Управление качеством в международных корпорациях. Практикум на английском языке

Practical training

They pay close attention to high quality during production and repeatedly set ourselves new goals so as to constantly improve the quality of existing products as well.

Quality thus plays a key role at every phase of the creation of a product. A wide variety of checks and tests ensures that the requirements of the customer are met completely or even exceeded.

No piece of equipment leaves the company without it having been checked thoroughly first.

Quality Management System

In order to assure the quality of the products delivered by the Supplier, the Supplier shall set up a Quality Management System. This Quality Management System shall be oriented to the relevant recommendations and requirements of the ISO 900 series in the current valid version. Compliance with the requirements of the ISO 901 is the long-term intention of both parties.

The quality characteristics for the products to be complied with by the Supplier are indicated in the Kärcher purchase order documentation (e.g. technical specifications, drawings, Kärcher standards, reference to catalogue article numbers, information letters or circulars etc.). Legal directives and regulations (e.g. bans of substances, emission targets, and identification regulations) have to be complied with even if they are not particularly mentioned in the order documents.

If Kärcher specifics product quality characteristics, the Supplier checks whether they are without contradictions and plausible and if they can be obeyed process wise with the available production capabilities. In cases of doubt he supplier informs the Central Purchasing Dpt. of Kärcher accordingly and offers, as far as possible, proposals under which conditions a process certainty production of the products.

The Supplier self-obligates to identify raw material/ material of the delivered products to the Central Quality Management Dpt. of Kärcher by ensuring its business secrets. Kärcher needs these data e.g. for the subsequent disposal of the product and to create eco balances. The delivered products are basically provided for a worldwide distribution. Should the delivered product not be appropriate for certain countries according to the Supplier (e.g. because of bans of substances of contents, emission targets, identification regulations), the Supplier will inform the Central Quality Management Dpt. of Kärcher about his.

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The supplier specifies the test equipment and test measures used to ensure the compliance with the quality characteristics of the products. The test equipment, test measures and test frequency have to be designed in a way that the quality characteristics can be examinedtoasufficientextent.Thetestequipmentshallbemaintained regularly (usually at least once per year) and checked for its failurefree function, as well as performing a regular, documented calibration by the supplier. In case of analyzes (e.g. for determination of the amount of certain substances of contents) national and international standards have to be complied with. Thereby international standards take priority over European ones and European standards take priority over national ones.

The Supplier shall inform the Central Purchasing Dpt. of Kärcher about any intentional, significant changes to the Quality Management System as well as about changes to their most relevant production factors (e.g. use of alternative materials or constructions; use of new, modified or alternative tools; change of manufacturing methods or production processes; relocation of productions to other locations or use of new production faculties; change of important subcontractors). Just so Kärcher is able to decide which consequences this might have (e.g. a new initial sample inspection, the execution of an audit or an intensified incoming gods inspection). Changes without influence on agreed quality of the contractual items are exempted from the information obligation of the supplier.

1.7 If the Supplier for Kärcher products purchases completely manufactured products from a sub-supplier, those shall establish a QM System, which at least is oriented to the requirements of EN ISO 901 in the current valid version. If this is not possible, the Supplier will inform the Central Quality Management Dpt. of Kärcher about this in writing. The Supplier informs the Central Quality Management Dpt. of Kärcher about whether the merchandised products delivered to Kärcher are from one or more established sub-suppliers or from frequently changing sub-supplier. If established sub-suppliers are used for purchase of merchandised products intended for Kärcher, the Supplier shall inform the Central Quality Management Dpt. of Kärcher of any permanent changes of a sub-supplier. (Only this way Kärcher will be able to decide if more stringent inspection of the merchandised products or new sampling is necessary).

If the Supplier for Kärcher products purchases completely manufactured products from a sub-supplier, those shall at least conduct an incoming and an outgoing inspection.

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The supplier commits to manufacture al products intended to be delivered to Kärcher by means of production methods and/or manufacturing facilities which are the state of the art.

WiththeEU-directiveRoHS(201/65/EUonrestrictionoftheuseof certain hazardous substances in electrical and electronic equipment) as well as several other EC–directives and national regulations and laws the use of certain substances of contents in products is restricted or prohibited. The current state of the international legislation is summarized in the Kärcher standard 050.032. On request it will be provided to the supplier. If the legislation exceeds the scope of the Kärcher standard, the legislation has to be followed.

The supplier self-obligates to keep his level of knowledge, regarding the respectively current bans of substances, up to date. He will be supported upon request by the environmental department of Kärcher.

