Case Study-final.pdf

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Corporate restructuring through quality Initiatives: Case Study on inefficient delivery of ERP in Handicraft manufacturing Industry Fatima Zehra1, Kritika Kataria2, Mahuri Kesharwani3, Poorva Nagi4 1

Department of Civil Engineering, Women Institute of Technology, Dehradun, 2Department of Computer Science & Engineering, APJ Abdul Kalam Technical University, 3 Department of Computer Science & Engineering, Nagpur University, 4Department of Textile Technology, Manikya Lal Verma Textile & Engineering College, Bhilwara

Abstract: Quality refers to the different workmanship of various activities. Quality is critical to satisfying your customers and retaining their loyalty so they continue to buy from you in the future. The quality costs is associated with avoiding, finding, making and repairing defects and errors – assuming all defects and errors are detected. TQM refers to a management process and set of disciplines that are coordinated to ensure that the organization consistently meets and exceeds customer requirements. The costs associated with avoiding, finding, making and repairing defects and errors – assuming all defects and errors are detected. Total quality and TQM are much more than a number of critical factors, these also includes others components such as tools for quality improvement. In this paper, we carry out an empirical study in order to verify the importance of these tools for quality improvement and their effect upon TQM and Cost of Quality result, in Skat Infotech Pvt Ltd. and Design Co. For this purpose we provided the quality tool solution for the issue mention in the case study. Keywords IT industry, TQM, Quality Tools, Framework,

Introduction Quality is "The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs". Quality refers to the different workmanship of various activities. Consequently, each business or activity has a different definition of quality, for example in sales the term quality is more focused on the services which are provided to the customer, while in manufacture, the term quality is more focused on the production process, and in Apparel Manufacturing, quality refers to both of services provided and output products.

Companies actually compete on three major issues; Quality, Price and Delivery. If the choice is to compete in the marketplace on the basis of product or service price, then the level of competition is clearly defined; the low-cost provider wins. However, companies choosing the low cost approach may find themselves losing premium business to competitors while retaining the lowmargin business in the long term. Importance of Quality

TQM engages all divisions, departments and levels of the organization. TQM companies are focused on the systematic management of data in all processes and practices to eliminate waste and pursue continuous improvement. (Isaac, 2010)

Quality Costs are associated with creation of quality, evaluation of conformance with quality, and consequences of failure to meet requirements both within the factory and in the hands of customers.

The goal is to deliver the highest value for the customer at the lowest cost while achieving sustained profit and economic stability for the company.

Meaning of Quality and Quality Costs

Quality management principles provide understanding of and guidance on the application of quality management. By applying quality management principles, organizations will produce benefits for customers, owners, employees, suppliers and society as a whole. 27/11/2018

Companies should measure and report cost of maintaining high product quality in order to achieve desired quality at an optimum cost level. Before examining the kind of costs of achieving and maintaining high product quality, meaning of quality will be explained in the next sections. Cost of quality is a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor

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quality, that appraise the quality of the organization’s products or services, and that result from internal and external failures. Having such information allows an organization to determine the potential savings to be gained by implementing process improvements. Internal failure costs Internal failure costs are incurred to remedy defects discovered before the product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to the customer. They could include: Waste performance of unnecessary work or holding of stock as a result of error, poor organization or communication. 2. Scrap defective product or material that cannot be repaired, used or sold 3. Rework or rectification: correction of defective material or error. 4. Failure analysis: activity required to establish the causes of internal product or service failure. 1.

External failure costs External failure costs are incurred to remedy defects discovered by customers. These costs occur when products or services that fail to reach design quality standards are not detected until after transfer to the customer. They could include: Repair and servicing: of both returned products and those in the field. 2. Warranty claims: failed products that are replaced or services that are re-performed under a guarantee 3. Complaints: all works and cost associated with handling and servicing customer complaints. 4. Returns: handling and investigation of rejected or recalled products, including transport cost.

