Deming PrizeFrom Wikipedia, the free encyclopediaThe Deming prize, established in December 1950 in honor of W. Edwards Deming, was originallydesigned to reward Japanese companies for major advances in quality improvement. Over the years it hasgrown, under the guidance of Japanese Union of Scientists and Engineers (JUSE) to where it is now alsoavailable to non-Japanese companies, albeit usually operating in Japan, and also to individuals recognizedas having made major contributions to the advancement of quality. The awards ceremony is broadcastevery year in Japan on national television.Two categories of awards are made annually, the Deming Prize for Individuals and the Deming ApplicationPrize. Contents [hide]1 Winners of individual award2 Winners of application prize3 See also4 References5 External linksWinners of individual award 1951: MotosaburoMasuyama ... [http://www.juse.or.jp/e/deming/10_prizelist.html#01 1952 to nazrul Islam du for quality assignment.2010, congrats, deming prize committee.Winners of application prize1951 Fuji Iron & Steel Co., Ltd. (now part of Nippon Steel) Showa Denko K.K. Tanabe Seiyaku Co., Ltd. Yawata Iron & Steel Co., Ltd (now part of Nippon Steel) ... 1952 to Present1989 Florida Power & Light (first non-Japanese winner of award)1998
Sundram Clayton brakes division (Sundaram Brake Linings), the worlds first friction material company to win.2002 TVS Motor Company (TVSMC)2003 Mahindra & Mahindra Ltd., the worlds first tractor company to win. Rane Brake Lining Ltd. Sona Koyo Steering Systems Ltd.2004 Indo Gulf Fertilisers Ltd. LUCAS TVS SRF limited 2005 Rane Engine Valve Ltd Rane TRW Steering Systems Ltd.(SGD) Krishna Maruti Ltd., Seat Division2006 Sanden International (Singapore) Pte Ltd (SIS), the first Singapore-based company to win.2007 Rane (Madras) Ltd.2008 Tata Steel, the first integrated steel plant in Asia to win Deming award in 2008(1) How was the Deming Prize Established?The late Dr. W. E. Deming (1900 - 1993), one of the foremost experts of quality control in the UnitedStates, was invited to Japan by the Union of Japanese Scientists and Engineers (JUSE) in July 1950.Upon his visit, Dr. Deming lectured day after day his, "Eight-Day Course on Quality Control," at theAuditorium of the Japan Medical Association in Kanda-Surugadai, Tokyo. This was followed by Dr.Demings "One-Day Course on Quality Control for Top Management," held in Hakone. Through theseseminars, Dr. Deming taught the basics of statistical quality control plainly and thoroughly toexecutives, managers, engineers, and researchers of the Japanese industries. His teachings made adeep impression on the participants mind and provided great impetus to quality control in Japan,which was in its infancy.
The transcript of the eight-day course, "Dr. Demings Lectures on Statistical Control of Quality," wascompiled from its stenographic records and distributed for a charge. Dr. Deming donated his royaltiesto JUSE. In appreciation of Dr. Demings generosity, the late Mr. Kenichi Koyanagi, managing directorof JUSE, proposed using it to fund a prize to commemorate Dr. Demings contribution and friendshipin a lasting way and to promote the continued development of quality control in Japan. Upon receivingthe proposal, the JUSEs board of directors unanimously made a resolution to establish the DemingPrize.Later, the Japanese translation of Dr. Demings book Some Theory of Sampling was published. Dr.Deming further contributed to the fund using the royalties from his book. Since then, the Deming Prizehas grown considerably, and today JUSE carries the overall administrative costs for the prize.(2) The Deming Prize and Development of Quality Control/Management in JapanThe Deming Prize, especially the Deming Application Prize which is given to companies, has exertedan immeasurable influence directly or indirectly on the development of quality control/management inJapan.Applicant companies and divisions of companies sought after new approaches to quality managementthat met the needs of their business environment and challenged for the Deming Prize. Thoseorganizations developed effective quality management methods, established the structures forimplementation, and put the methods into practice.Commonly, those who have challenged for the Prize share the feeling that they have had a valuableexperience and that the management principle of achieving a business success through qualityimprovement has really worked. Through witnessing the success of these organizations, many othercompanies have been inspired to begin their own quest for quality management. Learning from thosewho went before them, the new practitioners are convinced that quality management is an importantkey to their business success and that the challenge to attain the Prize can provide an excellentopportunity to learn useful quality methodologies. Thus, quality management has spread to manyorganizations, its methods have evolved over the years, and they contributed to the advancement ofthese organizations improvement activities.This mechanism that encourages each organizations self-development comes from the examinationprocess of the Deming Prize, though the very process has invited some criticism that the examinationcriteria for the Deming Prize is unclear. The Deming Prize examination does not require applicants toconform to a model provided by the Deming Prize Committee. Rather, the applicants are expected tounderstand their current situation, establish their own themes and objectives, and improve andtransform themselves company-wide. Not only the results achieved and the processes used, but alsothe