Furthermore, the supplier self–obligates with appropriate measures to ensure that the Kärcher standard 050.032 as well as, if applicable, exceeding regulations be recognized and complied with. The products which are supplied to Kärcher can’t contain any substances which are under the Kärcher Standard or exceeding regulation are restricted or prohibited. Therewith it is assumed that the Kärcher Standard and the matching regulations are applicable for these products. Deviations hereof need the prior written release by Kärcher.

The supplier self-obligates, – to inform its suppliers, as far as they are concerned, about bans of substances which they have to comply with,–toensurethroughappropriatemeasures(e.g.obligationsofthe suppliers, check of the supplied products) that the Kärcher standard 050.032 or exceeding guidelines, directives or laws are recognized and complied with. Therewith, al products and materials supplied to Kärcher do not contain substances, restricted or prohibited according to the Kärcher standard 050.032 or exceeding regulations. Therewith it is assumed that the Kärcher Standard and the matching regulations are aplicable for these products

The supplier will comply with all the statutory requirements resulting from the EU regulations concerning protection against chemicals (REACH) (in particular the registration, notification and authorization duties). The supplier shall provide sufficient information for the safe use of their products to the environmental department

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at Kärcher as required in accordance with Regulation 1907/206 EC (REACH) section 3 and 57. If there are, due to REACH, any changes in the availability or the intended usage of materials, components, groups of components, subject matter of a contract or packaging, or if there are measures by Kärcher necessary, the environmental department at Kärcher hereof has to be notified without delay. The supplier shall also pas on the duties set forth in this subsection to the supplier’s upstream suppliers.

Thematerials,components,groupsofcomponents,subjectmatter of a contract or packaging do not contain any alarming substances (SVHC), which are currently on the REACH candidate list. If SVHC is present in a concentration above 0.1%, the supplier shall notify the environmental department at Kärcher hereof without delay.

Task

1.Describe quality standards are used Karcher.

2.Name an intermediary between production and sellers.

3.Why fire safety is included in the quality standards? Explain your opinion.

4.Highlight basic requirements for the Karcher’s quality system.

Questions

1.What city was established German system of quality?

2.Which factor has influence on the formation of the German quality system?

3.What the basic principles of the German system of quality?

References

1.Gabler Verlag, 2013. Total Quality Management. / Springer Fachmedien Wiesbaden GmbH, pp. 135–144.

2.Hans-Ulrich Frehr, 2012. «TQM Transforms Philips Germany», The TQM Magazine, Vol. 1 Iss: 3.

3.Professor Klaus j. Zink, Rolf Schildknect, 2014. «German companies react to TQM», The TQM Magazine, Vol. 2 Iss: 5.

4.Quentin Brook, 2013. Lean Six Sigma and Minitab / OPEX Resources Ltd.

5.Thomas Pyzdek, 2012. The Six Sigma Handbook / McGraw– Hill Professional.

6.Karcher official site : http://www.karcheroutlet.co.uk/

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12. THE SPECIFICS OF THE QUALITY MANAGEMENT

IN THE UNITED STATES

The purpose of this practice – to discuss and fix bases of quality management, its main principles in the United States.

This practice will allow creating competences PK-3: possession of skills of the strategic analysis, development and implementation of strategy of the organization aimed at providing competitiveness; and PK-5: ability to analyze interrelations between functional strategy of the companies for the purpose of preparation of the balanced administrative decisions and also to acquire the following knowledge and abilities:

–knowledge of quality management basesin the United States;

–understandingofanorderofitsimplementationinthecompanies’ activity;

–abilitytodefine,whatelementsqualitymanagementintheUnited States consist in and how to use them to develop the company and economy.

Relevance of practice consists in necessity to know the United States experience of quality management.

Theoretical part

Total quality management (TQM) has been one of the major buzz words for improved productivity for almost 20 years.Although TQM is much older than that, the «total quality movement» really picked up steam in the late 1970s and early 1980s when several largeAmerican corporations adopted the techniques that enabled the Japanese to be so successful.

The background of TQM is explained in a Federal Quality Institute publication, «Introduction to Total Quality Management in the Federal Government».

From about 1960 to 1990, the United States lost 40 percent of its market share to foreign competitors, while Japan increased its foreign market by 500 percent.

For the Japanese, the secret to success was the implementation of systematic quality efforts to meet or exceed customer requirements and expectations the first time and every time. The three basic principles of TQM are to: focus on achieving customer satisfaction, seek continuous and long term improvement in all the organization’s

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processes and outputs, and take steps to ensure the full involvement of the entire work force in improving quality.

