strategic use of tqm in project management of large...

Proceedings of the Fourth Middle East Conference on Global Business, Economics, Finance and

Social Sciences (ME16Dubai May Conference) ISBN: 978-1-943579-30-3

Dubai-UAE. 13-15 May, 2016. Paper ID: D626

1 www.globalbizresearch.org

Strategic use of TQM in Project Management of Large Projects –

An Indian Experience

R. Jayaraman,

Professor, Operations Management,

SP Jain Institute of Management and Research,

Mumbai, India.

___________________________________________________________________________________

Abstract

Quality of construction projects is achieved through a mix of planning, execution, continuous

improvement - all elements of project management strategy. While methods and instances of

practicing continuous improvement as an integral element of operations / corporate strategy

in manufacturing operations have been documented, the same is not true in the case of

project management. Most approaches are piece-meal and ad-hoc. We have developed a

framework for practicing continuous improvement in a construction project environment in a

strategically integrated manner and present an example of how it was adopted in a large

project.

___________________________________________________________________________

Key Words : project management , TQM , strategy , Cold Rolling Mill Project ( CRMP ) ,

Business Excellence ( BE) , Tata Business Excellence Model ( TBEM ) , Malcolm Baldrige

Model , performance excellence , integrated practice e of TQM





Introduction

Japanese Quality Revolution

The visit of Dr Edwards W Deming to Japan in 1950 was an epoch making event in the

modern movement for continuous improvement. In the 1940’s Dr Deming was active in the

American industry facilitating the use of SPC methods to improve efficiency and quality of

products. When the Japanese invited him to introduce the same processes in their industry he

was more than keen to help them out. He visited many Japanese companies under the aegis of

JUSE and lectured to them on the uses of SPC techniques. Based on the inputs given during

this visit Japanese companies began their journey in quality which continues to this day. This

movement was started primarily on the shop floors of Japanese companies, to improve

product quality, to begin with. Quality Circles and 5 S Circles were started to take forward the

concepts of involvement of shop floor personnel in making quality happen , formation of

improvement groups to tackle problems , use of simple statistical tools ( the Seven QC tools )

to be applied to production machinery and practice kaizens for continuous improvement .

(Artemis and David Garvin 1990).

Following the visit of Dr Deming, Dr Juran visited Japan in 1950, to build on the work

done by Dr Deming. Subsequently many Japanese workers in this area contributed to building

a body of knowledge and practice which have been chronicled in the literature (Imai, 1990;

Logothetis , 2000 and Mohanty and Lakhe, 2002 ) . These efforts which came to be known as

TQM included the following:

1. QC’s ( Quality Circles ) ( see , for example , M.H.Patel et al , 2003 )

2. 5S Circles

3. Policy Deployment (the X matrix or Hoshin Kanri) (Lee and Dale , 1998)

4. Strategy Planning

5. Strategy and Policy deployment

6. QFD (Quality Function Deployment) (see, for example, Sharma, J, 2009 )

7. TPM ( Total Productive Maintenance )

8. 7 QC Tools

9. 7 New QC Tools ( see , for example , Kume , Hitoshi , 2006 and Hosotani ,

Katsuya , 2005)

10. Visual Quality ( see , for example , Michel Greif , 1995 )

11. TPS ( Toyota Production System ) ( see , for example , Liker , 2004 )

12. Kanban ( JIT ) ( Just in Time)

13. Poke Yoke

14. Waste Elimination

Using TQM Japanese companies improved their management practices. They used systematic

daily management to gain market shares through high quality products. This happened

between 1950 and 1980 largely.





The American Response

The threat perception by American companies reached its peak when a film was screened

in 1980, titled “If Japan can, why we can’t? “. The essence of the film was that if American

companies did not respond to the TQM advancement in Japanese companies which had led to

the demise of several leading American companies, then the leadership of American

companies could be adversely affected. While American companies pioneered introduction of

SPC techniques, in introducing many new inventions which later became best-selling

products, increasingly they were beaten in the marketplace in the US by Japanese companies

who used TQM. The following factors were amongst the many that led to this state of affairs:

1. Complacency developed due to the thinking that the quality of Japanese products

was far inferior. This thinking may have been correct in the 1950’s but then the

quality revolution through TQM in Japan was underrated by the Americans. To

the extent that even after the Japanese were capturing market after market form

American and European domination , Americans refused to change their attitude

of “ Not Invented Here “ . (See, for example, Powell, 1995).