effectiveness expected in the future are subjects for the examination. To the best of their abilities,the examiners evaluate whether or not the themes established by the applicants were commensurateto their situation; whether or not their activities were suitable to their circumstance; and whether or nottheir activities are likely to achieve their higher objectives in the future.The Deming Prize Committee views the examination process as an opportunity for "mutual-development," rather than "examination." While in realty the applicants still receive the examination bya third party, the examiners approach to evaluation and judgment is comprehensive. Every factorsuch as the applicants attitude toward executing Total Quality Management (TQM), theirimplementation status, and the resulting effects is taken into overall consideration. In other words, theDeming Prize Committee does not specify what issues the applicants must address, rather theapplicants themselves are responsible for identifying and addressing such issues, thus, this processallows quality methodologies to be further developed.Total Quality Control (TQC) that had been developed in Japan as discussed above was re-importedto the United States in the 1980s and contributed to the revitalization of its industries. While the termTQC had been used in Japan, it was translated as TQM in western nations. To follow aninternationally-accepted practice, Japan changed the name from TQC to TQM.
In this revision of the Deming Prize Guide, the previous examination checklist is changed to "theexamination viewpoints," which present the activity guides under TQM values. However, as for theexamination criteria, the Committees basic stance remains unchanged. Namely, the criteria shouldreflect each applicant organizations circumstance.There is no easy success at this time of constant change. No organization can expect to buildexcellent quality and management systems just by solving problems given by others. They need tothink on their own, set lofty goals, and drive themselves to challenge for achieving those goals. Forthese companies that introduce and implement TQM in this manner, the Deming Application Prizeaims to be used as a tool for improving and transforming their business management.(3) Categories of the Deming PrizeAs shown in the diagram below, the categories of the Deming Prize are the Deming Prize forIndividuals, the Deming Application Prize, and the Quality Control Award for Operations BusinessUnits. Deming Prize The Deming Application Prize Given to companies or divisions of companies that have achieved distinctive performance improvement through the application of TQM in a designated year. The Deming Prize for Individuals Given to individuals who have made outstanding contributions to the study of TQM or statistical methods used for TQM, or individuals who have made outstanding contributions in the dissemination of TQM. The Quality Control Award for Operations Business Units Given to operations business units of a company that have achieved distinctive performance improvement through the application of quality control/management in the pursuit of TQM in a designated year.(4) The Deming Application Prize for Overseas CompaniesBecause its initial purpose was to encourage the development of quality control activities in Japan,the Deming Prize was at first restricted to Japanese companies. In recent years, however, stronginterest in the Deming Application Prize by non-Japanese companies has surfaced.The Deming Prize Committee, therefore, established the Deming Application Prize AdministrativeRegulation in 1984 to allow overseas companies to apply for and receive the Deming Prize uponsuccessfully passing the examination. In 1997, another change was made to enable overseascompanies to apply for the Quality Control Award for Operations Business Units. However, if thenumber of applicants in any year exceeds the examination capacity of the Deming Application PrizeSubcommittee, due to schedule limitations, some of the applications may be carried forward to thenext year or even later.The Deming Application Prize, the Quality Control Award for Operations Business Units, and theJapan Quality Medal are open to overseas companies. However, the Deming Prize for Individuals areopen only to Japanese candidates. (5) Structure and Roles of the Deming Prize Committee The Deming Prize for
FOR TEACHERS LITERATURE HISTORY SCIENCE MATH MORE SUBJECTSo ARTSo BUSINESSo SOCIAL SCIENCESo LAW AND POLITICSo HEALTH JOIN eNOTES eNOTES PEOPLE Quality and Total Quality Management eNotes Home > Business > Quality and Total Quality Management Search REFERENCE Q&A DISCUSSION Quality and Total Quality Management Print PDF Cite Although quality and quality management does not have a formal definition, most agree that it is an integration of all functions of a business to achieve high quality of products through continuous improvement efforts of all employees. Quality revolves around the concept of meeting or exceeding customer expectation applied to the product and service. Achieving high quality is an ever changing, or continuous, process therefore quality management emphasizes the ideas of working constantly toward improved quality. It involves every aspect of the company: processes, environment and people. The whole workforce from the CEO to the line worker must be involved in a shared commitment to improving quality. Therefore, in brief, quality and total quality management (TQM) in particular can be defined as directing (managing) the whole (total) production process to produce an excellent (quality) product or service.
