Written by: Jean Scheid
edited by: Michele McDonough
Ford Motor Company total quality management or TQM practices started in the 1980s when “Quality Is Job 1” was their slogan. How did TQM work at Ford and are they still standing behind this process? Jean Scheid, a Ford Dealer talks with Ford management along with some insights of her own.
- TQM at Ford Motor Company Today at Ford Motor Company, their most popular slogan is “Ford Has a Better Idea.”
Back in the 1980s when Ford Motor Company total quality management practices were vast, the slogan of “Quality Is Job 1” made more sense. In a conversation with Dan Dobbs, a Six Sigma Master Black Belt at Ford, it was noted that TQM may have worked in the 1980s, but Six Sigma is the project management methodology of choice these days. When TQM, a process improvement methodology based on a customer satisfaction quality-driven process with guidelines set by management was first utilized, it started through a joint venture.
Through a partnership with ChemFil, a division of PPG Industries, Ford wanted to produce better quality products, a stable work environment for the workforce, effective management, and profitability; all by the 1990s, “Quality is Job 1” became “Quality People, Quality Products. ” Free Online Kanban Board kanbanery. com Simple, powerful project tracking for agile and lean teams. Ads by Google Through this partnership with paint supplier ChemFil, paint process were developed to ensure that a “quality product that meets customer’s needs translates into financial success,” according to an insider press release obtained from the Ford Media Room.
TQM was forefront in their painting design as the process of preparation (based on customer quality standards) was implemented by ChemFil with Ford management and workers informed of all steps needed to follow the application of paint to a quality outcome. Gone were the days of guessing, and TQM meant processes at all levels of production were strictly followed, constantly developed upon, and improved mostly through customer quality satisfaction surveys. * TQM is Revisited.
In 1999, Terry Chenault joined Ford, a risk management specialist who along with Phong Vu, helped to further the TQM methodology through a Consumer Driven Six Sigma Process. Says Dan Dobbs today of TQM and Ford, “It may have been newsworthy in the 1980s but Ford Motor Company Total Quality Management practices really began with Henry Ford. ” That’s true if you look at Toyota’s 5S Best Practices in the production of their vehicles, a methodology decided upon after visiting Henry Ford’s assembly lines. While TQM at the Ford assembly lines looked good to Toyota, they found too much waste and went on to develop their own quality process or 5S.
- What Changed TQM at Ford? According to Dan Dobbs, the Six Sigma Master Black Belt who runs Six Sigma practices at Ford, “Waste and lack of quality on many levels. ” This is true especially when you look at the far superior Ford Warranty claim system. As of 2008, the warranty repair rate for Ford by utilizing Six Sigma decreased by 60%. Ford Chief Engineer Art Hyde takes the now implemented Six Sigma a step further saying, “The design and engineering analysis process makes it possible for problems, that previously may not have surfaced until (product) launch, to be caught and corrected in the virtual world through the DMAIC process.”
The DMAIC process, or define, measure, analyze, improve, and control has “built an overall strategy for consistency in our teams,” continues Hyde. Of their Six Sigma implementation for 2010 product launches, Dobbs told me, “The Company’s Quality Operating System or (QOS) is crucial for identifying and correcting problems within the manufacturing facilities. ” He goes on to say, “Six Sigma and QOS implemented in each plant includes cross-functional groups of engineers, plant management, and production specialists—all skilled problem solvers who’ve been trained through Six Sigma.
Ford seems to be sticking with Six Sigma roles and has 60,000 Six Sigma Green Belts, over 7,000 Black Belts and 400 Master Black Belts worldwide. To make the process work even better, Ford is working with Wayne State University in Detroit to aid all UAW Ford reps in becoming Six Sigma Black Belts.
