Unit 8 Other Concepts, Tools and Techniques-I

Objectives After reading this unit, you.should be able to: + discuss the characteristics and structure of Quality Circles; + describe the took and techniques of Quality Circles; + explain the needfor and difirent Mes of benchmarking; and + implement and appreciate the usefulness of Quality Function Deployment (QFD) strum 8.1 Introduction 8.2. Quality Circles: Rationale and Brief History 8.2.1 Quality Circles: Essential characteristics 8.2.2 Structural Organisation for QC Circles 8.2.3 QC Circle Process 8.2.4 QC Circle Techniques 8.2.5 QC Circle Implementation 8.2.6 QC Circles: A Case Study 8.3 Benchmarking: Rationale 8.3.1 Principles of Benchmarking 8.3.2 Types of Benchmarking 8.3.3 Product Benchmarking 8.3.4 Performance Benchmarking 8.3.5 Process Benchmarking 8.3.6 Strategic Benchmarking 8.4 Quality Function Deployment (QFD): Rationale and Histofy 8.4.1 What is QFD? 8.4.2 QFDIHouse of Quality (HOQ) Table 8.4.3 Benefits of QFD 8.5 Summary 8.6 Keywords 8.7 Self-Assessment Questions 8.8 Further Readings , References

240 8.1 Introduodon TQM employs several tools and techniques. Some of these tools viz., Statistical Process Control (SPC), Acceptance Sampling,Taguchi's techniques, Parato analysis, 6-Sigma, etc. were discussed in the previous unit. In this unit we focus on three tools and techniques of TQM viz., Quality Circles, Benchmarking and Quality Function Deployment (QFD). This unit is the first of the two units dealing with "Other concept, tools and Techniquesn. The second unit will deal with the remaining other concepts, tools and techniques, e.g., Zen Defects, Reliability, Re-engineering, etc. 8.8 QualiwCircles: Rationale and Brief History Total Quality Management (TQM) has 'employee involvement' as one of its basic tenets. Such involvement does not mean only co-operation in carrying out tasks assigned by supervisors and managers but something more than that. All employees have basic intelligence and creativity. They acquire considerable amount of insights about their tasks and other related matters while carrying out any work, day in and out. The potentialities hidden within employees are normally not made use of. Quality Circles, alternatively known as Quality Control (QC) Circles, are the means of getting the potentialities utilized to solve problems that do arise in immediate work situations of the employees. Japanese industry was the first to discover and make use of this concept for very effectively bringing about the industrial recovery during the nineteen fifties. Such formations became so successful and widespread that quality circles are now said to be one of the sources of Japan's competitive advantages. Quality circles are also said to be the seeds of Total Quality Control (TQC) movement that became known as Total Quality Management (TQM) in the West. The beginning of the Quality Control Circle (QC Circle) idea can be traced to the Japanese drive for training and accomplishment in quality control, and their conviction that effective quality control can only be achieved when the interest is aroused among the employees. With such a background, the logic of extending training to the workers was obvious. The Journal "Quality Control for the Foremann, published by the Japanese Union of Scientists and Engineers (JUSE), has played a key role in initiating the idea of QC Circles, to tap the immense potential for contribution by workers and first-line supervisors through training, motivation, and application of the techniques. The QC Circle idea was born around 1962. While the objective of QC Circle may vary from company to company, the following are identified as basic generalisations.: i) To encourage first-line supervisory personnel to educate themselves, and to develop legdership and supervisory capabilities ii) By including all workers, to raise the morale of the work force, to carry quality control to the ultimate degree, and encourage and develop employees' self-awareness of what quality is, what problems may arise, and what to do about them, and iii) To serve as 9 means of unifying company-widequality control activities and as a nucleus within the shop, and work t&rd clarification of executive and managerial policy, stablisation of work-place supervi- sion and guaranteeing of standards. By June 1962, there were three Circles registered with the Japanese Union of Scientists and Engineering (JUSE). As of August 1969, there were 24,000 QC circles registered with a membership of 2,80,000 and the 'number was increasing by 700 to 1000 each month. By mid 1972, the Japanese estimated that the total QC Circles had reached 5,WOOO with a membership of about 5 million. The QCC movement grew very'fast since then till the A- . _. 4

nineteen eighties. It is estimated that during 1961-82,15 million projects had been completed. The QC Circle concept has spread to USA. It has been mentioned that the spread of QC Circle programmes throughout the American industries is unparallelled by any other organisational improvement programme. The Wall Street Journal reported (Sept. 1981) that about a thousand organisation had some form of Quality Circle programme. As early as 1974 Lockheed Missile and Space Company initiated a large- scale programme and during the years 1974-1977 the QC Circles had saved the company approximately 3 million dollars. The ratio of savings to the cost of operating the Circles was six to one, with great improvement in quality. Within the federal sector, Navy was the first to implement a QC Circle programme in 1979 in its Norfolk Naval Shipyard. By 1980 the shipyard claimed to have achieved a four- to-one cost-benefit ratio.The Navy has since expanded its QC Circle programme to a number of its bases and shipyards. In addition, a variety of other federal agencies (including the Air Force, the Veteran's Administration, and the Public Health Service) have all begun to experiment with their own QC Circle programmes. Interest in the QC Circle process among federal agencies appears to be rapidly growing. In India, Bharat Heavy Electrical Ltd. (BHEL) has made an impressive start in introducing QC Circles (they call it Quality Circles). It began around 1980 in its Hyderabad Unit. It is reported that the Hyderabad Unit has introduced 51 cirdes with 455 members. 83 circles are working BHEL units with about 700 employees participating. The names of the organisations which have introduced or shown interest are :Kirloskars,Shriram Group, -- Allwyns, ECIL, BEL and Heavy Engineering Corporation, Durgapur Steel (of SAIL). 8.8.1 QualityCircles: Essential Chara-tics Several definitions of QC Circles have emerged over the years. QC Circle is a small group of departmental work leaders and line operators who have volunteered to spend time outside their regular hours to help solve departmental quality problems (juran). QC Circles is a small work group which meets regularly to perform quality control activities voluntarily within the same workshop (Miyauchi). It is a small group of people doing similar work who meet voluntarily on a regular basis under the leadership of their supervisors to identify, discuss and analyse their work problems and implement the solutions themselves if possible (attributed to Ishikawa). iL While one can thhk of some special small pupactivities existing in an organisation, QC Circle group has some unique features which are not present in most of the existing small groups or schemes. To understand the uniqueness of QC Circles, it is necessary to analyse the definition. (i) It is a small group of people who do similar works :This brings out that the group is small, the members belong to the same area of work who do similar activities ,know their environment, know each other well, and therefore can participate and contribute individuallyto the solution of problems on hand or for any other improvements. The most important aspect to note is that every member can be an active par- ticipant because of the structuring of the group. (ii) It meets voluntarily on a regular basis: Since the group is concerned with problems of their own

