Appendix 1. Survey Report on Quality Management Systems In Indian Companies

Transcription

1 Appendix 1 Survey Report on Quality Management Systems In Indian Companies

2 Contents INTRODUCTION A-1 OBJECTIVES A-2 QUESTIONNAIRE PREPARATION A-3 ANALYSIS OF SURVEY RESULTS A-4 GENERAL INFORMATION A-4 Overview of Organization Characters A-4 Information Regarding Quality System A-6 Management Responsibility - Commitment A-7 Management Responsibility-Customer Satisfaction A-8 Management Responsibility-Quality Policy A-9 Management Responsibility - Planning A-10 Management responsibility: Responsibility, Authority and Communication A-11 RESOURCE MANAGEMENT A-12 PRODUCT REALIZATION A-14 Purchasing A-15 MEASUREMENT ANALYSIS AND IMPROVEMENT A-17 QUALITY RESULTS AND SATISFACTION WITH RESULTS A-19 Quality Results A-19 Satisfaction with Quality Improvement Results A-20 Employee Satisfaction/ Work Environment A-22 SUMMARY AND RESULTS A-24 CONCLUSION A-26 REFERENCES A-27

3 LIST OF FIGURES Figure A. 1 Classification of survey by respondents...a-4 Figure A. 2 Organization characteristics...a-5 Figure A. 3 Information regarding quality system...a-6 Figure A. 4 Overall performance - quality management system...a-6 Figure A. 5 Requirement management responsibility- commitment...a-1 Figure A. 6 Overall management responsibility- commitment...a-8 Figure A. 7 Requirement management responsibility-customer satisfaction...a-1 Figure A. 9 Requirement management responsibility - quality policy...a-9 Figure A. 8 Overall requirement management responsibility-customer satisfaction...a-1 Figure A. 10 Overall management responsibility-quality policy...a-10 Figure A. 11 Requirement management responsibility quality planning...a-1 Figure A. 12 Overall requirement management responsibility quality planning...a-11 Figure A. 13 Requirement management responsibility - authority and communication...a-11 Figure A. 14 Overall management responsibility authority and communication...a-12 Figure A. 15 Resource management...a-13 Figure A. 16 Overall resource management...a-1 Figure A. 17 Product realization...a-14 Figure A. 18 Overall product realization...a-15 Figure A. 19 Purchasing...A-15 Figure A. 20 Overall purchasing...a-1 Figure A. 21 Measurement analysis and improvement...a-17 Figure A. 22 Overall measurement analysis and improvement...a-17 Figure A. 23 Overall quality results...a-1 Figure A. 24 Satisfaction with quality improvement efforts...a-1 Figure A. 25 Overall satisfaction with quality improvement efforts...a-1 Figure A. 26 Overall employee satisfaction / work environment...a-1

4 QM Survey Appendix 1 Introduction This study is carried out to improve understanding of Indian organizations, with main criteria as ISO 9001:2000 quality system requirements. Similar studies such as [5] among the Indian companies provided some understanding that shows that majority of Indian manufacturers are improving quality management practices focusing on customer satisfaction and treating customer complaints with top priority. To put in the perspective, governance in Indian firms is mixture of controlled family conglomerates to state owned companies [12]. After the markets opened for global competitiveness in 1991, increasing level of product performance, necessity of reliability, a standard (effective and efficient) system became requirement to every company in order to stay in the business. However, there are difference in practices of Indian companies before and after the start of liberalization in terms of usage of management techniques such as TQM, TPM, and ISO certification. ISO 9000 series of standards became norm for every company especially for those who are export oriented. The transformation in Indian Industry in implementation of management techniques makes it clear the capability of adopting Japanese management practices improve productivity and quality [10]. For example, Sundram Fastners has won the award for best supplier to GM for number of years in succession. The main intention of reforms 1 is to inject the desired level of technological dynamism in Indian industry and develop indigenous competence for the efficient absorption of foreign technology. [21]. In addition, it hoped for the competitive pressure will also induce industry to invest much more in R&D. This wish was realized to some extent with first indigenous car made by TATA in 1998 with the name INDICA 2 [22]. Government continued its help to industries to adopt successful techniques to increase competence of Indian industries. For example, in quest for successful management techniques, Confederation of Indian Industry (CII) hired DR Shoji Shiba, Japanese Quality expert to guide the selected Indian CEOs of successful Indian companies that have core competencies in TQM to lead the companies in achieving Break through management [16]. Altogether, research regarding Indian industry indicates, organizations are making good progress. Mainly medium and large industries are able to adopt new technology, innovation, and modern management techniques, which are necessary for survival. However, there is still ambiguity about how wide spread and sustainable these practices are. In this scenario, it is necessary and is of great value to know how Indian companies are doing 1 Industrial policy of Government of India of July 24, A small car for budget-oriented people A-1

