Quality CirclesQuality Circles

OverviewOverview

What are Quality Circles?What are Quality Circles?How Do Quality Circles Work?How Do Quality Circles Work?How Can They be Used in an How Can They be Used in an

OrganizationOrganizationSummary of History and PracticesSummary of History and PracticesBibliographyBibliography

What is a Quality Circle?What is a Quality Circle?

• Voluntary groups of employees who Voluntary groups of employees who work on similar tasks or share an area of work on similar tasks or share an area of responsibilityresponsibility

• They agree to meet on a regular basis to They agree to meet on a regular basis to discuss & solve problems related to discuss & solve problems related to work.work.

• They operate on the principle that They operate on the principle that employee participation in decision-employee participation in decision-making and problem-solving improves making and problem-solving improves the quality of workthe quality of work

How Do Quality Circles How Do Quality Circles Work?Work?

• CharacteristicsCharacteristics– VolunteersVolunteers– Set Rules and PrioritiesSet Rules and Priorities– Decisions made by ConsensusDecisions made by Consensus– Use of organized approaches to Use of organized approaches to

Problem-SolvingProblem-Solving

How Do Quality Circles How Do Quality Circles Work?Work?

• All members of a Circle need to All members of a Circle need to receive trainingreceive training

• Members need to be empoweredMembers need to be empowered• Members need to have the support Members need to have the support

of Senior Managementof Senior Management

Why QCWhy QC

• Improve quality & productivityImprove quality & productivity• Reduce the cost of product/servicesReduce the cost of product/services• Solve work related problemSolve work related problem• Full use of human resourcesFull use of human resources• Improve communication with organizationImprove communication with organization• Promoting employee moral & Promoting employee moral &

commitmentcommitment• Build meaningful work environmentBuild meaningful work environment

Benefits of QCBenefits of QC

• Heightened quality awarenessHeightened quality awareness• Increase the value of the brandIncrease the value of the brand• Creating sense of ownershipCreating sense of ownership• Job satisfaction for workerJob satisfaction for worker• Financial benefitsFinancial benefits

Org. Structure of QCOrg. Structure of QC

• Steering committee-Gen manager,HRD, employee union, Steering committee-Gen manager,HRD, employee union, top managementtop management

• Coordinator-administrative officer/personal managerCoordinator-administrative officer/personal manager• Facilator- supervisor officerFacilator- supervisor officer• Circle leaderCircle leader• Circle memberCircle member

How to implementHow to implement

• Management informed about itManagement informed about it• Committee is formedCommittee is formed• Scope is definedScope is defined• First line supervisor identified area of concernedFirst line supervisor identified area of concerned• Give ppt on valuable tipsGive ppt on valuable tips• Training to the coordinator and middle Training to the coordinator and middle

managementmanagement• Fixing the roleFixing the role• employees are invited to join QCemployees are invited to join QC• Circle is formed & start workingCircle is formed & start working

Important things which Important things which need to take careneed to take care

• Voluntary participationVoluntary participation• Management supportManagement support• Employee empowermentEmployee empowerment• Training programsTraining programs• Team workTeam work• Problem solving skillsProblem solving skills

Tools of QCTools of QC

• Pareto diagramsPareto diagrams• Cause & effect diagramCause & effect diagram• SatisfactionSatisfaction• Check sheetCheck sheet• HistogramHistogram• Scatter diagramScatter diagram• Graphs & Control chartsGraphs & Control charts

Problems with Quality Problems with Quality CirclesCircles

• Inadequate TrainingInadequate Training• Unsure of PurposeUnsure of Purpose• Not truly VoluntaryNot truly Voluntary• Lack of Management InterestLack of Management Interest• Quality Circles are not really Quality Circles are not really

empowered to make decisions.empowered to make decisions.

Summary of History and Summary of History and PracticesPractices

• Quality Circles were first seen in Quality Circles were first seen in the United States in the 1950’sthe United States in the 1950’s

• Circles were developed by Dr, Circles were developed by Dr, Kaoru Ishikawa in Japan in the Kaoru Ishikawa in Japan in the 1960’s1960’s

• Circles were re-exported to the US Circles were re-exported to the US in the early 1970’sin the early 1970’s

Summary of History and Summary of History and PracticesPractices

• 1980’s brought Total Quality 1980’s brought Total Quality Management and a reduction in the Management and a reduction in the use of Quality Circlesuse of Quality Circles

• Quality Circles can be a useful tool Quality Circles can be a useful tool if used properlyif used properly

It is It is

Passion of Passion of every heartsevery hearts

It is It is

Obsession Obsession of youngster of youngster Craziness of speed loverCraziness of speed lover

It is It is

Craziness of Craziness of speed loverspeed lover

True journey start with itTrue journey start with it

Live to ride, ride to live;"Live to ride, ride to live;"   

So screw it, let's rideSo screw it, let's ride

Boss of the roadBoss of the road

Brijendra-24 Puneet-25Anuj-47

Mona-32 Priyanka-23

Minal-48

Ananthlaxmi

pallavi-27

Sheetal-18

Priyanka T-57

Jyoti-37

Pre & post world war timePre & post world war time

• Demand of motorcycle Demand of motorcycle growsgrows

• HD became leader in HD became leader in innovative engineeringinnovative engineering

• Export & sales to police & Export & sales to police & militarymilitary

• Demand decreasedDemand decreased• 90,ooo bike mfg to military90,ooo bike mfg to military• Won the “Army-Navy E” Won the “Army-Navy E”

awardaward

World war-I World war-II

1969- taken over by AMF but sales 1969- taken over by AMF but sales decreased due to poor qualitydecreased due to poor qualityAgain 13 members of HD management team purchased Again 13 members of HD management team purchased the co. from AMFthe co. from AMF