2. The dependence of American companies on quantum jumps rather than

continuous, incremental improvement, thereby leading to inefficiencies in the

short term and long term loss of competitiveness.

3. The typically adversarial relationships between workmen and management in

many American companies , as opposed to the co-operative approaches in

Japanese industry through the practice of kaizens , QC’s and 5S circles .

4. High attrition rates in American companies – compared with Japanese companies

where life time employment was the norm - leading to flight of intellectual

capacity, the replenishment of which took time and created short term setbacks.

These and other factors resulted in the development of the Malcolm Baldrige Model for

Business Excellence (MBMBE) in 1987 (see http://www.nist.gov/baldrige/ for a copy of the

latest guidelines). Put together by a group from the NIST (National Institute for Standards and

Testing), a US government body, the criteria for Business Excellence (BE) were devised as a

defence mechanism to regain competitiveness by American companies and beat back the

Japanese. Introduced as the Malcolm Baldrige National Quality Award (MBNQA) this model

was a framework for carrying out BE in all American companies. The idea was to introduce

key concepts like continuous improvement, people involvement in quality activities, co-

operative relationships between management and workmen, developing a highly motivated

workforce through deployment of Statistical Process Control (SPC) and other techniques in

all areas of management (not only the shop floor) to improve productivity and profitability of

enterprises and using tools like six sigma, ISO and TQM to improve competitiveness through

http://www.nist.gov/baldrige/





overall quality improvement. The MBMBE, which was run throughout America through the

MBNQA, was a resounding success, in that it rejuvenated the American Industry to previous

heights, before the Japanese Juggernaut rolled over. (See, for example, Noriaki Kano, 1993)

Use of TQM in organisations

How TQM has come to be used as a systematic tool to improve the operations of

companies is summarised in Table 1:

Name of practice What was done What were the results

Quality Circles,

Improvement Groups,

Small Group Activities, 5

S Circles, Other Team

efforts

Teams of 4 to 15 formed in many functions.

Many teams were cross functional. Some

companies included members from external

stakeholders, mostly from customers and

suppliers. Concepts of QCC’s used to do the

work. Also concepts like Value Engineering ,

Poke Yoke , waste elimination , cost reduction

were utilized to plan and do work . Some

companies which were also into the BE

movement used the Balanced score Cards

method to align and integrate (example, Tata

Steel, Tata Chemicals, Tata Motors). Some used

the Hoshin Kanri technique (example, BHEL)

Development of team work, greater

and more productive involvement

of employees in company work,

deepened understanding of

company’s priorities and work

themes by all employees, a general

awakening of employees to be

values driven. Some of the themes

like agility, corporate governance,

and ethics were being discussed in

many functions amongst employees

in the front line. This has led to

better customer experiences overall.

Systematic strategy

formulation, goals setting,

target setting,

identification of areas for

priority improvement at

the company level,

communicating and

deploying strategy at the

grass roots (connecting the

Top Floor and the “Shop

“Floor )

Teams formed to devise company strategy in a

systematic manner using modern tools and

techniques (example, Blue Ocean strategy,

Scenario Building, Using Vision statements for

strategy design). Tools AQUIP (of Tata Steel)

developed to cascade strategy form the Top

Floor to the Shop Floor. Deployment of the X

Matrix and Hoshin Kanri to identify and

articulate goals and targets.

More detailed strategy formulation,

better monitoring, closer

monitoring through use of ‘AQUIP

“, improved measurability through

use of score cards. Vision and

Mission statements prepared by

many companies gave clarity to

employees. Values identified to

make company employees become

conscious of value driven behavior.

Customer consciousness

developed, satisfaction

and delight measured

regularly, market related

concepts refined and

applied more rigorously

through well-defined and

monitored practices.

Updation of practices

through benchmarking.

Customer satisfaction surveys became a regular

feature. Product development dovetailed to

customer requirements more closely through use

of QFD concepts and Kano Model. Market

segmentation, new products development,

product portfolio design using the Product

Portfolio Matrix type of concept. Use of IT

based applications to track market information

and customer visits discussions. Design of

distributor and dealers incentives schemes based

on a systematic decision making process

marked with the best through benchmarking.