5 QM Survey Appendix 1 specially those companies that are having collaborations and doing business with other countries. This group of companies is expected to be active in embracing new technology, modern management techniques, and use standard systems for managing company activities. With this study successfully completed, the results will help Indian companies who want to do business with other countries (or) collaborate with companies of developed countries. In addition, helps to evaluate how far these Indian companies successfully adapted standard systems and to enable them compare with practices of companies from developed countries. Objectives The prime objective of doing this survey are to gain understanding of QMS in Indian companies, which are having formal quality management system, secondary objectives are: 1. To collect data regarding activities Indian organizations are not able to practice with great success 2. To enable to compare Indian organizations practices with German companies. A-2

6 QM Survey Appendix 1 Questionnaire Preparation Most of the questions in the questionnaire [Appendix 4] are prepared using ISO 9001:2000 quality management system requirements manual, some general questions taken from similar surveys conducted on TQM and related literature. The questionnaire consists of multiple-choice questions asking for a single or multiple answers. In addition, at the end of each section space was provided for additional comments, which can be used to give much needed insight about the section, or communicate important information. Survey questionnaire consists of mainly three parts: Part 1: General information about the organization Part 2: Information regarding quality system Part 3: Quality results and satisfaction with results We expected it to take approximately 8 to 10 min to for completion of each part in this survey. All companies are randomly selected from Directory of German Companies in India - I, Collaborations, Joint Ventures, Subsidiaries, 12 th Edition published by Indo- German Chamber of Commerce. Letters are sent to Indian companies asking to fill the questionnaire directly or online at giving approximately four to six weeks time. This survey is based mainly on manufacturing Industries; all the companies small, medium and large-scale companies participated in this survey are having their main business activity as manufacturing. A-3

7 QM Survey Appendix 1 Analysis of Survey Results Total number of companies participated in the survey are 32, out of which 53% are medium scale companies (100 to 1000 employees), 38% are small companies (less than 100 employees) and 6.3% large scale or big companies with (more than 1000 Employees). This survey is based mainly on manufacturing Industries; all the companies small, medium and large-scale companies participated in this survey are having their main business activity as manufacturing Figure A.1 shows the classification of survey respondents according to their job positions. This indicates responses to the survey came from senior managers and from the higher level managers in the corporate activity. Thus the results obtained can be considered to be valid and present high degree of accuracy in presenting respective organisational practices. The participants who has given reply for the survey are Managing Director 10 Manager(other) 7 Vice President General Manager 5 5 Manager Quality Assurance 4 Figure A. 1 Classification of survey by respondents General Information Overview of Organization Characters Indian work environment is changing rapidly since last decade due to globalization and embracement of management techniques such as TQM and continuous quality philosophy. When organizations are questioned about the type of work environment, majority of them (40%) are having dynamic and entrepreneurial environment where people are willing to take risks; in addition, the remaining (28%) organizations are like very personal place. The behavior of managers in the organizations is not consistent; there is no particular behavior common among the managers. However, many managers tend to act as coordinators and coaches, helping employees to meet the organizations goals and objectives. A-4

8 QM Survey Appendix 1 Cohesion works with managers and employees to improve the organization by focusing on strategies that improve workers both short term and long term. Cohesion helps companies to cultivate workplaces that assist people to do their best and have the company prosper in the process. There is no single common binding principle among the organizations, which said to be the reason for cohesion. However, commitment to innovation and development, emphasis on tasks and goal accomplishment are principles uniting the organizations. In general, organizations emphasize mainly on competitive actions and achievements. This indicates measurable goals are very important to Indian organizations. Second most important aspect for organizations is growth and acquiring of new resources, readiness to meet new challenges is always important. Individual initiatives (37.5%) and achievement of objectives (34.3%) are the most preferred criteria for organizations to reward their employees. In other terms, organizations prefer to recognize employees whose innovative ideas and actions immensely benefit organization. Moreover, individuals who provide leadership and contribute to attaining the organization s goals are also rewarded. The objective of customer-orientated business is to meet the needs of customers, internal or external. Majority of the organizations practice customer oriented quality philosophy, with this organizations focus explicitly on customers -both external and internal. In addition, 90% of organizations (Figure A. 2) have measurable goals related to customer satisfaction. Leading companies in the world, follow continuous quality philosophy. Indian organizations are very much aware of this philosophy. Results from the present study indicate 90% of organizations use this philosophy. However, only 63% regularly use this philosophy for continuous improvement of organizational processes. For this purpose, nearly 24% of the Figure A. 2 Organization characteristics A-5

