Emergency – Case study total quality management

BBA323 TOTAL QUALITY MANAGEMENT Task brief & rubrics

Task

CASE STUDY

Texas Instruments Europe – leadership and commitment to TQ and business excellence

Texas Instruments Incorporated is a global semiconductor company and the world’s leading designer and supplier of digital signal processing and analog technologies, the engines driving the digitalization of electronics. Headquartered in Dallas, Texas, the company’s products and services also include material and controls, education and productivity solutions, and digital imaging. The company has manufacturing or sales operations in more than 25 countries. Texas Instruments Incorporated employs more than 35000 people worldwide and has net revenues in excess of $8bn.

Innovation – a driving force for the growth of the company The ‘chip’ has revolutionized our everyday lives. It has increased what we are able to do, the speed at which we can do it, and has created profound benefits for society.

The integrated circuit was invented at Texas Instruments (TI) in 1958, one of many significant inventions contributing both to the growth of TI and the electronics industry worldwide – an industry destined to grow to $2 trillion by the year 2000. TI’s technological innovations, in addition to the integrated circuit, include the first hand-held calculator, the single chip microcomputer, forward-looking infrared vision systems and the first quantum-effect transistor. These innovations have been the catalyst for the different businesses of TI, their growth, contributions to society and the way we all live, learn, work and play.

Texas instruments – global resources serving European customers

TI began in Europe in Bedford, England, back in 1956, the first US-based company to manufacture semiconductors in Europe. Today TI Europe, a wholly owned subsidiary of TI Incorporated, has responsibility to manage all operations in the European region in 15 different countries and employs more than 2300 people. The semiconductor business accounts for over 90 percent of TI Europe’s revenue and over 90 percent of its people in Europe.

Each of TI’s businesses is organized on a worldwide basis, with regional managers in Europe, Japan and Asia Pacific reporting back to a worldwide manager. The responsibility of the regional organizations is to be close to their customers, understanding their require- ments, cultures and languages. Operations include application, research, design develop- ment, engineering, manufacturing, marketing, sales, order fulfillment and support.

In short, TI’s objective is a ‘transnational’ company, combining global efficiency with the highest degree of regional and national responsiveness. Over more than 35 years, strong local presence has earned TI a reputation as a truly European partner, satisfying the needs of its customers.

The majority of TI products and services provided to its customers in Europe are sold to end equipment manufacturers, who incorporate the products into their own systems for resale. This entails many parallel channels to market for TI’s products, from direct sales to indirect distributors and agents. For example, out of

the 100 000 users of semiconductors, TI Europe serve around 500 customers directly, through market segment dedicated account managers and technical specialists. Other customers are served through independent third party distributors.

The semiconductor industry has over 300 suppliers competing for market share through product innovation, excellence of execution and lowest operating costs. Its customers expect price reductions on an ongoing basis, as they are also operating in fiercely competitive global markets. TI’s objective is to help them produce world class products, enabled by TI technology. This requires very close partner relationships to achieve the benefits of a ‘virtual vertical integration’ between the organizations.

TI Europe is strategically well placed, since it researches, designs and manufactures much of its own raw materials and uses the creativity of engineering innovation to continue to bring application solutions to its customers.

Total quality culture – a cornerstone of TI’s philosophy

During the 1990s it became clear to TI that, while technological innovation was vital to future success, it was insufficient on its own. The company had to find a way to enable its customers to gain access to the innovations and be supported and satisfied in that process. The adoption of total quality was TI’s chosen route to becoming more customer oriented, while retaining technological excellence.

The journey began in the 1980s with the first concepts and has developed over time into the way TI people do business with customers and each other. Total quality has permeated all TI companies, thousands of people having received continuous training, and it has become the TI way of life. The TQ journey took a major step forward in 1993 when the EFQM model was adopted for TI Europe.

Quality is now manifest in everything TI do, from original design to manufacturing and after-sales service. It is based on a rigorous approach comprising teamwork, people involvement and continuous improvement through understanding customer needs and ensuring products and services fully meet them.

