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Psm 507 Quality Management Systems Kitengela Campus Question Paper
Psm 507 Quality Management Systems Kitengela Campus
Course:Masters Of Business Administration Procurement And Supply Management
Institution: Kca University question papers
Exam Year:2014
UNIVERSITY EXAMINATIONS: 2013/2014
EXAMINATION FOR THE MASTERS OF BUSINESS ADMINISTRATION
(MBA) PROCUREMENT AND SUPPLY MANAGEMENT
PSM 507 QUALITY MANAGEMENT SYSTEMS KITENGELA CAMPUS
DATE: AUGUST, 2014
TIME: 3 HOURS
INSTRUCTIONS: Answer Question One and Any Other Three Questions
QUESTION ONE (31 MARKS)
ORIENT LTD
Rahul Verma, Vice President (Operations), Orient Ltd., was confronted by a terrible dilemma. He had
met CEO Abhay Shukla a few hours ago, and had been offered an additional responsibility: of co-
ordinatinf\d Orient''s Total Quality Management (TQM) programme. But, instead of being enthused,
Verma seemed a little hesitant. Nothing his reluctance, Shukla gave him a week to make up his mind.
Verma''s attitude was understandable. The TQM project had been coordinated by Bharat Saxena, vice-
president, human resources management (HRM), until his recent exit from Orient. It was Saxena who
had introduced TQM in the organisation a year-and-half ago, and, as a member of the apex committee
which was piloting the project, Verma was fully aware of its progress. A change of guard at this
juncture could make or break his career. He decided to call VarunMitra, who had taught him HRM and
organisational development in college. For, Mitra, who was now a TQM consultant, would give him an
outsider''s perspective.
"It is an oppurtunity that I would have jumped at." Verma told Mitra as they met later. "There are
several positive elements. The company is young; the people are enthusiastic; and the rank and file are
receptive to chage.The CEO has assured me of his personelsupport.But I have an uneasy feeling the
whole thing. It could be something to do with the false starts we have had in implementing TQM."
Mitra became after alert. "False starts?" he asked. "They mean trouble. They often turn the clock
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backwards. But let us start at the beginning. Tell me about Orient. And why the company thought of
TQM."
"We make paper-insulated cables, polyvinyl chlorine cables and cross-linked polyethylene (XLPE)
cables. They come in a varied range --- low-voltage cables of upto 11 kilovolts (KV), medium-voltage
cables of 33 KV, and high-voltage cables of 230 KV. We are, in fact, the only company oin India to
make 400 KV cables. Orient has a technical collaboration with Jigucji of Japan, which has given us
access to their quality manuals. We have kaizens and quality circle in place, and obtained an ISO 9000
certification. With a 17 per cent marketshare, we rank second in the cable industry."
"That is quite impressive. You have the right ambience for TQM," said Mitra. "Now tell me about the
motivation. Who are your customers?" "We are largely dependent on the State Electricity Boards
(SEBs) for the offtake of our products. The main problem with SEBs has been the collection of
receivables, which takes anywhere between six months and one year. There is little on prices, which are
negotiated annually, We are compelled to absorb hikes in input prices since there is no provision for an
escalation clause in the agreement. But the biggest constraint is the fluctuation in the prices of raw
materials like copper and aluminum, 70 per cent of which are imported. Evidently, the only way to get
a grip on the costs-revenues-margins chain is to tighten up production processes and secure efficiencies
in internal operations. That was why we thought of TQM."
"That is the classic trap that most companies fall into," said Mitra disapprovingly. "There is no link
with the customer. The raison d''etre of a TQM movement is customer satisfaction. Without the linkage
it becomes merely process oriented. Without the big picture, you would only be pursuing incremental
improvements in operational efficiencies. You would not be aiming for geometric leaps in business
results."
"I stand corrected," said Verma instantly. "I must mention that the decision to go for TQM was also
influenced by the emergence of a new marked category --- industrial power cables --- in the last three
years. We have been selling nearly 30 per cent of our output to the industrial sector through a dealer
network. The share of industrial power cables in our turnover is likely to go up to 50 per cent in two
years. The specialised TQM requirements of industrial users have ensured higher margins. Although
the dealer happens to be our customer, we are now talking directly to end-users to ascertain their needs.
We have developed customized products for several of our customers. So, the TQM movement did
have its origin in the needs of a growing customer segment."
