1. What is Total Quality Management (TQM)? 1.1 Definition TQM is an organization wide effort to infuse quality into every activity in a company through continuous improvement. 1.2 Objection a) To increase the high-level of efficiency and effectiveness in the firm or focuses on teamwork. - TQM involves overall organization and third parties such as consumer and customers. Enrollment of every person in organization will put more effort in commitment even increase the good communication process between the teams. b) increasing customers satisfaction - TQM principle is focuses on customer, identify the customers and needs - TQM provides good products and services, does not only satisfy the customer needs but keep customer happy with our management - Customers who fulfilled their needs by the products and services will be loyal to the firm. The primary benefit of TQM is the development of an organization of quality-trained, motivated employees working in an environment where the managers encourage creativity, initiative, and trust.' This working environment, in turn, promotes an atmosphere where each individual's contributions, actively use to upgrade quality, and are properly recognized i and awarded a win-win situation i Daft.L.R ii Mohamed A.H, Shamshudin F.M, Ismail H.C, Teong L.K, Saud M.B, Zainuddin N., Mat N., Yaacob N. (2009). 2. PROTON 2.1 The history Perusahaan Otomobil Nasional Berhad (PROTON) was incorporate in May 7, 1983 to manufacture, assemble, and sell motor vehicles and related products, including accessories, spare parts and other components. Proton Saga is the first produced by PROTON in Malaysia, commercially launched on July 9, 1985, by Dato’ Seri Mahathir Mohamed, who had originally conceived the idea of a Malaysian car. 2 i 2.3 The Performance of PROTON The year under review saw PROTON strengthening its export foundation, picking up the pace of sales and registering improved performance, both in terms of export volume and financials. These reflect our efforts in optimizing the increased sales potential in existing Regions e.g. The Middle East and Gulf Countries; as well as capturing new markets for future introductions. ii 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 5-year Export Volume and 2010/11 Forecast '05/06 '07/08 '09/10 •The major contributors to the Increased exports for FY2009/10 were China, Thailand, Indonesia, Australia and Egypt. • The volume growth projection in FY2010/11 relies on incremental CKD Operations in China i ii Retrieved 27, December 2011 PROTON Operation review on PROTON – Annual Report 2010 3 Overview of TQM on PROTON I had chosen the Proton Company as my firm to overview the usage of Total Quality Management (TQM). TQM is a popular approach based on a decentralized control philosophy. This been internalized in PROTON. Proton Company had review that quality is the discernible difference that sets apart the best. It has likely to understand the customer and fulfills their expectation. As a result, they had committed beyond the traditional approach of quality – that is to focus on quality inspection and quality control. Proton continued the journey by embracing the principles of the Total Quality Management. They were transforming all aspects of quality in all areas of business, cultivating quality culture, embedding further quality by strengthening the cross-functional organization, emphasizing more on process quality, and instilling quality core values deeper across the business value chain to deliver the intended quality results. 3.1 TQM Techniques on PROTON TQM is a popular approach based on a decentralized control philosophy in PROTON they implement the techniques such as quality circle, benchmarking, Six Sigma principles, reduced cycle time, and Kaizen. As customer focus and speed are their core values, hence Proton had committed to an effective quality improvement framework. iii i ii Daft.L.R 4 3.1 (i) Quality circles In this, Quality Improvement PROTON has implemented the quality circle. To provide direction and decision Proton had issued The Quality Improvement Committee (QIC), like comprising members of the senior management and meet on a weekly basis, meant to provide direction and decision on matters pertaining quality, the Quality Improvement Committee (QIC). PROTON also had done the development of Quality ownership and quality culture in PROTON for their employees. The implementation of the Innovative and Creative Circle (ICC), the PROTON’s employees were trained to identify, analyze, solve or enrich work related based on the Plan-Do-Check-Action (PDCA) cycle. Example of PDCA cycle: More than 250 ICC teams voluntary registered in the last financial year 2010 to undertake various projects to improve productivity the quality cost. 97% of the registered team has completed their projects and these have recorded cost savings up to RM26.2million. i i Operation review on PROTON 5 3.1 (ii) Benchmarking Is a major component, it defined as a continuous process of measuring products, services and practices against the competitors or those companies recognized as industry leaders to identify areas for improvement.i PROTON had identified in quality Design and Development for improvement. PROTON’s vision of “No. 1 in functional Quality by 2012,” more concerted efforts and structured activity are being caring out to implement built-in quality upstream at the early stage of a vehicle’s design and development. Initiatives like benchmarking and simultaneous engineering, are some of the detect prevention initiatives carried out. Especially customer’s complaints are channel back to the design and development team so that they can act to prevent recurrence and advantage on these new findings to emerge improvements and countermeasures in the design of new models. New Product Introduction required ensuring strict adherences to PROTON’s were monitor. All new models will be subject to various stages of comprehensive and systematic quality to track compliance against the set quality targets. With all these initiatives done during the design and development stage, there have been noticeable and meaningful improvements in the initial quality of PROTON vehicles as evidence by the reduction in customer complaints. The Exora, for example, has registered 68% improvement in concerns per car for the first three months from the start of production. This achievement started to bear fruits, it is clearly shows that the various initiatives