How To Implement Total Quality Management

Transcription

1 POWER SECTOR REFORM IN BANGLADESH: APPLICATION OF TQM IN SHAPING ORGANIZATIONAL PRACTICES A.M.M. Khairul Bashar 0.0 ABSTRACT Applications of TQM tools help improve performance of an organisation. Many private sector organisations implemented TQM tools very successfully. However it is extremely difficult in public sector. Performance of power sector in Bangladesh is very poor and belongs to public sector. It is gradually undergoing structural reform in order to improve its performance. Most structural reform measures failed to demonstrate success. Promotion of TQM as a management philosophy initially on experimental basis was undertaken in a power station under Bangladesh Power Development Board in The effort was proven to be successful. Following this almost all power sector entities belonging to generation, transmission and distribution are embracing the philosophy of Total Quality Management. The crucial problem was harnessing cooperation from the trade unions. This paper will explain in brief the process of implementing TQM in the public sector with special reference to power sector in Bangladesh.

2 1.0 BACKGROUND Electricity changes human life style. Getting connected to electricity is a dream for all households in Bangladesh. So far only 35 percent of the population is benefited from this resource. Per head generation is only 155 Kwh. Government desires to provide electricity to all by the year Unfortunately entire power sector in Bangladesh is very poorly managed. Until 1977 Bangladesh Power Development Board (BPDB) was the only entity responsible for generation, transmission and distribution of electricity while Rural Electrification Board (REB) was formed to distribute electricity in rural areas. Performance of REB was better compared to BPDB as it was operating through rural electric cooperatives called Pally Biddyut Samity (PBS) involving rural people. Dhaka Electric Supply Authority (DESA) was formed in 1991 bifurcating Dhaka electricity supply unit of BPDB. Dhaka Electric Supply Company (DESCO) was formed as a public limited company bifurcating an area of DESA. In 1996 transmission wing of BPDB has been converted to Power Grid Company of Bangladesh Limited (PGCB) as a public limited company. In 2003 western distribution zone of BPDB has been converted to a public limited company named Western Zone Power Distribution Company Limited. Today there are more than 15 entities operating in the power sector of Bangladesh. The aim of all those structural reform measure in the name of unbundling was to make power sector efficient and effective. Experiences demonstrate that only structural reform is not adequate to bring the desired result. Besides, performance improvement en-route to excellence in public sector entities is extremely difficult. Carefully planned activities supported by participatory techniques can bring significant changes in performance. 2.0 POWER SECTOR REFORM IN BANGLADESH Power sector in Bangladesh is still in very bad shape. The principal entity BPDB is making loss since inception. High system loss (29.60%), poor billing and bill collection, frequent outages, breakdown are the characteristics of almost all the entities. Power sector reform in Bangladesh is mostly donor driven. The restructuring process was conditional to various assistance and loan packages given by donor agencies. The principle features of power sector reform include separation of generation, transmission, distribution and privatization of generation through Independent Power Producers (IPP). The most significant was creation of DESA, a distribution unit engaged in Dhaka out of BPDB against resistance of the employees with an aim to improve performance. Today DESA is considered as a failed organization. DESCO was created out of DESA to improve management and performance. DESCO could not demonstrate any significant performance until recently. Failure of DESA has seriously impacted the power sector. Being largest distributor of electricity failed to collect revenues affecting its own operation and also that of the generator. Lately decision is in the process to convert DESA into a Public Limited Company.