9 QM Survey Appendix 1 companies regularly use cross-functional quality improvement teams; in addition, 62% use cross-functional quality improvement teams for introducing improvements. Workers participation in decision-making processes is a part of empowerment in the workplace. Empowerment involves decentralizing power within the organization to individual decision makers. Results from study (Figure A. 2) show only 50% of organizations have such a policy in their organization. Information Regarding Quality System In general, the quality management system of the companies participated in the survey, found to be very good (Figure A.4). Figure A. 3 Information regarding quality system Even though only 62.5% of them are certified (Figure A. 2), 73% of them strongly agree to have established and maintaining a quality manual with strong control of documentation at all levels. Majority (69%) of them strongly agree to have systems in place to perform internal audits on quality system from time to time to validate the system. Strongly Practice Practice with out complete commitment Rarely /Not at all Practice Figure A. 4 Overall performance - quality management system A-6

10 QM Survey Appendix 1 Management Responsibility - Commitment To satisfy customer, management commitment should be the force for establishing, implementing, maintaining, and improving the quality management system. The first duty of management is to communicate the organization the importance of meeting customer as well as regulatory requirements; establish a quality policy and objectives; conduct management reviews; and ensure the availability of resources. Results from the study showed that majority 63% of the organizations have exhibited commitment in establishing suitable quality policy and quality objectives. In addition, 62% of them strongly agree to the fact that management ensures the availability of resources to achieve objectives. However, the regular review of suitability of quality policies and objectives takes place only in 33% of organizations, in the remaining 43% organizations review takes place, but do not seems to be completely satisfied. Figure A. 5 Requirement management responsibility- commitment It is apparent from the survey that, majority (60%) of the organizations management behavior is consistent with the organization s values relevant to quality and CQI. However, only 43% shown strong commitment in articulating organizations values relevant to quality and continuous quality improvement. In addition, strong commitment to act on suggestions and generating confidence among the employees that efforts to improve quality will succeed can be seen only in 50% of organizations. A-7

11 QM Survey Appendix 1 Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 6 Overall management responsibility- commitment Majority (53.3%) of organizations have management strongly committed in establishing strong quality policy and quality objectives, providing resources to achieve objectives, making changes needed to improve the quality, (Figure A. 6). However, majority organizations should commit more to reviewing the suitability of quality policies and objectives and articulating values relevant to quality and continuous quality improvement. Management Responsibility-Customer Satisfaction Management responsibility towards customer should ensure that customer requirements are determined and met with the aim of improving satisfaction. Results indicate majority of organizations (Figure A.7) need improvements (52%) in assessing customer needs and expectations; however, 38% of organizations are able to do good work in this regard. Customer complaints are studied systematically in majority (52%) organizations to identify patterns and prevent from recurring. Strong practice collection of customer data to improve services is seen only in 43% of organizations, where as only in 36% organizations systematically use data on expectations and satisfaction in developing new products. Figure A. 7 Requirement management responsibility-customer satisfaction A-8

12 QM Survey Appendix 1 Strongly Practice Practice with out complete commitment Rarely /Not at all Practice Figure A. 8 Overall requirement management responsibility-customer satisfaction Considering all the activities necessary for establishing system to satisfy customer (Figure A. 8), data suggests about 40% of the organizations are systematically doing all the activities. Nevertheless, majority of organizations needs to improve their efforts in using data on customer in designing new services and products and assessing customer needs and expectations in order to realize customer satisfaction. Management Responsibility-Quality Policy Management should ensure that the quality policy is appropriate to the organization; commits to continuous improvement and is communicated and understood within the organization. Activities related to quality policy such as establishing proper quality policy, reviewing it periodically are performed well in Indian organizations. Figure A. 9 Requirement management responsibility - quality policy A-9

13 QM Survey Appendix 1 Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 10 Overall management responsibility-quality policy Results indicate (Figure A. 10), 56% organizations are systematically doing all the activities. However, improvements in organizational efforts are necessary in communicating policy so that it is well understood and reviewing periodically for continuing suitability. Management Responsibility - Planning Planning should ensure measurable quality objectives consistent with quality policy established at all functions and levels within the organization. Data from survey indicates only 33% of organizations have strongly established measurable quality objectives for all functions. Majority of organizations (55%) are performing well in documenting procedures for key activities. In contrast, only 31% organizations are doing exceedingly well in identifying and allocating, resources and activities needed to achieve quality objectives. Study (Figure A.12), indicates only 37% of the organizations are systematically doing planning activities. It shows efforts are necessary in improving organizations ability in establishing measurable quality objectives for all functions and levels and identifying and allocating, resources and activities needed to achieve quality objectives. Figure A. 11 Requirement management responsibility quality planning A-10

