Leadership and the Process Approach
Mr Vasu Krishnan, author, in discussion with Dr K C John, Director, Faculty of Management, Sri Ramachandra Institute of Higher Education & Research; Mr George Suresh Managing Partner, Vasanth Products; Cmdr M D Menon (Retd), Indian Navy; and Dr N Ravichandran, Distinguished Professor of Management (Part-time), IIT Mandi, Himachal Pradesh.
Mr Vasu Krishnan: Most organizations have a process approach but it’s a question of how effective they are in identifying the measures of process performance. 30 years ago, there used to be a concept of sales returns and it would be roughly 1.5%. That works out to 10,000 to 15,000 PPM defective products. If a tier one or tier two supplier does that, he will be out of business, as it’s not acceptable.
In this entire business of organisational growth, unfortunately, financial performance is considered as the gold standard. They think that if the performance with respect to other critical process parameters such as quality or delivery is lacking, as long as one could get away with it, so much the better.
A very clear understanding of the customer requirements, not only stated but unstated too, is needed to prevent potential failures. In the process of organizational growth, we must retain the lessons learned to ensure that they are not forgotten when individuals leave. Clause 7.1.4 of ISO 9001: 2015 refers to organizational knowledge and the necessity for retaining it in the organisation. If there’s something in the process that is not delivering, change the process and make sure it delivers on measures of performance, pertaining to quality and delivery.
When Competitors Collaborated
In 1994, the Automotive Industry Action Group comprising representatives of Ford, General Motors and Chrysler Corporation decided to collaborate, even though they were competitors, to come up with common customer requirements, because their common suppliers informed them that it was too difficult to deal with three people having three different requirements. So, they came up with their own publications or reference manuals covering advanced product quality planning and control plan, FMEA (Failure mode effects analysis), Production Part Approval Process, Fundamental SPC and measurement system analysis. These have been revised over a period of time and are being followed for more than 25 years by Tier 1 and Tier 2 automotive suppliers and serve as a gold standard on this subject.
The Process Approach
There is a fundamental assumption that organizations like individuals would like to present the best version of themselves. A process is a series of actions or steps taken in order to achieve an end. The PDCA cycle is a Plan, Do, Check and Act. More often than not, the ‘C’ is neglected. A process is a set of interconnected activities, having an impact on corresponding measures of performance.
When we talk of measures of performance, we don’t rule out other things like business process reengineering to cut out the non-value-added activities or benchmarking. According to automotive standard, special characteristics are those characteristics, attributes or variables of products and processes affecting fit, form, function, statutory and regulatory requirements. Corresponding organizations could either be design responsible or not.
Struggling with a Sachet
Forget about engineering products, where there are so many requirements affecting performance. Take a simple thing like a sachet of pickle served in trains. How many of us can open the sachet with our fingers? We have to use our teeth or look for a pair of scissors. Opening the sachet with our fingers is a special characteristic. If you apply this concept to your own product, you will find there are a lot of failure modes, which could be improved upon. The product and its packaging itself can lead to so many problems.
The PDCA cycle can be applied in process and discrete manufacturing organizations such as engineering, consumer durables, construction, automotive, aviation and pharma. Leadership styles can impact process measures of performance. This is really important. In one of the few organizations I had worked, people worked exactly eight hours. They didn’t spend an hour of overtime work and they were very relaxed, because the bosses were relaxed. The ability to communicate a certain degree of confidence to the people that report to you, in turn drives their performance.
Need for Review
When we discuss continuous and continual improvement, educational institutions must also be included. A lot of things are still lacking there including fundamental understanding of certain words like review, verification and validation. An example of review is the computer-generated document. It says that it does not require any signature. If a document has been generated, someone must take responsibility for it. If there is an error in it, change the document and accept responsibility.
A trading organization is the subject of service quality. Service quality is not something related only to banks, logistic organizations and other organizations supplying services. In the business of offering services, it also includes things like warranty and warranty service. Any organization which is involved in the process of improvement and organizational transformation can apply the process approach. It is just a question of asking some very simple questions, bordering on 5Ws and 1H.
Structured Growth
When we want structured growth, we must consider the context of the organization and the relevant needs and expectations of stakeholders, not limited to financial stakeholders. The context of the organization is the industry. It includes the needs and expectations of interested parties- what and how and therefore, what will be their strategy in meeting those needs. Leadership and leadership styles impact organizational effectiveness. In the ‘mirasdar’ leadership style, the person is not bothered about delegation. He thinks he is the big man and nobody should ask him questions, Here the leader cannot be bothered with the details of process effectiveness and it is a sure recipe for ultimate failure. Implementation of a structured approach is paramount. Recognition and certification are natural corollaries.
Process measures of performance consider measures of effective performance, considering quality and delivery, instead of only financial result. There must be a clear emphasis on knowledge as an enabler and the award process as differentiator in the organisations’ business and competitive strategy.
Quality Hierarchy
There are six categories in the quality hierarchy and they are:
- Uncommitted
- Drifters
- Tool pushers
- Improvers
- Award winners
- World Class
Uncommitted organizations are the dinosaurs and will not last long. Going up the hierarchy, we have drifters, who are the organizations who drift from one concept to another. Today, it’s ISO 9001. Tomorrow, it may be something else. Tool pushers are committed to the task and will complete them. Improvers are the ones who are one step ahead, like the organizations which are on the transformation route. Award winners focus on TPM, Deming and other awards. The best are world class organisations who can bag the Japan Quality Award.