- Six Sigma and Ford’s Future Perhaps the newest slogan, “Ford Has a Better Idea,” is on its way according to Louise Goeser, VP of Quality, “In fact, one and a half points of customer satisfaction drives about one point more in loyalty and our data shows that customers who are highly satisfied remain loyal. ”
Upon obtaining our new Ford dealership, last year, my husband and I traveled to Ford’s headquarters in Dearborn Michigan to “drink the Ford Kool-aid” and Six Sigma was everywhere from production to teams to management to consumer suggestions. Whether switching methodologies from TQM to Six Sigma will work for Ford remains to be seen, especially in a tough economy. However, way back when, as a Chrysler dealer, I do remember Lee Iaccoca telling us dealers that “Ford was richer and GM was bigger,” but both needed to “Lead, follow, or get out of the way.
” Perhaps this is a way for Ford Motor Company Total Quality Management to improve to a process such as Six Sigma that will involve everyone from the consumer to top management. As “Quality is Job 1” fades to the background at Ford, don’t be fooled, they still want that as any automaker, but through Six Sigma practices, they feel they’ve got a grand hold on the industry's market share. In fact, upon the end of our Ford Dealer Conference, we were handed a book, Ford Racing Century: A Photographic History of Ford Motorsports, by Larry Edsall and Mike Teske.
The inside inscription? “Welcome to the Ford Family,” signed by CEO Bill Ford. No more “Quality is Job 1” but instead, through Six Sigma and what we were shown, it really is more like a family with a bunch of kids to satisfy.
- Ford Media Room: http://www. media. ford. com (Press Releases) – Jean Scheid is a registered user of Ford Media Room.
- Dan Dobbs – Ford Motor Company Image Credits: Ford Media Room: http://ford. wieck. com/db/*wieck_search (Photos) http://www. brighthubpm. com/methods-strategies/72279-tqm-and-ford-motor-company/ http://knowledge. wharton. upenn. edu/article. cfm? articleid=1321 TQM, ISO 9000, Six Sigma: Do Process Management Programs Discourage Innovation? Published: November 30, 2005 in [email protected] Share this Article
Proof that the premier process management program in American business has crossed over into mainstream consciousness is that a rock band in Northern Kentucky calls itself 6 Sigma. Even those who know more about frets than fractions can explain that Six Sigma is a way of increasing efficiency.
A less-alliterative management tool, ISO 9000, also has many fervent adherents but, alas, no rock namesake. Within the business community, enthusiasm for process management programs such as Six Sigma, ISO 9000 or their predecessor Total Quality Management (TQM) runs strong after two decades. For example, numerous consulting firms still encourage firms to adopt Six Sigma. And despite the mid-summer departure of James McNerney to become chief executive at Boeing, 3M continues to implement the Six Sigma methods that McNerney brought in 2001 from General Electric.
Yet Wharton management professor Mary J. Benner says now may be the time to reassess the corporate utility of process management programs and apply them with more discrimination. In research done with Harvard Business School professor Michael Tushman, she has found that process management can drag organizations down and dampen innovation. "In the appropriate setting, process management activities can help companies improve efficiency, but the risk is that you misapply these programs, in particular in areas where people are supposed to be innovative," notes Benner.
"Brand new technologies to produce products that don't exist are difficult to measure. This kind of innovation may be crowded out when you focus too much on processes you can measure. " Read More About… innovation, six sigma, general electric, motorola, pharmaceutical Articles Idealized Design: How Bell Labs Imagined — and Created — the Telephone System of the Future [email protected] Kevin Lynch on Adobe's Plans for a New Generation of Software [email protected] Connecting the Corporate Dots: Social Networks Reveal How Employees and Companies Operate [email protected]
[More results for: innovation] TQM, a strategy in which an entire organization is focused on continuous improvement, arose in the 1980s in response to Japanese competition (and the work of W. Edwards Deming) and was popular into the early 1990s. Six Sigma started at Motorola and gained popularity in the mid-1990s largely because of GE's visible efforts. The goal is to improve a company's quality to only three defects per million through systematic incremental change in processes and careful statistical measurement of outcomes.