Some federal departments, primarily the Department of Defense, adopted a TQM approach as early as the mid–70s; however, the federal government formally became a participant in TQM with a presidential executive order in February 1986. That order established a government-wide effort to improve the productivity, quality, and timeliness of government products and services.

TQM began to «catch on» in the United States when some American corporations achieved spectacular results. The Xerox Corporation is a primary example.

Xerox was motivated to launch an all-out effort to improve quality because it was in danger of going out of business. The company had lost65percentofitsmarketshareofcopierstoJapanesecompetitors. The Japanese copiers were just as good and less expensive. Guided by TQM principles, Xerox regained the market share it had lost, and in 1990, the company won the Baldrige Award.

The Malcolm Baldrige National Quality Award was established in 1987 by the federal government to encourage more American companies to remain competitive and improve their quality. The Baldrige Award is presented annually to companies that excel in quality achievement and quality management, and the award has become the most prominent and publicized symbol of the quality movement in United States.

Forseveralreasons,manycompaniesthathavetriedTQM-related approaches have not been successful, and as a result, criticism of TQM is increasing.

Gilbert Fuchsberg, staff reporter for the Wall Street Journal, calls the «total quality movement, one of the biggest fads in corporate management». In his May 14, 1992, article, he also describes TQM as «plenty of talk and not much action». He goes on to say that a study suggests TQM is floundering.

«There are tens of thousands of private and public-sector organizations with quality programs chugging away somewhere within their establishments, and almost every one of them is failing», says James C. Shaffer, vice president and principal of the consulting firm Towers Perrin.

Robert Schaffer, another consultant, says businesses «like lemmingsmarchingtothesea...arerushingheadlongtoadestination called total quality».

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Even Tom Peters, the guru of corporate management, vents his spleen (his words) by saying things like, «Hangnails? Apply TQM before bed.

Lost market share? Two tablespoons of TQM will do the trick

... the infinitely flexible elixir called TQM is not the answer to all of America’s vexing business problems».

On the other side of the debate are people like Harry V. Roberts, professor of statistics and quality management at the University of Chicago graduate business school. He says that contrary to critics’ beliefs, quality management is helping many companies survive and even prosper. He cites the 1991 Government Accounting Office surveyof 20 major U.S. companies showing that many posted an overall average annual improvement in corporate performance after employing quality management techniques. Roberts’s points out that companies like Xerox wouldn’t be here without quality management.

What are we to believe? Some experts deprecate TQM; some praise TQM.

As Peters says, TQM is not a panacea for all problems in management. TQM works when it is the marrow, rather than the mantra, of the organization.

There are many reasons why a TQM effort fails. Chief among these is that the senior managers are not solidly behind the effort. They are looking for immediate solutions rather than long–term quality improvement. They will not truly empower their employees to make changes; they fail to capture the intelligence, imagination, and energies of the entire work force in the pursuit of the company’s goals. And most of all, they fail to understand that TQM must be embedded in the culture and environment of the organization and not simply be viewed as a set of specific management techniques and tools.

Many managers and employees have become disillusioned by the three-letter acronym «TQM». However, rejecting concepts that have been proven to work just because they come under the heading «TQM» is, at best, unwise.

WilliamA.J. Golomski, senior lecturer at the University of Chicago and president of a consulting firm, says quality management has been successfully used in the United States since the 1950s, although that fact isn’t well recognized.

Consider what Mark Graham Brown, a Baldrige Award examiner, writes in theAugust/September 1992 issue of Quality and Productivity Management Association’s QPMA Council Connection:

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«Both quality and the Baldrige criteria have become fads. I read the other day that ASQC (American Society of Quality Control) has doubled its membership since 1987. Just about every company in America is embarking upon some sort of quality or Baldrige-related initiative. For many of these companies, this is a fad. Some are already bored with it and are looking for the next management fad. Others are forced to get involved because their major customers have told them they need to jump on the quality bandwagon. The vast majority of these companies will never really implement total quality and will drop their quality or Baldrige initiatives within a few years. Interest in TQM, Baldrige, and quality improvement in general has peaked because it is a fad.