Fig.1 Cost of Quality

Total Quality Management Tool TQM tools are technical means used to work in the quality programs, and often include diagrams, statistical graphs, also, used to improve processes or develop products in any organization by identifying, analyzing and evaluating data that is relevant to their business. (Chan, 2003) Therefore, by using the tools and techniques, one can investigate problems, identify solutions and implement them in work practices, by measuring and analyzing the outcome. The seven quality control tools described by Ishikawa are usually perceived as too simplistic and not appropriate. (3) In a study conducted by Scheuermann L. The tools classified as Qualitative tools include flow charts, cause-and-effect diagrams, multi-voting, affinity diagram, process action teams, brainstorming, election grids, and task list, whereas Quantitative tools include Shewaryt cycle (PDCA), Pareto charts, control chart, histogram, run chart, and sampling.

1.

(Duffy, 2013)

A technique has a wider application, often resulting in the need for more thought, skill and training to be used effectively, such as SPC, benchmarking, quality function deployment. 1. 2. 3. 4. 5. 6. 7. 8. 9.

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The most popular sets of TQM tools are as belowPareto Principle: Identifying the key problems Control Charts: Variation Control Cause and Effects, Fishbone, Ishikawa Diagram Histogram or Bar Graph Traffic Light System 5S Quality Function Deployment Failure Mode & Effect Analysis.

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Company 1: Skat InfoTech Pvt. Ltd. D-92 Second Floor, A-Block, Sector-63 Noida. Noida based IT company that provides software solutions for majorly manufacturing industry. It provides solution for e-commerce websites and internet security systems also. Key people: Shahrukh Khan: Marketing Head Nana Patekar: Sr. Programmer Sunil Shetty: Jr. Programmer

Company 2: Design co. Village Lakri Fazalpur, Industrial Estate Delhi Road, Moradabad, Uttar Pradesh Muradabad based company that manufactures brass items like lamps, tables, mirrors, candle holders etc. Key people: Amitabh Bachchan: Founder Amir Khan: HR Head Shakti Kapoor: Store Manager

Background: In 2007, Skat InfoTech Pvt. Ltd. founded by Mr. Amitabh Bachchan was one of the most booming software solution providers in Delhi, NCR. They had developed their own ERP software for Garment Manufacturing Industry namely, “Exporter’s Delight”. They built their software in three years under the company Parasrampuria Synthetics Ltd. where they developed the entire ERP containing nineteen modules which were as follows: 1. 2. 3. 4. 5. 6. 7.

Master Module Sampling Module Order Management Production Planning and Control Documentation module Purchase Module Inventory control Module

8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Production Module Job Work module Quality Management module Dispatch module Store Module Shipment Module Accounts Module Attendance Module HR and Payroll Module Admin Module Machinery Module Maintenance Module

Within two years, Skat InfoTech had installed this software in more than seven companies. During their marketing campaigns; they came across this handicraft manufacturing company Design co.; who asked for a demo of the software. When the request was received, Shahrukh Khan; the marketing head and Nana Patekar; the Sr. programmer took up the lead to go for the demo. They met Amir Khan; the HR head of Design co. and gave a successful demo. Post this meeting, Nana Patekar wasn’t sure that the software can be deployed within a period of six months but Shahrukh Khan was adamant that if they extend the time period more than six months, they might just lose out on the order. So, a lot of discussions and meetings were held; and finally the order was finalized. PO was passed and a commitment was given by Skat InfoTech that the installation process shall be completed within eight months from the date of release of PO. Soon after the PO was passed, responsibilities were distributed and the project was shouldered upon Nana Patekar and his junior Sunil Shetty. As they started implementing; the reaction of workers and middle level staff was highly shocking. Shakti Kapoor, the store manager was very much against of this implementation and got the other staff to be really incorporative. Shakti Kapoor started spreading that this system will take away jobs and a lot of people will be fired from the company. As they started customizing the software as per the requirements being received, it was realized that the software cannot be deployed in the committed period of time. The requirements also concluded that the platform which Design Co. was using was entirely different from that of the one on which Exporter’s Delight could run. It took almost two and a half years from the date of PO, and the installation was finally completed. The

CAUTION: The research is based on a real life scenario while, the characters have been taken hypothetically in order to hide the identity.

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software was deployed and it was observed that the software could not perform efficiently during the run time. Looking at the time being invested and the cost being applied on the project; Rajesh Khanna; the CEO of Design Co. decided to withdraw from the project and soon after this, the collaboration was withdrawn from and AMC was taken back.