The basic assumption of FMEA (Failure Mode Effects Analysis) is Murphy’s Law, which is a reality. Anything that can go wrong, can go wrong, irrespective of all the people who believe in positive thinking. Life on Earth is part of it. FMEA comprises DFMEA and PFMEA, addressing failure modes in design and process.
The 7 Step Process
In 2019, AIAG collaborated with VDA to bring out the combined AIAG-VDA FMEA Handbook First Edition, the main feature of which is the 7-step process of FMEA, as follows:
- Planning & preparation / Project identification
- Structure analysis / Visualisation of the scope of analysis
- Function analysis / Visualisation of functions
- Failure analysis / establishment of the failure chain of events (covering DFMEA, FMEA and Monitoring System Response (MSR)
- Risk analysis /alignment of controls and rating of failures
- Optimisation / identification of brisk reduction actions
- Results documentation
Automotive organisations (Tier 1 and 2) transiting from AIAG’s 4th edition of FMEA must ensure their cross functional teams are trained to understand the above requirements as part of their new product development process. Normally, a period of three years is given for organizations who are Tier 1 or 2 to migrate to the next standard.
Mr George Suresh
We started off with the manufacturing components for the Ministry of Defence, where the volumes are low and repeatability was a challenge. We moved to the auto sector, adding technology and with the expertise gained from the defence supplies. But the challenge came in following a process approach. We were asked to get 100 PPM certification from Hyundai if we were to continue production and supply to their Tier-1 vendors. Mr Vasu Krishnan chipped in and we brought in a very effective FIFO for the raw material and single line flow for our product. We were making five varieties of flanges. The first off, middle off and last off inspections were taken care of and made very stringent.
Initially, the products were measured and checked using verniers and micrometers, wherein a lot of components would end up with the customer with quality issues. Then we went for fixtures and gauges for all the end products and we were able to give the customer perfect confidence. We were awarded the 100 PPM certification. This 100 PPM again has helped us a lot in supplying to Tier 1 and OEMs. We also went into automation like turning centers and CNC milling centers. We are now robotizing the machining centers too. Technology has helped us achieve the qualities required in today’s competitive world.
Commodore Menon
Deming propounded the PDCA Cycle. He also said, “Never blame the worker; People should not feel threatened at their workplace. They should not have fear in their minds.” If people are afraid, they tend to be tensed up. At the same time, it doesn’t mean they should be casual about work. Nobody comes to office with an idea of making mistakes. Everyone wants to come to work and do a good job but mistakes do occur. The good thing about system-based- approach is to learn from the mistakes and ensure that they do not recur.
Efficiency is doing things right and effectiveness is doing the right things. To be effective, you must have written down system procedures, work instructions, etc. The people should know their job and they should be skilled at it. They should be trained. They should be very clear of their role in a particular process. Next is the commitment of the person involved in the job. Culture is brought in by the top management.
When mistakes happen, we can repair or rework. When we rework, we can get back to the original quality. When we repair, the product can be put for alternate uses. It can be downgraded and sold. With PDCA, the whole idea is to prevent recurrence of defects. Corrective action is taken once a mistake has occurred. Preventive action leads to preventing recurrence of defects. If the same defects recur, then there is something fundamentally wrong. We also must have an eye for details. This doesn’t mean we should be nitpicking and going around over-supervising or micromanaging.
The Defence and the Corporate World
In defence forces also, like the corporate world, the systems are not static. They change and we have to follow the procedure and process very meticulously. Otherwise, it can lead to fatal results. In the corporate sector, if you want to survive the competitive business environment, you should not produce a single bad item. If you produce a bad item, it means you’re running an underground factory producing bad items and an overground factory, which is reflected in your books of accounts. The entire aim of a good organization is to shut down the underground factory which runs parallel without anybody’s knowledge, creating problems and losses to the company. Just imagine if there is a bad product or there’s an accident. You may lose 10 customers and to win one lost customer, you have to spend four times the money, 10 times a month. With the current level of communication, the risk is very high.
In the defence forces, we don’t have runners up. In the industry perhaps, we can say the top player, the second-best player and so on. In the Armed Forces, it’s a do or die. In the business process, you may be able to survive when the market is large, with a dominant player and couple of not-so-dominant players but everyone has to run. Lots of lessons have been learned from the defence services and used in the corporate world. For example, the quality management system itself has come from a NATO document. The term logistics comes from the armed forces.
Prof Ravichandran
According to the author, an organisation can attain leadership position by using the manufacturing systems and processes. It can add value to the consumers by an appropriate product design and execution of the value chain, so that the cost of the product is lower and it can be sold at a competitive price. This is what is meant by leadership through a process-oriented approach.
Lean management, Manufacturing strategy, Project management in the context of manufacturing organisations. critical chain which is the cousin of the theory of constraints, TPM, PPC, Business Process Reengineering, Quality systems and standards, how one designs manufacturing systems, design responsibility and design capability and future of manufacturing, covered by the author, are very relevant to today’s manufacturing context.