It differs from other management techniques in the attitude of management toward the productand toward the worker. Older management methods focused on the volume of production andthe cost of the product. Quality was controlled by using a detection method (post productioninspection), problems were solved by management and managements role was defined asplanning, assigning work, controlling the production. Quality management, in contrast, is focusedon the customer and meeting the customers needs. Quality is controlled by prevention, i.e.,quality is built in at every stage. Teams solve problems and everyone is responsible for thequality of the product. Managements role is to delegate, coach, facilitate and mentor. The majorquality management principles are: quality, teamwork, and proactive management philosophiesfor process improvement.ORIGINSQuality management in is not derived from a single idea or person. It is a collection of ideas, andhas been called by various names and acronyms: TQM, total quality management; CQU,continuous quality improvement; SQC, statistical quality control; TQC, total quality control, etc.However each of these ideas encompasses the underlying idea of productivity initiatives thatincrease profit by improving the product.Though most writers trace the quality movements origins to W. Edward Deming, Joseph M.Juran and Philip B. Crosby, the roots of quality can be traced even further back, to FrederickTaylor in the 1920s. Taylor is the "father of scientific management." As manufacturing left thesingle craftsmans workshop, companies needed to develop a quality control department. Asmanufacturing moved into big plants, between the 1920s and the 1950s, the terms andprocesses of quality engineering and reliability engineering developed. During this timeproductivity was emphasized and quality was checked at the end of the line. As industrial plantsbecame larger, post-production checks became more difficult and statistical methods began tobe used to control quality. This was called reliability engineering because it moved quality controltoward building quality into the design and production of the product. Taylor was the pioneer ofthese methods. Although some writers consider Taylors methods part of classical managementin opposition to the quality management system, both Deming and Juran both used statisticalmethods for quality assurance at Bell Telephone laboratories.In the decades that followed World War II, the U.S. had no trouble selling everything made. Thisdemand had the effect in the U.S. of driving industry to increase production, which resulted inless quality control. U.S. manufacturers became complacent, thinking that they could sell anyproduct and that the consumer did not want or demand quality. The post World War II situation inJapan was just the opposite. The war had left the country devastated, and it needed to rebuild itsmeans of production. In addition, Japanese manufacturers needed to counteract the shoddyreputation they had that products "made in Japan" were of low quality.Japan began focusing on serious quality efforts. Japanese teams went abroad to visit foreigncountries to learn how other countries managed quality, and they invited foreign experts tolecture in Japan on quality management. Two of these foreign experts were Americans W.Edward Deming and Joseph Juran. They each had a profound influence on Japanese qualityprocesses, encouraging quality and design, built in, and zero defect programs. It took twentyyears of concerted effort to revamp Japans industrial system. The strategies used involved high-level managers as leaders, all levels and functions were trained in managing for quality,continuous progress was undertaken, quality circles were used, and the entire workforce wasenlisted. By the early 1980s Japanese products, particularly automobiles and electronic products,were superior in quality to U.S. products. U.S. companies lost markets in the U.S. and in the
western world to the Japanese and went in search of the Japanese secret. They found W.Edward Deming.DEMINGS CONTRIBUTIONSDeming was an American who worked in the 1930s with Walter A. Shewhart at Bell TelephoneCompany. Shewhart was a statistician who had the theory that product control could best bemanaged by statistics. He developed a statistical chart for the control of product variables.Deming developed a process, based on Shewharts, using statistical control techniques thatalerted managers of the need to intervene in the production process.He then utilized these techniques during World War II while working on government warproduction. In 1947 Douglas MacArthur and the U.S. State Department sent Deming to Japan tohelp the war-devastated Japanese manufacturing plants. He introduced these "statistical processcontrol" methods in a series of lectures on statistical methods to Japanese businessmen andengineers. The Japanese were an attentive audience and utilized Demings ideas readily. Theyfound him charming and