Closer understanding of customer

requirements leading to market

share benefits and customer loyalty.

New products introduction became

a recognized part of product

portfolio strategy.

Table 1: Showing how TQM tools have been used to drive continuous improvements systematically in operation sin

organisations (adopted from R.Jayaraman , 2013 ) ( for a description of AQUIP see B.Muthuraman et al , 2014)





Use of TQM as a strategy tool

While the Japanese pioneered the concept and development of TQM as a toolkit to

superior performance their efforts started flagging in the mid 1980’s. While TQM is a great

set of tools to improve the competitive position of business organisations , the emergence of

six sigma , lean management ( the American way ) and business excellence ( as defined and

exemplified in the Malcolm Baldrige model for performance excellence ) in American

companies became a show-stopper . Led by the likes of Motorola , GE , Honeywell ,

Westinghouse these companies managed to stop the onslaught of Japanese TQM firms

which lost out primarily because TQM was a piece-meal approach and not an organisation

integrating mechanism . While TQM initiatives were helpful in improving performance ,

the emphasis on “ continuous , incremental improvements “ , in the long term , had serious

deficiencies in facing the “ quantum leaps “ by American firms which started using the MB

model .

Application of TQM in companies was characterised by:

1. Individual departments forming teams and practicing continuous improvement by

forming small groups. These were variously called quality circles , small groups , 5 S

circles , value engineering teams , etc

2. These teams made incremental improvements using PDCA principles and the 7 QC

tools and the 7 new QC tools. These continuous improvements resulted in

performance progress in individual departments

3. Goals and targets were set based on departmental requirements

4. The approach was department centric and there was little done by way of connecting

these improvements into a unified whole , although the hoshin kanri technique ,

annual themes /slogans were used in some companies to bring about a strategic

integration

The overall effect was that while individual pockets of excellence were functional the

company as a whole did not benefit in a strategic way. This lacuna became pronounced when

company-wide programs like six sigma, lean, waste reduction were all put together into the

Malcolm Baldrige model and driven by the company’s top management through the balanced

score cards / X matrix / hishin kanri frameworks.

With the advent of “disruptive technologies “ as described by Clayton Christensen (1995),

innovations and the boom in the services sector TQM started losing its sheen .However David

Garvin’s work (1987) breathed new life into quality as a strategic tool to improve competitive

position of companies.





While Dr Deming, who emphasised the SPC (Statistical Process Control) base of TQM,

Dr Juran and Philip Crosby all spoke in favour of a total quality approach

(Artemis and Garvin , 1990) , the revolution which was started in Japan in 1950 was slowly

vending its way to a close in view of the changed scenario engendered by competition which

itself was a result of TQM . The new competition situation called for strategic responses from

companies. It was no truer that if a company performed well it could expect market success.

This success was now being heavily influenced by how well companies could compete using

both TQM and BE. The main architects of the newly emerging industrial picture were:

The Malcolm Baldrige Model for performance excellence ( and many other imitators

of this model ( see , for example , Pankaj Madan 2010 )

The Balanced Score Cards ( Kaplan and Norton , 1992 , 1993)

The primacy of company strategy emerging as the main pillar to drive company

success in the marketplace

Innovations and disruptive technologies which helped companies leapfrog

competition in many cases and opened up new products and technologies

opportunities

The Malcolm Baldrige model was introduced in 1987 and since then companies have used the

framework to design and implement “business excellence “programs. This was in many ways

similar to the TQM programs introduced in companies in the 1950’s, 60’s 70’s and 80’s.

However there were several critical differences as well, as shown in table 2:

Aspect

TQM ( highlights of

progress during the period

1950 – 1985)

Business Excellence ( highlights of progress

during the period 1987 to 2015 )

Competitive

situation

1950 : Very few large ,

global companies to begin

with

Japan had the first mover

advantage

USA companies the

strongest serving mainly

NA and European markets

1985: Many companies in

many parts of the world

doing business. Higher level

of competition. Quality of

goods and services higher.

Costs down. Service

industries beginning to

appear.

