Application-of-TQM-at-SCECO-EAST

Application-of-TQM-at-SCECO-EAST

Summary

In order to improve customer service and satisfaction at minimal cost, SCECO-EAST introduced TQM concepts. TQM has been successful in enhancing productivity and quality, not only in the manufacturing industry but in various areas of business. Although, it has been widely used in the manufacturing sector as products are tangible and can be controlled by the prescribed specifications and standards. In this paper, an attempt was made to discuss the experience of SCECO-EAST in implementation of TQM to distribution substation maintenance.

SCECO-EAST introduced TQM to achieve the objectives of service quality improvement, create an environment for continuous progress, enhance employee satisfaction and develop a strategy for employee involvement in the continuous process improvement. The TQM programme should be implemented in three phases.

Phase 1: One-year pilot implementation through 24 quality improvement teams.

Phase 2: Introduction of TQM in all departments of the company; the phase duration is 2 years.

Phase 3: BPR methodology for the improvement of business process in all departments.

Business process improvement uses the methodology of PACE (pick, analyze, create and enact).When picking a project, the work process is defined at the outset. Afterwards, the customer requirements are taken into consideration before contacting the management approval. Then, process data is collected to determine the root cause. Only after that, process improvement can be realized through brainstorming and the cost-benefit analysis. Finally, positive and negative forces are identified, and a contingency plan is developed along with the implementation of improvements (Al-Saggaf 42).

In SCECO-EAST, the process is preventive maintenance (PM) of medium voltage distribution substations (S/S). Quality maintenance at the substation needs to be with less power outages and customer’s convenience delivered to them. In order to achieve this, the process is broken down into a series of activities. Each activity is given theoretical and practical time, and activities are identified on the basis of value added (Al-Saggaf 44).

In order to collect opinions and gather information, several customer meetings were conducted, and questions were asked pertaining to the product, its importance and the level of satisfaction related to existing services. Two parameters, namely improvement ratio and value of relationship, were used to quantify the level of customer satisfaction. Then, advanced ideas were analyzed through the cost-benefit analysis, force-field analysis and contingency diagrams.

Each process was mapped with the initial cost of implementation focusing on the cost-benefit analysis. The results were as follows: reduction in cycle time by 50%, reduction in a number of performed activities, savings on manpower and material and response to customer needs and wants as a final point.

In conclusion, it can be inferred that the improvement of S/S maintenance process has a significant impact on cut-throat competition in the electric service market.

The Methodology in the Implementation of TQM at SCECO-EAST

The key methodology adapted in the implementation of TQM is a process mapping technique. The main process is divided into 3 sub-processes. For each sub-process, the sequence of activity involved in the provision of final product and services to customers was laid down, and cycle time for each sub-process was estimated after it.

The Value Added (VA) and Non-Value Added (NVA) activities were identified for the process. Applying this process, many unneeded NVA activities were discarded, and necessary NVA activities were amended resulting in the reduction of  process cycle time, providing better customer service in such a way.

The methodology has helped in improving the quality of processes by reducing unnecessary activities and response time to customer service, thus, increasing both operation performance and customer satisfaction.

Moreover, by conducting customer surveys, information about needs, importance and the satisfaction level of existing services provided to customers can be known. Improvement ratio can be found out assigning relationship weight to each activity, the value of relationship. Thus, prioritization of processes can be done, taking care of those activities first of all, which are critical to the final customers (Al-Saggaf 43).

The Most Convincing analysis

The cost benefit analysis can be utilized to weigh the cost of the project and the benefits that can be derived from them in order to realize whether the project is viable or not. It is widely used for the analysis of projects in various sectors.

Advantages:

• Simplicity: quantitatively, dollar amount of involved benefits and costs is very easy to understand. Ex: labor man-hours, saving 10,848 man-hours that are equivalent to SR 455,616.
• Study of the future process: easy to examine worth of the improvement process. For example, estimating the time period, after which benefits will be achieved.
• Search of unknown factors: each aspect of the project improvement can be thoroughly examined. Ex: labor man-hours, operator man-hours, material cost, KWH consumption interruption, etc.
• Commitment: as each of the suggested improvements has initial cost, CBA has significant effect on the management, which takes decisions regarding the project improvements.

