drive work
horizontally, i.e., across functions within the company. This approach contrasts with the usual
vertical movement of goods, services, and ideas in organizations along the lines of functional
departments. This cross-functional orientation is what adds value to goods and services which an
organization produces. Second, defining the process for doing the work is comprised of three tasks:
mapping the process in order to evaluate non-value-added activities or services; recording the
defects at each stage; and determining the cycle times. Finally, these steps apply not only to the
production process, but to all internal and external service activities of the company. For example,
by applying these steps, the corporate finance department was able to enhance internal customer
satisfaction by reducing the time it took to close the company's books (world-wide) from about ten
days in 1988 to two days by June 1992. The current target is one day. By achieving this reduction
in cycle time, the company now has more timely financial data, has been able to reduce the number
of external audit hours (despite rapid corporate growth), and estimates its savings from this
enhanced efficiency at $20 million per year. An additional important improvement has been
reduction of the patent application process from two years to less than ninety days.

KEY SUCCESS FACTORS

The reasons Motorola believes it has been successful in implementing its TQM program are listed
in Figure 6. Although some of these points may be self-evident, a few deserve special mention.
First, the intense level of management involvement starts at the top of the company. When Robert
Galvin held business review meetings, he put four items on the agenda: Quality, Cycle Time, Sales,
and Profitability. After the first two points were addressed, he walked out, leaving the remaining
topics for others to discuss. The message he sent through his actions was obvious: issues related
to quality improvement are the most important aspects of corporate strategy; all others, while
critical, are merely details which flowed from the TQM initiatives. Second, the purpose of setting
aggressive improvement goals is to force the organization to fundamentally change the way it
operates in order to catch up with competitors. Third, if the corporation wants management
accountability for quality improvement, it must give managers proper incentives. Motorola builds
incentive factors into its executive bonus plan which are tied to quality performance standards.
These quality factors range from 20 to 40 percent of their potential bonuses. Fourth, when the
company initiated TQM efforts, they were implemented into the existing organization. Instead of
organizing a quality steering committee, self-organized teams form, act on a problem, and then
disband. Appropriate personnel then monitor the resultant changes. Finally, the company provides
recognition and awards to its employees. In 1990, when Motorola began holding a world-wide
corporate quality competition, 2,000 teams participated. The 1993 program drew 4,300 entries.

CONCLUSION

The TQM program at Motorola started in 1979 at a sales meeting, when a brave manager stood up
and said customers were complaining about the quality of its products. Since then, the company
has aggressively managed a quality improvement process which resulted in its being named a
winner of the first Malcolm Baldrige National Quality Award in 1988. The efforts which led to
this honor continue and enable Motorola to achieve other milestones. Since 1987, its TQM
program has produced cumulative savings of over $4.5 billion. The company used these savings
to invest in research and development, lower prices (it has not raised prices on established products
since 1987), and increase market share. As a result of these actions over that period, sales increased
183percent, the number of employees grew 25 percent, productivity rose 126 percent, and the
overall compounded annual growth rate was 12 percent. Despite these successful statistics
company data indicate that Motorola still has the potential for achieving savings of S1 billion in
non-manufacturing costs. Motorola's future quality goals are summarized in Figure 7 and are
consistent with its long-term commitment to the TQM process. The company is eager to share its
experiences with others in both the service and manufacturing fields so all can benefit from
implementing their own programs.

REFERENCE
https://www.researchgate.net/publication/13158279_Total_quality_management_at_Motorola_a_successful_bl
ueprint_for_manufacturing_and_service_organizations