The Management Development Centre of Hong Kong TQM

The Management Development Centre of Hong Kong TQM Development Group 2001 TQM Plus – History & Development -- Experience Sharing -April 24, 2001 - 6: 30 P. M. to 8: 30 P. M. Dr Stephen W. K. Ng Managing Director Qu. ST Continuation Ltd MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

WHAT HAVE WE CHANGED IN THE PAST 30 YEARS ? ? ? MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Customers Expectation – One of the key Drivers OLD TRADITION NEW TREND Good Increase Customer Satisfaction Fast Cheap Pick Any Two! MDC-TQM Group on TQM Plus sharing – April 24, 2001 While reducing total cycle times and costs HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Semiconductor Industry Drivers Over Time 1960’s 1970’s 1980’s 1990’s 2000’s Product Price Quality Service & speed Information & Integration Six Sigma MDC-TQM Group on TQM Plus sharing – April 24, 2001 10 X Cycle Performance Time Excellence and ? ? HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Internet – The Speed Challenge Internet TV Radio No. of years to reach 50 million users MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

e-Commerce is Huge! Forecast of Corporate Web-enabled Expenditures World i-Commerce in Billions $2. 2 4000 Trillion 2500 High potential 2000 3000 1500 2000 1000 Low potential $479 Billion 500 0 1998 1999 2000 2001 2002 2003 0 1998 $80 $170 $390 $970 $2, 000 $3, 200 $55 $145 $320 $640 $1, 100 $1, 800 Source: Forrester Research 1999 MDC-TQM Group on TQM Plus sharing – April 24, 2001 1999 Worldwide 2000 2001 2002 2003 U. S. Source: International Data Corp. 1999 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Rapid Migration to e-Everything in e alu V a Ch E Value $$ E 2 h lis b Pu t mi s an r T Intelligent e-Business Buying & Selling, Information Sharing Synchronized end-to-end business processes, spanning multiple enterprises Redeploying current business practices Optimized business processes e-Business Website Presence e-Commerce Buying & selling © 1999 i 2 Technologies, Inc. MDC-TQM Group on TQM Plus sharing – April 24, 2001 Data standards Common processes HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Organizational Improvement Continuum Process Improvements Incremental Quick - Hits Activity Improvements New Practices BASE Technology Innovation Breakthrough Strategy Market/Product Repositioning MDC-TQM Group on TQM Plus sharing – April 24, 2001 Progress Reengineering Reorganization Outsourcing Rightsizing TQM 6 Sigma Radical Strategic Change HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Six Sigma Implementation Highlights C p’ C pk’ P pk Sigma Quality Level Metrics DPMO Defect Rates Cycle Times RTY COPQ 6σ Expenditures "30, 000 Foot Level" Metrics Program Strategy Driven from the top Initiative Selecting the Right Players Business Strategy Effective Project Selection By F. Breytogle III MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Balancing the Change in Asia ( The 50/50 Rule ) Improve Productivity & Services Be No. 1 50 % Lower Total Costs The Leadership Practice in the 21 st Century MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

From A Consulting & Qu. ST… The Journey to Synchronization Stream Synergistic Synchronized The SCM evolution Connection/ Culture Interdependent Collaborate Commitment Interactive/Aligned Integrate Transactional Silo Understanding Hostile Investment The effect of * Globalization, * e- Commerce, & * The new economy Communication MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Total Cost Driver for e-SCM 10% $100 4% I 2 Technologies, Inc. 3% 3% 4% 6% 5% Direct Material Indirect Materials Cost of Labor Direct Overhead Sales expense R&D $65 Others 35% savings opportunity Before e-SCM MDC-TQM Group on TQM Plus sharing – April 24, 2001 After e-SCM HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

The Challenge To TQM PLUS Redefine And Reposition Advantage SIX SIGMA Prosper SCM Triggers Adopt Best Practices Parity Survive …. . There comes a time in the history of every company where they have to change dramatically to move to the next level of performance. Miss that moment …. . and they begin to decline. A. Consulting MDC-TQM Group on TQM Plus sharing – April 24, 2001 Do Nothing Decay RIP Fail HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Six Sigma Data Quality In the 80’s, inadequate process quality led to our Six Sigma initiative. In the decade ahead, data and information quality must make the Six Sigma journey. The Challenge of Six Sigma Quality in everything we do in the 21 th Century MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Performance Excellence Stephen’s Process Development Model 6 Sigma & beyond Quality Performance ma Bench rking A ass -cl est-in B Could be A d be Shoul B Class nt B ne C Old standard D me entitle baseli as is C as was MDC-TQM Group on TQM Plus sharing – April 24, 2001 Speed of Execution HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

YOUR ROLE IN TQM PLUS MANAGEMENT is. . Leader Mentor Model Facilitator Motivator Adviser Supporter Obstacle Remover MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Three Kinds of Corporations Need To Change In The Concept of Reengineering 1. Companies in deep trouble. They have no choice. 2. Companies not yet in trouble but have the foresight to see trouble coming. 3. Companies that are in peak condition. No discernable difficulties. Seek to raise the competitive bar even higher. MDC-TQM Group on TQM Plus sharing – April 24, 2001 What is you company’s position ? ? ? HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

What do you think …… ASIA COMPANIES BELONG To 1 MDC-TQM Group on TQM Plus sharing – April 24, 2001 2 3 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