>. work, they meet regularly (once in a week for an hour or so on company time or otherwise) and thrash but solutions. When circles have been introduced properly this effect can be observed anywhere. (iii) QC Circles identify problems, analyse the cause and recommend solutions : Because of the structuring of the group, it is in a position to identify problems with suitable training,and can compile information Other Conoepb, Tools aad Te&dquw-I

and analyse the problem for possible solution and motivation. The challenge in the job thus introduced both for individual advancement and for working out possible solution. Upward communication in the structure is a new innovation of the circles. (iv) Where possible, employees implement the solutions themselves: QC Circles are not merely cbncerned in identifying problems, involved in analysing and providing solutions, but also implement them wherever possible, with of course, a planned trainifig efforts by the organisation.The implementation by the group or otherwise adds to the morale of the group and motivates them for improved performance. Though, initially, the QC Circles considered problems relating to quality ,their success has led to the broadening of the concept. One area of extension has been to deal with non-quality problems e.g. productivity, safety, cost reduction etc. The most fruitful area of broadening the concept that has emerged is strengthening the relationship between the management and employees. Establiihment of QC Circles is not only cost effective but also improves morale, communications and attitudesin ways that promote long term benefits to the organisation. In fact, in the Indian context this aspect should be borne in mind. The term Quality Control Circles in itself is interesting. It signifies the importance of "Qua1ity"of products and services, the involvement of all concerned and its relevance to the success and stability of organisations. It recognises that it is only through quality and customer satisfaction that profits can be achieved, and thus must be reflected in all the activities within the organisation. It recognises excellence in everything. Quality Control principles and approaches, particularly SQC techniques, have been imbibed in the gecn'&al management of the companies in Japan and strongly reflected by their use in the QC Circles. However, it is not confined to Quality Control Department or people alone, but used extensively for all kinds of problem solving, they are thus managerial in nature 8.8.8 Structural Organisation For QC Circles A; may be noted from the nature of QC Circles, it is participative,and experience suggests that it takes time for any participative culture to take deep roots. Managers and supervisors are generally impatient and look for quick results. Establishing effective QC Circles require considerable time and therefore a suitable organisational structure should be developed. Experience over the years suggests the use of steering committee, facilitators, circle leaders and circle members in successfully introducing and operating the QC Circles.

I Boles and Fund0118 of QC Circle O~tion Top Manag~lllent Top management, being at the highest executive level, should extend all the necessary support to the activities of the QC circles. Through their personal presence at the presentations and other major activities of QC I circles, it can make its support seen and felt by all concerned. I t?mmhgCOmmittee I This is an apex body at the highest level of the unitldivision ,which oversee the functioning of QC circles in the unitldivision and served as an advisory body.The committee is headed by the chief executive of the Unit1 I Division and its meetings are convened atleast once in twolthre months by the Manager of the co-ordinating

I Department. Other members of the committee will include the heajs of departments. Special invitees to the meetings are facilitators, and representatives of Industrial Engineering and Public Relations Departments. Scope and Activities of the Steering Committee are: - To take an overview of the operation of Quality Circles, - To establish the programme objectives and resources, - To provide policy guidance and direction, - To promote Quality Circles in the organihation, - To obtain feedbaY from facilitators and review circles' activities, - To meet regularly once in two months with the facilitators, afid - To attend "Management Presentations" by Circles.-

?adlmw Facilitator is usually a Manager or Senior Manager of the shopldepartmentlsection.

Role He is responsible for building and directing the activities of the Quality Control Circles in his area and enthuse other executives also to get involved in supporting Quality Cudes activities.

Functionr: - To attend Quality Circle meetings, at least for brief periods, - To assist the leader in the training of the members of the cirdes and rainforcing the leadefs skills, - To guide the circles to focus attention on their work related problems and catalyse circles activities, - To coordinate and obtain the support and assistance from other functional areas whenever required by the circles, . - To act as an intermediary in resolving cirde problems, - To work closely with the Steering Committee, as an invitee, - To organise mid-term and top management presentations, - To resolve operational problems/hurdless faced by the Qualiry Control cirdes, and - To catalyse other executives to facilitate the successful woqcing of Quality Control Circles. I Lea- A leader is chosen by the members of a Quality Control Cirde among themselvesand could be the natu- ' ral heirachical foreman, supervisor or chargehand or any other member. Members could also decide

, themselves to have rotation of leaders after each project is completed, in order to provide leadership opportunities to every member, in turn.

Role: A leader shall function as a first among equals and shall be responsible for the effective performance of ------his circle. Functions: - To train the members with the assistance of the facilitatorlco-ordinator, - To maintain a high degree of cohesiveness in his team, - To involve every member in the circle meetingslactivities, - To bring about a consensus approach in problem solving, - To chalk out action plans and assign roles to members, - To maintain progress recordslminutes of circle meetings, - To interak with other functional areas in problem solving, - To review progress vis-a-vis goalslobjectives set for themselves, - To arrange for mid-term and top management presentations, and - 'I. ,atalyse non-members to join existing circles or start new ones.

Manbaa Members of a Quality Control Circle area small group of five to eight persons from the same work area ot doing similar t& of work, who voluntarily from a Quality Control Circ1e.Once a drde is brmed they main as permanent members of the Circle, unless they leave the work area for good. q ,

Role To contribute actively to the effective functioning of their QC Circle, aiming at better performance of their work area in every way on an-on going basis.

Functions : I - To meet regularly (say, an hour in a week) and actively participate in circles meetings. - To assist the leader in data gathering, record-keeping and interacting with other areas etc. . - To catalyse generation of cohesive team working in the work-area. - To strive for the highest standards of performance of the circle. - To involve in the improvement of the total performance of the organiration. - To take part in the mid-termltop Management presentation.

- ao-ordbtor Role To coordinate the activities of Quality Control Cirdes on behalf of the manapment and carry out such functions as would make the operation of Quality Control Circler smooth, effective and self-surtrined. I \ Functiom. - To register Quality Circles in the unitldivisiofi . - To liuw with the facilitators for ensuring regularly of cirde mtetinp, a mid-term pre~ntationrttc, and to

otae?~,~oot.n4~4

Problems ldentifkatlon t Problems Selection

t ( Implementation ]riCCcrre8.1: QC~Roeeu 8.a.r QC O~EXWT~~ The Quality Control Circles commonly use certain basic techniques in their functioning. They are: 1. Brainstorming 2. Pareto Analysis 3. Cause and Effect Diagram 1 4. Che* sheets 5. Histogram 6. Stratification 7. Control Charts

These simple techniques are very powerful ones and they help the circles in investigating the causes for their work related problems and find solutions. These techniques do not require any ingenuity except sound com- - mon sense with some basic knowledge of arithmetic.