14 QM Survey Appendix 1 Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 12 Overall requirement management responsibility quality planning Management responsibility: Responsibility, Authority and Communication Management should ensure that responsibilities and authorities are defined and communicated within the organization. In addition, appropriate communication processes should be established for effectiveness of the quality management system. According to study, in 44% of the organizations, responsibilities and authorities are clearly defined and communicated; remaining organizations needs improvements in this regard. About 41% surveyed organizations have been active in working for establishment, implementation and maintenance of quality management system through the appointment of key management personal; however, 41% of organizations do agree to have responsible management personal yet to reach complete satisfaction with the appointment. Figure A. 13 Requirement management responsibility - authority and communication A-11

15 QM Survey Appendix 1 Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 14 Overall management responsibility authority and communication From the study, it can be said that only 37% of organizations have complete awareness of customer requirements throughout the organization. In addition, only 27% of organizations strongly agree to have a very good communication system for an effective QMS. Considering activities needed for establishing responsibility, authority, and communication systems (Figure A.14), results indicate altogether only 43% organizations are successful. However, majority of organizations needs improvements, especially in establishing proper communication process and developing awareness of customer requirements. Resource Management Organizations should plan and manage all required resources, such as human resources, facilities, equipment, and work environment. Additionally, appropriate resources are to be identified, planned, made available, used, monitored, and changed as per necessities. Data from the study suggests only 41% of organizations able to provide and maintain infrastructure necessary to assure product /service quality. However, 48% of organizations are not lagging far behind in doing so. Human resources are most neglected part of managing resources, as we can see from this study, only 23% organizations provide the necessary education and training to staff for identifying and acting on quality improvement opportunities. Altogether (Figure: A.16) only 23.3% of the organizations are having the suitable system to perform activities for managing resources. A-12

16 QM Survey Appendix 1 Figure A. 15 Resource management Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 16 Overall resource management Results clearly indicates that management of Indian organizations should give immediate consideration human resources, education and training in how to identify and act on quality improvement opportunities, training in statistical and other quantitative methods and education and training to improve job skills and performance. A-13

17 QM Survey Appendix 1 Product Realization Organizations are required to plan and develop all the processes needed for product realization. Planning of should be consistent with the requirements of the other processes of the quality management system. Majority (63%) of the organizations have clearly defined quality objectives and requirements of every product they produce. Before defining product for manufacturing 46% of the organizations collect clear and specific information from the customer; however, 39% organizations work needs improvement. Data indicates 47% of organizations have established, documented product specific process; however, remaining 43% organizations working on it has not reached the desired performance level. Figure A. 17 Product realization Reviewing the organization capacity to ensure the delivery of defined product/service is done only in 40% organizations; but remaining 47% of organizations are working to achieve the desired satisfaction level. An effective communication system is there only in 35% of organizations to handle the customer for providing product information, handling enquires. Considering all activities, study found (Figure: A.18) only 46.6% of organizations are having the suitable system needed for product realization. Results clearly indicate majority of Indian organizations need to work on developing communication system for effective A-14

18 QM Survey Appendix 1 communication with customers and review the organization capacity to ensure the ability to deliver product. Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 18 Overall product realization Purchasing Organizations procurement policy should ensure that purchased product conforms to requirements to evaluate and select suppliers based on their ability to supply product in accordance with the organization s requirements. Figure A. 19 Purchasing Selection of suppliers that provide materials and services is done mainly through established and documented criteria. Results show only 35% organizations follow such a supplier evaluation procedure while majority of 48% yet to follow evaluation procedure successfully. Involving suppliers is critical to improve products performance, for this purpose 48% organizations work closely with suppliers to improve the quality of their products and A-15

19 QM Survey Appendix 1 services. However, 41% of organizations are working towards developing relationships with suppliers to improve the quality. Most of the Indian organizations (45%) are active and have standard system for monitoring the supplier s performance so that quality of the final product will bear no ill effects with time, but significant number (41%) of organizations have a system for monitoring the supplier s performance which is yet to reach desired performance level. While developing new products only 31% of organizations involve suppliers to inform them about the new products and collect innovative ideas for maintaining lasting relationship. Strongly Practice Practice with out complete commitment Rarely /Not at all Practice total Figure A. 20 Overall purchasing Considering activities needed for supplier management in organization (Figure A.20) only 45% organizations are systematically doing all such activities. However, results clearly indicate that organizations need improvements in particular, in involving suppliers while developing new products and evaluating supplier. A-16

20 QM Survey Appendix 1 Measurement Analysis and Improvement Organization is required to implement monitoring, measurement, analysis, and improvement processes to demonstrate conformity of the product, to ensure conformity of the quality management system and to continually improve the effectiveness of the quality management system. In this process, organizations should use all applicable methods, including statistical techniques where necessary. Figure A. 21 Measurement analysis and improvement Organizations participated in the study are customer oriented and have measurable objectives related to customer satisfaction. Study indicates customer satisfaction is monitored regularly in only 52% of organizations to know whether organization actually meet customer expectations. In addition, products are checked and monitored carefully in 48% of organizations to ensure the customers gets defect free products. Strongly Practice Practice with out complete commitment Rarely /Not at all Practice Figure A. 22 Overall measurement analysis and improvement A-17

