TQM Practices of Aci Salt Industries Bangladesh PDF

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UNIVERSITY OF DHAKA

TQM Practices of
ACI Salt Industries Ltd. Bangladesh

Submitted to:
Monika Chakrabarti
Asst. Professor, Dept. of Management Studies
University of Dhaka

12/12/2012
University of Dhaka

Department of Management Studies


MBA (Evening Program) Fall, 2012
Term Paper

Course Title Total Quality Management

Course code EM 540

Course Monika Chakrabarti


Teacher
Topic TQM Practices of
ACI Salt Industries Ltd.
Bangladesh
Date 12-12- 2012

Submitted by

Nahid Rijwan 3-09-17-033


Bijoy Mohajan 3-11-21-050
Neaz Parvez 3-11-21-079
Md. Sujan Mahmud 3-10-19-049
Zahidul Islam 3-11-21-013
Table of Contents

Serial Topic Page No.


1 Organization Profile 01

2 Organogram 02

3 Production Flow Chart 03

4 PRE-requisites of TQM in ACI Salt Ind. 04

5 TQM Questionnaire 09

8 Concluding Remarks 18
Organization Profile:

ACI Salt was launched in August, 2005 and marketed and distributed by ACI Consumer
Brands through its network. ACI has set up its salt refining plant in Rupganj, on the banks of
the Shitalakhya River. The plant produce refined iodized salt through Thermal Evaporation
System. ACI has used technology from China Heavy Machineries Corporation (CHMC) in
establishing the plant. The end product will be of high quality, free-flowing salt with even,
crystallized grains. The iodine content of ACI salt will have a stability of more than 6
months. The project has been undertaken at an approximate cost of Taka 32 crores. Within
the very short period it has been enjoying the pride of the Brand Leader. The best in its kind,
ACI Salt is vacuum evaporated, free flowing and properly iodized. It is also very porous and
free flowing. Iodine is coated in every single grain which makes it an essential product for the
children; the absence of right quantity of iodine in their food may cause mental disability to
them. ACI Salt has won the "BEST BRAND OF BANGLADESH AWARD 2008" for
unparallel customer loyalty beating all the brands in Foods & Beverages category.
The comparative features of ACI Salt and other ordinary salts produced through washing
method are shown below:

Particulars Ordinary Salt ACI Salt


NaCl Content <85% 99.5%
Iodine Content 5-20 PPM 20-50 PPM
Soluble Impurities 1% Nil
Insoluble Impurities (Sulphur, 2% Nil
Calcium, Magnesium, Arsenic etc.)
Technology Washing-Crushing Vacuum Evaporation

1
Organogram:

2
Production Flow Chart:

3
PRE-requisites of TQM in ACI Salt Ind.:

• Commitment from Management

In order for any organizational effort to succeed, there must be a substantial


management commitment of management time and organizational resources. The
purpose must be clearly and continuously communicated to all personnel.
Management must consistently apply the principles of TQM.

ACI management is committed to provide quality products and for this management
is committed to –

 Allocate resources for providing quality products and/or services


 Reduce production cycle time
 Handle customer complaints efficiently
 Provide cost for failure
 Communicate strategic plans to the stakeholders
 Give importance to the quality of goods

• Ability to change Organizational culture

Changing an organization’s culture is difficult and will require as much as five years.
Individuals resist change – they become accustomed to doing a particular process and
it become the preferred way. Management must understand and utilize the basic
concepts of change. They are:

1. People change when they want to and to meet their own needs.
2. Never expect anyone to engage in behavior that serves the organization’s
values unless adequate reason has been given.
3. For change to be accepted, people must be moved from a state of fear to trust.

Impediments to a cultural change are the lack of effective communication and


emphasis on short-term results. Organization that spends more time planning for the
4
cultural aspects of implementing a TQM program will improve their chances of
success.

ACI as an organization handle cultural change through –

 Communicating values throughout the organization. HR department conduct


session on values throughout the business units and factories and hang values
related poster in the organization premises.
 Providing training on quality
 Listening to the voice of the employees of the organization through biannual
MD’s address
 Providing trust by giving security of job; so that employees feel confident in
time of change.

• Proper planning

All constituents of the organization must be involved in the development of the


implementation plan and any modifications that occur as the plan evolves. Of
particular importance is the two-way communication of ideas by all personnel during
the development of the plan and its implementation. Customer satisfaction should be
the goal rather than financial or sales goals. Focus on quality and the other goals will
follow.