To support the program and priorities of its worldwide businesses, each organization developed a total quality facilitation unit (TQ Promotion Center) and quality steering team, as well as training and communication processes to advance the total quality journey. Several of the roadmaps have now been in place for ten years.

More recently, the European dimensions of TI business have strengthened and many core business processes now extend across businesses and country borders. Cross-fertilization, transfer of expertise becoming a ‘learning organization’, and harmonization of the TQC processes have become paramount.

Use of the EFQM business excellence criteria

The approach was refined by adopting a common program of continuous improvement against the EFQM criteria, under the banner of ‘Total Customer Satisfaction Through Business Excellence’. As part of this program, all of TI Europe’s business and support organizations’ self-assessment were to fundamentally transform the company and shape the organization for the future.

TI Europe had performed unsatisfactorily for several years, the European market and its customers had changed fast, and Europe had become more a part of the global market. Customers wanted fewer suppliers, but closer relationships, together with competitive costs for products and services, including advanced technologies that would help them win in the new global market place. For companies to succeed they had to understand these changes and proactively adapt to ever-changing customer needs. The past approach of cost reductions in TI Europe had not been enough to make a real impact and put the company back on the road to growth and sustained profitability. They needed a substantially different approach.

The 12-month assessment using the EFQM criteria showed clearly the radical changes needed in the company’s processes and structure. There was also a need for a tool to drive the efforts towards excellence and competitiveness, a tool that would provide a common language and the ‘glue’ between the diversified businesses. The EFQM methodology was chosen to help completely rethink the structure and execute a major re-engineering plan across the region that included five key tactics:

• Disengage from non-strategic, labor-intensive and uncompetitive manufacturing activities – to be able to invest in strategic, high value adding activities with focus on core competencies.

• Obtain better synergy and rationalization through business organization consolidation into business centres (Figure C3.1).

• Refocus marketing on sustainable, profitable growth and penetration gain. • Operate as one single ‘virtual’ European entity across Europe to the extent allowable by legislation. • Align support and infrastructure functions to the business center needs.

A key element of the new TI Europe was its management structure, entirely based on the EFQM criteria so as to ensure maximum synergy between its component teams, a clear, common focus on TQ business excellence and a common purpose and direction with a clear, shared vision (Figure C3.2). The TI Europe Strategic Leadership Team (ESLT) is comprised of all the business managers and the chairmen of eight quality steering teams (QSTs), each of which is responsible for one or more of the EFQM criteria. The ESLT is led by the European President who is part of the worldwide Strategic Leadership Team.

Adopting the EFQM model has not only changed the way TI Europe are structured and operate – more importantly, it has helped to turn the company around significantly. TI are once more gaining market share, have substantially reduced overhead costs, have reduced the number of business units, created a ‘Virtual Europe Team’, invested $500 m in value- added technology and achieved significant growth and profitability levels that position the company well for a competitive future.

Leadership and the quality policy

TI’s management understanding of the quality approach dates back to 1964, when TI founder Patrick Haggerty publicized the mission statement alongside the TI principles and values (Figure C3.3.). Sometime later, following their awareness training by recognized leaders of the quality movement (Crosby, Juran, Deming) in the late 1970s and early 1980s, and visits to role model companies, TI management recognized the need for a major change to the company’s culture. The technology-driven approaches that apparently served the electronics industry well during its infancy (1960s and early 1970s) needed to be replaced by a customer-led, process-focused culture for the 1980s and 1990s. Such a significant cultural change, while eventually destined to involve everyone in the corporation, needed clear leadership to set the objectives, define the strategies and nurture its initial development and tactics of execution. This resulted in a substantial change of the behavior of managers in inspiring and driving the organization towards total quality.

The measure of success of these leadership efforts is the extent to which TI have managed to develop its culture and achieve the desired level of ‘Business excellence’, a total quality approach to the execution of business strategy.