1987: Many large companies, some global (Porter’s

five forces theory had just kicked in, CK Prahalad

came up with the core competency theory in 1990

and bottom of the pyramid in 2004). Large range of

products, companies starting to consider

globalization. China had not yet stirred. USA ,

Europe , Japan , Korea and parts of Asia were dotted

with some / many competitive companies

Early stages of MNC’s

2015 : MNC’s and global corporations , large

companies ( with sales of over a billion USD ) many

in number , China in full cry , Japan in recession ,

USA on top , Europe in stages of recession , Asian

companies growing through acquisition to become

global

Quality of

goods and

services

Starting with good in the

USA and parts of Europe

and poor in rest of the world

Good quality in USA, Europe, parts of Asia, Japan,

and Korea. Service sector starting to develop, with

McDonalds, Walmart, Tesco, Takashimaya and





( 1950 ) , the situation

changed to Japan – very

good , Korea – good , US /

Europe – quality challenged

(1985)

similar others. The industrial scenario was starting

the move away from manufacturing to services

(1987)

High quality goods , huge range of products and

services , technologies ubiquitous and multiple

choices , global slowly becoming the norm ,

Popular and

much used

tools

Quality circles , QFD ,

Hoshin Kanri , Poke – yoke

, Lean , Value engineering ,

etc

Six sigma , innovations , Environment issues ,

Balanced score cards , Integrated approaches , Agile

manufacturing , Lean , Six sigma ,

Emerging

global issues

Globalisation , MNC’s ,

service industry growth ,

mass customization , boom

in demand for goods and

services , economic growth

across many parts of the

world

Climate change , Global warming , Use of renewable

energy resources , economic stagflation , turmoil in

specific industries , peaks and troughs of industrial

cycles becoming more pronounced but the mean of

amplitude of the cycle moving up in magnitude

Table 2 : Issues and aspects of the two major industrial eras – the TQM era and the BE era (Source :

author’s research )

Although many companies ( at least the larger ones in the organised sector ) adopted and

embraced the TQM way of doing business , some did not see the benefit of getting engaged

in TQM , as they thought that it was “ just a set of things to do “ and do not have much

relevance for the business as such . (See, for example, Go and Ridgway (1994)). This

negativism about TQM is more pronounced in SME’s and larger companies which are in an

early stage of their development. (For a description of the theory of 4 stages of a company’s

development and growth, see R.Jayaraman, 2013, September). The same is the case with

company’s attitude towards ISO 9000 and other systems standards certifications (with some

honourable exceptions, like ISO 27000).

As explained before, the main architects who developed a new way of doing business

proposed these changes based on certain premises:

1. Malcolm Baldrige was introduced with the specific aim of making American

companies more competitive and face up to the Japanese industrial attack.

2. A holistic approach to re-orient companies was needed to address the complexities

arising from the multiple products , services , markets

3. Due to the increasing industrialization acid rain and other climate related phenomena

were appearing on the horizon and a general clamour was building up to make

industry address these ill effects of unbridled industrialization

4. Environmental degradation was another issue

5. CSR ( Corporate Social Responsibility ) was becoming a serious business





6. Ill effects on climate change were becoming more apparent

7. Corporate governance was another area of concern as societal and governmental

agencies were expressing concern about the “ wealthy getting wealthier and the poor

getting poorer “

8. Increasing globalization

Business complexity had greatly increased as evident from the above points. When the

Baldrige model was introduced it certainly did not include all the above issues but the model

was open to interpretations. Over the course of the next 20 years every one of the above

issues got included and thus a holistic SOP (Standard Operating Procedure) for running

businesses was developed through the efforts of companies from all parts of the globe. Unlike

the TQM movement which was mostly Japan centric, at least for many years beginning 1950,

the MB movement was more severally actioned, with inputs coming in from the USA,

Europe, Asia and other regions. It has now become a truly global phenomenon. The BE

movement, over the years, became an integrated run companies in an “excellent” way, and

TQM became embedded in BE .The paper by Garvin made this inclusion a “must “. Other

similar works also supported this view. PDCA, continuous improvement, achieving and

aspiring for high quality were all a part of the SOP in the TQM era, and they continued into

the Baldrige era as well. TQM became an integral part of a company’s strategy. The details of

how this actually happened and was actioned is not within the scope of this paper.