THE CHALLENGES OF TQM
CHANGE DRIVER: Orient dearly needs to provide a compelling need for transforming the
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organisation; LEADERSHIP: The change initiative needs the backing - and personal investment of its
CEO; CUSTOMER FOCUS: Orient needs to shift to a customer-oriented mindset from a process-
oriented one; EMPLOYEE INVOLVEMENT: To drive TQM, it needs to secure the buy in of middle
managers first; TEAM CULTURE: A quality transformation like TQM is primarily a team effort, not
an individual initiative; EXTERNAL INTERVENTION: An external agent is extremely important to
prepare Orient for change; OVERALL OBJECTIVE: Orient should synergise its subordinate goal with
various operating goals.
"The link is still not wholesome," said Mitra. "But tell me, how did you go about implementing TQM
processes?"
"We began by asking ourselves several questions," said Verma. "What does the customer want? The
answer was self-evident: a high-quality output a competitive price. What drives prices? Raw material
costs, interest, and employee costs. What is the most critical issue that merits management attention?
Reducing the lead-time of the production cycle by bringing down the downtime for imports of copper
and aluminum.All that was part of an attempt to identify processes that would give us a tight control
over costs. Simultaneously, we started looking at the key result areas: commodity-trading skills that
would enables to make timely purchases of copper and aluminum and inventory and receivables
management."
"Good start," said an enthused Mitra. "Tell me how TQM was co-ordinated." "We did not enlist any
external consultants except for some of the training programmes," continued Verma "The vice-
president, HRD, had some experience in TQM in his earlier job. He was also a qualified trainer. That
helped we formed an apex committee, headed by Saxena."
"A basic mistake," intervenedMitra. "The apex committee should have been headed by the managing
director with the vice-president HRD action as the convener."
"On hindsight, yes," said Verma. "The committee would meet once a month with a structured agenda.
The idea was to examine the feedback on some of the internal training programmes we had initiated on
team-building, of continuous improvement programmes, and experiential workshops. We had also
started computing the cost of poor quality, and some of the tasks of the apex committee was to keep
track of such costs regularly. We had a cascading organisation structure for TQM, wherein the vice-
president, HRD, was the head of the apex committee, and each member of the apex committee was the
head of a sub-committee pertaining tohis department. For example, I headed the Operations sub-
committee for TQM."
"You seem to be, by and large, on the right track"saidMitra," But why are you in two minds about
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accepting the offer?"
"You know, the CEO''s intentions are right, But I don''t think about the kind of change he wants. TQM
needs he is clear sustained backing of the CEO. The change initiative must be the personal
responsibility of the CEO; the role of the co-ordinator is merely to facilitate change Shukla has not
spelt out the factors thaat drive him personally towards TQM. If he withdraws the mandate at a later
stage, overtly or covertly, the change process would collapse. That is my biggest concern."
"Secondly, as I said earlier, we have had some false starts. Let me give two examples. After some
initial hesitation, which was quite natural, people at Orient were enthused with the team concept.
Everybody plunged into the new style of working and a number of small-improvement projects took
off. Once the team members got to the root of a problem that they were asked to solve, they became
confident. They believed that any problem at any level in the organisation, however formidable, could
indeed, be tackled. Surprisingly, Orient''s line managers started feeling uncomfortable. When teams
were uncovering major problems and people went around seeking information from sources they had
no access to earlier, the line managers felt that the situation was getting out of control. Lone used to
screening information before it went outside their departments, they found the new openness quite
daunting. The result? Departmental heads started pulling out their subordinated from various cross-
functional teams on seemingly-valid grounds. This cross-functional teams on seemingly-valid grounds.
This led up to a backlash. Employees felt bitter at having their hopes raised only to be let down.
Perhaps the mistake lay in not securing the buy in of line managers right at the beginning of the
programme.
"Another example is with regard to our capacity utilisation. As we started developing custimised
products, Orient''s capacity utilisation level started falling. It fell from 80 to 45 per cent within the first
five months. When you eater to customised demand, an increase in cross-sectional area and voltage
requirements of finished cables become the new value drivers, not output as measured by cable length.
The overall output measured by tonnage of metal drawn would increase, but the output in terms of
kilometers of cables --- the conventional measure of capacity utilisation --- would decrease. It took time
for indicator of the productivity of fixed assets in customised manufacturer. But the decline in plant
capacity was attributed to TQM.