Br- ,Of all the techniques of creative thinking, brainstorming is one of the most gqeral applications with the most widespread use. The technique was developed by Alex E Osborn in the 1930s. It can be defined as: a means of getting a large number of ideas from a group of people in a very short time. Brainstorming is usually a group activity, although the principles can be practiced by an individual on his 0wn.A group of people not only provides a wider range of experience, but also ensure cross- fertilisation of ideas. In this, an idea from one member sparks off further ideas in another and then to another and then to- a real fly of ideas. Most sessions do not take longer than a couple of hours. One hundred ideas in twenty minutes is an average rate flow of ideas and this may be exceeded in a real- r ly freewheeling sessions.

847 ' -* Brainstorming has four main stages: 1) Stating the problem 2) Restating the problem 3) Brainstorming one or more of the restatements, and 4) Evaluating the ideas produced.

1) Stating the problem: The leader of the brainstorming session states the problem and explains it to those taking part. 2) Restating the Problem; In this stage the problem is restated in a number of ways. Each restatement is prefaced by the words, " How to.. .. . "when at least sizeable number of restatements have been proposed, one or two are selected for brainstorming and written down for all to see. 3) Brainstorming the restatement of the Prob1em:This is the main part of the session in which' a free flow of ideas is stimulated with quantity and not quality as the keynote. To stimulate a free wheeling atmosphere, a short warming session is held. 4) Evaluating the ideas produced: All the ideas generated are then evaluated based on their feasibility, ecomomics and ease in implamentation.

Pu~dnrl~ Pareto, an Italian economist, discovered a universal relationship between value and'quantity and used this technique for assessing uneven distribution of wealth. His technique has now come to be used for a wide array of problems needing decision making. It helps in the identification of the vital few from the trivia many at a glance when projected using a column graph named after Pareto.

Qaummd llffeat (Irhiwaka) Diagram Cause and effect Diagram is an invesgitation tool. This is also called "Ishikawa" since the technique was devised and popularised by Dr. Ishikawa, an important functionary in the Japanese Union of Scientists and Engineers, Japan .As a mark of honour, it is named after him. In an Ishikawa diagram, a systematic arrangement of all possible causes which gives rise to the effect, are made. Before taking up a problem for a detailed study, it is necessary to list all the possble causes so that no important cause is missed. The causes are first divided into major sources. Generally, they would come under . what are termed as'four MS' viz man, machine, method and material. Then each source is ultimately divided into sub-sources. The effect is represented by a horizontal line with an arrow pointing towards the right. The main sources are represented by vertical or slanting arrows meeting the horizontal line. Sub-sources/causesare again horizontal arrows meeting the vertical or slating lines. Thus a cause and effect diagram is con- structed. An example is given in figure 8.2: \ ACCURACY \.""L FORGING - SUPLY CONDmON \ \

JOB KNOWLEDGE SEQUENCE AND

OPERATORS I I

I I REDS CrnRS -

OF ROUGH

Pigum 8Jr The awe-and-EKaC DirQM

After an Ishikawa Diagram has been prepared, it is necessary to look into each of the causes in detail so that a short list of causes may be prepared for detailed study. Pareto analysis will help in this respect.

~8hwt The check sheet is made to gather data easily and to make the same automatically translated into eas)) to use form.

=to@- It is a graphical representation of variations in measurement of any attribute of an entity. For example,+ heights of individuals in a dass room of fifeen students could be depicted as follows : Height In Feet

8.8: =imP-

Histograms thus bring out a data distribution showing a central tendency and whether the data aR within the standard specification if they do not satisfy our requirements. Separate histograms should be preferred through stratification of data on workers, machines and materials.

8frawh8tioa Dividing a group of measurements or observations into several groups on the basis of certain characteristics is called stratification. Stratification can be done according to a) Source (MachineIProcess) b) Raw Material quality (Supplier) c) Period d) Operators e) Customer complaints f) Processing conditions.

Control char& However much we try to strengthen manufacturing conditions and specifications in the finished products, there will be deviations. These deviations can be divided into two groups : i) the'unavoidable' or Xllowable deviations' i.e. those which fall within a certain range, barring accidents. ii) the 'avoidable deviations' which are beyond that range. The control chart, by setting the upper and lower limites of deviations, allows us to find out whether production is aablised or not and to control the productive process. There are several kinds of control charts :the X-R' type which shows data by variables, the 'p' type which indicates data by attributes on a'go'or'no-go' (accept or no-accept) and the'c' type when data are on the number of defects per unit area. Fig 8.4 is a typical representation of a Control Chart:

Upper Control Limn Values

Central Line

I Lower Control Umit

Sampole Number or Time

?@we 8.4: Control Chart 8.8.8 Q.C. Circle - Implementatinn QC Cirpes involve a basic change in outlook in most organisations. The management practices usually expedrequire workers, (or, lower level subordinates) to follow orders only. In this sense there exists little room for employees to participate in problem solving processes. Success of QC Circles requires a solid backing of executives on a continuous basis, rather than merely accepting or permitting to introduce the circles. It becomes necessary to spend a great deal of time and have patience to achieve the involvement of workers. As the former Chairman and Managing Director, BHEL of K.L. Puri, put it "the glow of pride and enthusiasm of Quality Circle members when they present their findings are something to be seen, only for belief' It essentially implies that the style of management should become participative. QC Circles offer a strategy for changing the management culture slowly by involving employees in a constructive way. The broad steps in initiating QC Circles may be taken as under : (i) The top management must initiate or conceive the idea of introducing circles which paves the way for forming of the Steering Committee. The understanding of QC Circles may be provided by outside spe- cialists for the Steering Committee members. (ii) Facilitators are chosen and trained, coordinate the work associated with QC Circles. . (iii) The facilitators and departmental managers meet, discuss and evolve an approach for introducing the circles. (iv) When the Steering Committee and the facilitator(s) are ready to start work, several supervisors who are good at interpersonal skills as shown by experience are brought together and provided with an explana- " tion of QC Circles. They are also trained to act as Circle leders. I (v) An orientation meeting should be held to acquaint all departmental employees with the concept of QC 1 ! Circles and the role employees can play. The employees are then invited to form the circles; joining circles is voluntary. When a suffiaent number of employees volunteer, the circle is ready to start functioning.