3 PGCB is an organization dealing with transmission only. It could not perform satisfactorily till 2002 since its creation (1996) out of BPDB. Rather in certain cases performance was even poor compared to the parent organization. All distribution zones belonging to former BPDB are going to be decentralized through converting them to public limited companies. Accordingly, Western Zone Electric Power Company Limited was formed. Performance of West Zone is too early to comment upon. A generation facility of BPDB has been converted to a public limited company named Ashuganj Power Generation Company limited. Though no evaluation has been carried out effectiveness of this company is questionable. Recently government has opened generation facilities up to 30 MW capacities to local private sector. 3.0 IMPLEMENTATION OF TQM Power sector reform plan could not yet demonstrate significant achievement in strengthening the power market in Bangladesh. So far all reform activities focused on legal and structural changes. Inadequate attention has not been given to human resource development and strengthening management systems which were impacting on the performance of the sector. As a result reform activities did not receive support from the employees rather created fear about job security and uncertain future. Realising this in the year 2000, step was taken focused to performance improvement without mentioning structural and legal measures. Efforts has been undertaken to implement Total Quality Management (TQM) tools experimentally in one of the public sector power generation entity named Haripur Power Station. The step was successful. This has improved the performance of the power station. Now BPDB has taken step to implement TQM in the entire organization. PGCB has taken initiative to implement TQM in The organization has started getting benefit. Similarly, West Zone, which could not yet demonstrate much success, is now heading towards implementing TQM. DESCO is also trying to follow the same track. Observations reveal that practices and internal cultures of the organisations practicing TQM have changed. Salient features of implementing TQM in Haripur Power Station and PGCB have been explained in the following text. a. TQM in Haripur Power Station 1. Scenario before and after TQM Sl. Characteristics Before TQM After TQM No 1 Focus of the Nothing Quality focused Organisation identifiable 2 Orientation Aligned to the vision of the future role identified

4 3 Modus Operand As directed by Commercial Operation, BPDB Performance Based, Principle of buying & selling. 4 Tariff no tariff Power Purchase Agreement 5 Authority Centralised at Decentralised at plant level BPDB 6 Planning Supported by Six yearly O & M Plan annual budget 7 Management Crisis Management Policy Management with set targets followed by PDCA 8 Quality Management Non-existent TQM activities guided by Steering Committee 9 Employee Activities Routine, Unholy trade union practices, Muscle power 10 Training Almost non existent Self-enlightenment & mutual development through Quality Circles. 5-S activities to ensure good work place management Employee suggestion scheme. Cooperative and supportive union activities. Continuous training 2. Constraints Overcoming constraints was a gigantic task, which has taken most of the effort. The following are noticeable. a. Harnessing cooperation from trade unions (avoiding unholy practices). b. Harnessing cooperation from BPDB Directorates (separating from beauracracy). c. Matching operating systems with rigid administrative and legal framework of public sector regulation (BPDB). d. Poor understanding of corporate culture at the top level. 3. Strategies adopted to overcome constraints 4. Benefit a. Transparent of approach (ready to discuss anything openly) b. Firm commitment to maintain and enhance job security and service benefits c. Equal membership feeling d. Rigorous orientation training for everybody e. Sharing benefit/ gain of improved performance f. Involvement/ promotion of participatory management Implementation of TQM at Haripur Power Station demonstrated remarkable benefits of which following are notable.

5 a. Performance: Performance is compliant with the requirement set in terms of plant availability, reliability and efficiency. b. Technical Capability: demonstrating capability in carrying out Hot Gas Path Inspection, Combustion Inspection by them, which was not done before. c. Competitive with private generators. d. Increased real earning of the employees. e. Cooperative trade union Quality Circles of Haripur Power Station are very capable. They have actively participated in several national conventions and presented their case studies. Human relations inside the plant have improved remarkably. The plant is making good profit. b. TQM in BPDB TQM in BPDB has started following the success of Haripur Power Station. Teamwork, improvement in human relations and performance improvement in Haripur power station provided a good example to BPDB. Main features of TQM activities related to BPDB are as follows. a. Steering Committee headed by the Chairman BPDB to guide TQM activities, b. Established a TQM Promotion Office attached to the Chairman that works as the secretariat of the Steering Committee, c. Integrating TQM activities throughout BPDB by the year 2007 (about 90 offices), d. Vision of the future role of BPDB and long term policies identified, e. Promotion of Quality Circles for self-enlightened and mutual development (so far more than 650 active circles), f. Promotion of 5-S techniques in all offices for better workplace management, g. Kaizen Suggestion Scheme has been introduced, h. First Annual quality Convention was held in September In which trade union leaders and bureaucrats participated. i. Continuous training Activities under the supervision of TQM Promotion office. j. Organised internal annual quality convention in Though at initial stage diagnosis indicate improvement in performance in BPDB. Several teams already presented case studies indicating streamlining office work, standardizing files and improvement in revenue collection. Most importantly BPDB was resistant to reform initiative. With the introduction of TQM concept mind-set has changed. Now changes are more acceptable to employees. Members of trade

