UNIVERSITY OF DHAKA

TQM Practices of ACI Salt Industries Ltd. Bangladesh

Submitted to: Monika Chakrabarti Asst. Professor, Dept. of Management Studies University of Dhaka

12/12/2012

University of Dhaka

Department of Management Studies MBA (Evening Program) Fall, 2012 Term Paper

Course Title Course code Course Teacher Topic

Total Quality Management EM 540

Monika Chakrabarti TQM Practices of ACI Salt Industries Ltd. Bangladesh

12-12- 2012

Date

Submitted by
Nahid Rijwan Bijoy Mohajan Neaz Parvez Md. Sujan Mahmud Zahidul Islam 3-09-17-033 3-11-21-050 3-11-21-079 3-10-19-049 3-11-21-013

Table of Contents

Serial 1 2 3 4 5 8

Topic

Organization Profile Organogram Production Flow Chart PRE-requisites of TQM in ACI Salt Ind. TQM Questionnaire Concluding Remarks

Page No. 01 02 03 04 09 18

Organization Profile:
ACI Salt was launched in August, 2005 and marketed and distributed by ACI Consumer Brands through its network. ACI has set up its salt refining plant in Rupganj, on the banks of the Shitalakhya River. The plant produce refined iodized salt through Thermal Evaporation System. ACI has used technology from China Heavy Machineries Corporation (CHMC) in establishing the plant. The end product will be of high quality, free-flowing salt with even, crystallized grains. The iodine content of ACI salt will have a stability of more than 6 months. The project has been undertaken at an approximate cost of Taka 32 crores. Within the very short period it has been enjoying the pride of the Brand Leader. The best in its kind, ACI Salt is vacuum evaporated, free flowing and properly iodized. It is also very porous and free flowing. Iodine is coated in every single grain which makes it an essential product for the children; the absence of right quantity of iodine in their food may cause mental disability to them. ACI Salt has won the "BEST BRAND OF BANGLADESH AWARD 2008" for unparallel customer loyalty beating all the brands in Foods & Beverages category. The comparative features of ACI Salt and other ordinary salts produced through washing method are shown below:

Particulars NaCl Content Iodine Content Soluble Impurities Insoluble Impurities

Ordinary Salt <85% 5-20 PPM 1% (Sulphur, 2%

ACI Salt 99.5% 20-50 PPM Nil Nil

Calcium, Magnesium, Arsenic etc.) Technology Washing-Crushing Vacuum Evaporation

Organogram:

Production Flow Chart:

PRE-requisites of TQM in ACI Salt Ind.:

Commitment from Management

In order for any organizational effort to succeed, there must be a substantial management commitment of management time and organizational resources. The purpose must be clearly and continuously communicated to all personnel. Management must consistently apply the principles of TQM.

ACI management is committed to provide quality products and for this management is committed to

Allocate resources for providing quality products and/or services Reduce production cycle time Handle customer complaints efficiently Provide cost for failure Communicate strategic plans to the stakeholders Give importance to the quality of goods

Ability to change Organizational culture

Changing an organizations culture is difficult and will require as much as five years. Individuals resist change they become accustomed to doing a particular process and it become the preferred way. Management must understand and utilize the basic concepts of change. They are:

1. People change when they want to and to meet their own needs. 2. Never expect anyone to engage in behavior that serves the organizations values unless adequate reason has been given. 3. For change to be accepted, people must be moved from a state of fear to trust.

Impediments to a cultural change are the lack of effective communication and emphasis on short-term results. Organization that spends more time planning for the
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cultural aspects of implementing a TQM program will improve their chances of success.

ACI as an organization handle cultural change through

Communicating values throughout the organization. HR department conduct session on values throughout the business units and factories and hang values related poster in the organization premises. Providing training on quality Listening to the voice of the employees of the organization through biannual MDs address Providing trust by giving security of job; so that employees feel confident in time of change.