I - -. 251 (vi) The first meeting of the circle is called. The members get acquainted, establish objectives and get an understanding of the procedures involved and agree upon an approach. The facilitator explains the tools and techniques used in problem solving. Both facilitator and leader encourage discussions and participa- tion, and evaluate actions to be taken for gearing the members for fruitful involvement. Records are maintained and agenda for the next meeting is drafted. 8.8.6 QC Circles: A Case Study: Iqweli Lignite Corporation (m) Brief Description of NLC Industrial Complex Neyveli Lignite Corporation Limited is a public sector enterprise engaged in commercial exploitation of lignite from two mines of 6.5 million tonnes and 10.5 million tonneslannum capacity. It has two Thermal Power Stations (600 MW and 1470 MW), a Fertilizer Plant producing urea (1,29,200 tonneslannum) and a briquet- ting plant to produce carbonised products (2,62,000 doneslannum). It has a well-planned township with self- contained facilities such as medical ,transport and shopping facilities. Neyveli Thermal Power Station-I is one of the first Power Stations in India which is located close to the pit- head and the fuel is transported by belt conveyer system from the mine to the power Station. The strategic idea of construping the Thermal Station in close proximity to its source of fuel has paid rich dividend is over the years, by way of saving transportation costs, reducing inventory costs and minimising the time lag. The Thermal Power Station-I of 600 MW capacity has been built under Soviet assistance. It consists of six units of 50 MW and three units of 100 MW. The first 50 MW unit was commissioned in May 1962 and the ninth unit was commissioned in September 1970. The Thermal Power Station-I has been operating continuously with high capacity utilisation and plant load factor for the past many years.

Quality Cirde Organisation Setup in NLC The seeds of Quality Circle were planted in NLC during 1986. In order to promote quality circle movement

I . A~exSteerina Committee I

Area Coordinator

Facilitator Facilitator Facilitator 0 a-N , 1 0Leader 0Leader Members Members Members la-! I L-7 lac-N I throughout the organisation and to formulate objectives, policies, rules and regulations, and implement the suggestions of quality circles, a steering committee at the apex level was formed. The organisational structure of quality circles in NLC is as shown in Figure 8.5 The coordinating agency at the Training Complex carries out the decisions taken by the apex steering committee and to formulate policies. Quality Circles have been functioning in all the production units, support services and ofices of the NLC Industrial complex. Fig 8.6 shows the growth of QC's 1986-87 to 1996-97.

Certain Problem Handled by Quality Circles -- The problems undertaken by various Quality Circles from different Divisions of Thermal Power Station -I during 1997-98 are analysed and their contribution in improving the quality and productivity is as follows.

S. No. Obiectives No. of Problems - - - 1. Down Time Reduction /Reducing Breakdowns 10 2. Work Simplification 03 3. Cost Reduction 07 4. Wastage ReductionIWaste Reutilisation 07 5. SafetyIFire Hazard Prevention 04 6. Quick Delivery 02 7. Customer Satisfaction 02 8. Process Improvement .9. Environment Concern 02 10. Improved Life 01 11. Energy Conservation 0 1 Total 38

A few problems and their solutions are discussed below.

Wastage Reduction Difficulties were faced in the water chemical treatment plant with the available sink where chemical analysis were carried out. Out of the many alternatives suggested, reuse of the container in which chemicals are received was taken as the best one. The PVC container was cut into two pieces and provided with wash basin tubes and used as the sink The waste material was thus used with negligible costs, i.e. a Recurring maintenance expenditure. a Cost of relining a and time taken for such works.

The QC also attempted to reduce the breakage of number burettes, identified the causes of the positioning and filling of the burettes, and eliminated them by simple modification which reduced the number of break- ages from about 20 to only 2 a year. - By wastage reduction these circles helped in improving productivjty.

Energy Conservation A Quality Circle from the lighting division found that the illumination provided by 120 sodium vapour lamps of each 250 W capacity for the 420 metres outdoor yard was not sufficient. It also did not have the trwwkour rendering capacity. These lamps were replaced by 10 sets of 3000 W sodium vapur fittings and with 10 metal halide fittings of 1000 W ckpacity. This resulted in the energy savings worth of Rs. 80,189 per year. Thus the work environment improved. It not only resulted in energy conservation but also helped in improving the productivity.

Work Simplification Practising the Quality Circle concepts not only made considerable improvement in the area of production, it also helped in improving the office productivity. One quality circle functioning in the Personnel and Administrative Department simplified the procedure followed in maintaining the service records of the employees. It contributed in the a reduction by 75% of searching time of the details in the service book a reduction in printing and binding cost, and a reduction in the manpower strength required for that division. Quick Ddivay One of the Quality Circles functioning in the purchase department found that instead of procuring instru- ment transmitters along with dual channel power supply units and process connection limbs, procurement of the two separately would result in more that 25% reduction in the Procurement Lead time apart from about Rs. 3.78 lakhs savings for two units of the power station. It also projected a saving of Rs.4.00 l*s in another three units.

I Did your organisation have Quality Circles (or a similar concept) at any point of time? If so describe the salient features of QC and briefly describe and analyse the experience. - *,

8.3 Benchmar~Rafionale With the economic liberalization of a developing country like ours, most of the domestic firms are going to face severe competition in their respective businesses. In dealing with such a situation, many of the firms in our country have been found to be reacting in some,though limited manner by corporate level measures like restructuring, diversificationsetc., as a common response to the rising competition. Such a response is often necessary but may not be sufficient to attract new customers or even to retain existing customers. Customers over a time will patronize only those products and services that are expected to give them higher benefits, that is, greater value, brtheir money, compared to others. Business unions operating in an industrylmarket compete with each other. It is at this level where competitive advantages can be built. Many of the domestic firms do not yet pay sufficient attention towards developing a competitive advantage in their businesses. In times to come,they will have to give more emphasis to business level strategies for their products and services because it is only through such strategies that customers can be attracted. Further, it has to be noted that the strength to compete developed once may not last long as competitors may also develop such strengths. So, there is a need for continuous increase in such strengths not just by 10% or 15% but by such magnitude which will be much more than the competitors have achieved. Western managements have recognized the need for an approach called'Benchmarking'. The latter has been found to be an effective structured method to continuously develop the requisite strengths to compete. In most of the developing countries like India, almost all the industries, until recently, had quite limited number of products and services which differed markedly in their utilitarian characteristics. Customers then had limited choices and brought products that were available in the markets. Through marketing mus- cle the competing firms attempt to generate quite superficial differentiation between their own and competitors' products. This kind of a situation is emerging with increasing competition and rising entry of foreign goods and services. A competing firm has to continuously keep on improving the features of its products and services. The recent approach of benchmarking' not only provides a comparative profile but also helps the management to generate innovative products and services. As a sequel to building competitiveness, many of the Indian firms have upgraded core technologies of their businesses. However, there are many work practices associated with the core technologies that are too inefficient and hence result in sub-utilisation of the core technologies themselves. Many of these supportive processes, whether technical or administrative, have been in practice for a long time. These have been designed on the basis of age-old management principles of extensive fragmentation, divide and rule, checks- and balances, etc. There is, therefore, considerable scope of improvement for such processes. An organisa- I tion without efficient and effective operating and management infrastructwe cannot build a competitive advantage even if it has the state-of-the-art core technology and an excellent brand image. It is for this rea- son that continuous process improvement has been emphasised in management under the label of Total Quality Management. Such process improvement requires management to create appropriate cultural environment. It also requires that employees change their mindsets to evolve better and better processes. A benchmarking approach has been found to be effective not only in providing new ideas for changes but has also helped in building the required commitment for change.