Developing a framework for using TQM in project management to practice continuous

improvement

While TQM is now an integral part of the strategy of a company it is not embedded yet in

the project management area. Table 3 shows the embedment of TQM in different areas of

management:

Area of company

management How TQM is embedded Actions

Strategic planning Mission , Vision , Values , strategy

description , cascading of strategy to

the entire organization through

Balanced score Cards

Co-creating VMV , strategy map ,

strategy architecture , X matrix , new

techniques in strategy preparation ,

continuous improvement in strategy

preparation using PDCA

Operations

Management

Goals setting , efficiency &

effectiveness metrics , use of tools

like six sigma , value stream

mapping , lean , takt time

Optimisation studies , business

modelling , operations planning using

techniques like AQUIP and BSCV

driven initiaitives , PDCA through

quality circles

Marketing

management

CRM , CSI measurement , Customer

loyalty building , mystery shopping ,

linking CSI to other areas of

management ,Customer Value

Management

Customer polling , questionnaire

administration , use of conjoint and

other analysis , PDCA through

marketing initiatives using team

culture





Financial

management

Debtor management , optimization of

working capital , global sources of

funds , treasury management ,

average cost of capital

Working capital pipeline model ,

inventory management , PDCA

through risk management , group

initiatives , continuous improvement

to reduce capital costs , cost of

operations and budget management

Table 3 : How TQM is embedded in all areas of company management – a sample of actions and

initiatives and PDCA ( Source : author’s research )

Why is TQM not embedded in project management and how to achieve the same?

The main reasons include : project is a one-time activity (except in the case of project

companies or companies which have a project management department which plans and

executes projects in-house) and apparently is not amenable to PDCA , each project is different

and hence repetition of activities is not a regular phenomenon , formation of groups across

areas of project management is not often possible due to lean manning , the temporary nature

of project jobs makes personnel short term oriented especially if the incentive structure

rewards inly current performance . These factors make the embedment of TQM in project

management a non-critical area for corporate management. Hence projects suffer from

considerable delays (for example, the Standish Group report 1995, Dmitry Chulkov et al,

2005, Jake Widman, 2009).

Many studies which have been done to identify the reasons for such delays list several

causes, but do not examine whether the project was managed using TQM or BE techniques.

All these studies use the questionnaire technique to get responses from industry practitioners,

however the questionnaires do not include some basic inquiries on the systematic practices

followed to make the project a success. Examples of such studies are plentiful - Abd El-Razek

et al ,2008 ; Abdelhak Challal and Mohamed Tkiouat , 2012 ; Aibinu and Jagboro 2002 ;

Arshi Shakeel Faridi and Sameh Monir El Sageh , 2006 ; Daniel W M Chan and Mohan M

Kumaraswamy , 1997 ; Mohamed M Marzous and Tarek I . El – Rasas , 2013 ; Mohammed

Ruqaishi and Hamdi A. Bashir , 2015 ; Odeyinka , Henry and Ade Yusif , 1997. None of

these indicate that construction projects use either TQM or BE methods to improve

performance or achieve project success. While we have cited the possible reasons why TQM

or BE do not usually form a part of project management there are instances which clearly and

unambiguously demonstrate that the application of TQM and BE (using TQM in a strategic

way) has enabled achievement of superior results in project management.

Using TQM and BE techniques in a strategic framework, as strategic tools, in

construction projects management

The CRMP of Tata Steel, Jamshedpur, India was taken up as an initiative to reinvent the

process of project management in the company. The top management decided to do a BPR





exercise to completely revamp and reinvent the project management processes in the

company to address the several developments that had taken place in this field of

management practice. While the company had a large engineering department to design and

implement in-house projects, whose cost could range from 10 million USD to 600 million

USD and more (the CRMP cost the company about 400 million USD), the company wanted

to update and improve the efficiency of the processes in this archaic department which had

been in existence since the early 1930’s. The main impetus came from the TBEM thrust that

the company was giving across the organisation to become world class. Project management

and engineering were also included in the ambit of TBEM which was a bold and courageous

decision.

In table 4 is shown how the BE framework of TBEM was deployed using the principles of

Dr Deming – this was the convergence of BE and TQM. The company already had a rich

tradition of practicing several TQM initiatives and had achieved great success in cost

reduction as shown in Figure 1, 2 and 3:

Dr Deming’s principles Relevant

Baldrige core

values

How practiced in the

CRMP

Benefits to the project

Create constancy of purpose Visionary

leadership

Declared a co-created

vision statement

Aligned all project managers.

The purpose statement -

Adopt the new philosophy.

Leadership for change.