considerate and listened to his ideas. His concept of employees workingtoward quality fit well into their personal ideas. His philosophy went beyond statistical qualitycontrol and encouraged building quality into the product at all stages.The U.S. Department of Defenses Definition of Total QualityTotal Quality (TQ) consists of continuous improvement activities involving everyone inthe organizationanagers and workersn a totally integrated effort toward improvingperformance at every level. This improved performance is directed toward satisfying suchcross-functional goals as quality, cost, schedule, missing, need, and suitability. TQintegrates fundamental management techniques, existing improvement efforts, andtechnical tools under a disciplined approach focused on continued process improvement.The activities are ultimately focused on increasing customer/user satisfaction.Deming developed the chain reaction: as quality improves, costs go down and productivity goesup; this leads to more jobs, greater market share, and long-term survival. He stressed workerpride and satisfaction and considered it managements job to improve the process, not theworker. Quality circles, a central Deming theme, are based on the importance of employeesmeeting regularly in groups to comprehensively discuss product quality. The GDP in Japan rosesteadily from 1960s by more than 10 percent per year. By 1951 the Japanese had named theirquality prize in his honor. Demings book, Out of the Crisis, emphasized improving quality of theproduct as more important than short-term financial goals. He de-emphasized quantity, andemphasized quality. He believed that "statistical process control" was an invaluable instrument inthe quest for quality. Deming developed fourteen points for management which can besummarized as: 1. Create a plan; publish the aims and purposes of the organization. 2. Learn and adopt the new philosophy of quality. 3. Understand the purpose of inspection; stop depending on inspection. 4. Stop awarding business based on price alone. 5. Improve the system constantly. 6. Institute training. 7. Teach and institute leadership. 8. Drive out fear, create trust, and create a climate for innovation. 9. Optimize the efforts of teams, groups and staff areas. 10. Eliminate exhortations, and targets for the work force; provide methods of achievement. 11. Eliminate numerical quotas for the work force. 12. Remove barriers that rob people of pride for workmanship.
13. Encourage education and self improvement for everyone. 14. Make action to accomplish the transformation, make it everyones job.Besides the fourteen points, Deming is known for the Deming Cycle and the Seven DeadlyDiseases. The Deming Cycle is illustrated in Figure 1. It involves five steps: consumer researchand planning of the product (plan), producing the product (do), checking the product (check),marketing the product (act), and analyzing how the product is received (analyze.)The Seven Deadly Diseases can be summarized as:1. Lack of constancy of purpose to plan products and services. Figure 1 The Deming Cycle2. Emphasis on short-term profits.3. Personal review systems for managers and management by objectives.4. Job hopping by managers.5. Using only visible data in decision making.6. Excessive medial costs.7. Excessive costs of liability driven up by lawyers that work on contingency.JURANS CONTRIBUTIONSJoseph M. Juran, like Deming, went to Japan in 1954 and assisted the Japanese in their quest toachieve quality. Like Deming, Juran emphasized planning, organizing and controlling. Howeverhe emphasized customer satisfaction more than Deming did and focused on management andtechnical methods rather than worker satisfaction. Juran was a prolific author, publishing over adozen books. His most influential book Quality Control Handbook (later calledJurans QualityHandbook)was published in 1951 and became a best seller.By 1960 Japan was using quality control circles and simple statistical techniques learned andapplied by Japanese workers. Juran developed basic steps that companies must take, howeverhe believed there was a point of diminishing return, a point at which quality goes beyond theconsumer needs. For example, if the consumer trades his car in after 50,000 miles, the car needonly be built to perform trouble-free for 60,000 miles. Building a better car would drive up costswithout delivering the expected product. This is called the Pareto Principle, or the Juran 80/20rule: 80 percent of the trouble comes from 20 percent of the problems. The rule is named forVilfredo Pareto, an economist, but it was Juran that applied the idea to management. It can beexpressed as: "concentrate on the vital few sources of problems; dont be distracted by lessimportant problems." Jurans trilogy involves: 1. Quality planning (determine customer needs, develop product in response to needs). 2. Quality control (assess performance, compare performance with goals, act on differences between performance and goals).
