One apparent advantage of being relatively small is that you needn't bother with the big nostrums that gurus and consultants love to sell to big companies. Or is it an advantage? What if TQM (Total Quality Management), say, is the right road to making money?
In many businesses, top-class quality is actually becoming the only road. If you're supplying giants (for example, in cars) they may well insist on quality certifications like BS5750. Getting these can be expensive and burdensome; they don't require plunging into TQM - but if you're going to all that trouble, it makes sense to launch a total quality drive.
Total quality made much sense to Jack McGavigan, just retired, in his 80s, as chairman of John McGavigan & Co, founded by his grandfather in 1860. The family firm was a traditional printer, but developed from the Sixties into specialists in 'graphics related plastics technology.' Touch switches and backlit fascia panels in cars are examples of the uses. McGavigan, rightly keen on innovation, has constantly expanded into new technologies and product lines. Consequently, the group's car parts have a 12% world market share.
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None of this might have happened if McGavigan hadn't reacted to impending crisis in mid-1987. Costs were rising, the company was being squeezed between strong suppliers and stronger customers, and competition was intensifying. The firm had been using quality circles for years - with employees banding together to tackle quality issues, Japanese-style, in a voluntary, bottom-up effort to improve. But more was needed to avert disaster.
Quality was the answer, passionately advocated by Edward Smith, 47. Managing director of John McGavigan Automotive Products, he joined the company as a stripling in 1963. 'Employees are the experts', he says. 'We wanted to exploit the potential of people,' which demands 'training, teams and communication.'
You also need something else: 'the will to win.' Smith stresses that 'you have to have that very clear in front of you. You're not nice guys.' Rather, you're tough, determined managers who don't let anything or anybody stand in the way of 'exceeding customer expectations'. And in Smith's business, which is where McGavigan's total quality drive started, those expectations are sky-high.
Once, his customers would live with 1.5 to 2% rejects. The maximum is now '500 parts per million - that's .005%.' The TQM methods which achieve this super-performance are basically bottom-up, like the quality circles. But in total quality, everybody in the firm gets involved - otherwise the 'total' is meaningless. The lofty aim is to produce only perfect goods by only perfect processes, and to deliver the goods only in perfect ways to customers who are perfectly satisfied with the results.
If that sounds impossible to you, you're right. It's the striving for impossible perfection - 'continuous improvement', in the jargon - throughout the business, from start to finish, that's the name of the game. The name of Smith's quality circles has thus been changed recently to 'improvement circles'. And improvement is truly the word for what's been achieved.
The automotive company, accounting for 70% of the McGavigan business, was producing 1.6 million parts a month with 190 people in October 1993. Last October, production had reached 2.3 million, with only 152 employees. That's a rise in productivity of 80% - and Smith puts it down to 'employee involvement.' Don't think that comes easily, though. Is it tremendously difficult to 'change the culture'? 'Let's say we found it very, very challenging.'
The exercise started in April 1988, with all employees, in groups of 10-15, listening to the managing director as he stressed key points: first, that TQM isn't a 'flavour of the month', but lasts for many years; second, as noted, it involves absolutely everybody. In fact, everybody left the meeting with a Corrective Action Form on which as many items as they liked could be put: 150 forms were filled in.
TQM work, very detailed and demanding, has never stopped since. Does it pay off? Smith is adamant that 'you've got to have continuous improvement to give your customers what they want.' For solid proof of the consequences, the McGavigans sold out to Pressac Holdings in December - for ÃÆ’ââ‚¬Å¡Ãâ€šÂ£9.75 million.
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Xerox is known all over the world as being the # 1 photocopier manufacturer. The Xerox Corporation is a company that has definitely proved thought its practice that the "right management" and the ability to be flexible can lead to a great success no matter how stiff the competition is.
Xerox Business Systems Expository Essay
The history of its outstanding management starts in the 1980's, when the company changed its market strategy and introduced a new kind of management that lately transformed into their fantastic quality management practice. Their program "Leadership through quality" against the Japanese competitors set new quality standards for the market and opened their way to success. The program established the manage-for-results as the primary goal for all of the operations within the company. The expected results were improved productivity and increased revenue growth achieved through the quality-oriented strategy. After experiencing difficulties on market before the company opened a new era in management and created a model that will lately be followed by almost every single one company.