Organisational

and personal

learning , focus

on the future

Transform the project

management function

in the company , do a

BPR through the

CRMP

Set up a new projects and

engineering department, closed

down the old one

progressively.

Cease dependence on

inspection to achieve quality.

Management by

fact , focus on

results and

creating value

Adopted new method

as per guidance from

TBEM

Provided pro-active

suggestions to all contractors

and project personnel to build-

in quality rather than inspect

quality. Used ISO 9000 ( the

CRMP was separately certified

for ISO 9000 )

End the practice of awarding

business on the basis of price

tag. Instead, minimise total

cost.

Customer driven

excellence ,

agility

Contracts were

awarded based on a

techno-economic –

commercial basis,

based on merits.

A new cost estimation ,

allocation , progressive control

method was innovated (

R.Jayaraman , accepted for

publication , 2014 )

Improve constantly and

forever the system of

production and service, to

improve quality and

productivity, and thus

constantly decrease costs.

Organisational

and personal

learning

Used TBEM and TQM

methods , like use of

latest techniques in

project management

adopted through

benchmarking from

world class companies

The project was completed in a

lowest ever cost (at that time)

for a facility of the type

installed. It was accepted as a

world record.

Institute training on the job.

Institute a vigorous program

of education and

self-improvement.

Organisational

and personal

learning , Valuing

employees and

partners

Training was provided

as per the AQUIP (

Annual Quality

improvement Plan ) for

the CRMP

Training areas included PM,

quality, construction. Training

was provided in India and

abroad

Institutionalise leadership Visionary

leadership ,

The project was run on

a decentralized basis

See B.Muturaman et al , 2001

and B.Muthuraman et al , 2014





Organisational

and personal

learning , systems

perspective

with each PM put in

charge of one or more

ell defined “package”

Break down barriers between

departments. Put everybody in

the company to work to

accomplish the ransformation.

The transformation is

everybody's job.

Systems

perspective

The entire project team

was seated in an open

office. Integrated PM

using a PRIMAVERA

software

See R.Jayaraman , 2014 for

further details

Table 4: Dr Deming’s principles as given by Dr Kosaku Yoshida (the first assistant to Dr Deming) in a

presentation to the top management in Tata Steel in 2001 , Jamshedpur . (source : authors research )

52101

137

247

295

497

740

0

100

200

300

400

500

600

700

800

Rs

in

Cro

re

s

95-96 96-97 97-98 98-99 99-00 00-01 2001-02

Savings through CIPs(Savings excludes TOP)

Increase Over

last year

by 49%

Figure 1: Cost savings due to TQM initiatives – CIP’s (Continuous Improvement

Projects) done by groups within the company. TOP refers to the Total Operating

Performance, which was another program to obtain large scale cost reduction under

the TBEM umbrella (In 2015 1 Million USD = INR 6.6 crores) (source: company

documents)





Figure 2 : Cost savings classified into new and recurring – one of the key metrics of TBEM

efforts – achieved due to TBEM practices in the company (source : company documents )

Figure 3: Savings in cost as a percentage of sales revenue , showing the impact of the

benefits of running TQM as a strategic tool under the TBEM framework , Tata Steel ,

India operations ( source : company documents )





Details of the construction , project planning , monitoring , control , cost control etc of the

CRMP are available in other published works (B Muthuraman et al , 2000 ; B Muthuraman ,

et al 2000 ; B Muthuraman , et al , 2000 ; R Jayaraman wet al , 2000 ; R. Jayaraman , et al ,

1999 ; R.P.Singh et al , 2001 ) . In this work we include the details which illustrate the

systematic practice of using TQM tools under the TBEM to make the CRMP a world class

project.

The key difference in using TQM in manufacturing and using TQM as a strategic tool

under TBEM in a manufacturing set-up are shown in Figures 4 and 5:

R & D Prodn Maint

Quality Inspection PPC

Inspection Packing Stores

Figure 4: Using TQM as a continuous improvement

tool. The rings show PDCA.





The WBS of the project management practiced in CRMP is shown in figure 6 and the

integration of TQM into the project management of CRMP through BE is shown in figure 7:

Project approval

phase

Project planning and readying for

execution phase

Project

execution hase

Daily

Management

Project idea

initiation

Select and appoint

project "owner” (for

internal projects).

Else the customer is

the client.

