Case Study Q:What change in organizational structure accompanied the move to tea

Question

Case Study

Q:What change in organizational structure accompanied the move to teams? Please explain.

TQM and Teams at TIM

Alan B. Cheney, Henry P. Sims, Jr., Charles C. Manz

One innovative plant in Malaysia shows how work teams and total quality management can coexist with excellent results.

At a place most North Americans can't locate on a world map, on the other side of the world from us, just north of the equator, lies Kuala Lumpur, a bustling city of 1.2 million people. In the city streets one can hear a variety of languages, the most common being Chinese, Tamil, Bahasa Malay, and English. Many people in Kuala Lumpur speak very good English. The city is the setting for a story about a company that has evolved over the years from a traditional management structure to TQM (total quality management) to self-managed work teams. It's a story of how teams and TQM can be used together to conduct business without bosses.

Kuala Lumpur, called K.L. by the locals, is quite modern. In fact, much of its charm lies in the mix of old and new. It is the capital of Malaysia, the peninsular nation stretching between Thailand and Singapore and extending onto parts of the island of Borneo. The climate is hot and humid throughout the year, with the temperature never varying more than 20 degrees. Most people probably don't own a sweater, but everyone owns an umbrella: It rains about 100 inches a year.

Like the rest of the country, K.L. is officially a Muslim city -- a fact that surprises many Westerners, who forget that Islam also took hold outside the Middle East and North Africa. The architecturally modern Masjid Negara, the national mosque; the Tabung Haji Building, the tallest in K.L., near embassy row; and the graceful Moorish arches and minarets of the railway station and railway administration headquarters attest to an Islamic heritage. One of the most beautiful mosques in the world is in the suburb of Shah Alam, which presents a spectacular welcoming site as one flies into Subang International Airport. If these are not enough, one may be reminded each day at sunrise, when one is likely to be awakened by the call to prayer of the muezzin, broadcast over loudspeakers in downtown K.L. The city is also home to the large and ornate Sri Mahamariaman Hindu Temple, numerous brightly colored Chinese Taoist temples, and an International Buddhist Pagoda. This tolerance -- even nurturing -- of other religions and cultures is one of the most striking things about Malaysia and its neighbor Singapore (see Figure 1).

Kuala Lumpur has another marvel, one that is not on many tourist itineraries, but one that many people, including the authors, have flown as many as 23 hours by jet to see. The semiconductor plant of Texas Instruments Malaysia Sdn. Bhd. (meaning "private, limited") is located in the business park called Ampang/Ulu Klang, near the zoo. It is one of the best examples in the world of the planned integration of self-managed work teams into a Total Quality Management (TQM) environment. At this plant, TQM is the main vehicle in the transition to business without bosses.

THE COMPANY: TEXAS INSTRUMENTS MALAYSIA (TIM)

Texas Instruments established a wholly owned subsidiary, Texas Instruments Malaysia Sdn. Bhd., in November 1972. On a 15-acre site near Kuala Lumpur, TI built a 250,000-square-foot facility to produce integrated circuits for use in computers and related products. More than twenty years later, Texas Instruments Malaysia, or TIM, produces about three million high-volume integrated circuits per day -- many of which are shipped to companies in Japan -- and employs 2,600 people, almost all Malaysian nationals.

Malaysia is a good place for multinational companies like TI to do business (see Figure 2). In addition to a favorable business climate, the Malaysian work force tends to be well-educated, hardworking, loyal, and dedicated to quality. Apparently the attraction is mutual. Results of TIM's annual employee attitude survey, in which 97 percent participate at TIM, show an overall favorable percentage of 89.2 in 1991 and 85.3 the year before. This represents the highest favorable percentage of all TI plants in East Asia and one of the highest worldwide.

On visiting the plant, the positive atmosphere and mutual respect are evident. Malaysian TI-ers (as employees call themselves) smile and greet visitors, even on the plant floor. The cafeteria -- itself quite an experience, with its indoor stalls selling foods from the three major ethnic cultures -- is often adorned with banners celebrating such holidays as Chinese New Year or the Hindu Deepavali Festival. There are frequent after-hours celebrations, such as family dinners recognizing company service anniversaries, the annual recreation committee ball, and the annual sports day. Employee quality awards are frequently given and an excellent company magazine, Gema TIM, comes out bimonthly with articles and scores of pictures of employees and customers. The company is also active as a corporate citizen, sponsoring such activities as blood drives and the Malaysian Young Enterprise Program.

Much of the atmosphere and success of TI Malaysia can be linked to Jerry W. Lee, the managing director. Jerry Lee apparently loves Malaysia and TIM. In June 1976 he moved his family to Kuala Lumpur when he became manufacturing manager. He stayed five years. Moving back to the U.S. for only two years, he returned to TIM in 1983 as operations manager and was then promoted to managing director in September 1985. Lee is active in the professional community and was voted Boss of the Year for 1988-89 by the Secretaries' Society of Malaysia. One of Jerry Lee's greatest contributions has been a dedicated focus on total quality and employee involvement.