 Disadvantages:

•  Quantification of benefits with total accuracy.
•  Enhanced subjectiveness for intangible benefits.
• Putting valuation on cost and benefits is cumbersome: some costs are easy to value while others are more complicated. 

The force field analysis examines all the forces, which play some role in deciding whether the project should be accepted or not. It helps in strategizing the project taking cue from all the factors, which affect the plan.

Advantages:

• All the factors affecting the decision are summarized.
• Qualitative factors, which can have potential impact on the project, are also taken into consideration. Ex: save S/S maintenance man-hours that will be used in other activities like inspection, decrease in occasions of mobile generator (MG).

Disadvantages: 

• Dollar amount of cost and benefits is not provided, which makes the process of deciding difficult for management.
• Potential problems, which can arise later, are not considered.
• It is difficult to examine worth of the improvement process because negative and positive forces added to the cost and benefits are not estimated in dollar terms.
• Intangible benefits are not quantifiable.

A contingency diagram is a procedure for identification and illustration of potential difficulty with the plan and methods to avoid these problems.

Advantages:

•  Pro-active approach in developing a new process improvement plan.
• The identification of causal events and conditions. Ex: defining emergency.
•  The identification of conditions, which can lead to the process going the wrong way.  Ex: increase in emergency.
• The identification of preventive actions. Ex: decrease in inspection cycle.

Disadvantages:

• Dollar amount of benefits and costs is not offered, which makes decisions problematic for supervision.
• It is difficult to study value of the improvement process as negative and positive forces added to the cost and benefits are not measured in dollar price.
• Immaterial benefits are not calculable.

Judging from the advantages and disadvantages of each type of analysis, the cost benefit analysis is most suited in this case as the high initial cost is involved in the improvement processes. CBA gives quantified results and makes decisions much easier.

Other Tools/ Techniques, which Could be Utilized by This Company while Implementing TQM

Process maps can also be constructed through the flowcharting process. It is a powerful technique for recording what must be done in the process by creating a pictorial image. The flowchart will be used to take such actions:

• Visually depict the processes;
• Show step-by-step details of current process;
• Give the overview of detailed procedures;
• Examine processes.

When examining the plan/process, the following questions should be asked:

• Does the flow chart depict each step?
• Are some steps missing?
• Is every step necessary?
• Is it possible to join several steps?
• Are there unneeded decisions points?
• Is it possible to rearrange and simplify the flow?
• Is it possible to change the flow for the improvement of cycle time?
• Are too many people involved?
• Does every step include relevant data?
• Is the desired flow shown in the improved system?
• Is it easy to find non value added steps?
• How can employees be trained promptly?

Statistical process control (SPC) is a method for managing processes. It can be used to reduce the variability of materials, products, equipment and deliveries. SPC shows whether a process is under control – stabilized and giving only random variation – or it is out of control and needs attention. It also gives warning when performance reduces and can help with the identi%uFB01cation of specific causes, long-term vulnerability decrease, and reduction in the cases of change and performance achievement close to the goal.

The Key Learning Taken from This Case Study

From this case study, it can be learned that TQM is an excellent technique to improve the quality of customer service and reduce costs in terms of money and time. However, in order to achieve that process, analysis needs to be properly followed using available tools and a systematic methodology like PACE in this case. In addition, the customer needs and wants should be understood through several interactions in such a way that the desired product or service can be delivered.

After analyzing the process, the ideas of improvement should be implemented using multiple analytical concepts such as cost-benefit analysis, force-field analysis and contingency diagram techniques, which are shown in this particular case study. Areas of improvement must be quantified on the basis of parameters like customer benefit, cost, management support and ease of implementation.