«... The fact that something is a fad does not make it worthless. Exercise is a fad in America right now also. Most Americans read about the benefits of exercising and join a health club, start jogging, walking, or buy some exercise equipment such as a stationary bicycle or a stair climber. Almost all of these people will not stick to it, however. Regular exercise is hard work, and requires tremendous dedication to keep at it three to five times a week for the rest of your life. The same thing can be said for total quality. It takes a long-term commitment, much effort, a great deal of time, and is something you have to work on forever. Consequently, most drop out. For those companies that have stuck with TQ, and for those individuals who have stuck with their exercise programs, amazing benefits have resulted. Both will live longer, be happier and healthier. The remaining 90 percent of the organizations and individuals will be looking for the newest management book or diet book that promises yet another quick fix to their problems. The individuals will go through yo-yo diet cycles and the organizations will reorganize, lay off employees, and engage in other short-term strategies. The bottom line is that both will remain unhealthy and fail to attain any of their long-term goals».

The differences in Japanese and Western views may relate to differences in culture, politics and company philosophy. Ishikawa (1989) identified fourteen areas of difference between Japan and the West, including:

1.In the United States and Western Europe, great emphasis is placed on professionalism and specialization; QC only for QC specialists.

2.In the United States and Western Europe, great emphasis is

placed on the Taylor system.

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3.The pay system in the United States and Western Europe is based on merit (to motivate people by money alone). Japan uses a system of seniority and ranking.

4.High turnover rates and layoffs are found in the West; Japan has a lifetime employment system.

5.Relationships with subcontractors – 70 % of a product’s manufacturing costs are contributed by outside suppliers in Japan, and only 50 % in the United States. Subcontractors are treated as friends not enemies as in the case in the west.

6.Old-style capitalism vs. democratization of capital: short-term profits vs. long-term profits.

These six differences, together with political and cultural differences have meant that the TQM approaches in Japan, the USA and Europe are different. Although the Japanese model has a proven successful track record, the existence of differences is not necessarily an indicator that the Western model is inferior, since, as Ishikawa (1989) advocates, companies must adapt CWQC to the country or company according to differences of social background. In the last decade numerous success stories have emerged of TQM applicationsinEuropeandAmerica.Abo(1995)demonstrateshowthe management of manufacturing systems of Japanese multinationals is different in Asia, Europe and the USA. These differences indicate that Japanese multinationals have had to adapt their management systems to the different conditions of countries. On the other hand, Ebrahimpour (1988) and Garvin (1986) examine how Japanese companies operating in the USA have successfully applied some of the features of the quality management approach they employ in Japan.

Examining the ISO 8402(1994) definition of TQM, it is clear that TQC and CWQC are essentially TQM. However, differences in its application in companies, due partially to the differences that Ishikawa (1989) identified, still exist and this will always be the case.

Case: TQM at Xerox

On July 29, 1975 Xerox entered into a consent decree with the FederalTradeCommission(FTC)tosettleananti-trustsuitagainstthe company.Thecompanyhadgrowntocontrolsome86%ofthemarket on the basis of accumulating and licensing of patents.Their marketing

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practices had to be abandoned and their patents essentially entered the public domain. Xerox had spent millions on product development through the Palo Alto Research Center (PARC) established in 1970, introduced few products, and concentrated heavily on growth. As the company grew, Engineering and design departments became inefficient due to increasing layers of management, procedures and controls.

By 1979, Xerox’s failure to take a strategic direction to account for the new market realities allowed new entrants to consolidate their positions and had created too centralized a decision making apparatus. Initially they were not concerned with their competitors because they were making small, desk-size units and Xerox was making high-output for central copying-locations. However, the drop in return on net assets from 25 % in 1976 to under 5 % in 1979 and in the ten years between 1974 and 1984, market share had fallen from 86 % to 17 % with revenues falling from $1.15-Billion to $ 290-Million it became clear that business processes had become outdated and the company had to reinvent itself.

Under CEO David Kearns, Xerox remade itself from top to bottom with «Leadership through Quality». This TQM process identified the performance gaps, namely that they had been comparing their output only to their own not to their competitors.

Through operational benchmarking: defects per 100 products fell to a tenth of what they were and the number of suppliers fell from 5000 to 300 – the company found their Japanese competitors typically had 1000 suppliers; there was a 13-times improvement in the proportion of defective parts; There was a 40 % decrease in unscheduled maintenance; a 27 % drop in service response time. By 1989, every employee had received at least 28-hours of training in problem-solving and quality improvement techniques. The company invested more than four million man-hours and $125 million in educating employees about quality principles.

Xerox appointed Quality Improvement Teams, often crossfunctional, wherever and whenever areas for improvement are highlighted. That included a QIT for management behavior. The former «huge monster» of Xerox HQ was downsized after division into various groups and clarifying roles. This is a basic principle of teamwork: nobody’s perfect, including the team leader, and everybody can be improved. The new objective was designed to focus everybody’s attention on the business priorities at Xerox,

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