TI require its managers to lead the total quality process ‘from the front’, since they believe that management by example is the most effective technique for achieving significant cultural change and that strong leadership is pivotal to the pace of improvement.

Texas Instruments has a worldwide quality policy (Figure C3.4) which has been in place since the early 1980s. Quality steering teams (QSTs) throughout the corporation continue to ‘cascade’ the requirements of this policy to all employees. Through the European QST structure (Figure C3.2) higher-level statements are made relevant to staff by creating

individual business and regional vision statements (Figures C3.5 and C3.6). Specific business excellence goals are further deployed through a policy deployment process.

Communication to staff has always been a high priority for TI managers at all levels. More recently this communication has been reviewed through surveys and refined by increasing the focus on total quality culture (TQC) priorities and processes. The main mechanism for communication is via business/department meetings, addressed by senior executives and managers from corporate and group organizations (2 per year), European organizations (4 per year), individual business (4 per year) and departments (4–12 per year). In addition,

ongoing awareness and communications programs are run using posters, newsletters, in- house TQC magazines, badge stickers, pocket reminders, and satellite broadcasts to reaffirm the core messages.

QUESTIONS

1. What are the particular features of implementing TQM/business excellence in a large company in the IT sector? 2. Evaluate the leadership, commitment and policy aspects of the approach used in Texas Instruments. 3. How might the cascading vision statements approach be applied in an organization in the public service sector, such as higher education, health or

armed forces?

PROCEEDINGS

• You have to write a document with the answers and submit it via Moodle. • The document should be between 500 and 1,500 words.

Submission: Week 5 – Via Moodle by Friday 6th, March, before 23:55hrs.

Weight: This task is worth 25% of your overall grade for this subject.

Outcomes: This task assesses the following learning outcomes:

– LO1: Understand the principles of TQM applied to different services – LO2: Discuss the importance of the different dimensions of service quality within different industries – LO3: Assess the different phases of the TQM management process within different industries – LO5: Discuss different TQM designing strategies within different industries

Rubrics

Exceptional 90-100

Good 80-89

Fair 70-79

Marginal fail 60-69

Identification of main

Issues/Problems

25%

Identifies and demonstrates a sophisticated understanding of the main issues / problems in the case study

Identifies and demonstrates an accomplished understanding of most of the issues/problems.

Identifies and demonstrates acceptable understanding of some of the issues/problems in the case study

Does not identify or demonstrate an acceptable understanding of the issues/problems in the case study

Analysis and Evaluation of

Issues / Problems

30%

Presents an insightful and thorough analysis of all identified issues/problems

Presents a thorough analysis of most of the issues identified.

Presents a superficial analysis of some of the identified issues.

Presents an incomplete analysis of the identified issues.

Development of Ideas

and Opinions

20%

Supports diagnosis and opinions with strong arguments and well- documented evidence; presents a balanced and critical view; interpretation is both reasonable and objective.

Supports diagnosis and opinions with limited reasoning and evidence; presents a somewhat one-sided argument; demonstrates little engagement with ideas presented

Little action suggested and/or inappropriate solutions proposed to the issues in the case study.

No action suggested and/or inappropriate solutions proposed to the issues in the case study

Link to Legal Theories and Additional Research

25%

Makes appropriate and powerful connections between identified issues/problems and strategic concepts studied in the course readings and lectures; supplements case study with relevant and thoughtful research and documents all sources of information

Makes appropriate but somewhat vague connections between identified issues/problems and concepts studied in readings and lectures; demonstrates limited command of the analytical tools studied; supplements case study with limited research.

Makes inappropriate or little connection between issues identified and the concepts studied in the readings; supplements case study, if at all, with incomplete research and documentation.

Makes no connection between issues identified and the concepts studied in the readings; supplements case study, if at all, with incomplete research and documentation.

 

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Emergency – Case study total quality management was first posted on March 6, 2020 at 3:24 pm.
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