Proper planning

All constituents of the organization must be involved in the development of the implementation plan and any modifications that occur as the plan evolves. Of particular importance is the two-way communication of ideas by all personnel during the development of the plan and its implementation. Customer satisfaction should be the goal rather than financial or sales goals. Focus on quality and the other goals will follow.

ACI implement planning by

Communicating yearly planning to all employees of ACI Giving production target for each product Furnish back up plan for any short comings of the yearly plan

Continuous training and education

Training and education is an ongoing process for everyone in the organization. Needs must be determined and a plan developed to achieve those needs. Training and
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education are most effective when senior management conducts the training on the principles of TQM. Informal training occurs by communicating the TQM effort to all personnel on a continual basis.

ACI is giving continuous training on

Values and professionalism Communication techniques Teambuilding Decision making and problem solving method Behavioral improvement techniques

Structured organization

Differences between departments and individuals can create implementation problems. The use of multifunctional teams will help to break down long-standing barriers. Restructuring to make the organization more responsive to customer needs may be needed. Individuals who do not embrace the new philosophy can be required to leave the organization. Adherence to the six basic concepts will minimize the problems over time.

ACI is a structured organization as shown by

Function based organization Inter-department communication on problem solving Customers need are identified through cross functional teams

Easy access to data and results

In managing quality, it is important for organizations to have a good system to manage data and information on its operation and external environment, i.e. process/product performance and their customer or market needs. Having sufficient data and information on the process performance and operations, customers,
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suppliers, and other stakeholders would help the organization and its employees to continuously improve their decision and action in producing and delivering goods and services that fulfill the standards and requirements. Therefore, access to data and quick retrieval is necessary for effective processes.

ACI has given easy access of data and results through

Implement modern ERP system/MATPLAN for storing sales, customer and stakeholders data and subsequently the employees have access to these data. The data and results are than converted to future planning and execution of the strategy to achieve goals.

Measurement techniques

The organizational improvement program that matches output to customer needs, requires teamwork and continuous improvement. TQM also involves strategic planning. A key to assessing the progress of a TQM process is measurement. Today's companies need performance measures that will allow them to effectively manage their operations and meet business and financial goals. Defining current performance in the elements of quality, cost, flexibility, reliability, and innovation allows organizations to evaluate performance and to prioritize areas for initiating improvement processes. Data analysis is the critical factor in determining how well an institution is accomplishing its goals. Key characteristics of the organization should be measured so that effective decisions can be made. In order to improve a process you need to measure the effect of improvement ideas. ACI measures key characteristics by

Balance Scorecard system for measuring job performance and improvement. Innovation prize is introduced to encourage process improvement Quality parameters are standardized by introducing ISO 9001:2008.

Paying attention to internal and external customers

Organizations need to understand the changing needs and expectations of their customers. Effective feedback mechanisms that provide data for decision making are necessary for this understand. One way to overcome this obstacle is to give the right people direct access to the customers.

ACI has prioritize the attention to customers by

Give orientation to the employees to identify the customers Introduce customer focus as one of the core values of the organization Customer survey and complaints are handled through proper supervision

Use of empowerment and teamwork

Teams need to have the proper training and, at least in the beginning, a facilitator. Whenever possible, the teams recommendations should be followed. Individuals should be empowered to make decisions that affect the efficiency of their process or the satisfaction of their customers.

ACI provide both empowerment and teamwork by

Problem solving through forming teams and empower the team to formulate solutions for the problems Desire for continuous improvement

It is tempting to sit back and reset on your laurels. However, a lack of continuous improvement of the processes, product and/or service will even leave the leader of the pack in the dust.

Continuous improvement is a priority for ACI as it is shown by

Providing innovation prize for the employees

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Introducing new technologies as available in the market

TQM Questionnaire:
1. What is the quality in your view?

The quality of a product or service refers to the perception of the degree to which the product or service meets and exceeds the customer's expectations. Quality has no specific meaning unless related to a specific function and/or object. Quality is a perceptual, conditional and somewhat subjective attribute.