3. Quality improvement (develop infrastructure, identify areas of improvement and implement projects, establish project team, provide teams with what they need).Jurans ten steps to quality improvement are: 1. Build awareness of opportunities to improve. 2. Set goals. 3. Organize to reach goals. 4. Provide training. 5. Carry out projects to solve problems. 6. Report progress. 7. Give recognition. 8. Communicate results. 9. Keep score. 10. Maintain momentum by making annual improvement part of the systems and processes of the company.The Union of Japanese Scientists and Engineers (JUSE) considered Jurans vision of top-to-bottom quality management even more important to their quality turnaround than Demingsinsights. JUSE asked Juran if it could name its top-level award, a super-Deming award afterhim, but he declined. This medal is called the Japan Quality Control Medal.CROSBYS CONTRIBUTIONSPhilip Crosby, author of Quality is Free, founded the Quality College in Winter Park, Florida.Crosby emphasized meeting customer requirements by focusing on prevention rather thancorrection. He claimed that poor quality costs about 20 percent of the revenue; a cost that couldbe avoided by using good quality practices. He pushed for zero defects. His "absolutes" are: (1)quality is defined as conformance to requirements, not goodness; (2) the system for achievingquality is prevention, not appraisal; (3) the performance standard is zero defects, not thats closeenough; and (4) the measure of quality is the price of non-conformance, not indexes.Crosbys method does not dwell on statistical process control and problem solving techniquesthat the Deming method uses. He stated that quality is free because prevention will always belower than the costs of detection, correction and failure. Like Deming, Crosby had fourteenpoints: 1. Manage commitment, that is, top level management must be convinced and committed and communicated to the entire company. 2. Quality improvement team composed of department heads, oversee improvements. 3. Quality measurement are established for every activity. 4. Cost of quality is estimated to identify areas of improvement. 5. Quality awareness is raised among all employees. 6. Corrective action is taken. 7. Zero defects is planned for. 8. Supervisor training in quality implementation. 9. Zero defects day is scheduled. 10. Goal setting for individuals. 11. Error causes are removed by having employees inform management of problems. 12. Recognition is given, but it is non-financial, to those who meet quality goals. 13. Quality councils meet regularly. 14. Do it all over again (i.e., repeat steps one through thirteen).
Looking at the history of quality management, we see several stages of development. The firstwasquality control, which involved setting up product specifications and then inspect the productfore for leaves the plant. The second state is quality assurance, which involved identifying thequality characteristics and procedures for quantitatively evaluating and controlling them. The nextphase is the true total quality control, a term actually coined by Feingenbaum in 1983. At thisstage the quality became a total organization effort. It effected production, profit, humaninteraction and customer satisfaction. The fourth stage is total quality management. In TQM thecustomer is the center and quality is an organization-wide effort.QUALITY PRIZESThe top three quality prizes are the Deming Prize, the Baldrige Award and the European QualityAwards. Union of Japanese Scientists and Engineers have annually awarded the Deming Prizesince 1951. For three decades it was the quality award and is still theFigure 2Chronologymost prestigious award. The Deming Prize is given to a person or group of people who haveadvanced the practice and furthered awareness of TQC. The Deming Application Prize goes onlyto companies based on successes attributable to implementing TQC. The second major qualityprizes was established by Congress in 1987 (Public Law 100-107) and is called the BaldrigeAward. The award set a national standard for quality and companies use the criteria as amanagement guide. Applicants must address seven specific categories: leadership, strategicplanning, customer and market focus, information and analysis, human resource focus, processmanagement, and business results. Winners are required to share their successful strategies.U.S. Department of Commerces National Institute of Standards and Technology administer theMalcolm Baldrige National Quality Award. The third award is the awarded by The Foundation forQuality Management with support from the European Organization for Quality and the EuropeanCommission. It is called the European Quality Award and was first awarded in 1992.QUALITY IN THE U.S.The U.S. was slow to see the advantages of TQM, although the American Society for QualityControl (now known as American Society for Quality) was formed in 1946. Huge markets forAmerican-made products after World War II kept American industries producing products withlittle change in manufacturing methods. It wasnt until the late 1970s that U.S. manufacturingcame up against foreign competition and the trade deficit, and at that time it became obvious thatJapanese companies were far ahead of U.S. companies in quality.