THE EVOLUTION OF THE ORGANIZATIONAL STRUCTURE

Several factors characterize the local employees at TIM. First, the work force is relatively mature, with 60 percent having more than ten years of service, although most are relatively young. With cost improvement and "de-layering," the structure of the organization has been continually changing in the direction of a "flatter" structure. The future holds diminished opportunity for traditional organizational advancement "up the ladder." Second, the booming economy and industrialization of Malaysia projects a shortage of experienced professionals in the external labor market.

The aggregate meaning of all these factors is that TIM has been seeking a way to provide internal achievement opportunities for current employees while enhancing their skills and qualifications. The TIM answer has been to push responsibility to the lowest level. The story of how this was done is the theme of this article. Jerry Lee calls this "building the flexible organization."

Starting in 1972, the "baseline," or originating structure of the plant, was the traditional functional/vertical hierarchy, characterized by separate, specialized departments -- planning, manufacturing, control, and facilities maintenance -- and attitudes that can be described as "protectionist" and "cover your rear."

The plant remained organized this way for the next 15 years. In 1980, however, something began to change at TI Malaysia. People refer to it now as the beginning of the "Eleven-year Search" (see Figure 3). In 1980, Mohd Azmi Abdullah, the plant's TQM manager, read and began to discuss with others a chapter from a book by Peter Drucker in which the author argued the value of worker self-management. Of particular interest to TIM managers were the three prerequisites for self-management: productive work, continuous feedback enabling self-direction, and a continuous learning environment. As Mohd Azmi remembers, "We thought, `This looks very good, but how do you apply it?' We couldn't find any methodology to do it, so we weren't able to try it then." But a seed was planted.

By 1982, the structure had evolved to a matrix form, characterized by an intertwining of the traditional vertical organization with project management. This matrix structure was distinguished by the typical conflict between project management needs and the vertical hierarchy.

Then, in 1985, TIM was swept up in what was becoming a worldwide phenomenon: the "discovery" of and emphasis on total quality. At that time, the perspectives of W. Edwards Deming and Joseph M. Juran were most influential. The story of these two pioneers, of their initial rejection in the U.S. and their welcome in Japan, is well-known. It is important to note, however, that at TIM, perspectives and contributions from both American and Japanese management have always been considered and evaluated with some interest. Perhaps this is because of geographical and cultural proximity, or because Malaysians do not feel as threatened by Japanese economic growth as do Americans. Japanese ideas and phrases, particularly relating to quality, abound at TIM.

Time Line of Important Organizational Changes at TIM

Since 1980, total quality has been a focus of TI worldwide. In a company brochure called "Management Perspective: Customer Satisfaction Through Total Quality," chairman, president, and CEO Jerry R. Junkins writes, "Over the past few years, we have changed our culture within TI to focus on Total Quality. Today, this concept is well-established and the essentials of guaranteeing customer satisfaction are in place, but we must realize Total Quality is a continuous process and our journey along this path is never-ending."

At TI, the three components of customer satisfaction through total quality are customer focus, continuous improvement, and people involvement. Junkins writes, "More than any other factor, dedicated TI-ers contributing ideas through teamwork is vital to our continued success." This commitment to total quality on the part of the parent corporation was an important backdrop to the change at TIM.

MORE ABOUT PEOPLE INVOLVEMENT: QUALITY IMPROVEMENT TEAMS AND EFFECTIVENESS TEAMS

Among Juran's ideas, those addressing operator self-control especially captured the attention of Mohd Azmi Abdullah at TIM. Like Drucker, Juran stressed prerequisites to increased employee participation: knowledge of what one is supposed to do, the ability to monitor one's own performance, and the ability to regulate one's own activities through a decision-making process. Juran also proposed a model for building self-control into operations. At last, the seed at TIM was beginning to sprout. That initial seedling took the form of quality circles.

Quality circles -- and their close relative, quality improvement teams (QITs; see Figure 4 for a definition of this and other abbreviations) -- have taken different forms. Basic to all of them, however, is the aim to involve employees in ways that will improve quality and cut costs.

At TIM, QITs started not on the factory floor, but in the management and engineering offices. Mohd Azmi explains, "Why did we not start at the grass roots level? Because, according to Dr. Juran, 80 percent or more of problems are management-controllable problems. For example, many systems, design, and other problems are not operator-controllable." The first QITs were cross-functional, consisting of managers and professionals from different departments.