The quality philosophy of the company- the customer-demands orientation- is one of the most remarkable traits that makes Xerox an upstart company. The customer-based orientation was the first one at that time, due to the major orientation of the companies on the quantity, not quality of manufacturing. This philosophy is completely based on the quality of every aspect of the company's activity, including the final product. It starts with the employee's management and ends up in the final result of their work - Xerox products. This final result started being evaluated from the objective point of view of a customer. The three factors that are taken into account the most are: the customer, the process and the people. The goal of the company was, is and will be "Total customer satisfaction". Basically saying the customer was to become the "quality controlling team" of the company. This philosophy is reflected in their introduction of Total Quality Management (TQM). The main change that this management philosophy brought to the Xerox Corporation was moving from a production-based over to a customer-based company. The Total Quality Management of the Xerox Corporation includes principles that are used by the company's employees and directors: strong customer focus, entrepreneurial spirit of the employees, integrations through market focus and quality control. Nowadays, owing to this philosophy the company is eager and able to meet all the requirements that the customer has. The satisfaction of the customers became the criterion of evaluation of the company's work. The main orientation of the company is continued integration through total quality of their products and of the customer service. The knowledge management of the Xerox Corporation resulted in a very deep research of the market and the customer needs and made a great platform for the realization of the philosophy of the company. The whole Xerox Corporation is a quality control mechanism with an extremely high level of quality assurance that makes the customers turn to this company over and over again.
The main criterion for measuring quality for the company has always been the customer. The satisfaction of the customer through high-quality products was a thing that Xerox always achieved through quality control. At the same time customer satisfaction is a generalized term and in its turn it depends on many factors. The quality control is than achieved through analyzing such data as the conformance to specifications of the company's product, comfort in usage and the price of the given product. To measure the quality of work Xerox made an accounting of defects per every produced machine and kept track of all the breakages and complaints through the "Automated Installation Quality Report" system. All the complaints on the performance of the machines after being analyzed by special teams later on improved and modified the manufacturing process in order to prevent their repetitions. Avoiding the possible and known defects became the most important part of the company's activity and the machine performance data became a tool to measure the quality of the products. The quality-improving phase is the most important in the "Leadership through quality" program. As the Xerox management model (XMM) developed, it also produced six main categories of evaluation of the quality level: the level of management leadership, the level of human resource management, the level of customer and market focus, the level of business process management, the level of information utilization and quality tools and finally the level of the business results achieved. All this categories in the long run result and define the quality level of the company. These activities in connection with the effectiveness of the organizational structure provide the guarantee of obtaining first-class quality. So generally speaking the main criterion of measurement of the quality is the defects data, obtained through putting the customer at the center of the business process with its future evaluation and improvement changes made. The quality approach is to be measured by the changes that were made in it in order to correspond to the Total Quality Management goal. So converting the performance of the machines into a measurable data and its future evaluation is the secret of the Xerox's high level of customer satisfaction.
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Quality management did result in a great success for the Xerox Corporation. The examples of this success are very easy to trace and are known all over the world. Its first and main success was the impossibility to reproduce the quality of the company products. The adjusted work of the new management model of the company showed an excellent ability to function and improve the manufacturing. Therefore, the quality level take-off of other became very significant. Xerox built its own information model that provided data required to support the business quality planning and therefore giving strategic advantage over other companies. The policy of workforce empowerment increased the level of customer-satisfaction, through high-level human resources approach and the introduction of quality improvement teams. Xerox became the leading company not only in the production of the copying machines but it also helped in creating the personal computer. The company showed an outstanding ability to stand all the market changes owing to its unique organizational architecture and quality principles as the base of this structure. Nowadays, Xerox offers the document industry's best variety of business -proposals. The company supports its vitality for the customers and employees by the manufacture of fundamentally new products. The company culture is very strong and besides caring about the business results the environmental problems are one of its vital problems. The company tries to achieve:"Zero defects", "Zero disposal" and "Zero pollution". The customers of the company can contact the company and report any defects found in the machine they purchased, which gives two main advantages: the breakage can be fixed and the data about the breakage can be collected. The collected data allows the company to improve the quality of the process of manufacturing of the machine and therefore put in a new level of quality.
Xerox has always been a client-focused and market connected company and truly achieved their leadership in the market through the quality level of its products. The Xerox Corporation was not on top of the existing market - it created and leaded its own market by being able to recognize the true requirements of the customers. The values of the customers resulted to be not just "recommendations" for the management process of the company, but its driving force. The quality strategy of the company results was primarily reached directly by the management leadership. Even now, when almost every company uses this scheme Xerox still remains a benchmark.