Problems: 1. Primarily the software was implemented for Garment Manufacturing Industry; so all the formulae that were applied in the implementation were according to Garment Industry only. The major reason why the installation took so much time was because there was a lot of implementation and high level of customization required. 2. While taking the decision that ERP software will be installed in Design Co.; the workers were not informed and a proper awareness was not created amongst the workers so as to give a confidence that it is for the best. 3. The platform on which Design Co. was running was not taken into account while accepting the order.

3. Since Exporter’s Delight was developed for the Garment Manufacturing Industry, and particularly a mass producing industry, therefore standards were more or less fixed. While, Design Co. was not a mass producing firm. They worked on batch production and therefore, they had variability in their products and production methodology. Due to this variation, Design Co. did not have a very high end platform to run their system. Whereas, Exporter’s Delight needed high end platforms and bigger servers to run the software. This led to lagging on running the software on Design Co. servers; thereby decreasing the efficiency and increasing the run time. 4. Skat InfoTech followed a particular lifecycle for software development. They used the “Waterfall” model for their implementation.

Analysis of Alternatives: 1. Right after the first meeting, when Nana Patekar analyzed that the customization will take time, Shahrukh Khan should have prioritized the correct delivery of the project rather than just accepting the order for that time. Due to the wrong decision made at that moment, the customization was done on a very fast pace which led to a higher cost of quality. The implementation could not be done as per the expected output. 2. When the management of Design Co. decided to implement ERP in their organization, they should have first interacted with the staff and spread awareness about how the software will not just benefit the firm but also benefit them. Due to the lack of communication, there were a lot of interventions and therefore, adequate amount of requirements were not received. Due to the incomplete access of requirements, the software was not as effective as its cost.

Fig 2: Software Development Lifecycle-Waterfall Model

The waterfall model is very rigid and movement from one phase to another is highly restricted. Therefore, the testing phase where quality can be assured in done only after the entire implementation is done. This methodology does not permit the process to backtrack and correct the mistakes made in the previous phases. Due to this rigidity, neither can the quality checks be performed to assure the fitness for use in the primary stage nor can it go back to re-correct. This model was successful when they were installing Exporter’s Delight in the Garment Manufacturing Industries only because the requirements were more or less similar and majorly fixed. While, switching over to a different industry, the software development

CAUTION: The research is based on a real life scenario while, the characters have been taken hypothetically in order to hide the identity.

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lifecycle should have been modified such that each phase is accessible from any other phase. 5. Considering that Skat InfoTech is an IT company, they should have not just focused on the implementation part but quality checks should have been performed on a priority basis. They should have used quality tools like six sigma. Given adequate data, six sigma would have helped in increasing the capability and quality and reducing the defects. 6. Use of fishbone diagram is suggested. Fish Bone diagram: It is a tool for discovering all the possible causes for a particular People

effect.Helps to think through causes of a problem thoroughly. Their major benefit is that they push you to consider all possible causes of the problem, rather than just the ones that are most obvious. The approach combines brainstorming with use of a type of concept map.The major purpose of this diagram is to act as a first step in problem solving by creating a list of possible causes. This tool helps workers spend time on concentrating on the causes of problems rather than focusing on improving the indications of problems.

Environment

communication

Different Setup

Lack of knowledge

Lack of awareness Modular Difference Rebellious worker

lack of mutual understanding

Different product

Dissatisfied workers

Different product lifecycle

Inefficient Platform Different server

Complex Customisation

Delivery

Time consuming

Obsolete language

Not Reliable

Wider Database

System

Automated

Different approach

Implementation

Procedure

Fig. 3 Fish Bone Diagram for inefficient delivery

Conclusion 1.

A basic understanding of different quality tools which can be applied based on the different outcome or solution that we want in order to improve the quality which in turn will increase the profitability of the organization.

2.

Here we studied the case study and understood that it is important to focus on the quality parameter because it will affect the profitability, and different cost associated with quality. It is very essential to focus on quality and quality tools that we are using is appropriate and will provide the desired outputs.

CAUTION: The research is based on a real life scenario while, the characters have been taken hypothetically in order to hide the identity.

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4.

5.

6.