The term8Benchmarking'has different meanings for different persons. Many think that the term denotes'tar- geting'i.e. fixing up a'norm'. In fact, a dictionary definition says benchmarking is "a standard against which something can be measured, i.e. a "reference point*. Though this is not entirely wrong, it misses an important aspect of learning which we shall elaborate a little later. The term, as originally coined by Xerox Corporation, U.S.A., meant continuous process of measuring the products, services, and practices against the toughest competitors or companies, known as 'leaders* This definition emphasizes the analytical part of the work measurement and comparison. But one of the subsidiaries of Xerox - Rank Xerox, U.K. looked at it somewhat differently. It viewed it as a continuous systematic process of evaluating companies recognised as industry leaders, for determining business and work processes that represented best practices. In operational terms, this is frequently condensed to "the search for industry best practices that lead to superior performancen By "best practicesn is meant the methods and procedures used in work processes that best meet customer requirements. Benchmarking is then not simply about what we want to achieve - the benchmarks or the measurements of best performance, but also how they are achieved i.e. processes in action. This has been very succinctly noted by Spendolini in his book as "find and implement best practices for high performance process that fully satisfy customer needsn. In fact, in a recent British publication, which Cook has very clearly defined benchmarking asutheprocess of identifying, understanding and adapting outstanding practices from within the same organisation or from other businesses to help improve performance*. Thus, benchmarking is an ongoing task at all levels of business of finding and implementing the world's best practices in the key things that are done to deliver customer satisfaction. On a little deeper reflection of all the above-mentioned definitions, it could be visualize&that the benchmarking process consists of the following three elements or components: i) Analysis: breaking down an issue into components - Other Conoepta, Tools and Teobniquw-I ii) Comparison: component-by-component comparison to find gaps or differences. iii) Synthesis: Recombination of components with ideas stimulated from the differences. The original concept of benchmarking had been in practice in India about 3000 years ago. The dominant method of learning which was known then to people, used to be watching the actions of leaders. Footprints of wise men are what common people are told to follow. Lord Krishna, according to Hindu philosophy, is believed to have taken various reincarnations only to demonstrate how an ideal leader should behave under various kinds of situations. Lord Krishna was, therefore, believed to be universal benchmark. Such a principle of learning got subsequently spread to countries far from of India like Japan, for example, and trans- formed the principle into a practical application in an industrial context. Japan calls it 'Dantatsu', a method of choosing the best of the best. Subsequently,US organisation, faced with severe competition from Japanese firms, made use of this principle to develop a structured method of adaptive innovation and termed it as 'Benchmarking'.

8.3.8 ' Types of Benchmar- Since benchmarking is essentially learning from comparison with others, it is categorised into different types depending upon either objects being compared or in respect of units with which comparison is made. Based on the objects to be benchmarked, benchmarking has been classified into four categories. These categories are as follows : Product Benchmarking Performance Benchmarking 'e Process Benchmarking Strategic Benchmarking

Product Benchmarking: This is also alternatively termed as 'Customer Satisfaction Benchmarking' or 'Customer Value Profiling'. This refers to both engineering or qualitative comparison of products and services among competing offerings. Many of the manufacturing organisations have been doing several kinds of reverse engineeringto benchmarking various features of their products. Recently, several organisations espe- cially in the service sector, have shown their concern in comparing their services with others. Product Benchmarking can also help in identifying activities where improvement is possible. Product Benchmarking quite often leads to the redesign of existing products and services.

Performance Benchmaking: Performance benchmarking refers to comparison of performance indicators related to a business as a whole or tszhe group of critical activities or processes. Business level performance benchmarking which was previously used under the banner of'interfirm comparison' done through a set of well defined financial ratios, has again drawn the attention of world class organisations. It has been found to be a very important tool to identify different functional areas where scope for improvement is high. However, such business level comparison now includes many performances issues like innovativeness of the firm, customer satisfaction from the product and services delivered by the firm,etc. Process level performance benchmarking includes comparison of process performance indicators in terms of those issues which are critical to the implementation of business strategy. These indicators relate ,to resource efficiency, resource allocations and many other issues which are relevant for the processes under reference. Performance benchmarking is bedoming very important tool to provide external feed- back to the concerned persons involved in the process or in any of the constituent activities. Though improvement is implicit in performance benchmarking of both kinds mentioned above, there is no explicit attempt to design any new course of action as part of performance benchmarking.

Process Benchmarking: This refers to comparison of processes. A process is a set of sequential activities as performed on an item to increase its value to the customers. There are three major categories of processeses - business process, support process and management processes, depending upon the nature of customers served. In a developed country where competition in product market has become fierce, business process benchmarking is fast becoming a standard management tool to maintain market share. Process benchmarking requires explicit conduct of all three elements of benchmarking as mentioned above. In other words, it leads to the redesign of new processes to be implemented by the management.