21 QM Survey Appendix 1 As found in any modern organizations, 45% of organizations have standard system in place to take action and eliminate the cause of non-conformities, and prevent their reoccurrence. In addition, 45% of the organizations strongly agree to have system to eliminate potential cause of non-conformities in order to prevent occurrence. The use of statistical tools to monitor and measure product and process is very poor, as the study found only 17% of organizations strongly use the statistical tool to monitor product and process and in about 48% of organizations using statistical tools their application is limited. Further, only 17 % of organizations actively works and analyze the appropriate data to demonstrate the suitability and effectiveness of QMS. Considering activities needed to carryout measurement analysis and improvement, study (Figure A.22) found that only 16.6% organizations systematically doing all such activities. Results clearly indicate, substantial organizational efforts needed in continuous improvement activities such as use of statistical tools to monitor and measure product and process and analyzing the appropriate data to demonstrate the suitability and effectiveness of QMS. A-18

22 QM Survey Appendix 1 Quality Results and Satisfaction with Results Quality Results Quality results are organization`s achievements with their efforts for success, growth and well-being of all the employees. Three factors are considered for evaluating quality results (or) success of an organization Success in simplifying how products and services are provided. Increase in quality of products and services. Measurable cost reductions without compromising on quality of the product/service they provide Very Strong Quality Results Good Quality Results Poor Quality Results total Figure A. 23 Overall quality results Organizations are working hard to achieve good quality results, it is evident from this study that about only 28% of organizations very successful in simplifying how products and services are provided with about 49% of organizations are not lagging behind in doing it with complete satisfaction. From the past few years, quality of products and services of the organizations have grown steadily, over 47% of organizations strongly agree to have definite measurable improvements in the quality of their products and services. In addition, 37% of organizations see improvements in quality of products, but are still not convinced with results. Majority of organizations achieved measurable cost reductions; however only 43% of organizations strong results in this regard. In addition, 37% of organizations could see reduction in cost but are not completely satisfied with their performance. Interestingly over all, quality results of the organizations are relatively good, (Figure A.23) with 43.3 % of organizations are doing very well and are having excellent quality related results. In contrast, 36.6% of organizations are not completely satisfied with their results and think they should have achieved more. A-19

23 QM Survey Appendix 1 Satisfaction with Quality Improvement Results As we can see from results (Figure A. 24), only 43.3 % of companies are having excellent quality related results. These results depict majority organizations needs additional efforts for increasing efficiency and effectiveness of their processes. Study indicates organizations realized the needs for extra efforts with only 23% of companies are completely satisfied with their efforts to improve quality. Management understanding of quality in Indian organizations is good. Importantly, about 53% of companies believe their management has good understanding of quality, and 43% of organizations should put efforts and improve their understanding of quality. Sixty three percent of organizations strongly follow the principles of continuous improvement of quality; however, commitment to continuous improvement of quality exists only in 56% of companies. From the results (Figure A. 24), it is known only 23% of organizations providing necessary education and training; similar result is reflected in their satisfaction level of training provided. Result shows only 23% of organizations believe they are providing excellent training and completely satisfied. However, the majority of the companies (66%) believe quality of the training provided to employees is not sufficient and certainly, improvement is essential. Figure A. 24 Satisfaction with quality improvement efforts Altogether, 27% organizations have proper communication system, which also reflected in the overall ability to communicate about quality in the organization. In contrast, A-20

24 QM Survey Appendix 1 only 33% of companies are completely satisfied with their ability to communicate the quality across the organization; and majority (60%) thinks that improvement is necessary. One can say that if employees are active in giving suggestions, they are willing to see company succeed. However, only 33% of organizations report their employees are active in giving suggestions for improvement of quality. In addition to, the majority of (56%) organizations are not completely satisfied with the level of employee participation in giving suggestions and sees scope for improvement. Only 30% of companies are completely satisfied with their ability to use resources effectively but the majority of (70%) organizations report there is not completely satisfied and believes to work hard for effective utilization of resources. Regarding overall performance of the organizations (Figure A. 24), only 33% companies are completely satisfied with their performance and have good growth prospects through happy customer and satisfied employee. However, majority (60%) have their position not completely secured. They are required to invest their efforts towards achieving customer satisfaction, employee satisfaction, improve long terms growth prospects and profitability. Completely Satisfied Somewhat satisfied Not at all Satisfied total Figure A. 25 Overall satisfaction with quality improvement efforts In this present study, considering many aspects stated below which are necessary for good quality management, Efforts to improve quality Board understanding of quality Board commitment to continuous improvement of quality Quality of training provided Ability to communicate the quality across the organization Level of employee participation in giving suggestions for improvement of quality Effective utilization of resources A-21