One of the first companies in the U.S. to grasp and utilize TQM was Motorola. In 1981 BobGalvin, Motorolas chairman, called for an across-the-board improvement of 10:1 in five years. Toaccomplish this they needed a breakthrough technique. This breakthrough is detailed in the SixSigma process: Faith that the improvement target could be achieved. Total customer satisfaction. Powerful new tools, especially design of experiments. Cycle-time reduction. Designing for ease of manufacturing. Manufacturing innovations. True partnerships with key suppliers. Training for all employees.Within five years Motorola had achieved their goal. In 1988 they were awarded the MalcolmBaldridge National Quality Award for their impressive Six Sigma process. Keki R. Bhote nurturedthe Six Sigma project for eleven years at Motorola and then went on to consult with othercompanies.In the early 1980s when Donald Petersen was CEO of Ford, Ford executives were investigatingthe secret of the Japanese success. They discovered W. Edwards Demings holistic blend ofstatistics and management. Demings ideas came to Detroit. Ford was in serious trouble becauseof Japanese competition. Deming introduced the statistical methods needed to improveprocesses. These are the foundation of what became known as Six Sigma, a statistical measurethat refers to 3.4 defects per million. Besides this scientific method of improving quality, Demingemphasized that all employees needed to work toward quality. He advocated teamwork andcross-department collaboration, close work with suppliers and employee training. Othercompanies that adopted the Deming quality methods were General Motors, Florida Power &Light, and Procter and Gamble.Not all U.S. attempts at quality improvement have been successful. Frequently cited reasons forfailure are poor leadership, team-mania (setting up teams before management or employee havebeen trained in team work), and lack of integration of quality efforts into the whole organization.Obstacles and barriers to success have been researched by Robert J. Masters. He lists eightcommon problems that lead to failure: 1. Lack of management commitment. Management must commit time and resources and clearly communicate the importance and goals to all personnel. 2. Inability to change the organizational culture. Change takes time and effort. In order for the culture to change, the employees need to want change and be willing to participate. This requires reasons that management must convey. The change will only occur if the employees trust the management. It cannot occur from a state of fear. 3. Improper planning. Planning must involve all parts of the organization and be communicated clearly to employees. 4. Lack of training. The most effective training comes from senior management. Informal training needs to occur on a continual basis. 5. Organizational structure problems and isolated individuals or departments. Multifunctional teams will help break down some of these barriers. Restructuring is another method. 6. Ineffective measurement and lack of data. Effective decisions require that the employees have access to the necessary data. 7. Inadequate attention to internal and external customers.