Six Sigma is similar to TQM in its focus on techniques for solving problems and using statistical methods to improve processes. But whereas TQM emphasizes employee involvement organization-wide, the Six Sigma approach is to train experts (known as green belts and black belts) who work on solving important problems while they teach others in the company. We Suggest… Innovation: Creating Long-term Value in New Business Models and Technology Ben Franklin Forum on Innovation: What Can You Learn from the World's Top Innovators?
How Technology is Redefining the Role of the Firm: Lessons for Corporate Strategists The focus of ISO 9000, a program started in 1987 by the International Organization for Standardization, is to make sure that companies have standard processes in place that they follow: "Document what you do and do what you document. " ISO 9000 involves a third-party registration program (UL — Underwriters Laboratories — is one such registrar) certifying that companies are following documented processes. In addition to these three programs, there are many others that fall under the general rubric of process management.
One aspect they all have in common is that their use has evolved. From the initial 1980s application in manufacturing, they are now used in many industries and within many corporate divisions. "Light-bulb Moments of Brilliance" Benner's work on process management and innovation — a subject she and Tushman have been studying since 1998 — is attracting new attention. She suggests two reasons: "I suspect that many companies with widespread process management initiatives over the past few years have reached the limits of improvement."
In addition, the ability to gain competitive advantage from cost and efficiency gains also has limits. Once a firm's competitors are adopting the same practices, it is difficult to have competitive advantage longer term. "Companies need other advantages, such as new innovation. " Today, companies ranging from IBM to pharmaceutical firms to consumer product manufacturers such as Procter & Gamble and Unilever have acknowledged a renewed attention to gaining advantage through innovation. Even General Electric — the symbol and evangelist of Six Sigma discipline — is looking to grow through exploratory innovation.
As companies focus on gaining competitive advantage through innovation, research on how and why innovation flourishes is significant. Benner and Tushman's 2002 paper, "Process Management and Technological Innovation: A Longitudinal Study of the Photography and Paint Industries," looks at patenting activity in two industries that rely on process management. Their underlying question was whether the discipline of process management will fertilize or strangle those new ideas that come from light-bulb moments of brilliance.
"Our results suggest that exploitation" — building on a firm's existing knowledge — "crowds out exploration," the authors write. Benner and Tushman examined the photography and paint industries from 1980 to 1999, choosing these two industries for differences in their competitive arenas. "Photography was undergoing major change. It was a turbulent environment and there was a potential need for innovation," says Benner, referring to the move from chemical-based film to digital technology. "Paint was focused on cost reductions.
It was trying to reduce solvents in paint as opposed to developing wacky new stuff. " The authors looked at the number of ISO 9000 quality program certifications obtained by the paint and photography firms, the numbers of patents issued to the firms and "the extent to which a firm's patenting efforts built on knowledge it had used in previous patents. " In photography, increased ISO certifications were associated with "a significant decline in the number of patents that were based entirely on knowledge new to the firm.
" In paint, the effect was not as strong but echoed the photography industry's disappointing experience. The results suggest, the authors write, "that in both the paint and photography industries, as process management activities increase, exploitation increases at the expense of exploratory innovations. " And even exploitation is hamstrung. In the photography industry, Benner and Tushman found that patents that relied up to nearly 40% on previously acquired knowledge were squeezed out in favor of patents based 80% or more on existing firm knowledge.
"These results suggest that firms' challenges in maintaining exploration may be more difficult than previously suggested," the researchers write. Organizations already find it hard to sustain highly risky search and exploration into new domains, but it appears that this difficulty "extends even to sustaining moderately exploratory innovations that leverage existing organizational knowledge. " In their paper, Benner and Tushman propose that in the photography industry, "the dampening effect of process management on exploratory innovation may have implications for adaptation to subsequent transitions in technology.