25 QM Survey Appendix 1 long-term growth prospects, customer satisfaction, employee satisfaction and profitability Study clearly illustrate (Figure: A.25) only 27% organizations are completely satisfied in terms of quality improvement efforts. However, majority of (63%) organizations are merely satisfied and there is considerable work to be done to get desired quality improvement results. Employee Satisfaction/ Work Environment Generally it is believed that opportunities for employees to use skills is quite good in Indian organizations, with majority 57% of companies are completely satisfied with opportunities employees are having to use skills and abilities better and about 43% of the companies say that there is room for improvement. Indian companies not only provide opportunities for employees to use their skills but also recognize the employees contribution in the success of the company. In this regard majority (53%) of companies are satisfied with their management culture of recognizing (praise, promotion) employees for their achievements and for 43% organizations there is still work to be done in encouraging employees by recognizing their achievements in proper way. Majority of managers (63%) participated in the survey are completely satisfied with the feeling of accomplishing something worth in the company. However, one has to interpret this carefully as the managers are those who are having the authority to do things; one cannot say the same is true for all the employees in the company. Process changes are common in any organization, but there exist always some difficulty to transfer the good optimized process to other departments or other parts of organization. The ability to spread process changes to other parts of the organization, which took part in the survey, is good; however, only 43% of organizations completely satisfied with their ability to spread process changes, and about 47% organizations saying there is definitely room for improvement in their organizations ability to undertake necessary changes. Gaining support for process changes is very important for improving the efficiency and introducing new technology. It was found that only 37% of the organizations are satisfied with the support they are getting for process changes and about 60% of the organizations are not completely satisfied with support they are getting for process changes and sees room for improvement. There is need for organizations to see workforce is motivated. This reveals health of organization and discloses how many are willing to work hard for the organization. From the survey it is evident that only 57% of those participated in the survey showed, completely A-22

26 QM Survey Appendix 1 motivated to see company succeed and about 43% are happy to see company succeed but seems to be less motivated than others. Considering all the objectives of work environment / employee satisfaction such as Opportunities for employees to use skills Getting recognized for their work Satisfaction with the feeling of accomplishing in the company Ability to spread process changes to other parts of the organization Gaining support for process changes Motivated to see the company succeed Having exciting work environment Completely Satisfied Some what satisfied Not at all Satisfied total Figure A. 26 Overall employee satisfaction / work environment Results (Figure: A.26) obtained from the study revealed, majority of (53%) companies are completely satisfied with present situation having conductive work environment with satisfied workforce. A-23

27 QM Survey Appendix 1 Summary and Results The study "Quality management in manufacturing enterprises in India" says: organizations in India are working towards implementing and operating a determined quality management system. Though organizations are embracing modern systems, however majority of them are yet to successfully implement and achieve success Our study shows almost all the companies (90%) are pursuing excellence through philosophy of continuous improvement and customer orientation. For this purpose, 83% of the companies use cross-functional quality improvement teams in introducing improvements in organizational processes. In addition, nearly 75% organizations have their quality systems certified. In general, the quality management system of the companies participated in this survey found to be very good, with 73% of them systematically established and maintaining a quality manual with strong control of documentation at all levels. Over all management commitment in the organizations participated in this survey is good with majority of (53.3%) organizations are having management strongly committed in establishing strong quality policy, quality objectives and communicating them to organization. Even though customer satisfaction was given high priority, observations revealed only 47% of the organizations are systematically doing all the activities such as assessing customer needs and expectations, studying customer complaints, collecting data from customers and use data on customer expectations and / or satisfaction in designing new services and products. The performance of activities related to quality planning is not encouraging; only 37% of organizations are performing all the activities such as establishment of measurable quality objectives, documenting procedures for key activities identifying and allocating resources and activities needed to achieve quality objectives to complete satisfaction. Communication system is essential for effective and efficient running of any organization. Results from this study showed, good communication system prevails only in few organizations; only 27% of organizations have established a very good communication system and 57% of organizations should improve in their communication system, necessary for effective implementation of QMS. Performance of the activities related to resource management in Indian organizations is not good. This study found only 23.3% of the organizations doing excellent resource management activities. These activities include allocation of sufficient resources for A-24