Problem with HDProblem with HD

• Sales decreasedSales decreased• Market continued to dropMarket continued to drop• Large inventory of unsold productLarge inventory of unsold product• Down in quality and reduce productivityDown in quality and reduce productivity• Less operating cost & high production Less operating cost & high production • Hard to sustainedHard to sustained

Alternate solutionAlternate solution

• Cut the employee jobsCut the employee jobs• Decrease the productionDecrease the production• President Ronald Increase tariff on President Ronald Increase tariff on

Japanese motorbike 4.4%-49.4% Japanese motorbike 4.4%-49.4% for 5 yearsfor 5 years

• CEO Richard Teerlink convinced CEO Richard Teerlink convinced lenders to accept a restructuring lenders to accept a restructuring planplan

• Plan to improve the quality at Plan to improve the quality at various level through making various level through making quality circlequality circle

The 3M’s of HDThe 3M’s of HD

MANAGEMENTMANAGEMENT

MARKETINGMARKETING

MANUFACTURINGMANUFACTURING

• ““And this 3M’s were not possible And this 3M’s were not possible with out top management, with out top management, supervisor, worker’s commitment & supervisor, worker’s commitment & motivation” what quality circle motivation” what quality circle teaches us meansteaches us means

self & mutual development of self & mutual development of workmen workmen

Careful analysis by top Careful analysis by top mgt-QC approachmgt-QC approach

• Corporate management focused mostly on short term Corporate management focused mostly on short term returns. returns.

• Belief in quick fixes for problems, such as throwing in Belief in quick fixes for problems, such as throwing in computers and state-of-the-art machinery to improve computers and state-of-the-art machinery to improve productivity. productivity.

• High break-even point that left the company vulnerable High break-even point that left the company vulnerable to unpredictable market fluctuations.to unpredictable market fluctuations.

• Management that woke up too late to the threat of Management that woke up too late to the threat of foreign competition because of the "it can't happen foreign competition because of the "it can't happen here" syndromehere" syndrome

Relationship Relationship

• With workerWith worker• aid in the advancement of new aid in the advancement of new

company practicescompany practices• Establish open communicationEstablish open communication• Define roles & consequencesDefine roles & consequences• shared vision of the company values shared vision of the company values

with employee means “tell the with employee means “tell the truth”truth”

• Since HD worker’s were unionized Since HD worker’s were unionized but they couldn’t see themselves but they couldn’t see themselves separate from co. mission, Vision, separate from co. mission, Vision, &values&values

HD learning centreHD learning centre

• Polish their skillsPolish their skills• Give the job as per the individual Give the job as per the individual

skillsskills• Invited all of them to free sign upInvited all of them to free sign up• Once they would signed in they Once they would signed in they

would work as a teamwould work as a team

Result of learning centreResult of learning centre

• All became managerAll became manager• foster employees' personal growth and developmentfoster employees' personal growth and development• Extensive team-building- union leaders, negotiation Extensive team-building- union leaders, negotiation

committees, and stewardscommittees, and stewards• EX- engineers are located right in the plant, within EX- engineers are located right in the plant, within

walking distance of machine operatorswalking distance of machine operators• union has considerable control over- in sourcing work union has considerable control over- in sourcing work

means job securitymeans job security

Total employee involvement (EI) cannot exist Total employee involvement (EI) cannot exist until management and labor can agree that they until management and labor can agree that they have a mutual goal: the long-term successhave a mutual goal: the long-term success

The Top Management initiated

Participated and learned about customers concerns and Participated and learned about customers concerns and complaints at Harley Owners Group (HOG) rallies & creates complaints at Harley Owners Group (HOG) rallies & creates changeschanges

Learned about Japanese plants and HondaLearned about Japanese plants and Honda

Implement the production improvement thru Just-in-time Implement the production improvement thru Just-in-time (JIT), Materials-as-needed (MAN), Quality Circles (QC) & (JIT), Materials-as-needed (MAN), Quality Circles (QC) & Statistical Operator Control (SOC)Statistical Operator Control (SOC)

Educate the middle management and front line people in Educate the middle management and front line people in turning the plant to profit center by reducing defect turning the plant to profit center by reducing defect products and increase productivityproducts and increase productivity

Implemented product improvement thru new engine, stereo Implemented product improvement thru new engine, stereo system, etc system, etc

The Top Management initiated

Enhanced its presence in Europe - Harley opened a Enhanced its presence in Europe - Harley opened a branch office of its HOG club in Frankfurt, Germany, branch office of its HOG club in Frankfurt, Germany, for its European fansfor its European fans

1997 - A new engine plant in Milwaukee 1997 - A new engine plant in Milwaukee 1998 – A new assembly plant in Kansas City1998 – A new assembly plant in Kansas City

Recreate the public image with high quality Recreate the public image with high quality licensed goods licensed goods

(i.e leather jackets, cologne, jewelry, (i.e leather jackets, cologne, jewelry, pajamas, sheets, towels etc)pajamas, sheets, towels etc)

Benefits of this effortsBenefits of this efforts

The Harley-Davidson production plant has improved, between 1981 – 1988

•Inventory reduced by 67%•Productivity up by 50%

•Scrap and rework down two-thirds•Defect per unit down 70%

Harley Owners Group (HOGs)The trailblazers for the successful growth and mystique to come

•The branded merchandises/licensed goods has created

•New customer segment – Rubbies (the rich urban bikers)

•In 1992 the merchandises contributed $155.7 million in sales

•(alternate revenue for dealers)

•IMAGE

American flag and the eagle- reflective of the passion and freedom

PRICE

value over price +customized prod.

What HD learned What HD learned

Problem can not solve only throwing money.It is the game of team work to improve the quality through making various circle around the problem