Strategic Benchmarking: This refers to a study of corporate level or business level strategies pursued by some of the selected companies reputed for reformulation of strategies or polices in recent times. Many of the top managements have been constantly reviewing the business portfolios of their companies. Benchmarking corporate strategies of other successful companies could give some additional insights in their such efforts. Business strategies refers to the direction in which a specific business is moving to ensure its attractiveness to customers and other stockholders. A company could study the business strategy of another successful*businessand use the strategy for building up the attractions. Such strategic benchmarking will gain more and more significance as markets become competitive. Based on the organisations against whom one is benchmarking, benchmarking methodology could again be categorised into five following types : i) Internal Benchmarking - Comparison between department, plants, subsidiaries etc. within the country or among the countries through collaborations. ii) Industry Benchmarking - Comparison of performances by the organisations producing the same class of products and services. iii) Competitive Benchmarking - Comparison of performance against direct competitors. iv) Best-in-class Benchmarking - Comparison with best practices prevalent in an organisation irrespec- tive of products and services. iv) Relationship Benchmarking - Comparison is made with a company with which the benchmarking company already has a relationship like customer-supplier relations, joint venture arrangement, etc. 8.3.3 Product Benchmarking This refers to comparison of different features and attributes of competing products and services either through engineering analysis or through analyses of perception of customers. Engineering approach of product benchmarking was in practice for quite some time. This method, norn~allyknown as reverse engineering, is basically technical, engineering based approach comprising of tear-down and evaluation of technical product characteristics. Most of the consumer goods and capital equipment manufacturing firms have one or other way, been doing reverse engineering to finalize product specifications. Some of the Indian firms also carried out value analysis in conjunction with reverse engineering. Value analysis facilitates searching for cost-effective alternatives for the chosen components or sub-assemblies, specifications of which are found out through comparison process. An engineering department equipped with tools of value engineering, can develop suitable for developing product specificationsthat are comparable, if not better, to competitive offerings. Comparison of customer-perceived-quality assumed great significance during the 1970's when it was * revealed to be the most important factor for market share in competitive economic conditions. It was observed that customers made their judgment relative to value i.e. quality and price. The relative perceived quality is a quality from the customer perspective, with respect to alternative competitive offerings in the market. A famous example of product benchmarking has been found to be one used by Ford company during the development of their "Taurus"mode1 of automobile. Ford learned that competitive product analysis can pro- , vide perspective and guidance on critical design and developing issues. Products and services provided by many Indian firms are of much lower perceived quality compared to world class offerings. A gap is very high. Under this situation, one can easily perceive use of product benchmarking to identify immediate priority areas for improvement. This should be done on continuous basis so that all the important attributes as sought by Indian customers are supplied through their offerings, thereby increasing relative customer-perceived-quality and, in turn, increasing market share. Though some marketing departments of Indian firms have been doing some form of product perception w analysis, many of such analyses fall short of requirements as mentioned above. Further, it has been found that product benchmarking should be done by an inter-disciplinary group instead of marketing departments alone, to provide maximum benefits. 8.3.4 Performance Benchmarking It is alternatively known as 'Result Benchmarking' or 'Benchmark Studies' as benchmarking often includes business or process outcomes. It is also termed as 'industry benchmarking' as participants of such a study often belong to a single industry . For this kind of benchmarking, all the different kinds of system performance variables - efficiency, effec- tiveness, productlu&y,tj-uality, quality of worklife, flexibility, innovativeness and profitability could be measured and compared either for a whole business or for any of the constituent functions or processes. Criticality in a business context decides which variables out of all the above mentioned ones are relevant and of common interest to all the participating organisations in a performance benchmarking study. Performance benchmarking which was used to be known earlier as 'Interfirm Comparison' has been in practice in India since 1960s. In some of the industries like Textile, Fertilizer etc., performance benchmark's were in vogue. However,such comparisons included mostly financial ratios at aggregate levels and were often used for management control purposes. Performance benchmarking which has recently been prompted by the National Productivity Council of India includes all the strategic and critical issues both at business and fundiod levels that are current concern of managements of participating companies. These issues are expressed either in financial or in operational terms. 8.3.5 Process Benchmarking It is now realised that it is not enough to know'where' a company is but it is also important to know'how' and 'why' it has reached that stage. Process benchmarking provides us with a more effetive and efficient process to be implemented. A process is a set of sequential activities performed on an item to add value to the item for creating customer satisfaction. Process benchmarking is a complete method containing all the elements of ideal benchmarking process i.e. analysis, comparison and synthesis. It is, thus, an essential tool when an existing process is to be redesigned or re-engineered. There are many models available in the West regarding the appropriate methodology to carry out process benchmarking. National Productivity Council (NPC) of India has evolved an &step process to suit Indian conditions. According to the NPC mode1,process benchmarking methodology, to be carried out by a process oriented benchmarking team, consists of the following steps :

Step 1: Identify the object or process to be redesigned or imprpved. Sten 2: Map and measure the existing process in its entirety in terms of relevant critical dimensions. step\.': Identlfy the partper where the same process is known to be better performed. Analyse the pa tner's process and find out the differences. This often requires collection of data step Y through a cheall isttquestionnaire and/or physical visit to the partner's site Step a Redesign the process and put up the proposal for management approval. step 61 Implement the re-designed process . step 7: Monitor the performance of the redesigned process. Step 8: Recalibrate the process.

Though the benchmarking partner could belong to the same company or to the same industry, any major change in the process performance could be achieved when the partner is drawn from an organisation whose products and services are quite dissimilar. However, in such benchmarking, acceptance by the company personnel could be an important factor. Several studies have shown that almost all the leading American and European firms have gone for process benchmarking. In ~ndia,each and every process provides scope as each has been estabilshed based on traditional management thinking. An organisation normally has three kinds of processes; business processes, support processes and management processes. The business process linking the organisation , directly with customers is a high priority area for benchmarking in a highly competitive situation. But, quite often, an improved business process like distribution, customer service provision, etc. cannot be sustained over a long time if supportive processes are not equally efficient. So, support processes like procurement, manufacturing, machinery maintenance, etc. are required to be improved or re-engineered before an efficient business process is fully functional to its optimum performance level. In Indian circumstances, support processes should be priority areas for improvement. These also include management processes. Other Concepts, Tool8 and TeanQue6-I

Strategy is the ability to see where one wants to go, and to do things necessary to stay on track and get there. Using this definition, strategy is both forward-looking (proactive) and side-looking (reactive). Looking around and learning from others are thus important enablers for such strategy planning. Strategic thinking in business is the matching of a business's opportunities with its resources in order to develop a direction. Such thinking is often reflected in a strategic plan that specifies goals and objectives and areas for resource allocation. Strategic benchmarking addresses all the pertinent issues involved in the above mentioned strategic planning. It is only during the 1990's that many Indian firms have been seriously pursuing strategic planning and carrying out competitor's analysis. An established quantitative method of strategic benchmarking has been developed with the application of PIMS (Profit Impact of Market Strategy) model containing up-to-date strategic information of 3000 business units. None of the Indian companies are known to be using PIMS model at present. Alternatively, strategic benchmarking could also be carried out by the application of process benchmarking techniques and methods. Many sfrategic consultants in the West have now observed that strategic benchmarking is similar in application to benchmarking of work processes, but different in scope.

Activity a Is the concept of 'benchmarking'being used in your organisation? How is it being used? What benefits have ensued? I . -