6 unions are also providing support to those changes in the organisation. The bureaucrats have understood the real benefit of implementing TQM. c. TQM in PGCB Scenario in PGCB before and after introducing TQM Sl. Scenario before Parameter No starting TQM 1 Management 1. Day to day basis 2. Future role was not known 2 Planning 1. Short Term, 2. Crisis Management 3 Decision Making 1. Centralised, 2. Lower echelon was not aware of their empowerment Changed scenario due to TQM 1. Vision of the future role of PGCB has been established. 2. Vision, Mission, Quality Policy has been decided/ identified and effectively communicated at all levels. 3. Management based on P-D-C-A (Plan- Do-Check-Action). 4. Concept of Policy Management is gradually taking place. 1. Planning is consistent with vision of the future role of PGCB 2. Thirteen SMART (Specific, Measurable, Achievable, Realistic, Time bound) Objectives are the basis of O & M plan, 3. Annual targets has been set 4. Work plan for each unit of operation decided which covers up to year 2010 initially. 1. Decision making has been delegated to the point of operation, 2. All are aware of their roles & responsibility 4 Quality 1. Not a priority 1. Quality is the most priority 2. Total Productive Maintenance gradually implementing 3. All operation & maintenance activities following ISO-9001 Quality Assurance System has been initiated. Effort to complete the same by 2005 is going on S for good house keeping and smooth work environment has started. 5. Suggestion scheme to promote creativity of employees has been

7 Sl. No Parameter 5 Maintenance of Facilities 6 Employee Relations 7 Delegation of Powers Scenario before starting TQM 1. Mostly Breakdown 2. Some schedule maintenance 3. Sub-stations looked dirty and full of weeds 1. There was a clear gap between officers and staff, 2. And between various levels of management 3. Was confused about the future of PGCB 1. Lack of clear understanding 2. Not adequate in some cases Changed scenario due to TQM implemented. 1. Gradually shifting to Total Productive Maintenance based on original condition policy, 2. Targets to bring down system loss to 3% by 2007, reduce interruption by 20% annually starting from 154 (i.e.118 hrs) in 2003, stabilize voltage by 2010 etc. has been set & is being implemented. 3. Now sub-stations look like gardens, 4. Old & unserviceable materials has been disposed off by June All employees are aligned with the vision of the future role of PGCB. 2. Small Group Activities promoted to create situation of selfenlightenment and mutual development among employees 3. Participatory & involvement of employees in improvement activities have started. 4. Employees are participating in suggestion scheme. 5. HRD plan based on at least 3 man-days training for an employee per year. 1. Delegation of powers are now understood, 2. Efforts to improve it further has been initiated, 3. Confusions in empowerment have been removed. 8 Team Work 1. Non existent 1. Teams in Grid Maintenance Divisions are carrying out problem solving activities as a part of selfenlightenment and mutual development activities. This has resulted in simplification of work procedure and saved financial resources. 9 Structural Changes 1. A TQM promotion Office at Head Office under Managing Director

8 Sl. No Parameter Scenario before starting TQM Changed scenario due to TQM has been established. 2. A Steering Committee headed by the Managing Director at the head office has been established. 3. Steering Committees at various Grid Maintenance Division like GMD-East has been established Performance of PGCB has improved with the introduction of TQM. Transmission outage is gradually coming down. Maintenance has improved. Organisation is aligned. Last year PGCB has earned profit amounting 120 million taka, which was only over forty million. 4.0 BENEFIT TQM in power sector in Bangladesh impacted in changing the traditional practices. It contributed tremendously in human resource development. Confidence, commitment to performance and belongingness of employees has improved. Change is gradually reflected in the performance of Haripur Power Station, BPDB and PGCB. 5.0 CONCLUSION Practice of TQM brought positive changes in people and in the practices of the organizations. This is impacting the organizational culture. Implementation of TQM tools in public sector is not very easy. Adoption of suitable approach help in achieving desired result.