It worked like this: A QIT might be formed to look at reducing cycle time. The manufacturing manager, appointed to form the QIT, would have to recruit members from other departments. An accountant might be recruited to bring expertise to the QIT, as would someone from planning, production, facilities, and so forth. Mohd Azmi explains that in forming QITs this way, departmental barriers began to break down. Such myopic comments as "Reducing cycle time is not my problem" began to go away. Eventually breaking down interdepartmental barriers led to the actual removal of physical barriers. Today at TIM, individuals representing all functions sit together in a common area: assemblers, process engineers, manufacturing engineers, planners, and equipment engineers. "We literally make them sit in one place," says Mohd Azmi.

Following the success of QITs at the management and professional support levels, effectiveness teams (quality circles) were created among workers. Effectiveness teams (ETs) are made up of employees from the same area of the organization working together regularly to solve specific quality, productivity, and customer service problems. Sometimes viewed as a precursor to self-managed work teams, quality circles have contributed to several important "paradigm shifts" for companies that have used them successfully. Among these contributions are a realization of the value of worker input in solving work-related problems, the value of cross-functional problem solving, and a clear demonstration of how involved and committed most workers will become when they are invited into the decision-making process.

As in other companies that sponsor quality circles, TIM employees are encouraged to form ETs among themselves. A team leader is selected, and training in ET leadership is provided. Each team selects a work-related problem as a "project" and meets regularly to discuss it, following a problem-solving methodology. The team eventually devises recommendations to solve the problem, and, when ready, makes a formal presentation of its findings and recommendations to plant management.

An example of an ET in action is provided by a team from TIM's solder dip function (one of the steps in making semiconductors), who call themselves "Solder Human." The nine members -- technicians and expediters -- work on different shifts but still manage to meet weekly to work on their project. Encouraged by the results of their first task, which successfully solved a difficult production problem and won an incentive award, the team members selected a second project. This time they chose to look for ways to improve a process called the solder pot crank system. With experience gained from their first success, the team recommended changes that were again implemented, solving another production problem and saving the company more time and money. Again, team members were given an incentive award (an all-expenses paid weekend trip), were written up in Gema TIM, and made a presentation at the annual TI Malaysia/TI Singapore ET Presentation forum.

Team leader Lien S.S. is quoted in the article as saying, "ET has given us the opportunity to solve our work problem and made our work much easier. We also learned to solve problems systematically, which we were never taught in school. It brings us together as one family working for a common objective. Our communication has improved. We understand each other and there is better cooperation and, best of all, we are recognized!"

In this statement, Lien referred to learning to solve problems systematically. One of the major vehicles for this is the "Q.C. Story." TQM Manager Mohd Azmi describes the Q.C. story as a "very important" problem-solving procedure used extensively in Japan, noting, "It is like a detective going through the whole problem solving process systematically." In his 1986 book Kaizen, Masaaki Imai describes the steps usually employed in a Q.C. story:

Select a theme (problem). This includes a list of reasons why the quality circle chose this problem, a Pareto diagram (which shows key factors contributing to the problem), and specific goals for the team's activities.

Understand the situation. Team members use SPC tools such as histograms or cause-and-effect diagrams to analyze the current problem and identify variances in quality.

Set the target. Specific improvement targets (goals) and target dates are set based on the foregoing data.

Analyze factors and measures. Factors contributing to the problem are examined from the cause-and-effect diagram, and priority factors are identified. Analyses are then made and countermeasures applied to enable the quality circle members to attain their target.

Report results. Tangible results such as decreased or eliminated variances in quality are reported, as are intangible results such as an increase in realization by workers of the importance of daily quality controls or improved quality procedures.

Prevent backsliding. Team members develop countermeasures aimed at preventing any recurrence of the problem. Procedure manuals are often created or updated to standardize the improvements.

Develop insights and future directions. Each team member casts a critical eye inward and starts looking for ways to improve on the improvement. This is known as kaizen.

The response to ETs has been very positive. In December 1989, an ET Council was formed at TIM to coordinate current ET activities and promote expansion of the program. The council is responsible for providing support and encouragement to individual ETs, coordinating training for team leaders and members, and providing guidance as necessary to ensure completion of team projects. Among other things, the council plans to create an ET resource center with audiovisual equipment and reading material, foster awards for teams completing their projects, and organize rallies for ET members and an annual ET convention. ETs that complete their projects are also recognized in Gema TIM and can present their projects at the annual ET Presentation.

"QUALITY AT THE SOURCE"

The Q.C. story is just one of the tools used by employees at TIM. Beginning in 1985, acting on the insights from Juran and others, managers began to put operator self-control into practice. They did this in two ways: first, by teaching operators how to recognize problems and arrive at solutions; and second, by giving them the responsibility, discretion, and authority to do something about a problem when they discovered one.