8.4 QualityFunction Deployment (QFD): Rationale an8 History The level of competition is intensifying as the business environment shifts from national to global. This increase in competition has often focused on developing new and imprwed products to meet cust6mers'specific needs. This is forcing companies to match or surpass their competitors' products in terms of quality, price and service in order to survive. As customers become more value conscious and selective in the products they buy, companies have began to focus their attention on ways in which they could attain long-term market share and profitability through enhanced product development practices. I Examining how successful companies develop their products may helpful to managers in understanding adopting benchmarking of their awn product development methods in their organisations. Quality Function Deployment (QFD) has bem hearlded as an important tool of the product aavelopment process. QFD enables an organisation to measure customer 'wants' and map them against the engineering'how' in a way that highlights trade-offs and dri .?esthe product's design toward customer requirements. * History Tr.2 importance of meeting customers' quality requirements has steadily migrated upstream through the manufacturing process since the final inspection ear of the 1920s. As the cost of producing nonconforming products has risen (in terms of production cost, warranty claims, lost sales, etc.) ,companies have attempted to identify the root causes. Statistical process control (SPC), introduced in the army forces during World War 11, was one of the first methods used to reduce the number of defective products. SPC gained industry acceptance during the last 1950s and early 1960s and remained the most common form of quality control in the United States until the 1970s. While SPC can reduce the number of defective products that reach the cus- % tomer, it is still a reactive quality control measure. Designing quality into the product through improvements in the product development process and building robustness into the production system by designing products for easy manufacturing and assem- bly became important issues in the US during the 1980s. Addressing quality, production, and customer issues while still in the design stage of product development allows companies to realize greater savings while attaining higher product quality. As the intensity of competition increases, companies use cross- functional teams with representatives from marketing, manufacturing, suppliers and final customers to design, market and manufacture products. This front-loading of quality allows companies to develop and maintain a competitive advantage over competitors who follow the traditional 'over-the-wall' approach to product development. QFD, which was first used at Mitsubishi's Kobe shipyard site in 1972, was designed as a tool to facilitate a cross-functional product development process. The application of QFD by Japanese companies accelerated through the 1980s. The acclaimed benefits of using QFD (lower production cost, shorter development time, and higher quality) attracted a few US companies in the mid to late 1980s. This gap between Japanese and US implementation of QFD methods may help to explain the superiority of Japanese products and the growth of Japanese companies' market share during this time period. 8.4.1 What is QFD? Quality Function Deployment has been defined as 'a system for translating consumer requirements into appropriate company requirements at each stage from research and product development to engineering and manufacturing to marketinglsales and distribution (American Supplier Institute, 1989). QFD is taking the voice of the customer from the beginning of product development and deploying it throughout the firm through a sequence of phases. In QFD, the voice of customer aligns the company's resources to focus on max- imising customer satisfaction and minimising waste. QFD is not just a quality tool, it is also a planning tool for developing new products and improving existing products. QFD permits the'voice of the customer', rather than the'demands of management', to allocate company resources and to coordinate skills and functions in producing the final product. Listening to the customer requires that the management works to gain an understandingof its customers at three levels. The first level is understanding the basic wants and needs of the customer. A cross-functional team using a variety of market research methods (e.g. individual interviews, focus groups and mail and telephone surveys) generates a list of customer requirements. The information collected during this stage is referred to as the'spoken' quality demands and performance expectations. The requirements are usually vague (e..g.'good ride') Other Conoepts, Tools and TeohPique6-I 1 or incomplete and must be further defined into measurable characteristics. There is also information which is not directly given by the customer but must be included in the analysis to obtain a more complete understanding of customer requirements. The 'unspoken' attributes are often overlooked by the customer or assumed to be incorporated into the product [e.g. airplane arrives safely). The product must fulfil all these basic requriements, along with attaining high levels of performance in order to achieve a competitive level of customer satisfaction. Second, QFD must drive the company to go beyond these data collection techniques and identify funda- mental customer needs and root product function. In addition to the spoken and implied wants of the customer, QFD forces the design team to determine hidden customer requirements by studying how customers use a product, examining the product's applications and learning customer behaviours. For example, customers may express a desire to have the bank offer more covenient hours. One response would be to open the bank for longer hours. Another would be to offer access to its services via a computer network and automat- ed teller machines. Third, in addition to learning the basic quality and performance attributes and root product functions, the product must provide unexpected features which 'excite and delight' the customer in order to sustain long term market share. These features are not usually known by the customer because they are either not aware of technological advances (e.g. new laser applications) or have become accustomed to standard product uses or applications. While some new characteristics have evolved from technological breakthroughs, not all new features must come through research and development. 'New' features or product applications are found when time is spent understanding the customer and how the product is being used. As new features are introduced and competitors copy or surpass existing products or services, characteristics which one surprised the customer, become standard product features over time (e.g. air bags in automobiles). Hence, the list of product characteristics must be continually updated and revised. 8.4.8 QFD/Hause of Quality (HOQ) Table Fig. 8.7 shows the essential components of the quality table or HOQ diagram. The construction begins with the customer requirements, which are determined through the'voice of the customer' - the marketing and market research activities. These are entered into the blocks to the left of the central relationship activities. These are entered into the blocks to the left of the central relationship matrix. Understanding and priori- tising the customer requirements by the QFD team require the use of competitive and compliant analysis, focus groups, and the analysis of market potential. The prime or broad requirements should lead to the detailed WHATs. Once the customer requirements have been determined and entered into the table, the importaim of each is rated, and the rankings are added. The use of the'emphasis teclmique'or paired comparison may be helpful here. Each customer's requirements should then be examined inkrms of customer rating; a group of customers may be asked how they perceive the performance of the organisation's product or service versus those of competitor's. These results are placed to the right of the central matrix. Hence the customer requirements' importance rankings and competition ratings appear from left to right across the house. The WHAT'S must now be converted into the HOWs. These are called the technical design requirements interactions HOW vs HOWs Customer Customer Technical design rating requirements requirements the The 'WHATs' the 'HOWs' 'WHYS' Worse Better 1 5

Prime Details relationship

0 WHATs vs HOWs

Technicallcost HOWs vs HOW MUCH rankings the 'HOW MUCH'

Technical ratings (benchmarkings)

Target values of technical characteristics (including costs) Figure 8.7: The Emae of Quality and appear on the diagram from top to bottom in terms of requirements, ranking (or costs) and ratings against competition. These will provide the'voice of the process'. The technical requirements themselves are placed immediately above the central matrix and may also be given a hierarchy of prime and detailed requirements. Immediately below the central relationship matrix appear the rankings of technical difficulty, development time, or costs. These will enable the QFD team to discuss the efficiency of the various technical solutions. Below the technical rankings on the diagram comes the benchmarking data, which compares the technical process of the organisation against its competitors. The central relationship matrix is the working core of the house of quality diagram. Here the WHATs are matched with the HOWs, and each customer's requirement is systematically assessed against each technical design requirement. The nature of any relationship-strong positive, neutral, negative, strong negative - is known by symbols in the matrix. The QFD team carries out the relationship estimation,using experience and judgement, thk aim being to identify HOW the WHATs may be achieved. All the HOWs listed must be necessary and together sufficient to achieve the WHATs. Blank rows (Customer ~.requirement not met) and columns (redundant-technich characteristics) should not exist. - Other Con-, Toob and T~u~-I

The root the house shows the interaction between the technical design requirements. Each characteristic is matched against the others, and the diagram format allows the nature of relationships to be displayed. The symbols used are the same as those in the central matrix. The complete QFD process is time-consuming, because each cell in the central and roof matrices must be examined by the whole learn. The team must examine the matrix to determine which technical requirement will need design attention, and the costs of that attention will be given in the bottom row. If certain technical costs become a major issue, the priorities may then be changed. It will be dear from the central matrix, if there is more than one way to achieve a particular customer requirement, and the roof ll. HOWs(1)

WHATs

WHATs (3) matrix will show if the technical requirements to achieve one customer requirement will have a negative effect on another technical issue. The very bottom of the house of quality diagram shows the target values of the technical characteristics, which are expressed in physical terms. They can only be decided by the team after discussion of the complete house contents. While these targets are the physical output of the QFD exercise, the whole process of information-gathering, structuring, and ranking generates a tremendous improvement in the team's cross-functional understanding of the productlservice design delivery system. The target technical characteristics may be used to generate the next level house of quality diagram, where they become the WHATs, and the QFD process determines the further details of HOW they are to be achieved. In this way the process'deploys'the customer requirements all the way to the final operational stages. Figure 8.8 shows how the target technical characteristics at each level become the inputs to the next level matrix.