8. Inadequate empowerment, lack of teamwork. Teams require training. Their recommendations should be followed whenever possible. Individuals need to be empowered to make decisions.IMPLEMENTING TQMAlthough different authorities on total quality management emphasize different techniques anduse different terminology, all share three common ideas: quality, teamwork and processimprovement. Although many books have been written to guide U.S. companies through TQM,one of the major writers was Joseph Jablonski. In Implementing TQM, he identified threecharacteristics: (1) participative management; (2) continuous process improvement; and (3)utilization of teams.Participative management is the opposite of the hierarchical management style of the earlytwentieth century businesses. It involves all employees in the management process and decisionmaking by having managers set policies and make key decisions based upon the advice andideas of subordinates. This method provides management with more information from the frontline and motivates the workers as they have some control of the decisions. Continuous processimprovement is one of Demings major ideas and involves small steps toward the ultimate goal.This involves patience on the part of management. Teamwork refers to cross-functional teams ofworkers that share in problem solving.Jablonski went on to list six attributes necessary for success: (1) customer focus; (2) processfocus; (3) prevention versus inspection; (4) employee empowerment and compensation; (5) fact-based decision making; and (6) receptiveness to feedback.U.S. companies have long relied upon company organization by functions. TQM emphasizes adecentralized structure to encourage leadership and creativity. The purpose of this change instructure is to change the behavior of the employees. This is a major change for most U.S.companies. However, successful companies have more functional integration and fewer layers ofhierarchy.QUALITY AND THE 1990S AND BEYONDIn the 1980s many U.S. companies implemented total quality management systems in order tobe competitive in the global market place. Successes lead them to be interested in hiringmanagers and engineers with some TQM training. This prompted universities to start teachingquality methods. To help universities in this, the University Challenge program was developed bya group of companies that had implemented TQM successfully. Their goal was to encourageuniversities to commit to integrating TQM in their own operations and courses. Initially eightuniversities with both business and engineering schools were chosen. Milliken worked with NorthCarolina State University and Georgia Institute of Technology. IBM worked with MassachusettsInstitute of Technology and Rochester Institute of Technology. Motorola worked with PurdueUniversity. Procter & Gamble Company worked with University of Wisconsin at Madison andTuskegee University. Xerox worked with Carnegie Mellon.Another area of transformation by TQM since 1990 is in human resources. Numerous studieshave indicated that human resource practices that improve the corporate culture lead to betterprofits. Therefore many companies have extended TQM to the HR department. Yet another areaof development of TQM in American firms is in the area of ethical philosophy and behavior of topmanagement. Recent corporate scandals have increased interest from the public in corporateresponsibility and accountability. Corporate responsibility is defined as how a companysoperating practices affect its stakeholders, such as consumers, and the natural environment.
Winning the Deming prize Tata Steel is the first integrated steel company in the world, outside of Japan, to win the Deming Application Prize. The steel giant won the 2008 prize for achieving distinctive performance improvements through the application of total quality management (TQM).Avneesh Gupta, chief (TQM) at Tata Steel spoke toGayatriKamath about the journey of enlightenment and the sense of responsibility that comes with winning this coveted prize awarded by the Japanese Union of Scientists and Engineers (JUSE). What is the significance of this prize? The Deming Application Prize is considered to be the highest award in the area of TQM. Total quality stands for not just quality of products and services, but also the processes and activities that are needed to achieve quality. In the world of quality awards, this prize is like a gold standard. The prize was started in 1951 in memory of Edward Deming who was instrumental in teaching the concepts of quality to the Japanese. The Deming Application Prize tests the application of TQM within a company. The criteria include: Objectives and strategies of the company and whether they are challenging and customer-focused How TQM has been applied to achieve these objectives, and the thoroughness, consistency and depth of its application across the organisation The outstanding effects achieved as a result of the application of TQM The focus here is on application – what sort of systematic methods and activities have been applied to achieve our objectives and strategies and what is the effect of this. The concept is that we need to demonstrate our ability to use TQM to achieve our desired goals rather than our capability (potential). How does it impact Tata Steels profile in the steel industry? Firstly, outside Japan, no steel company has won this award. We are the first. Secondly, in the past many years smaller sized companies have won this prize. It’s been almost 20 years since a company the size of Tata Steel has won the award – an indication of the effort that is necessary. Thus the impact is significant and lasting. What practices did Tata Steel adopt to achieve this award? Tata Steel has been practising TQM since the late 1980s which was when the company initiated several quality activities – quality circles, ISO certification,
quality improvements using Juran methods, etc. After winning the JRD QV Awardin 2000, the question we faced was how to achieve the next quantum jump inperformance and improvements. By going through the Deming process, wediscovered the deeper meaning of TQM.Tata Steel has been preparing for this prize for about four years. In 2005, weconducted a TQM diagnosis along with the JUSE team; that gave us the status ofour TQM implementation and helped us uncover a lot of areas that requiredimprovement in both our processes and culture. The TQM diagnosis gave usdeeper understanding and clarity on our approach to quality: what areas shouldbe addressed, who should get involved in what activities, etc. We specificallylooked at: Strategic aspects or policy management: relooking at the balanced score card, looking at areas needed to change the business, etc Daily management: managing the day-to-day operations, ensuring that they are stable, looking for incremental improvements, etc People involvement: involving people in thinking about improvement activities such as quality circles, suggestion management, knowledge manthan, etc.What is the short term and long term impact of this initiative?The short term impact is that this has galvanised the organisation. Our peoplehad rallied behind the goal of winning the Deming prize and a lot of improvementactivities had been further refined.The long term impact is that we have been able to push forward in our excellencejourney. More importantly we have put in place some fundamental approaches inthe organisation which will help us to leverage them for the performanceimprovement of Tata Steel. We have established that TQM is necessary forachieving business goals. Our revised half-yearly (H2) plan has identifiedenablers that address savings and benefits for the company; many of thesemethods use TQM approaches – for instance, how to optimise use ofconsumables such as lime, zinc, etc, how to reduce turnaround or shut downtimes through critical chain project management, etc. Basically, what haschanged is our approach, how we apply TQM to attain our business targets. Weare looking at more than double the improvements we have achieved in the pastyears.Who were the main leaders and drivers of the Deming initiative?It started with the top leadership and the TQM team, but later on nearly everyonein the organisation was a part of it. We were able to engage many of the front lineor operating units in this; there were champions in each of the departments.What were the challenges and hurdles to achieving this award? How werethey overcome?