Extensive training was begun at TIM to give operators the knowledge and skills needed to monitor their own work, look for and recognize variances in quality, and know what to do when they saw problems. In many cases, this training simply polished or standardized existing worker skills. At the beginning, TIM, like most other companies, had been set up in a line manufacturing format, with each operator on the line performing a specific job. At the end of the production line, quality control inspectors were responsible for catching quality problems. Workers on the line were not encouraged, even allowed, to point out problems they saw; that was the job of highly trained QC inspectors. Stories abound all over the world of line workers, "not paid to think," quietly watching defective materials go down the line. Sometimes it even became a game: Will the QC inspectors catch that piece of junk? Ha! They missed it! As a result, quality -- and the customer -- often suffered.

Juran had declared that for operator self-control to work, three requirements had to be met. The first, a knowledge of what one is supposed to do, was accomplished at TIM by expanding the jobs of each operator to include monitoring the quality of his own work. Now workers would be asked to think on the job and actively look for defects in their own work and the work being passed to them. Quality awareness training was given and job descriptions were changed to promote "quality at the source."

Juran's second prerequisite, the ability to monitor one's own performance, was accomplished through training that provided knowledge and skills in quality inspection and control. Statistical process control (SPC) techniques, developed in the 1950s in Japan, were taught to line operators, and such tools as Pareto analyses, control charts, fishbone or cause-and-effect diagrams, and run charts were introduced.

The third requirement, the ability to regulate one's own activities through a decision-making process, was taught through the use of Deming's PDCA (Plan-Do-Check-Act) cycle, the Q.C. story, and other frameworks for problem solving and decision making. QC inspectors carried out all this training. As a result, after much of the training was accomplished, many QC jobs were eliminated. The people who had formerly performed those jobs, however, were given new responsibilities at the plant, while the QC function became an integral part of each operator's job.

After operators were taught the principles and tools of quality at the source, they were empowered to practice them. A major aspect of empowerment is the authority to act on decisions. At TIM, operators are now allowed to shut down the line when a defect is found. Previously, only QC inspectors could do this by formally writing out a machine shutdown tag.

SELF-MANAGED WORK TEAMS AS A TOTAL QUALITY TOOL

At Texas Instruments worldwide, the components of its goal of "Customer Satisfaction Through Total Quality" are customer focus, continuous improvement, and people involvement. TIM is now using self-managed work teams as an integral component of its evolution into a TQM culture. Mohd Azmi says, "All quality activities here are aimed at trying to satisfy customers. Customers look at quality, cost, service, and so forth. But at TIM, people development shares equal priority with customer satisfaction. Why? If our people are not developed and trained to deliver, you cannot have customer satisfaction. Personal development is the cause and customer satisfaction is the effect or result."

TI-ers in Malaysia are quite proud of their ability to satisfy the rigorous quality requirements of their Japanese customers. Mohd Azmi says, "It is not easy to penetrate the Japanese market. They'll come and audit you for months. They'll go out and inspect the road to your factory and if they find a cigarette butt, they'll chew you out, saying, 'You think your people can produce quality products and they have no discipline!' We listen to them, though, and make a lot of improvements." All over the TIM facility, one can see beautiful little brass name plates with the word KAIZEN. Here, however, they try to make continuous improvement more than a slogan. Another striking symbol of the commitment to total quality at TIM can be found near one of the main entrances to the plant. It is the Quality Garden, a lush and attractive garden surrounding a marble monument on which is inscribed TIM's commitment to TQM (see Figure 5). We were told that Japanese visitors are especially impressed by this beautiful and constant reminder.

After redesigning the work to integrate quality at the source, TIM managers went on in 1989 to begin implementing what they called the flexible organization. Plant manager Jerry Lee explains that operator self-control, though a step in this direction, did not fully meet the goal of empowering all employees. The design of the flexible organization is simple, involving three components: a quality steering team (Jerry Lee and his reports), a process management team (middle managers and engineers, chartered with providing guidance and expertise), and self-managed work teams. These three groups have two basic functions in common: maintain and improve -- the two pillars of continuous improvement. Following Juran's model, the maintain function guarantees the maintenance of processes, actively looks for problem situations, monitors quality, and promotes total participation. The improve function embodies kaizen, the continuous improvement of work standards and quality.

To begin the movement toward self-managed work teams, TIM first instituted total productive maintenance (TPM), another concept developed in Japan. TPM attempts to maximize effectiveness with a system of preventive maintenance covering the entire life of its equipment. People are motivated to achieve enhanced plant maintenance through small-group and voluntary activities. Like quality at the source, TPM is designed to include workers as more than mere equipment operators; they are charged with maintaining the working order of their own equipment.

Several steps are required to set up TPM. First, machine operators learn to clean and oil their machines using standard cleaning procedures. When they have mastered this, they learn to adjust the machine when something goes wrong. Previously, operators were instructed to stop a machine with even small maladjustments and tell their supervisor, who then filled out a maintenance request order, which was then sent to maintenance and answered perhaps the next day (or later!). Although many seasoned operators knew how to perform these minor adjustments, they were not permitted to do so.