" As examples, they speculate whether the slow response at Polaroid and Kodak to the digital revolution in photography may have been linked to organizational inertia rooted in their attempts to exploit expertise in film. Benner knows first-hand how performance management measurements can be knitted into the fabric of a company and produce positive results. As an executive with Honeywell from 1989 to 1996, "I thought it was useful to map processes for how to run a business and get better at it. The view was that these are universally good things. When I left to get my PhD, I began to consider the effects on innovation.
What does it do to new knowledge creation? " She started exploring these ideas as the prior enthusiasm for TQM — triggered by the intense competition from Japanese manufacturing in the 1980s — was waning, but enthusiasm for ISO 9000 and Six Sigma was building. Because process management practices focused on increasing efficiency or taking out wasted steps are important for companies in the highly competitive global market, "there will always be pressure on firms to adopt programs that help them systematically improve their current business, whether the popularity of Six Sigma per se diminishes or not," says Benner.
Yet companies are making room for other imperatives. Chief executive Jeffrey Immelt, for instance, has set GE on an ambitious course of growing more revenue from existing operations. This growth is fueled by radical technological innovation, or what he calls "imagination breakthroughs" proposed by his executive team — whose annual bonuses are partially tied to meeting marketing, sales and idea-generation goals. Immelt has invested $100 million in revitalizing GE's research center in New York and spent millions for centers in Munich, Shanghai and Bangalore.
He has encouraged his managers to take risks even when that means risking failure, Benner says. An "Ambidextrous" Approach Changing the culture at GE or any established company to embrace long-term innovation will be challenging, Benner acknowledges. "Most managers know they must do this. But there are few short-term rewards for focusing on long-term. When you give people a choice of something that's new and distant in time, they will choose the short-term, measurable goal…. You can get stuck being very, very good at something you were good at yesterday.
That's what some managers choose because it is measurable. " Measuring innovation is not easy because there is no yardstick. Rewarding innovation makes compensation a tricky exercise. Managing those who innovate is also challenging. "Creative people will push back in an environment where people are required to follow standard processes and are being measured," says Benner. "People who are comfortable in such an environment are not exactly the most innovative. " Benner doesn't suggest that companies abandon the process management principles, but rather that they apply them where most appropriate.
In their study, she and co-author Tushman recommend "a more nuanced approach to creating organizations that can celebrate both variance reduction in the service of exploitation and variance creation in the service of exploration. " Companies need to balance two types of activities: improving current operations to be competitive in the short term, and exploring for new knowledge for the future. Swinging back and forth between enthusiasm for process management or for new innovation, says Benner, doesn't achieve the balance.
Too much process management across all levels of an organization makes it easier to implement but can strangle bolder, breakthrough innovations. Conversely, it's difficult to focus on systematic, continuous improvement in quality and cost if the entire organization is focused on big innovations for the future. It is important for senior managers to be aware of this dilemma and exercise care about extending Six Sigma-like programs into all areas of their organizations. Instead, Benner and Tushman recommend that companies become "ambidextrous" — managing process management and innovation simultaneously.
Individuals who run business units must be able to manage the inconsistency of separate areas of an organization focused on fundamentally different activities. Within a business unit, managers can specialize in either more process-oriented functions with the benefits of Six Sigma efficiency or more innovation-oriented activities without Six Sigma constraints. This innovation can happen in both the R&D department, where companies are generating new ideas or creating new products, and in marketing, where companies search for new markets and new customer sets.
Companies may be tempted to apply process management approaches to ensure that they are "improving" how they innovate or find new markets. But innovation may not lend itself to strict processes with measures. For example, Benner says, if a company typically applies for patents for its big, potentially important innovations, and then implements a process management approach to improve its patenting process, it may end up gauging success by looking at change in the number of patents it applies for. It may indeed get a larger number of patents, but these patents may each be less innovative, more incremental, and less important.