While making a decision and you encounter with dilemma’s that may affect the quality of the work or the product, proper measures should be taken to reduce the defects, faults, error and rework. An organization should have policy for quality to maintain the level of service they are providing and the best quality practices should be maintained. In the above case, the Marketing head should not have taken an impulsive decision of providing the shorter time period for deploying the software even though he knew that there’s a lot of customization required for the desired project, which he did not tell honestly to the client. He should have thought of the quality first before delivery his commitment, as the software was not deployed on time and did not worked well. They performed the testing on a certain stage which is defined in the software development life cycle that they used to develop the software which do not allow backtracking and entry from one phase to another is restricted; is not a best practice as the quality should be maintained throughout the development cycle

and should start from initial stage of development. 7. They focused only on deploying the software as per the SDLC but Various methodology and tools could have been used to maintain the quality of the software. 8. Quality is conformance to the requirement and fitness for use. 9. There are seven classical statistical quality tools, namely, cause and effect diagram, checksheets, control charts, histograms, pareto chart, scatter diagram and stratification. 10. The costs associated with avoiding, finding, making and repairing defects and errors assuming all defects and errors are detected. 11. The total amount of money an organization spends to prevent poor quality and to ensure that the quality requirements are met, plus any costs incurred by the organization as a result of poor quality being produced. 12. Total Quality Management it the way of managing organization to achieve excellence , degree of excellence, Management – art, act or way of organizing, controlling, planning, directing to achieve certain goals.

References 1. 2.

3.

4. 5.

BS4778. (1987). "Quality Vocabulary" (Vol. 1). London: British Standards Institution. Chan, F. T. (2003). Performance measurement in a supply chain. The international journal of advanced manufacturing technology, 21(7), 534-548. Designco, Designco Global. Get in Touch with Us. Designco. from http://www.designcoindia.com/about-us/contact-us/index.php Grace L. Duffy. (2013). Cost of Quality. ASQ Quality Press, pages 62–65. Nicoleta Isac, “PRINCIPLES OF TQM IN AUTOMOTIVE INDUSTRY”, Romanian

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Economic and Business Review, Vol. 5, No. 4 pp187. Parasrampuria Synthetic Ltd. Official Website https://www.justdial.com/Alwar/Parasrampuria -Synthetics-Ltd/9999P1494-1494090924171340-H2D8DC_BZDET Syduzzaman1, Md., Biswas, S., Yeasmin, D. (2016). Developing a Framework for Implementing Total Quality Management in the Apparel Industry: Case Study on a Bangladeshi Apparel Manufacturing Factory. International Journal of Textile Science , 5(5): 87-95 DOI: 10.5923/j.textile.20160505.01

CAUTION: The research is based on a real life scenario while, the characters have been taken hypothetically in order to hide the identity.

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Questions: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Do you think that the software was not as qualitative as expected because of the miscommunication between the marketing head and the Sr. programmer? Do you think that Marketing Head had taken an impulsive decision to commit the deployment time of software within such a short period? Do you think that the HR head bought the software on the basis of the demo provided and did not take in account the number of modules that were present in the ERP? Was it worth extending the deployment time to two and a half years for implementing the software which was supposed to be completed within eight months? Why do you think the Store Manager got so rebellious when the implementation started? Do you think enough quality checks were performed that the company could not foresee the inefficiency in running the system even after two and a half years of implementation? Do you think that holding on to the implementation for two years was bared upon because there was personal relationship between the companies rather than just a professional relationship? Do you think Skat InfoTech should have increased the number of programmers when they saw that implementation was taking too much time? Do you think that Skat InfoTech majorly focused on their software development lifecycle but somewhere forgot to emphasize on the quality tools? What stage from the Quality Maturity Grid does this case study reveal about Skat InfoTech’s product development procedure? What other quality tools could be applied for a successful deployment of the ERP? What do you think were the internal and external failure costs? What were the main reasons that the software did not perform well at time of run time when it was working in the demonstration time. Here they have used quality tools like flowcharts and check sheets, and we have suggested fishbone cause and effect diagram to identify the different causes of problem, do you think any other quality tool can be applied which will be best suited for the better quality of work.

CAUTION: The research is based on a real life scenario while, the characters have been taken hypothetically in order to hide the identity.