Pre-bid meetings

with suppliers

Land levelling ,

preparation

Update the

project

network

Figure 5: Using TQM as a strategic tool in the overall strategy of an organisation. The rings and the arrows

bounded framework show PDCA loops. (source: author’s research )

Motivate

Employees

Empower Teams

Set

Direction

Learn &

Improve Plan

Perform

to Plan ( Do) Check Results

Continuously Improve

Support





In principle

approval to

examine feasibility

Chief project

manager (CPM )

appointed

Award contracts and

appoint suppliers

and contractors

Construction -

civil , structural

Communicate

with all

package

managers

Commit funds Finalise project

network , WBS

Finalise the project

budget , allocation

of costs for

individual packages

Mechanical ,

electrical

Hold meetings

with the

package

managers

Appoint consultant Finalise the project

packages

Receive

equipment ,

install

Hold meetings

with suppliers

Prepare Detailed

Feasibility Report

(DFR)

Finalise the project

organisation

Test and

commission

Hold meetings

with

customers

Board approval for

the DFR

Obtain concurrence

of the project owner

Handover to

owner / customer

Hold meetings

with senior

management

Sanction of funds

by the Board

Appoint Package

Managers

Update

milestones

Discuss and obtain

views of all

package managers

on the project

details

Appoint an

independent project

cost control and

schedule

monitoring cell ,

reporting to the

CPM

Figure 6 : The work breakdown structure for the project management of CRMP





Top

Management

Project Strategy

Project

Reporting

Figure 7: An integrated TQM practice with strategic alignment and synergy in CRMP





In terms of practicing TQM in a strategic way, integrated into the overall strategy of the

CRMP, the project management activities were designed and executed based on a design as

suggested by the TBEM framework. This is shown in Figure 8:

TBEM ( Baldrige ) Category How applied in the PM of CRMP

Leadership VMV declared , package managers appointed

Strategy CRMP strategy was described through a balanced score

card

Customer focus Extensive discussions with potential customers , using

QFD type of inputs , discussions with world renowned

suppliers , collaborator Nippon Steel , internal customer

concept used to ensure that package managers do what is

needed by their customers

Information Management PRIMAVERA software used as the central control tool,

using a WBS for the project which contained as many as

12,000 activities. Centralised MIS , the PMC ( project

Management and Cost Control ) Group was the central

information clearing and disseminating agency , which

worked in close co-ordination with all package managers

, using best practices adopted from world leaders like

Fluor Daniel , Afcons , Larsen and Toubro

HR practices Used best practices based on TBEM work done in Tata

Steel , new conspts based on best practices form other

well-known Baldrige winners ( these efforts are described

in a separate work which is to be published shortly )

Processes and continuous improvement ISO 9000 certification obtained for CRMP. Process grid

used to define and describe all processes based on best

practices obtained from Baldrige winners ( published

information ) as well as given by Baldrige consultants

invited form the USA

Results orientation Was declared by project management community as a

world class project , in terms of cost , time to completion

and many other areas , which became new benchmarks

in project management

Figure 8 : TQM strategic embedment based on TBEM guidelines

Based on the benchmarked best practices, world class project management techniques,

embedment of TQM as a strategic tool, and working under the overall umbrella of TBEM

world class results were achieved as shown in figures 9, 10 and 11:

Achieved highest rate of concrete pouring of 15,000 cum per month, a record

for Tata Steel.

Achieved highest rate of structural fabrication of 2,255 tonnes/month in the

month of Aug’98, a record for Tata Steel.

Achieved the highest rate of structural erection of 2,475 tons / month, a record

for Tata Steel.

Completed 130,000 cum of concreting in 12 months, a record for Tata Steel.

Achieved 14,160 tonnes for structural fabrication in 12 months, a record for

Tata Steel.

Achieved 13,170 tonnes of structural erection in 12 months, a record for Tata

Steel.

Placed orders for a Continuous, Coupled Pickling Line + Tandem Cold Mill at

the lowest cost, a world record.

Received shipment of first mill housing from Hitachi within 12 months of

placement of order, a world record.

Commissioning of roll grinder done in 14 months, a world record.

Obtained EPCG licence within 2 ½ months, a record for such type of activity.

Threading of first strip in the Pickling Line done in 24 hours, a world record.