Next, the workers become responsible for total inspection of the machine operation using the manual. They learn in detail how each machine operation affects the quality of their product so that they can be responsible for total preventive maintenance. It takes three years, on average, for a worker to become qualified in all levels of TPM.

Another manager at TIM, Murugan, explains, "In the early days, a machine was repaired only after it broke down. Then, time-based preventive maintenance was introduced. That was further improved by the addition of condition monitoring and reliability engineering. TPM is productive maintenance involving total participation. Its success depends on everyone's cooperation and participation." According to Murugan, the advantages of TPM are increased productivity through the elimination of equipment losses, better quality, a minimum inventory of spare parts, zero pollution, a safe working environment through elimination of accidents, and a pleasant working environment. As for the concept of TPM, he adds, "it's gaining popularity worldwide year by year."

At TI Malaysia, a TPM method called "The Five S's" is used. Each S represents a Japanese word and component of involvement: seiri (cleaning), seiton (tidiness), seiso (sweeping & washing), seiketsu (good housekeeping), and shitsuke (discipline). Murugan sums up the concept: "If you look at it critically you will realize that the Five S's are simple rules to keep any place clean and orderly, be it your house or workplace."

HOW SELF-MANAGED TEAMS WORK AT TIM

The goal at TIM was to have all manufacturing people involved in self-managed work teams by 1993. As of June 1992, about 85 percent were members of self-managing teams. After quality circles, quality at the source, and TPM, the next important building blocks toward the flexible organization were daily administration and management of teams. Daily administration, explains A. Subramaniam, TIM's training manager, involves teams taking on routine activities formerly performed by supervisors. "Now," he says, "they are expected to take care of the daily operations like marking attendance, setup, control of material usage, quality control, monitoring cycle time, safety, and line audits."

"Subra," as he is called, mentions several American companies that TIM used as benchmarks for setting up daily administration for teams. For example, its flow-charting procedure comes from Milliken Textiles, which has very good flow and maintains that if a team does good flow charting, it can reduce problems by 50 percent. Florida Power & Light keeps customer satisfaction in mind in everything it does, so TIM challenges each person to continually keep the impact on the customer in focus.

Japanese companies were also used as benchmarks. Toyota, for example, maintains that people have to know why things are done the way they are. This inspired TIM to write down the whys and make certain team members knew them. There are written explanations at TIM even for such "minor" tasks as marking attendance and housekeeping.

Daily management, which comes closest to full self-management, is defined as a team of TIers working together and managing their process without any need for supervision. Daily management, says Mohd Azmi, involves "a control activity that incorporates quality, cost, delivery, and service as the customer satisfaction drivers that link all critical sources of problems, from management to the lowest organization level." He continues, "It involves a standardized procedure for identifying and solving problems, and is applicable to every level in the organization." Low Say Sun, training and development administrator, adds, "They [team members] are expected in daily management to detect abnormality and take corrective action as well as make improvements in their work area using problem-solving techniques and quality control tools. It will be just like running a business company. Of course," he adds, "there will be facilitators or managers whom they can turn to for help. In other words, there will be somebody to take care of the team. Training will be provided to enable them to manage their operation and process well."

To begin with, each team member at TIM receives about 50 hours of training in the Q.C. story, quality control tools for problem solving, team building, daily management, analysis, capacity, communication, and other areas. To accomplish this, the training function at TIM was increased by eight people whose purpose is to teach, coach, and support members toward maturity as fully functioning, self-managed teams. Incidentally, many of the trainers are former production supervisors who have been displaced by the changeover to self-managed teams.

DIFFICULTIES ALONG THE PATH

Was everyone equally on board when it became clear that self-managed teams were where TIM was headed? Subra answers, "There was concern that some of the senior technicians would not like self-management and would want to leave. What we found is that they actually enjoy the teaching aspects and find more fulfillment in doing that than in doing their old jobs. The most important thing in this or any program is good communication right from the start. Never hide anything from the workers. Tell them up front what is involved, how long it is going to take, what is their role, how they will be affected. Everything has to be told up front. Our plant manager meets every month, without fail, with all the employees. He has explained during these meetings the basics, and then I follow up with the workers in meetings of thirty people more of the details, answering their questions."

This issue of "senior technicians" is a problem that sometimes emerges with other organizations. Has every manager and supervisor been able to adapt to the new self-management system? The answer is no. Although the overwhelming majority is enthusiastic about the new system, some have not made the transition. Subra recounts how one manager "completely dominated his team with his self-centeredness. He never was able to adapt to the give-and-take of the team system and the sharing of authority. He wanted to make all the decisions himself." Eventually, this manager left TIM and was hired by another Kuala Lumpur electronics company with a traditional management style. "From a technical viewpoint, we regretted his loss," said Subra. "He was excellent at the technical side, but he was never able to accept the team system. I've talked to him recently, and he's much happier in a traditional management setting."