2. In your organization, do you have any practice of using employee suggestions?

Yes, we do have a suggestion box which is placed in a convenient place so that employees can submit their suggestions for process improvement of the organization. We also have web-based suggestions submission techniques which are attended or solved through cross functional groups.

3. Do you provide any monetary incentives to encourage employee suggestions for process improvement?

No, we do not have direct monetary incentives for encouraging employee suggestions. But, ACI provide performance bonus to encourage employees to add value and innovation in the individual job area.

4. If you do, are they individual based or group based or for the entire company employees?

Individual based.

5. Do you provide any non monetary incentives to encourage employee suggestion for process improvement?
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Yes, we do have non monetary incentives for providing suggestion for process improvement. This scheme will cover all the employees working in the Company which includes field employees also.

Key Criteria:

1. The innovative idea should bring value addition to the existing processes, products and systems and results in substantial benefits to the Company in terms of finance, image and productivity. The idea of encouraging innovation is to looking for ways to improve things, solve problems and generally make things better, more efficient and more convenient. 2. Before considered to be rewarded, the idea must be implemented at least for a consecutive period of three months & the value addition to the company after implementation must be calculated. Whilst accurate costs & benefits may not be fully quantifiable, the Idea Evaluation Committee & the Value Addition Calculation Committee will have the sole discretion to decide its merits. 3. The Value Addition Calculation Committee will be consisting of the Business Manager, CB; Financial Controller & Corporate Finance Manager. 4. In the event a team submits a proposal, the total amount of award will be distributed to the members by equal proportion. 5. More than one submission is permitted 6. Submissions must be practical and capable of being implemented 7. Ideas must be innovative- in the event that they are already being implemented or is in the process of being implemented, or is under consideration for implementation within ACI, they will not be considered as innovative ideas. This decision will be at the sole discretion of the Idea Evaluation Committee.

Idea Submission Subjects:

Idea submissions may cover a broad range of subjects, including, but not restricted to:

1. Business proposals on new products and/or services 2. Marketing campaigns for existing products and/or services
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3. Organizational and structural changes 4. Workflow and process improvements 5. Improving the customer services 6. Anything what you feel ACI is missing 7. Product improvement leading to increased profitability through design change, recipe change etc. 8. Any breakthrough ideas in doing current jobs/practice differently or making deal with outside parties differently which will bring savings to the company.

6. If you do, are they individual based or group based or for the entire company employees?

The incentives are given as individual based for best innovation for process improvement. Ideas will be collected monthly and the idea evaluation committee will determine which ideas will be forwarded to the concerned business heads for determining the possibility of implementation. After three months of implementation, the Value Addition Calculation Committee will calculate the net value addition of the idea to the company against different set criteria. If the value addition is significant, the Value Addition Calculation Committee will forward the idea along with value addition calculations to the Management Committee. The Management Committee will be the final authority to give decisions regarding the ideas to be selected for recognition & reward in the forthcoming Managing Directors Address.

7. In your view, most problems in the production of products/services are related to: a. The people who are engaged in producing the products/services

8. Which of the following does you organization use, if any:

a. JIT b. Kaizen c. Business Process Reengineering d. Benchmarking

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e. None

9. If your organization uses any of the above concepts, please provide the situations where the above are used.

Cross functional teams are formed to solve the problems and decision making. Moreover, line managers meet monthly with the subordinates to solve problems.

10. Do you benchmark? Where do you get the data about the best performers in order to benchmark?

Yes, Benchmarks are provided through evaluating Balance Scorecard of the employees.

11. What are the ways the organization attempts to involve lower level employees in decision making? Please explain some methods.

12. Although Deming proposed that qualitative objectives, MBO and performance appraisals should not be used in organizations if they are to focus on quality, what is your opinion?

13. Circle the number that best describes the firms situation:

a. How flexible is the organization culture?

Very Flexible

Very Inflexib

7 7

10

b. How much is the emphasis on policies, procedures as opposed to tolerating deviations?

Very Low Very High

8 8

9 12

10

c. How cautious is the firm about trying something new?

Not Cautious

Very Cautious

10

d. Top-down management and communication is strictly followed?