28 QM Survey Appendix 1 implementing, maintaining and improving QMS providing education and training the staff and infrastructure to achieve conformity to product requirement. In addition, majority (56.6%) of organizations have to improve resource management activities in realizing organizational goals. Activities related to purchasing such as, evaluation of supplier, and working with suppliers to improve the quality and developing new products are being performed very well by Indian organizations. This study found, about 45% of organizations are having the excellent system while the remaining 45% of organizations agree to be working on the criteria to perform all the related activities. Indian organizations are conscious about customer satisfaction, majority (52%), collect information about customer satisfaction to know whether organization actually meet customer requirements. In addition, products are checked and monitored carefully to avoid defective products reaching customer. As found in many modern organizations, study found only 45% of organizations have standard system in place to take action to eliminate the cause of non-conformities and also to eliminate potential cause of nonconformities, and the remaining organizations need improvements in this regard. The use of statistical tools to monitor and measure product and process is very poor; only 17% of organizations strongly use the statistical tools to monitor product and process and in 48% of organizations using statistical tools, their application is limited. In addition, only 17 % of organizations actively work and analyze the appropriate data to demonstrate the suitability and effectiveness of QMS. Taken together, quality results of the organizations are reasonably good. From the study, it was found that 43.3 % of organizations are doing very well and are having excellent quality related results considering the criteria in simplifying how products and services are provided to improve quality of products and services, and reduce the costs. It was clear from the study that only 27% companies are completely satisfied with their quality improvement efforts and all other activities they are undertaking related to QMS. Majority (63%) organizations are merely satisfied with their efforts and there is considerable work still to be done to get desired results. Conductive work environment is very important to make employees interested in their job and get desired results. Results obtained from the present study showed, majority of (53%) companies are completely satisfied with present situation of having conductive work environment and satisfied workforce. However, about 43% organizations are not completely satisfied with their work environment and believe there are definitely many necessary improvements to be made to make work environment more conductive. A-25

29 QM Survey Appendix 1 Conclusion Quality management systems have been implemented in almost all manufacturing enterprises in India especially from the beginning of economic liberation with the goal of supplying products of outstanding quality to the customers and ensure profit for organization. Internal organizational efforts to achieve good results and profits are worth taking note; they are working hard on every aspect required for success through customer satisfaction. Establishing world-class quality management system has been given primary importance. Even though they are working to achieve their goals with a world class overall efforts, there remained a considerable gap with the ideal situation compared with good management systems. Many organizations believe they have to work hard to fill those gaps and achieve success. In every aspect of QMS, only 50% of organizations have excellent systems to fulfill all the requirements necessary and about 35% organizations are having system in place to perform various activities necessary for good QMS, but yet to do with complete satisfaction. However, gap remains between them and those of world class. Study indicates altogether 40 % companies are showing excellent performance and can compete with the best.. In addition, 30 to 40% of companies need to work hard in various aspects of QMS such as using statistical tools, providing training, and establishing proper communication system and resource management. Remaining 10 to 20% organizations are performing poorly in many activities related to QMS. Their management should take strategic decisions, to establish and perform all the activities needed for having a decent QMS. One has to take care when reading the results of this survey as study is based only on 32 organizations, which are into manufacturing at least for part of their business and are based in India having some sort of collaboration with German companies. Even though survey sample is not big enough to conclude anything definitely, study provides information about organizations work with respect to quality in implementing various aspects of QMS. There is definitely a scope to study further, with larger samples by visiting these companies, interacting with the employees and find out actual situation on site. A-26

30 QM Survey Appendix 1 References [1] Critical success factors of TQM: A select study of Indian organizations AYOOB A. Wali, S. G. Deshmukh and A. D. Gupta, Production Planning & Control, 2003, Vol. 14, No. 1, 3 14 [2] Quality management practices of ISO vs non-iso companies: A case of Indian industry [3] Atul Gupta Lynchburg College, Lynchburg, Virginia, USA, Industrial Management & Data Systems, Vol 100 Issue 9 Date 2000 ISSN [4] EPW Special Article October 11, 2003, India's Growth Chase High Aspiration, Low Inspiration by Narendra Jhaveri [5] Benchmarking Quality Management Practices in India Sharad K. Maheshwari and Xiande Zhao, Benchmarking for Quality Management & Technology, Vol. 1 No. 2, 1994, pp [6] Manufacturing Excellence and Global Competitiveness Challenges and Opportunities for Indian Industries, Pankaj Chandra and P R Shukla Paper [7] Major Indian ICT Firms and Their Approaches towards Achieving Quality* by Dilip Dutta & Anna Sekhar, ASARC Working Paper [8] Practice of manufacturing strategy: Evidence from select Indian automobile companies [9] G. S. Dangayach and S. G. Deshmukh Int. j. prod. res., 2001, vol. 39, no. 11, [10] India's drive to rule the world By Kunal Kumar Kundu, 2004 Asia Times Online Ltd. [11] Mr. M.N. Shivaram, Promoting business and technology incubation for improved competitiveness of small and medium-sized Industries through application of modern and effective technologies in India, Director, SJCE-Science and Technology Entrepreneurs Park, Sri Jayachamarajendra College of Engineering, Mysore, India. [12] India s Corporate Culture: A Potential Source of Competitive Advantage, Vishal Jain, April 6, 2004 [13] Zipping in the fast lane by V.Jagannanthan 2004 [14] QM in Indian Companies by Haresh J.Jani 2004 [15] TVS group: smitten by Deming by V.Jagannathan Jan 2004 [16] Break through management: Mind over Mantra by V.Jagannathan 2005 [17] Asia s first ISO certified saloon in Chennai by V.Jagannathan Jan 2004 A-27