ACI implement planning by –

 Communicating yearly planning to all employees of ACI


 Giving production target for each product
 Furnish back up plan for any short comings of the yearly plan

• Continuous training and education

Training and education is an ongoing process for everyone in the organization. Needs
must be determined and a plan developed to achieve those needs. Training and
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education are most effective when senior management conducts the training on the
principles of TQM. Informal training occurs by communicating the TQM effort to all
personnel on a continual basis.

ACI is giving continuous training on –

 Values and professionalism


 Communication techniques
 Teambuilding
 Decision making and problem solving method
 Behavioral improvement techniques

• Structured organization

Differences between departments and individuals can create implementation


problems. The use of multifunctional teams will help to break down long-standing
barriers. Restructuring to make the organization more responsive to customer needs
may be needed. Individuals who do not embrace the new philosophy can be required
to leave the organization. Adherence to the six basic concepts will minimize the
problems over time.

ACI is a structured organization as shown by –

 Function based organization


 Inter-department communication on problem solving
 Customers need are identified through cross functional teams

• Easy access to data and results

In managing quality, it is important for organizations to have a good system to


manage data and information on its operation and external environment, i.e.
process/product performance and their customer or market needs. Having sufficient
data and information on the process performance and operations, customers,
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suppliers, and other stakeholders would help the organization and its employees to
continuously improve their decision and action in producing and delivering goods and
services that fulfill the standards and requirements. Therefore, access to data and
quick retrieval is necessary for effective processes.

ACI has given easy access of data and results through –

 Implement modern ERP system/MATPLAN for storing sales, customer and


stakeholders’ data and subsequently the employees have access to these data.
The data and results are than converted to future planning and execution of the
strategy to achieve goals.

• Measurement techniques

The organizational improvement program that matches output to customer needs,


requires teamwork and continuous improvement. TQM also involves strategic
planning. A key to assessing the progress of a TQM process is measurement. Today's
companies need performance measures that will allow them to effectively manage
their operations and meet business and financial goals. Defining current performance
in the elements of quality, cost, flexibility, reliability, and innovation allows
organizations to evaluate performance and to prioritize areas for initiating
improvement processes. Data analysis is the critical factor in determining how well an
institution is accomplishing its goals. Key characteristics of the organization should
be measured so that effective decisions can be made. In order to improve a process
you need to measure the effect of improvement ideas.
ACI measures key characteristics by –

 Balance Scorecard system for measuring job performance and improvement.


 Innovation prize is introduced to encourage process improvement
 Quality parameters are standardized by introducing ISO 9001:2008.

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• Paying attention to internal and external customers

Organizations need to understand the changing needs and expectations of their


customers. Effective feedback mechanisms that provide data for decision making are
necessary for this understand. One way to overcome this obstacle is to give the right
people direct access to the customers.

ACI has prioritize the attention to customers by –

 Give orientation to the employees to identify the customers


 Introduce customer focus as one of the core values of the organization
 Customer survey and complaints are handled through proper supervision

• Use of empowerment and teamwork

Teams need to have the proper training and, at least in the beginning, a facilitator.
Whenever possible, the team’s recommendations should be followed. Individuals
should be empowered to make decisions that affect the efficiency of their process or
the satisfaction of their customers.

ACI provide both empowerment and teamwork by –

 Problem solving through forming teams and empower the team to formulate
solutions for the problems
• Desire for continuous improvement

It is tempting to sit back and reset on your laurels. However, a lack of continuous
improvement of the processes, product and/or service will even leave the leader of the
pack in the dust.

Continuous improvement is a priority for ACI as it is shown by –

 Providing innovation prize for the employees


8
 Introducing new technologies as available in the market

TQM Questionnaire:

1. What is the quality in your view?

The quality of a product or service refers to the perception of the degree to which the
product or service meets and exceeds the customer's expectations. Quality has no specific
meaning unless related to a specific function and/or object. Quality is a perceptual,
conditional and somewhat subjective attribute.

2. In your organization, do you have any practice of using employee suggestions?

Yes, we do have a suggestion box which is placed in a convenient place so that


employees can submit their suggestions for process improvement of the organization. We
also have web-based suggestions submission techniques which are attended or solved
through cross functional groups.