The third reason for my apprehension: TQM co-ordination is, essentially, a staff role --- and not a line
function. And I am a line manager. In my 20 -year-long career, I have been used to issuing instructions
and commanding action by allocating responsibility and ensuring accountability from people on the
Shopfloor. I am used to chasing results on a day-to-day basis. It is a mindset unsuited to a staff function
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like TQM, where the role of a co-ordinator is not to hand out instructions, but into facilitate change
through a slow and steady process of individual transformation. I have seen it happen in many
companies: any attempt by a staff functionary to chase results is doomed to fail."
"Perhaps you are over-reacting," said Mitra. "Let me address each of your concerns. The best way to
ensure the continuing support of your CEO is to make him the sponsor of the apex committee. The
false starts are, of course, alarming. You should have factored in these changes right at the beginning.
The only way of undoing the damege is through training. Your line managers, in particular, must be put
through development sessions. And there is no reason why you can''t hold on to two contradictory roles
simultaneously. It depends on the kind of person you are. Three issues are relevant here: are you likely
to be biased towards your own traditional function? You should avoid giving too much attention to
Operations in implementing TQM. Can you build trust among your people easily and establish your
credibility with them without the backing of the authority? And, if the change process details for some
reason do you still have a job at Orient? My own feeling is that you have a good opportunity to add
value to the company."
"Thanks for your confidence in me," said Verma. "If I decide to accept the offer, are there any other
specific issues that I should look at?"
"Yes," said Mitra. "I think what Orient needs is a change driver. Something that provides a compelling
need for change in the company. It could be a vision that is just our of reach unless a radically new
thinking is applied, it could be some signs of decline within the company. It could be the fact that
competition is closing in on you. If people do not see a fundamental reason for change, the leader''s
commitment, however genuine, may be discounted by them as one person''s eccentricity.
"I think it is also important for you to realise that TQM is not an employee motivation programme. Nor
is it a panacea or a guarantee of success. In its very nature, a quality transformation is a team effort, and
not everyone starts off with the same enthusiasm. Unless someone takes responsibility for
masterminding the whole affair, either nothing gets done or there is complete chaos. This is where the
skill and dedication of the change agent is a key success factor. You cannot succeed as a TQM co-
ordinatos if you are inclined to hogging the limelight. You have your priorities cut out at Orient. But
the choice is entirely yours. All the best,."
Required:
(a)
Has Orient Ltd. Identified the objectives of TQM? If yes, what are they? If no, identify them.
(7 Marks)
(b)
How can Orient CEO galvanize the organisation to bolster the quality and overall performance?
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What kind of approach would it need?
(c)
(12 Marks)
How can Verma ensure that the quality movement will not be drailed in the company? Should
TQM be a stuff function? What roads map should Verma choose and why?
(12 Marks)
QUESTION TWO (23 MARKS)
a.
"TQM is a total system approach and is an integral part of corporate strategy. It works
horizontally across functions and departments involving all employees from top to bottom."
Discuss the ramifications of the statement.
b.
(13 Marks)
Juran divided quality management into three parts known as Juran''s Quality Trilogy. Explain
the three parts of the Trilogy.
(10 Marks)
QUESTION THREE (23 MARKS)
a.
What are roles and responsibilities of top management of an organization in developing and
implementing TQM concepts in an organization?
b.
(10 Marks)
Explain various components of quality costs and strategy for reducing quality cost. (13 Marks)
QUESTION FOUR (23 MARKS)
a.
“Six Sigma is disciplined, data driven approach & methodology for eliminating defects in any
process”? Discuss the steps involved in the process and explain why a business organization
needs to use it as a quality measure
b.
(13 Marks)
Critically analyze the components of document management systems appropriate for a business
organization identifying any FIVE of its benefits.
(10 Marks)
QUESTION FIVE (23 MARKS)
a.
The Deming Cycle known as the Deming Plan-Do-Check-Act (PDCA) is a cyclic approach for
planning and testing improvement activities prior to full-scale implementation and/or prior to
formalizing the improvement of business activities in an organization.
With examples drawn from your experience, discuss the application of the approach, explaining
how the PDCA Cycle provides opportunities for continuous evaluation and improvement in
contemporary organizational management in Kenya.
b.
(13 Marks)
Discuss FIVE benefits of auditing as a management system standards for quality assurance in a
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business firm.
(10 Marks)
QUESTION TWO (23 MARKS)
a.
Discuss FIVE principles of quality management that a business firm can apply for effective
quality assurance standards.
b.
(10 Marks)
Explain the meaning of ISO explaining the need for business organizations in Kenya to be ISO
Certified.
(13 Marks)
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