Another issue is the question of what to do with former supervisors. This group is quite vulnerable to anxieties about job security, which are not entirely unfounded. Many former supervisors have become trainers, facilitators, and technical specialists. Some, however, like the gentleman above, have chosen to leave TIM.

Did workers ask for more money when they realized self-management meant increased responsibility in their jobs? Subra explains, "We tell them up front that there will be no monetary incentive in going into self-management. Even if we were to divide the pay for the supervisory positions that are eliminated between the 1,600 manufacturing employees, it would come to only US$10 per employee. We talk more about the freedom and skill development that they will get." However, Gene Carlone, assistant plant manager, indicates that this may soon change. "We are considering a gain sharing approach," he says. "When aggressive improvement goals are exceeded, employees share the monetary gain." Does the existence SMWTs mean that supervisors, technicians, or others will lose their employment? "No," says Subra. "We never laid off a single employee as a result of SMWTs or any quality improvement activity."

ARE TEAMS WORKING?

How has the 11-year search fared? Mohd Azmi lights up. "I've got people who are so enthusiastic now," he answers. "Someone recently came to my office, a technician, who said, 'You know, Azmi, before these self-managed teams started, when I set up the equipment and I had problems, I just put a hold tag saying "Hold for Engineer" on that lot. The next day, the engineer would come and fix the problem. But you know, now that we have gone through all this training for self-managed teams, and I know why my job is so important in relationship to my customer, I feel very bad. Now I understand. Now I know that if I put the lot on hold for the engineer, I will create one more day of cycle time, which is not good for our customer. Now I know that customer satisfaction is our number one priority.' And he was so enthusiastic. He even suggested to me that we go to the next operation and tell them how to handle our units so that they don't break so many wires and we can have better yields. They are so excited."

Low S.S. explains, "Self-managed teams are the way most companies in the future will go. Today's workers are more educated, motivated, responsible, and capable of doing their jobs without being closely supervised. We can be proud that TI Malaysia is among the first in TI world-wide to have adopted SMWTs. It is a creative way for you to use your talents and it provides an opportunity to learn and develop yourself to be a better person, while at the same time makes life more interesting and rewarding." Mohd Azmi adds, "Technicians, in the past, some of them, as they stepped into the plant, parked their brains outside the fence. They came in with a body and hands and they went to work and they went home. But today, we have got technicians who come to work with a brain and work and also take home work. Can you believe it? And feel happy! I believe it is something the people want, something they really want.

"Now, by getting into the self-managed teams concept, we are creating an environment where there is a certain amount of freedom to choose what they want to do. I believe some of them who never enjoyed their jobs now have the opportunity to express themselves. And sometimes there are surprises. In the past, we had operators who we assumed were not very smart and could not contribute much. Today many of those same people come in and show fishbone diagrams and Pareto diagrams and ask why a certain lot has increased cycle time or why there are other problems. They come forward and show us analyses! We are very excited because there is a lot of potential we can tap if we provide the necessary training, coaching, and support."

PERFORMANCE OUTCOMES

As to the big question, the one everyone always asks regarding the numbers, people at TIM will tell you:

TIM attributes a savings of US$50 million in ten years to quality improvements alone.

There is a positive change in "attitude" among the TI-ers in Malaysia, demonstrated by the fact that annual attitude survey results improve each year, and for the last two years have been among the best within TI worldwide.

Today, 35 percent of TIM's production goes to Japanese customers, as opposed to 0 percent before 1985. Every major Japanese electronics company buys products from TIM, and several have exclaimed that quality at TIM rivals Deming Prize winners in Japan.

As a result of putting Juran's operator self-control into practice, sustainable increases in yield and quality have been recorded. The average outgoing quality "part-per-million defect" was reduced tenfold from 1982 to 1990.

In 1989, TIM was awarded both Malaysia's Award for Manufacturing Excellence and ISO 9002 certification from the International Standards Organization.

In December 1991, Prime Minister Dato Seri Dr. Mahathir presented TIM with the 1991 Ministry of International Trade and Industry Excellence Award for Quality Management.

From 1980 to 1991, the number of units shipped increased from 400 million to almost 1 billion per year, while the number of semiconductor employees decreased from 2,500 to 2,000, showing a dramatic increase in output per person.

The ratio of operators to supervisors increased from 60:1 to 200:1, whereas the number of supervisor positions decreased from 79 to 18; the plan is to reduce these positions even further.

Efforts have resulted in demonstrable increases in cleanliness and machine "up time." The equipment MTBF (mean time between failures) has increased fourfold, and "down time" is only 25 percent of what it was before.

Thirty-eight percent of the workers had perfect attendance in 1990.

Product cycle time has been cut in half.