Very Loosely Very Strictly

10

e. The organization trains everyone (not just new employees)?

Never

Always

f. Decision making is centralized at the top?

10

Always

Never

10

g. Productivity and profitability is the primary focus of the organization.

Always Never

7 7

10

h. Cross-functional teams are often created to identify and solve problems.

Never Always

10 10

i. Employee turnover is tracked in order to control it

Never Always

7 7

10

j. The organization accepts a certain margin of error in operations and processes.

Always Never

8 8

10

k. Some conflict is allowed to occur in the organization

Always Never

7 7

13 8 9
10

l. Conflicts of any type are nullified

Always Never

14. For the same type of products or services do you use

1 2 3 4 5 6 7 8 9
10

a. One supplier b. Few suppliers c. Several suppliers d. Uncertain

15. Which in your view, is better to do?

a. Use one supplier b. Use a few suppliers c. Use several suppliers

16. Please describe why?

Several suppliers will help to negotiate the cost acquiring raw materials.

17. Does

the

supplier

organization

representatives

visit

your

factory/plants/organization?

a. No, it is not necessary b. Yes, every month on average c. Yes, once a year on average d. Yes, but not regularly

18. Do you train the supplier organization so that it knows exactly what you want from it?

a. No, it is not necessary

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b. Yes, rarely c. Yes, occasionally d. Yes, often

19. Do you visit the supplier organization to know how they produce?

a. No, it is not necessary b. Yes, every month on average c. Yes, once a year on average d. Yes, but not regularly

20. Have you formed any sort of alliance with your suppliers (upstream or downstream, e.g., product alliance, promotion alliance, logistic alliance, pricing alliance etc.)? please describe.

No.

21. Does top management undergo any training in relation to quality improvement?

Yes

22. Does the top management themselves train others in any of the quality issues?

Yes

23. Does the top management spend time with front line employees face-to-face?

Yes

24. If so, how often?

a. One a year

e. Everyday
15

b. Once semi annually c. Once in a month d. Once a week

f.

No fixed schedule

g. Never directly

25. Does the top management spend time with customers face-to-face?

Yes 26. If so, how often?

a. One a year b. Once semi annually c. Once in a month d. Once a week

e. Everyday f. No fixed schedule

g. Never directly

Questions the Interviewer should answer through observation and interview input

27. Provide a diagrammatic representation of the organization structure. Examine the organization structure of the firm. State which type it is (e.g., function based, product based, customer based, geography based, work process based, matrix etc.)

28. Do you think that the current organization structure of the firm is conductive to TQM?

Yes

29. What artifacts, symbols and behaviors in the organization do you observe that tells you that this organizations culture is quality conscious? Explain.

List of symbols, artifacts:

16

a. Quality policy b. Values posters c. Safety posters d. SOP/Written documents/procedures e. Job rooster for production process f. Notice board notifications g. Important notices on the notice board

30. How much this organization spends on regular training annually?

Approximately 1,10,00 hours on Operational knowledge and Skill Managerial skill Quality management system Strategic Skill or conceptual skills

31. How much does this organization spend on management development annually?

BDT. 10,00,000.00

32. Does it appear to you that the organization treats spending on training and development as cost or investment?

Investment

33. In your view, what is the level of partnership of the firm with its suppliers?

Low

High

7 7

10

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Concluding Remarks:
ACI's mission is to achieve business excellence through quality by understanding, accepting, meeting and exceeding customer expectations. ACI follows International Standards on Quality Management System to ensure consistent quality of products and services to achieve customer satisfaction. ACI also meets all national regulatory requirements relating to its current businesses and ensures that current Good Manufacturing Practices (cGMP) as recommended by World Health Organization is followed for its pharmaceutical operations. The management of ACI commits itself to quality as the prime consideration in all its business decisions. All employees of ACI must follow documented procedures to ensure compliance with quality standards. The pool of human resources of the company will be developed to their full potential and harnessed through regular training and their participation in seeking continuous improvement of work methods.

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