Completed commissioning of the Coupled Pickling Line + Tandem Cold Mill in

26 ½ months, a world record.





Item of project management Remarks

Discrete turnkey method of project

execution

Helped in achievement of world class results due to – role

clarity , superior contracting , appropriate utilisation of

expertise , meticulous planning

Repeated negotiations before placement

of order

Negotiations were held a record number of times , and

order was placed only after the bid value of the package

was brought under the budget provided for the package

Target package cost A new practice started by the CRMP, which enabled to

identify a target cost for each item of the project. If orders

are placed below these values , the cost of the project

would come within the budget

Liquidity damages clause in the contract The contract included only the LD clause, no bonus. Since

the target was world best , a bonus clause was felt to be

superfluous ( however , in the end , the world’s best target

was bettered , but without payment of any bonus )

Shipping and clearing of FOB items MOU signed with TKM. Another ‘first ‘for the CRMP.

Goods from Japan reached the site within 32 days of

leaving the foreign port, a record low time. Freight costs

were also a record low. ( TKM – Tata Korf maritime , a

shipping subsidiary of Tata Steel )

EPCG licence for TCM items An EPCG licence was procured in a record time of 2 ½

months. This reduced the cost of the project by some Rs 45

crores. Another ‘ first ‘ for CRMP ( EPCG - a type of

0.00

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MONTHS

TATA STEEL COLD ROLLING MILL PROJECT AT JAMSHEDPUR

PROGRESS - PROJECT (OVERALL)

Plan % Achievement % Cum. Plan % Cum. Achievement %

Figure 10: Showing the close fit of the plan vs actual performance of the CRM project of Tata Steel

(adopted from R.Jayaraman et al ,( 2001)





import licence)

Supply of first mill housing Done by Hitachi within 11 months of LOI, a world record (

LOI – letter of intent )

Erection of EOT crane in pickling bay Done in 7 months from the order date by TGS. A record for

TGS. ( Tata Growth Shop )

Erection completed by October , 1999 Work completed two months ahead of schedule

Start testing of equipment in November,

1999

Done two months ahead of schedule

Dry run of all mill stand motors Done in February , 2000 , 2 months ahead of schedule

Threading of coil through the pickling

line on 5 th April , 2000

Done 1 ½ months ahead of schedule , a world record

Pull coil through the pickling line Done in 24 hours , a world record for such activity

Run first coil through the PL/TCM (

Pickling Line / Tandem Cold Rolling

Mill )

Done on 15 th April , 2000 , 1 ½ months ahead of schedule

, a world record

Level III automation installed and first

coil run with Level III

A first for Tata Steel

Figure 11 : World class results achieved by using TQM as a strategic tool integrated into the project

management of CRMP using TBEM framework ( source : company documents )

An Approach to Develop the Framework Further

The culmination of the work done in the CRMP was reflected in the score of the first

TBEM application filed for assessment by a team of Baldrige assessors , who gave a score of

500 on 1000 , which is considered a very high performance . The score indicates that the

CRMP was managed in a manner leading to superior results, continuously improving through

processes used to gather, disseminate and do CAPA (corrective and preventive actions). The

methodology followed in the CRMP has been applied in Tata Steel projects in Jamshedpur

which yielded further world class results (for example , D blast furnace revamp , which was

done in a world class time of 107 days) . However there is a lot of scope to adopt and improve

TQM practices in project management , The way to go forward is to adopt the Baldrige ( or

equivalent frameworks like EFQM) for the overall project management and use TQM

techniques (like benchmarking , best practices , PDCA) within the several work spheres as

shown in figure 6 . Configurations like those shown in figures 7 and 8 will have to be worked

out to suit the project needs and deployed. These efforts can be taken up by EPC companies

and large companies with in-house project management / engineering departments using the

thoughts distilled by academic researchers and practitioners.





Conclusions

Using TQM in every department of companies was an outcome of the Japanese quality

revolution kicked off by Dr Demings visit toi Japan in 1950. Using a stratgegic framework to

run organisations using the PDCA philosophy was developed through the Malcolm Baldrige

beginning 1987. Using the TQM techniques in a strategic way in project management is still

evolving. A significant contribution to this effort is the CRMP at Tata Steel, India. The usage

of TQM and Baldrige will surely make project management an efficient and people oriented

endeavour where excellence can be practiced with world class results.

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