3. Do you provide any monetary incentives to encourage employee suggestions for


process improvement?

No, we do not have direct monetary incentives for encouraging employee suggestions.
But, ACI provide performance bonus to encourage employees to add value and
innovation in the individual job area.

4. If you do, are they individual – based or group – based or for the entire company
employees?

Individual – based.

5. Do you provide any non – monetary incentives to encourage employee suggestion for
process improvement?

9
Yes, we do have non – monetary incentives for providing suggestion for process
improvement. This scheme will cover all the employees working in the Company which
includes field employees also.

Key Criteria:

1. The innovative idea should bring value addition to the existing processes, products
and systems and results in substantial benefits to the Company in terms of finance,
image and productivity. The idea of encouraging innovation is to looking for ways
to improve things, solve problems and generally make things better, more efficient
and more convenient.
2. Before considered to be rewarded, the idea must be implemented at least for a
consecutive period of three months & the value addition to the company after
implementation must be calculated. Whilst accurate costs & benefits may not be
fully quantifiable, the Idea Evaluation Committee & the Value Addition
Calculation Committee will have the sole discretion to decide its merits.
3. The Value Addition Calculation Committee will be consisting of the Business
Manager, CB; Financial Controller & Corporate Finance Manager.
4. In the event a team submits a proposal, the total amount of award will be
distributed to the members by equal proportion.
5. More than one submission is permitted
6. Submissions must be practical and capable of being implemented
7. Ideas must be innovative- in the event that they are already being implemented or
is in the process of being implemented, or is under consideration for
implementation within ACI, they will not be considered as innovative ideas. This
decision will be at the sole discretion of the Idea Evaluation Committee.

Idea Submission Subjects:

Idea submissions may cover a broad range of subjects, including, but not restricted to:

1. Business proposals on new products and/or services


2. Marketing campaigns for existing products and/or services
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3. Organizational and structural changes
4. Workflow and process improvements
5. Improving the customer services
6. Anything what you feel ACI is missing
7. Product improvement leading to increased profitability through design change,
recipe change etc.
8. Any breakthrough ideas in doing current jobs/practice differently or making deal
with outside parties differently which will bring savings to the company.

6. If you do, are they individual – based or group – based or for the entire company
employees?

The incentives are given as individual – based for best innovation for process
improvement. Ideas will be collected monthly and the idea evaluation committee will
determine which ideas will be forwarded to the concerned business heads for determining
the possibility of implementation. After three months of implementation, the Value
Addition Calculation Committee will calculate the net value addition of the idea to the
company against different set criteria. If the value addition is significant, the Value
Addition Calculation Committee will forward the idea along with value addition
calculations to the Management Committee. The Management Committee will be the
final authority to give decisions regarding the ideas to be selected for recognition &
reward in the forthcoming Managing Directors Address.

7. In your view, most problems in the production of products/services are related to:
a. The people who are engaged in producing the products/services

8. Which of the following does you organization use, if any:

a. JIT
b. Kaizen √
c. Business Process Reengineering
d. Benchmarking
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e. None

9. If your organization uses any of the above concepts, please provide the situations
where the above are used.

Cross functional teams are formed to solve the problems and decision making. Moreover,
line managers meet monthly with the subordinates to solve problems.

10. Do you benchmark? Where do you get the data about the best performers in order
to benchmark?

Yes, Benchmarks are provided through evaluating Balance Scorecard of the employees.

11. What are the ways the organization attempts to involve lower level employees in
decision making? Please explain some methods.

12. Although Deming proposed that qualitative objectives, MBO and performance
appraisals should not be used in organizations if they are to focus on quality, what is
your opinion?

13. Circle the number that best describes the firm’s situation:

a. How flexible is the organization culture?


Very Flexible Very Inflexib

1 2 3 4 5 6 77 8 9 10

b. How much is the emphasis on policies, procedures as opposed to tolerating


deviations?

Very Low Very High


1 2 3 4 5 6 7 88 9 10

12

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c. How cautious is the firm about trying something new?

Not Cautious Very Cautious

1 2 3 4 5 6 7 8 9 10

d. Top-down management and communication is strictly followed?

Very Loosely Very Strictly

1 2 3 4 5 6 7 8 9 10

e. The organization trains everyone (not just new employees)?