As part of its guiding principles, Texas Instruments is committed to "achieving customer satisfaction through Total Quality." Part of the plan to accomplish this end is reflected in the corporate values: "We will create an environment where people are valued as individuals and treated with respect and dignity, fairness and equality. We will strive to create and to achieve their professional goals." TIM takes this philosophy even further with this statement: "Our policy is to foster an atmosphere in which every employee is motivated and capable of using his talent and skill to promote customer satisfaction and customer success." Most of all, one frequently hears the word "family" as a metaphor to describe the philosophy and practice at TIM.

Jerry Lee's concept of the attributes that contribute to the success of TIM are summarized in Figure 6. Note that the centerpiece of these attributes are the values that relate to the "people" part of the equation. Most of all, at TIM, under a TQM framework, one can see a historical evolution of quality circles into teams, and how this evolution has dramatically influenced productivity and quality.

Figure 6

Attributes for Success

MODEL/DREAM                                PREPARATION

Clear objectives                                Training

Definable path                                    Procedures

Measurable                                        Organize

Check points                                      Improvement

                      VALUES

                       Respect for humanity

                       Every job is valuable

                       Sincerity, honesty, integrity

                     You get what you accept

                       Expect what you desire

INVOLVEMENT                                      DON'T GIVE UP

Practice at the top                                   Patience

Attack facts, not people                          Preparation

Team is responsible                               Persistence

TIM has provided an impressive model for combining TQM and teams. The accomplishments were driven by some overall themes that provide important lessons for other companies seeking the benefits of business without bosses:

Key to Important Abbreviations at TIM

TIM -- Texas Instruments Malaysia

The legal/organizational part of Texas Instruments, Inc., located in Kuala Lumpur, Malaysia, mainly engaged in producing semiconductors and semiconductor assemblies

QST -- Quality Steering Team

An ongoing team composed of TIM managers who have responsibility for defining overall policies and strategies

PMT -- Process Management Team

An ongoing team assigned to a specific area of operating responsibility within TIM typically composed of professionals with a high level of expertise for process management

SMWT -- Self-Managed Work Team

An ongoing team of operating-level employees assigned to a specific process, responsible for day-to-day management and improvement

QIT -- Quality Improvement Team

A temporary project team composed of operating-level employees drawn from one or a few areas who come together to resolve specific problems and issues

ET -- Effectiveness Team

Another, later name for Quality Improvement Team.

TPM -- Total Productive Maintenance

A system of preventive maintenance aimed at maximizing equipment effectiveness, especially by engaging production employees in preventive maintenance decisions and activities

References

Peter F. Drucker, Management: Tasks, Responsibilities, Practices (New York: Harper & Row, 1974).

Masaaki Imai, Kaizen: The Key to Japanese Competitive Success (New York: Random House Business Division, 1986).

