Identify Big Payback TQM Projects
by Harry P. Richard
Have you ever wanted to initiate some total quality management (TQM) projects with your suppliers? Have you ever gone to a supplier, gathered its key people and asked what TQM projects should be initiated? I have. And I wouldn't recommend it.
When asking suppliers which TQM projects would give us the greatest bang for our buck, I got a bunch of blank faces and some generalizations such as "improve quality" and "reduce inventory." As a supplier quality manager, I found that when suppliers are faced with implementing TQM projects, many of them don't know where to begin and can't identify which tasks offer the biggest payback.
As a result, I developed an approach to initiating TQM that benefits the customer, supplier and ultimately the consumer. I combined a top-down TQM process (I use the Juran problem solving process, but any proven TQM process works) with a bottom-up employee involvement process (the Workout Process as developed by GE). This approach helps prioritize which projects will yield the greatest results according to the difficulty involved in implementing them.
Identify the payback project
The approach used to identify payback projects is carried out in four steps:
1. Combine buyers, quality engineers and other customers with as many supplier personnel as possible to create a TQM team. Using the supplier's facility, ask the team to brainstorm what the companies do well together and what areas need improving.
2. Identify the underlying issues of the areas designated for improvement. This can be done by grouping theses areas according to what they have in common. For example, obsolete buyer inventory, low buyer inventory levels and value of buyer inventory all have the same underlying issue--buyer inventory.
3.Generate possible solutions to the underlying issues; this is best accomplished through another brainstorming session. After- wards, group possible solutions according to degree of implementation difficulty and payback. Consider using a modified Johari Window during this step.
The Johari Window, as designed by Joseph Luft and Harry Ingham, is a model of interpersonal communication. However, its four boxes, or windows, can be modified to categorize possible solutions by their degree of difficulty and amount of payback (see Figure 1). The modified windows include: projects that are easy to do and have a small payback, low hanging fruit; projects that are easy to do and have a big payback, focused attention; projects that are hard to do and have a small payback, low priority projects; and projects that are hard to do and have a big payback, long-term goals.
4.The final step is to form additional teams to work on the projects selected from the modified Johari Window.
The process in use
Suppose a team of supplier personnel, buyers and customers was assembled to discuss possible TQM initiatives. After brainstorming what worked well in their business relationship and what areas needed improvement, the team members grouped the improvement items to identify underlying issues.
As exemplified in step 2, the group discovered that buyer inventory needed to be addressed.
The team brainstormed possible solutions to the buyer inventory concern. One solution was consigned inventory. The work, risks and payback involved in a consigned inventory system were discussed as the team tried to place the solution in one of the modified Johari Window boxes.
The team agreed that consigned inventory was a big payback project that could be implemented easily--a low hanging fruit. Another team was then created to work on implementing the consigned inventory project.
I have been using this process successfully for the past 10 years, most recently with Dresser Manufacturing in Bradford, PA. Dresser identified 25 TQM projects, many focusing on inventory reduction. This process enabled Dresser to reduce its inventory by $900,000 during the first year. Using this approach, Dresser was definitely able to identify and carry out its big payback initiatives.
HARRY P. RICHARD is a quality manager with Epimed International Inc. in Gloversville, NY. He has a master's degree in management engineering from the University of Bridgeport in Connecticut. He is a quality systems lead auditor for the Registrar Accreditation Board and an ASQ member.