Never Always

1 2 3 4 5 6 7 8 9 10
f. Decision – making is centralized at the top?

Always Never

1 2 3 4 5 6 7 8 9 10

g. Productivity and profitability is the primary focus of the organization.

Always Never

1 2 3 4 5 6 77 8 9 10

h. Cross-functional teams are often created to identify and solve problems.

Never Always

1 2 3 4 5 6 7 8 9 10
10

i. Employee turnover is tracked in order to control it

Never Always

1 2 3 4 5 6 77 8 9 10

j. The organization accepts a certain margin of error in operations and processes.

Always Never

1 8 10
2 3 4 5 6 7 8 9

k. Some conflict is allowed to occur in the organization

Always Never
7 13
1 2 3 4 5 6 7 8 9 10
l. Conflicts of any type are nullified

Always Never
14. For the same type of products or services do you use –
1 2 3 4 5 6 7 8 9 10

a. One supplier
b. Few suppliers
c. Several suppliers √
d. Uncertain

15. Which in your view, is better to do?

a. Use one supplier


b. Use a few suppliers
c. Use several suppliers √

16. Please describe why?

Several suppliers will help to negotiate the cost acquiring raw materials.

17. Does the supplier organization representatives visit your


factory/plants/organization?

a. No, it is not necessary


b. Yes, every month on average
c. Yes, once a year on average
d. Yes, but not regularly √

18. Do you train the supplier organization so that it knows exactly what you want from
it?

a. No, it is not necessary


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b. Yes, rarely
c. Yes, occasionally √
d. Yes, often

19. Do you visit the supplier organization to know how they produce?

a. No, it is not necessary


b. Yes, every month on average
c. Yes, once a year on average
d. Yes, but not regularly √

20. Have you formed any sort of alliance with your suppliers (upstream or downstream,
e.g., product alliance, promotion alliance, logistic alliance, pricing alliance etc.)?
please describe.

No.

21. Does top management undergo any training in relation to quality improvement?

Yes

22. Does the top management themselves train others in any of the quality issues?

Yes

23. Does the top management spend time with front line employees face-to-face?

Yes

24. If so, how often?

a. One a year e. Everyday


15
b. Once semi annually f. No fixed schedule
c. Once in a month √ g. Never directly
d. Once a week

25. Does the top management spend time with customers face-to-face?

Yes
26. If so, how often?

a. One a year e. Everyday


b. Once semi annually f. No fixed schedule √
c. Once in a month g. Never directly
d. Once a week

Questions the Interviewer should answer through observation and interview input

27. Provide a diagrammatic representation of the organization structure. Examine the


organization structure of the firm. State which type it is (e.g., function – based,
product – based, customer – based, geography – based, work – process based,
matrix etc.)

28. Do you think that the current organization structure of the firm is conductive to
TQM?

Yes

29. What artifacts, symbols and behaviors in the organization do you observe that tells
you that this organization’s culture is quality conscious? Explain.

List of symbols, artifacts:


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a. Quality policy
b. Values posters
c. Safety posters
d. SOP/Written documents/procedures
e. Job rooster for production process
f. Notice board notifications
g. Important notices on the notice board

30. How much this organization spends on regular training annually?

Approximately 1,10,00 hours on


Operational knowledge and Skill
Managerial skill
Quality management system
Strategic Skill or conceptual skills

31. How much does this organization spend on management development annually?

BDT. 10,00,000.00

32. Does it appear to you that the organization treats spending on training and
development as cost or investment?

Investment

33. In your view, what is the level of partnership of the firm with its suppliers?

Low High
1 2 3 4 5 6 77 8 9 10

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Concluding Remarks:

ACI's mission is to achieve business excellence through quality by understanding, accepting,


meeting and exceeding customer expectations.

ACI follows International Standards on Quality Management System to ensure consistent


quality of products and services to achieve customer satisfaction. ACI also meets all national
regulatory requirements relating to its current businesses and ensures that current Good
Manufacturing Practices (cGMP) as recommended by World Health Organization is followed
for its pharmaceutical operations.

The management of ACI commits itself to quality as the prime consideration in all its
business decisions. All employees of ACI must follow documented procedures to ensure
compliance with quality standards.

The pool of human resources of the company will be developed to their full potential and
harnessed through regular training and their participation in seeking continuous improvement
of work methods.

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