31 QM Survey Appendix 1 [18] A Minitab Guide to Statistics 2 nd Edition by Ruth Meyer, Krueger [19] Data construction and Data analysis for survey research by Raymond Kent [20] How to Manage, Analyze, and Interpret Survey Data 2 nd Edition by Arlene Fink [21] [22] A-28

32 Appendix 2 Practices of Local oriented Small Scale Industries in India-An Interview Case study

33 Contents INTRODUCTION...A-31 OBJECTIVE...A-33 PRESENTATION OF THE STUDY...A-33 SUMMARY OF CASES...A-34 Sri Raghavendhra Painting and Powder Coating Works...A-34 Phanindhra Micro Tech...A-35 Mining Products for Bore Well...A-36 High Vacuum Equipments Manufacturer...A-37 Potluri Engineering Industries...A-39 Annapurna Industries...A-40 Tarun Engineering Works...A-41 SUMMARY...A-42 CONCLUSION...A-43

34 Introduction The SSI Sector plays a vital role in the growth of India, and contributes nearly 40% of the gross industrial value. It also creates largest employment opportunities, next only to Agriculture. SSI Sector plays a major role in India's present export performance by contributing 45%-50% of the Indian exports. However, non-traditional products account for more than 95% of the SSI exports. Sickness in the small-scale sector is a major concern, and a large number of SSI units are sick with little scope for improvement. Most of SSI units go sick due to inefficient management, over-staffing or obsolete production equipment, and techniques [5]. Sickness in Industrial sector results mainly in wastage of resources, loss of production and increasing unemployment [1]. There are many inherent weaknesses in the Indian SSI Sector, which can be listed as follows [2] : Obsolete Technology Un-competitive prices Poor quality Costly credit Weak infrastructure backs up like power, roads, communication, etc. Plethora of labour legislation. Lack of cohesion among SSI units. Ineffective Associations. Lack of information Lack of international exposure and sensitivity to the implications of the WTO agreements. Lack of standards conforming to international standards. To tackle these weaknesses it is necessary to understand their practices and develop strategy and action plans to solve them. According to [3] the need of the hour is focused assistance aimed at improving quality and productivity. Further, should be encouraged as breeding ground for innovation and technology development where it becomes the technology sources for larger companies. Concerning the practices adapted by SSIs lot of information available at Government of India websites pertaining to different statistics (exports, production, profitability) policies, facilitations. Similar information is also available from various studies regarding the SSIs practices with respect to infrastructure available, exports, production in different sectors. In contrast, detail information is not available regarding the actual day-to-day running of company, quality management practices, and their understanding of quality concepts. However, it is a known fact that available information about nature of products, technology available, exports, growth rate, and type of industry gives to some extent some insight into their management practices. Government being aware A-31

35 of practices tried to develop initiatives to promote quality management and to increase competitiveness in SSIs. One such initiative is a one-time financial incentive scheme in 1994 for encouraging SSIs to acquire ISO-9000 (or its equivalent) certification. Under this scheme, 75 percent of charges for acquiring certification are reimbursed to the SSIs, subject to a maximum amount of Rs for each eligible SSI. Accordingly, between March 1994 and March 2002, about 2376 SSIs availed this financial incentive. These ISO certified SSIs constitute 0.08% of total number (2.849 million) of registered SSIs in the country. Fifty six percent of these registered organisations are related to engineering goods industries. When it comes to the understanding of SSIs there is a source [4] which provides some understanding of the management practices, their awareness about quality, problems, and structure. Study [4] indicated that managers tend to be more flexible as their education level increased, but, only 13.64% were graduates owning SSIs and that only 2% of owners had technical education. Further, 4% of the owners/ managers had taken formal training on how to run business and around 25% started business with out formal training or experience. The report pointed out those organisations faced decreased out put, with about 40% organisations utilizing only 50% of its capacity. The main reason is being lack of demand, non-availability of raw material, employee problems, and competition. The average employment / each unit is around 11 and all the organisations are locally based and targeting local markets. On an average engineering based industries target 80% of their market locally. However, the report [4] lacked in-depth knowledge into the how quality being managed across engineering based organisations. The present study will try to address this gap to enable to better understand quality management practices in SSIs. This present study however, will not able to give complete picture of practices but throws light on practices of engineering based industries SSIs, which are local oriented. A-32