Module 5

Management Techniques.

Quality Circle, Total Quality Management, Business Process Re –engineering- Six Sigma,
Kaizen.

Management has to face many challenges in running business. Global

economy is characterised by cut throat competition , growing customer expectation, expanding
power of labour and fast changing technology. In order to meet these challenges . New management
techniques and practices are developed.

1) Quality Circle (Q C)

Quality Circle is participative management concept. Quality Circle is a small group of

employees belonging to the same or similar work area who meet regularly to discuss their quality
problems, investigate causes , recommend solutions and take corrective actions.

Quality circle is a group of people from the same organisational area , who
meet regularly to solve problems affecting their work. Usually these groups consist of 6 to 8
members.

Objectives of Q C ( Nature)

 To improve human relations and workers morale.

 To realise and satisfy workers needs at work place.

 To promote participative culture.

 To enhance job interest.

 To make team work more effective.

 To reduce defects and improve quality.

 To promote leadership development.

 Ti increase productivity.

 To reduce cost.

Benefits of Quality Circle.

 Self development of members in Q C.

 Making work more easy and safe.

 Increasing productivity.

 Improving quality of work life.

 Improving quality of products and service.

 Minimising wastage.

 Reducing cost.

 Increase customer satisfaction.

 Improves employee morale.

 Developing human relations.

 Solving work related problems.

 Improving working conditions.

 Improving communication.

Requirements of effective Quality circle.

 The employees should be encouraged to suggest ways and means to improve quality.

 Q C members must be given adequate training in the areas of statistical analysis.

 The Q C members should be trained in group dynamics.

 The management should allow the workers to hold Q C meeting periodically during working
hours.

 The top management should extent full support to Q C.

 Business Process Re-engineering. (BPR)

( Business Process Design/ Business process change management)

BPR is the fundamental rethinking and radical redesign of business process

to achieve improvements in critical areas like productivity, cost , quality and speed.

Steps in BPR ( Phases)

1) Define objective and framework.

The objective of re engineering must be defined in quantitative and qualitative

terms. Once the objectives are objectives are defined , it should communicate to the employees.

2) Identify customer needs.

While redesigning business activities customers must be taken into consideration .

The customer and customer groups , their expectations ,buying habits etc should be considered.

3) Study the existing process.

Before deciding on the changes to be made, the right and wrong of existing business
plan must be studied. This will give a base for new process.

4) Formulate a redesign business plan .

Once the existing business process is studied , the required changes to be made
should be developed and the best among all the alternatives is selected.

5) Implement the redesign.

Finally the changes are implemented in to the business to achieve dramatic

improvements. It is the responsibility of both management and designer to implement the new
process and the support of all.
 Total Quality Management

TQM is the continuous improvements in all parts of organisation with a view to satisfying
customer needs.

TQM refers to the deep commitment of the organisation to improve and maintain quality of
products and services.

Characteristics.

 TQM is customer oriented.

 It requires long term commitment for continuous improvements in all process.

 It is applicable to all levels of management.

 It requires involvement of every one in the organisation.

 It is the responsibility of the management to establish and improve TQM in the organisation.

Techniques of TQM

1) Re engineering.

It includes a total revising of operations by making an analysis of job. It also seeks

the measures to do the work more efficiently.

2) Bench marking.

It involves the process of comparing work with the best practices. It aims at
identifying the changes which will bring about higher quality output.

3) Empowerment.

It refers to the authority to take decisions within one’s area of operation. This
decision need not get the approval of anybody.

Benefits of TQM

 Better quality products.

 Improvement in productivity.

 Reduced cost.

 Increased market share.

 Higher profitability.
  Better return to shareholders.

 Effective team work.

 Customer satisfaction.

 Participative culture.

 Better company image.

Fundamentals of TQM

1) Focus on customers.

TQM is always focus on customer requirements and their satisfaction. TQM focus on
the theme “customer is the king”

2) Management by facts.

All the decisions should be based on facts . TQM will be successful only when
decisions making is based on facts. Facts means the information which is essential for arriving at a
decision and solving a problem.

3) Focus on prevention.

When a problem is solved , then the mechanism should be so designed that it is

solved for ever and it does not recur in future.

4) Principle of PDCA cycle

The Plan – Do- Check –Act principle is an essential tool for implementing TQM.

5) Employee involvement.

TQM can be successfully implemented if employees are fully involved in this

programme. Management should ensure the involvement of employees and give weightage to their
suggestions.

Principles of TQM

1) Customer centric approach.

Customer’s needs must be met in time , regularly and fully.

2) Employee involvement.

The organisation should ensure total employee involvement in achieving business

objectives . Employees must strive to do error free

3) Continuous improvements.

Continuous improvement will lead to improved and high quality processes.

Organisation should try to exceed customer expectation.
 Kaizen.

Kaizen means improvement. Kaizen is defined as a continuous effort by each and every
empolyee (from CEO to field staff) to ensure improvements of all processes and systems of a
particular organisation.

Principles of Kaizen.

 Good process bring good result,

 Work as a ream.

 Kaizen is everybody’s business

 Speak with data , manage by facts.

Establishment of standards.

Management should establish standards in products , process and people.

5) Communication.

Communication helps to motivate employees and improve their morale during

routine operations.

6) Reward.

There shall be system of reward and recognition in the organisation.

Areas of activities of kaizen

1) Quality.

Bettering products, service, work environment, practice and process.

2) Cost.

Reducing expenses, manpower and use of materials ,energy and resources.

3) Delivery

Cutting delivery time, movements and non value added activities.

4) Management.

Improving procedures , training, morale, administration, planning, reporting.

5) Safety.

Decreasing hazardous situations, unsafe working conditions, damage to the

environment.
 Advantages.

 Mistakes can be eliminated.

 Wasteful process can be minimised.

 Increase the morale of employees.

 Reduce the need for inspection.

 Increased team work.

 Satisfies customer needs.

 Goals can be achieved.

Disadvantages.

 It is very difficult to change the mind set of employees.

 Sometimes it will not provide long lasting results.

Six Sigma.

 Six sigma is a set of techniques and tools for improving the capability of
business process. Six sigma tries to identify and remove the causes of defects. A six sigma
process is one in which 99.99966 of the products are statistically expected to be free
fromdefects. ( 3.4 defective per million)

Methodology of Six sigma.

Six sigma has two methodologies:

DMAIC- Define , Measure , Analyse . Improve , Control.

DMADV- Define, Measure, Analyse, Design , Verify.

DMAIC- is used for projects aimed at improving an existing business process.

Define : Define the system , requirements of customers and project goals,

Measure: Measure the key aspects of the current process and collect relevant data
for future comparison.

Analyse: Analyse the data to investigate and verify cause and effect relationship ,
identify the root cause of the defect under investigation.

Improve: Improve the current process based on data analysis to create a new
process.

Control: Control the future state of process to ensure that any deviations from the
target are corrected before they result in defects. This process is repeated until the desired
quality level is obtained.
 DMADV: is used for projects aimed at creating new products or process
designs . It is also known as DFSS ( Design for six sigma.)

 Define: Define design goals that are consistent with customer demands and enterprise
strategy.

 Measure: Measure and identify characteristics that Critical To Quality. (CTQ), measure
product capabilities , measure risks.

 Analyse: Analyse to develop and design alternatives.

 Design: Design an improved alternative best suited base d on analysis.

 Verify: Verify the design , set up pilot runs, implement the production and hand it
over to the process owners.