It is more difficult to measure the innovativeness of each patent than it is to count patents. Additional Reading How Corporate Venture Capital Investing Increases Innovation: [email protected] Can Your Firm Develop a Sustainable Edge? Ask John Hagel and John Seely Brown: [email protected] The Power of Impossible Thinking: [email protected] Here's what you think… Total Comments: 2 #1 TQM, ISO, Six Sigma reduces innovation It is interesting to note the findings on barriers to innovation because of TQM and ISO implementation.
But the authors have not considered the financial implications involved in encouraging individual employees' innovation potential as it needs mangaement understanding to truly assess the capability of employees. There has been a mindset in upper management mindset that first line employees are not capable of bringing innovation. Six Sigma and TQM on the other hand certainly encourage bottom-line employees creativity and recognise the truth that people working with the product and process are most likely sources of innovation to make the organization truly competitive. By: krishnan sriram, research scholar-TQM.
Sent: 08:38 AM Sun Jul. 20. 2008 – AU #2 Process Management as Enabler of Innovation Process management and innovation seem to be opposites, but they should work hand in hand. Good process management ensures that processes and products fulfill customers expectations. Therefore trust is gained from the marketplace – and trust is needed for the market to accept new innovative products from the company. We need to think of Process Management as an enabler. By: Jamilah Haron, AmBank Group Malaysia/Head of Administration Sent: 10:47 AM Sun Aug. 17. 2008 – MY http://www. isixsigma.com/methodology/total-quality-management-tqm/eight-elements-tqm/ The Eight Elements of TQM Nayantara Padhi February 26, 20108
Total Quality Management (TQM) is a management approach that originated in the 1950s and has steadily become more popular since the early 1980s. Total quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company’s operations, with processes being done right the first time and defects and waste eradicated from operations.
To be successful implementing TQM, an organization must concentrate on the eight key elements:
This paper is meant to describe the eight elements comprising TQM. Key Elements TQM has been coined to describe a philosophy that makes quality the driving force behind leadership, design, planning, and improvement initiatives. For this, TQM requires the help of those eight key elements. These elements can be divided into four groups according to their function. The groups are: I. Foundation – It includes: Ethics, Integrity and Trust. II.
Building Bricks – It includes: Training, Teamwork and Leadership. III. Binding Mortar – It includes: Communication. IV. Roof – It includes: Recognition. I. Foundation TQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness and sincerity and allows involvement by everyone. This is the key to unlocking the ultimate potential of TQM. These three elements move together, however, each element offers something different to the TQM concept.
- Ethics – Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs.
- Integrity – Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity.
- Trust – Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built.
Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risk-taking for continuous improvement and helps to ensure that measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM. II. Bricks Basing on the strong foundation of trust, ethics and integrity, bricks are placed to reach the roof of recognition.
4. Training – Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company.
5. Teamwork – To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place. There are mainly three types of teams that TQM organizations adopt:
A. Quality improvement teams or excellence teams (QITs) – These are temporary teams with the purpose of dealing with specific problems that often recur. These teams are set up for period of three to twelve months.
B. Problem solving teams (PSTs) – These are temporary teams to solve certain problems and also to identify and overcome causes of problems. They generally last from one week to three months.
C. Natural work teams (NWTs) – These teams consist of small groups of skilled workers who share tasks and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and quality circles. These teams generally work for one to two hours a week.
6. Leadership – It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals. III. Binding Mortar
7. Communication – It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended. There are different ways of communication such as:
A. Downward communication – This is the dominant form of communication in an organization. Presentations and discussions basically do it. By this the supervisors are able to make the employees clear about TQM.
B. Upward communication – By this the lower level of employees are able to provide suggestions to upper management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust between supervisors and employees. This is also similar to empowering communication, where supervisors keep open ears and listen to others.
C. Sideways communication – This type of communication is important because it breaks down barriers between departments. It also allows dealing with customers and suppliers in a more professional manner. IV. Roof
8. Recognition – Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams.
Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of effort exhorted to the task a