VOICE OF CUSTOMERS …… BEFORE YEAR 2001 Expectations from Suppliers in Total Supply Chains ª ª ª ª ª World-class total supply chain leadership Time compression - continued reduction in total cycle time Perfect supplier in Quality, OTD & Responsiveness Fourth party logistics management World-class flex model of Compaq DJIT to HUB concept Consignment inventory, bill to use One system, two companies Customerized performance metrics - TQRD of HP Schedule sharing & inventory management Third party JIT service Single unit procurement 4 -week lead time support Kitting service Value-added services Consignment warehouse of Motorola Shared inventory MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Motorola’s TQM Plus Process Quality Control (QC) 50‘ Quality Assurance (QA) Total Quality Control (TQC) 60‘ 70‘ Total Quality Service (TQS) 1987 Service Quality Excellence 1997 Customer Advocacy 80‘ Six Sigma Challenge 90‘ Total Service Quality Management (TSQM) Total Quality Management (TQM) Motorola Total Customer Satisfaction Drive 2000 Performance Excellence Challenge To You and Your Plan NOW By Dr. S. W. K. Ng, Qu. ST MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

What It Will Take To Win – example of a global corporation Continuous Improvement in Factory & Planning Automation 10 - 30% Race to Best-In-Class Next Generation Tool Set Integration 20 - 40% Logistics Simplification Compete Lead Time / Responsiveness Simplification & Standardization 50 - 70% OF Release 1 Baseline Factory Execution CRITICAL 4: 1) 2) 3) 4) Materials Requirements Planning Output Scheduling Factory On Time Delivery Rough Cut Capacity Planning Survive Step Number 1: Build a solid foundation • Consistent business practices • Predictable, repeatable processes MDC-TQM Group on TQM Plus sharing – April 24, 2001 • Metric consistent with service focus HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

The TQM Plus strategy……. starts with Service Quality Mindset TOTAL SERVICE QUALITY MANAGEMENT (TSQM ) MODEL TM Le a TCS TQM Plus Communication People Training, Development and Culture ut de r ec sh Ex ip Service Vision, Strategy & Action Systems, Tools, Metrics, Processes and Rules By Dr. Stephen W. K. Ng TCS – Total Customer Satisfaction MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

A STRONG ORGANIZATIONAL CULTURE IS NEEDED TO SUPPORT TQM PLUS Quality & Speed COMBINING THE BEST OF EAST & WEST MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

TM THE QUST EVOLUTION IN MOTOROLA- a 6 sigma culture example Qu. ST Timeline Management D a om D ain 6 System D ain 2 om om Recognition Measurement Education Communication D ain 5 om Aim at delivering more values to customers D ain 3 om Participation D ain 4 om Generic Qu. ST MCTG CPSTG MMTG Executive Qu. ST LATG 8 Domains Strategic Qu. ST 4 Qu. ST 1987 Work Improvement Team (WIT) approach 1995 Qu. ST integrated into Quality Department 1998 -2002: • Customer Loyalty 1995 -1996: • Quarterly 1993 Quality Qu. ST renewed to include &Speed Teamwork & Technology Excellence as enabler 1991 Sharing ‘Total Quality Now’ 1992 -1994: • Year round Workshop • Quarterly Quality &Speed activities Formed Quality and Speed Teams (Qu. ST) Excellence Sharing • Yearly ‘Quality Week’ 1992: • Established ‘Small Win’ Recognition System MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

“MOST WELL RUN AND WELL MANAGED COMPANIES STILL ONLY USE 50% OF THEIR AVAILABLE RESOURCES” Alexander Proudfoot MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

“EIGHTY PERCENTOF THE ABILITY TO GET RESULTS IS BELIEVING THAT THEY ARE THERE TO GET” Alexander Proudfoot MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

PREPARING FOR THE 21 ST CENTURY And Beyond “If a process doesn’t work over a period of time, don’t keep trying to fix it. CHANGE it!” J. Anklesaria MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Effects of Service Programs on Customer Delivery MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

PKKI Balanced Scorecard 2002 Vision Mission Provide enjoyable environment for high quality knowledge transfer between academia and business world Financial • Healthy with surplus • Reliability of performance • Donation continuation • Repayment of debt • Reward & incentive Customer • Be a Premier Institute of Management focusing on consultancy, executive learning and action research • Equip employees and professionals with competencies to achieve higher quality and speed performance Internal Learning & growth • Value for money • Exceed customer expectations • Continuous improvement • Customer loyalty • Effective SCM • Service innovation • Corporate account • System management • New programs • SQ excellence • Superior project management • Empowered professionals MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

SERVICE QUALITY INDEX - INTERNAL CUSTOMERS Warehouse Customer Picking and Inventory Accuracy Performance: Warehouse Customer Picking Performance Inventory Accuracy Performance Accuracy (in %) 100 99. 75 99. 99% . . . 100% . 99. 61% 99. 25 98. 75 98. 25 . 98. 30% 1991 1992 1993 1994 1995 1996 1997 Time Source of Information: Inventory Audit MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

You and me now MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

Elements of transformational leadership • Has a vision & be able to articulate it in concrete terms • Perceived as a change agent • Able to develop rapport with his followers • Able to energize his followers to action to achieve challenging goals • Provides supports to, and act as a coach & teacher to his followers • Exhibits distinctive and consistent behavior (that is consistent with his vision) • Sensitive to & knowledgeable about the ‘environment’ (internal & external) MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

THE TRANSFORMATIONAL LEADERS CONSIDER…. . * Incremental change isn’t enough for many companies today. They don’t need to change what is; they need to create what isn’t * Some people see things as they are and ask why, transformational leaders see things as they never were and ask why not……. MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

A “Wake Up Call” to Business Leaders It’s Time to kill your organization before it kills your business and you !!! MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001

MDC-TQM Group on TQM Plus sharing – April 24, 2001 HKU-PKKI Dr. Stephen W. K. Ng, Qu. ST 2001