An Abridged Example A lawnmower manufacturer recently spent time and money redesigning a control for their most popular mover, only to find that customers were insensitive to the modification. So when they began planning to

1. Product planning matrix strong relationship - 3 points A medium relationship = 2 points 0 weak relationship - 1 points

IQuiet operation I. I. I I I I I

Cuts long grass

,-.------Reliable ,------*------*------.------.------.--- Light to carry A Compact for storage o lo • ,------10------me--.------Safe t I to lA ,------.------*------Total 113 111 t 12 11 lHgrw 8.9: QFD for mde#i$aing a lawnmower Other Concepts. Tools and Techniaues-I

redesign another of their models, they wanted to be sure that this time round they would make changes the customer actually wanted. The company carried out market research to find out their customer's priorities, and a QFD analysis to see what the implications for design and manufacturing were. Fig. 8.9 gives some details of QFD. The results showed that customers were interested in performance, and that improving the motor, the drive chain and the efficiency of the blades would have far more impact than changing the control features

I I which is what was done. There should be reductions in the number of midstream design changes, and these reductions in turn will limit post-introduction problems and reduce implementation time. Because QFD is consensus- based, it promotes teamwork and creates communications at functional interfaces, while also identifying required actions. It should lead to-a 'global view' of the development process, from a consideration of all the details. IF QFD is introduced systematically, it should add structure to the information, generates a framework for sen- sitivity analysis, and provide documentation, which must be 'living' and adaptable to change. In order to understand the full impact of QFD it is necessary to examine the changes that take place in the team and the organisation during the design and development process. The main benefit of QFD is of course the increase in customer sati- faction, which may be measured in terms of, for example, reductions in warranty claims. .+ Activity 3 In QFD or its some variant being used in your organisation? Discuss the format, if any, being used. In what ways has the concept of QFD benefitted your organisation?

8.6 Summarg Quality Circles are small groups, within departments and sometimes across departments of an organisation to solve problems related to quality and productivity. These groups are formed by about 7 to 8 workers under the leadership of their supervisors to deal with their work related problems. Groups are facilitated by a structure consisting of Steering Committee, Facilitators, and a Coordinator. Groups use various simple tools and techniques. In order to compete successfully in the emerging competitive market, an organisation should always be concerned with its business strategy, processes and products. It has to continuously review these aspects to improve, and sometimes re-engineer to bring them in line with its capabilities with market requirements. Benchmarking, if carried out systematically, provides outside views and ideas and thus triggers off creativity of the group to strengthen its competitive capability. Benchmarking consists of analysis, comparison and synthesis. All these elements are present in all the types of benchmarking except performance benchmarking. Omission of any of these elements may cause sub-utilization of the potentiality of the concept. For example, use of database for the best practices does not generate enough commitments of the personnel concerned as a full-scale study of benchmarking does. As organisations strive to compete in the highly competitive global economy, it makes them focus their attention on the customer. QFD links customer requirements of 'whats' with the appropriate engineering design characteristics or 'hows'so the voice of the customer is translated into product designs and specifications. Building the House of Quality is an important step in moving from customer requirements to production requirements. Proponents of QFD argue that it has several benefits. The study of firms implementing QFD demonstrates that it offers product development teams the opportunity to achieve significant improvements over traditional product development practices. QFD creates an information intensive atmosphere where communication increases and ideas are freely exchanged. This has a positive impact on developing product concepts and devising designs that meet customer quality and performance objectives. 8.6 Key Words Coordinator A role that acts as a secretariat to the steering committee. Facilitator A semi-formal role that catalyses development of quality circles in our organisation. House of Quality A tabular presentation that facilitates planning of methods to meet specified customer requirements. Leader A role that leads the group in solving problems in a quality circle. Performance Benchmarking A process of comparison of business results of several competirlg companies. Problem Solving Process A procedure commencing with selection of a problem till implenlentation that is followed by a quality circle in solving each problem. Process Benchmarking A comparison and action planning made for a specified functional process. Product Benchmarking A process that compares a product1 service, offered by a company with the same marketed by the competitorCs). Steering Committee A committee consisting of top management and functional heads that oversee proper working of quality circles. Strategic Benchmarking A procei of comparison and learning in respect of a corporatelbusinesslfunc- tional strategy.

8.7 Self-Assessment Questions 1. What is a quality circle? What are its principal objectives? 2. "Quality Circles do not work beyond Japan." Comment. 3. What are the important roles in management of quality circles in an organisation? \

Olher Coampta, Tools and Teuhd~uerr-I

4. What is the,process that is followed by a quality cirde in solving a particular problem known as? 5. Outline each of the common tools that are used by a quality circle? 6. Explain the following techniques with the help of some that you examples that you know: a) Brainstorming b) Pareto Analysis c) Control Charts 7. What barrierslproblems you think wouldlcould arise in the implementation of quality circles in an organisation in India? 8. What is benchmarking? How does it differ from an ad-hoc comparison?, 9. What are the different types of benchmarking in relation to objects being benchmarked?. 10. Classify benchmarking based on the nature of firms against which benchmarking could be done? 11. What is a process? How does it differ from a function? 12. What are the different kinds of processes? 13. How does benchmarking help an organisation? 14. What is QFD? What are the benefits of its application? 15. Explain briefly how you construct a house of quality?

Bagan, Christopher, E. and English, M. J. (1994) ~enchharkin~for ~est Practices: Winning Through Jnnovntiive Adaptation Camp, R.C. (1989) Benchmarking: The Searchfbrlndustry Best Practices that Lead to Superior Performance, Quality Press, Milwanke, Wisconsin, U.S.A. Cohen, Low and Louis Cohen (1995)- Quality Function Deployment : How to make QFD Work for You, Addison-WeslQ Pub. Co. U.S.A. Revelle ,Jack, B, John W. Moran and Charles Cox (1998) - The QFD handbook, John Wiley & Sons, U.S.A. Robson, Mike (1989) - Quality Circles. A Practical Guide, Ashgate Publishing Company. Sugimoto, Y (1972) - Japan Quality Control Circles, Asian Productivity Organisation, Tokyo ,Japan.

References 1. Cook, S - Practical Benchmarking, Kogan Page, London, 1995. 2. Spendolini. M. - The Benchmarking Book, AMACOM ,May, 1992.