that PROTON has put in place and our emphasis on prevention rather than detection. ii i ii Daft.L.R Operation review on PROTON 6 3.1 (iii) Six Sigma Important for both manufacturing and service organization. They have implemented it to quality in manufacturing. Manufacturing being one of the most important elements of quality is always the focus of our quality improvement initiatives. The quality level of vehicle has continued registering impressive improvement of more than 50% in all plans. Towards building – in quality into the manufacturing processes, efforts are be made to change their quality approach from judgment control to source control by implementing initiative like Zero Quality Control to eliminate the defects by fixing the root cause and controlling the processes at source. The year long continuous quality campaign strategy via the implementation of Zero Defect program has indeed helped improve the quality level tremendously. By implementing the Zero Defect they came out with the mindset of ‘Nothing is impossible” and embedded a commitment towards defect prevention into our work culture. This fulfills one of PROTON’s TQM emphases on people quality. 3.1 (iv) Reduced cycle time The next step is systematically and effectively implements this quality initiative through out the organization. Proton has established companies wide cross-functional Quality Improvement Team (QIT) to positively address product quality problems. Beyond this, a single channel for the problem solving process was also establish during the year to streamline communication coordinate problem-solving and enhanced customer confidence. Internal quality issues more importantly, customer complaints, now all undergo a stringent 8-stage problem solving process to ensure that the problems are resolved permanently. As a result, warranty trends have also shown improved trends for all models implying all quality initiatives implemented so far via the QIT have started to bear results. i i Operation review on PROTON 7 3.1 (v) Kaizen / Continuous Improvement A dynamic work culture was creates by PROTON when individuals take charge and are empowered to make a difference. In PROTON they have implement The Kaizen Suggestion Scheme, many of the one initiative to drive quality ownership and quality culture, is a continuous incremental improvement and structured feedback system within PROTON especially in the manufacturing environment. It encourages action by empowering individuals or groups to act to improve processes and work condition. Example there are the submission rate for suggestions improved by 705 for both PROTON plants and 25% of the submitted suggestions have been implement successfully resulting in cost savings of RM12.4million. 3.2 Quality in Supply Chain As one of PROTON’s critical success factors, they are required to implement various quality initiatives in order to ensure good quality components are being produced and fitted into PROTON’s vehicles. They has established quality improvement action plans focusing on selected critical suppliers, and special quality audits were carried out with direct enrollment of PROTON’s top management. In addition, all newly developed components had to undergo and fulfill more than 15 requirements of the part process being approved for supply to the factories and fitted into PROTON vehicles. i i Operation review on PROTON Ii Daft.L.R 8 Positive factors in TQM TQM serves to enrich jobs and motivate employees, it’s like we can see through out the PROTON management that develop the quality ownership and the quality culture. Problems solving skills are improved for all employees, this also I detected it in PROTON management, like establish the Quality Improvement Team, and the management also trained the employees concerns based on (PDCA) cycle. Participants and teamwork’s are used to tackle significant problems; this had been use in PROTON like now they are undergoing 8 stage problem solving. The continuous improvement is a way of life, in PROTON the customer complaint starts to reduce. Negative factors in TQM The management expectation is unrealistically high, like their profits. This has been proved in PROTON that they want a big profit but they undergo a lots of customer complaints. Middle managers are dissatisfied about losing their authority, I couldn’t prove this in PROTON management but there is the improvements made by the management like the dynamic work culture that individual take charge and are empowered to make a difference. Workers are dissatisfied with other aspects of organizational life, like the PROTON giving more pressure by implement many skills on employees, maybe some of the employee can’t bear with it.i i Daft.L.R 9 Conclusion PROTON indulges the TQM technique and now PROTON has never – ending commitment towards customer satisfaction is strongly reflected by the JD Power. PROTON also recorded 30% improvement in comparison to the (IQS) 2008 results. This achievement is indeed significant because no other companies Original Equipment Manufacture (OEM) have ever achieved such result. In addition, PROTON’s improvement rate surpassed the industry average which only registered 14% improvement. The strong results clearly imply that PROTON is listening to our customers seriously and more importantly, various actions are being implemented to relentlessly address all customers’ concerns, big and small, to keep our customers satisfied. Towards a future of unrelenting progress, PROTON remains committed to exceed expectations and continuously embark on various quality improvement by using TQM so as to attain and maintain a world class standard of quality. 10 References 1. Corporate information about PROTON. Retrieved 27, December 2011, from http://www.proton.com/Corporate/About-Proton/Corporate-Information/History-ofPROTON.aspx 2. Operation review on PROTON - (Universiti Teknologi Malaysia (UTM) collaborate with Universiti Teknologi MARA (UiTM) R&D in February 2009) – PDF PROTON C1– PROTON 2010 Annual Report. 3. Richard L. Daft, (2012) New Era Of Management, 10th edition, International Edition. 4. Mohamed A.H, Shamshudin F.M, Ismail H.C, Teong L.K, Saud M.B, Zainuddin N., Mat N., Yaacob N. (2009). Teks Pra-U STPM Matrikulasi Pengajian Perniagaan . PEARSONLongman publishing. 5. Thorton P.T, Spence.K(May 1994). Total Quality Management Planning. Management line. Retrived Jan 9, 2012, from http://www.ornl.gov/info/reports/1994/3445603856343.pdf 11