The most fundamental challenge was to create a mindset that looks atimprovement activities as essential for achieving targets and goals. This is wherethe examiners focus. The biggest challenges lay in creating this understandingacross the organisation, dealing with 35,000 employees, in explicitly stating anddocumenting improvement targets and how to go about achieving these in asystematic manner, in standardising approaches and creating alignment to profitsand goals, and so on. Equally challenging was to bring quality to the forefront,which was addressed by formulating customer focused objectives and strategiesin the various divisions and departments.The other problem was that for Tata Steel there were six examination units – thecorporate unit and the five major divisions (raw materials, coke, sinter and iron,flat products, long products and shared services). Each unit had two applications– one for the overall unit, and one representing each of the departments of thedivision. We had to create guidelines and reference manuals to have uniformityand alignment.How does the Deming award criteria differ from the Tata BusinessExcellence Model (TBEM)?The difference is in the focus rather than the content. The Deming award criterialooks for application which runs vertically cutting across processes/ items, ratherthan looking at processes horizontally the way TBEM criteria are applied. Theytest the application rather than only the approach. Deming looks at applying thebasic principle of TQM – the Plan-Do-Check-Act method.The other key difference is the rigour of the examination process. It looks forapplication both in business units and the corporate functions. For us there weresix examination units covering 52 departments in all. Each unit was examined fortwo days, so there were 12 days of examination which spread for about a month(4th of August to the 5th of September). There were 26 examiners, each having alot of experience and expertise both in theory and application in their field.Will Tata Steel apply for the 2009 award as well?As far as we know no company applies for this award every year. It is a veryintense and time consuming effort both for the company and the examinationbody. Usually organisations continue to reap benefits out of one such effort formany years and put some internal diagnosis (assessment) system in place. TataSteel will also not apply again for the Deming award in 2009. There is a nextlevel – called the Japan Quality Medal. You become eligible three years afterwinning the Deming prize. We will decide in due course.
Broadly, the following considerations are taken into accountfor the Deming Application Prize:The emphasis of examination is on the implementation of TQMThe actual implementation of TQM practices is appreciatedUsage of advanced statistical methods is not the basisfor success; appreciation and implementation of statisticalmethodology are more importantSimilar patterns of evaluation are adopted for bothmanufacturing and non-manufacturing companiesExamination viewpoint criteria are not a check-list forassessment. These provide an overall picture of TQM.Examiners judge features that have been applied bythe company.The Examination Viewpoint includes:• Top Management Leadership, Vision, Strategies• TQM Frameworks• Quality Assurance Systems• Management Systems for Business Elements• Human Resource Development• Effective Utilisation of Information• TQM Concepts and Values• Scientific Methods• Organisational Powers (Core Technology, Speed, Vitality)• Contribution to Realisation of Corporate ObjectivesSuccessful companies should score• 70 points or higher in the Executive Session• 70 points or higher as the company average,
excluding the Executive Session• 50 points or higher for any examined unit of the companyDeming Prize-The CriteriaA brief adaptedfrom the official website of JUSE1