Henry P. Sims, Jr. and James W. Dean, "Beyond Quality Circles: Evolution into Self-Managing Teams," Personnel, January 1985, pp. 25-32.

~~~~~~~~

By Alan B. Cheney, Henry P. Sims, Jr., and Charles C. Manz

Alan B. Cheney is a senior associate of organization development at Air Products and Chemicals, Allentown, Pennsylvania. Henry P. Sims, Jr. is a professor of management and organization in the College of Business and Management, University of Maryland at College Park. Charles C. Manz is an associate professor of management at Arizona State University, Tempe

The authors are especially grateful to the staff at Texas Instruments Malaysia, especially Jerry Lee, Mohd Azmi Abdullah, A. Subramaniam, and Gene Carlone. This article is adapted from a chapter originally appearing in Charles C. Manz and Henry P. Sims, Jr., Business Without Bosses: How Self-Managing Teams are Building High Performing Companies (New York: Wiley, 1993).

MULTICULTURAL MALAYSIA

Malaysia, like its neighbor Singapore, is a multicultural nation from which we in the United States can probably learn much about race relations. Malaysia's 17 million people are divided between three major racial backgrounds in peninsular Malaysia: Malays, 55 percent; Chinese, 35 percent; and Tamil, 10 percent. Although the official language is Bahasa Malay, signs in all three languages abound, and many Malaysians speak three languages. English is also common. Members of the three groups often live in separate neighborhoods by choice, but a striking phenomenon is the presence of Hindu temples in Chinese neighborhoods and vice versa. One of us was told that parcels of land are often donated by the neighborhoods expressly for this purpose, as a gesture of tolerance and good will. Although officially a Muslim country, Malaysian officials apparently showcase anti promote the practice of other religions. Intermarriage, though not common, exists and is socially accepted.

The Malaysian Economy

Malaysia is one of the world's fastest growing economies, posting a 10 percent rise in real GDP in 199l. Like other East Asian newly industrialized countries (NICs), Malaysia is friendly to business and leaves very little of its economic growth to chance. The country attracts multinational corporations with its political stability and 10-year government plans for improving its physical and human resources. Last year, Prime Minister Mahathir Mohamad's government announced its "2020 Vision," which details Malaysia's plan for becoming a "fully developed nation" by 2020. Among other things, the plan proposes that manufacturing continue to be the primary means of economic growth by being the major vehicle for export earnings. It also proposes a broadening of Malaysia's industrial base beyond electronics and textiles, which now dominate. For example, Malaysia is now the world's third largest producer of computer chips, behind only the United States and Japan. TI was a relatively early foreign player in contemporary Malaysia; now foreign investment capital is pouring into the economy, much of it from North Asian companies. The Malaysian-American Electronics Industry Association (MAEI), recently chaired by TI Malaysia's Jerry Lee, represents 15 American manufacturers located in Malaysia.

MAP: Malaysia

THE QUALITY GARDEN

There is no question that the Texas Instruments Malaysia (TIM) plant is located in an exotic setting. Kuala Lumpur, with its lush tropical plants and rich cultural diversity, creates a fascinating backdrop for self-managing teams. When you enter the large industrial complex itself, however, at first it seems similar to a thousand other production facilities. There are several buildings with a factory setting appearance interwoven with paved parking lots filled with rows of employee cars. Inside, a honeycomb of work rooms are bustling with production activity. Long hallways equipped with periodic meeting rooms, rest rooms, drinking fountains, and many company displays create the familiar feel of a factory, albeit a very clean, well-kept one.

One could enter through a particular main factory entrance into this production environment and easily overlook a small green garden area immediately to the right of the door. A detour to this well-kept garden yields a beautiful display of carefully arranged native tropical plants, a lush green area that creates a natural picture that is visually pleasing.

You will also notice that at the center of the garden is a small stone structure that appears to be a compact monument of some kind. It is the plant’s “quality shrine”—a continual reminder and symbol of TIM’s commitment to quality. In many ways we found the garden to be a particularly appropriate symbol of the total quality emphasis at TIM. The garden and the stone form a natural blending of numerous living organisms to create a total quality product for all to see. Interestingly, we hadn’t really noticed the garden until the end of our last day visiting the plant, and we suspect most Americans would likely overlook it as well. We were told, however, that for the Japanese visitors, a visit to the Quality Garden is one of the most interesting and valued highlights of a visit to TIM. It represents in a creative and powerful way the plant’s dedication to total quality.

Copyright of Business Horizons is the property of Elsevier Science Publishing Company, Inc.. Copyright of PUBLICATION is the property of PUBLISHER. The copyright in an individual article may be maintained by the author in certain cases. Source: Business Horizons, Sep/Oct94, Vol. 37 Issue 5, p16, 10p
Item: 9410113171

One innovative plant in Malaysia shows how work teams and total quality management can coexist with excellent results.

At a place most North Americans can't locate on a world map, on the other side of the world from us, just north of the equator, lies Kuala Lumpur, a bustling city of 1.2 million people. In the city streets one can hear a variety of languages, the most common being Chinese, Tamil, Bahasa Malay, and English. Many people in Kuala Lumpur speak very good English. The city is the setting for a story about a company that has evolved over the years from a traditional management structure to TQM (total quality management) to self-managed work teams. It's a story of how teams and TQM can be used together to conduct business without bosses.

Kuala Lumpur, called K.L. by the locals, is quite modern. In fact, much of its charm lies in the mix of old and new. It is the capital of Malaysia, the peninsular nation stretching between Thailand and Singapore and extending onto parts of the island of Borneo. The climate is hot and humid throughout the year, with the temperature never varying more than 20 degrees. Most people probably don't own a sweater, but everyone owns an umbrella: It rains about 100 inches a year.

Like the rest of the country, K.L. is officially a Muslim city -- a fact that surprises many Westerners, who forget that Islam also took hold outside the Middle East and North Africa. The architecturally modern Masjid Negara, the national mosque; the Tabung Haji Building, the tallest in K.L., near embassy row; and the graceful Moorish arches and minarets of the railway station and railway administration headquarters attest to an Islamic heritage. One of the most beautiful mosques in the world is in the suburb of Shah Alam, which presents a spectacular welcoming site as one flies into Subang International Airport. If these are not enough, one may be reminded each day at sunrise, when one is likely to be awakened by the call to prayer of the muezzin, broadcast over loudspeakers in downtown K.L. The city is also home to the large and ornate Sri Mahamariaman Hindu Temple, numerous brightly colored Chinese Taoist temples, and an International Buddhist Pagoda. This tolerance -- even nurturing -- of other religions and cultures is one of the most striking things about Malaysia and its neighbor Singapore (see Figure 1).

Kuala Lumpur has another marvel, one that is not on many tourist itineraries, but one that many people, including the authors, have flown as many as 23 hours by jet to see. The semiconductor plant of Texas Instruments Malaysia Sdn. Bhd. (meaning "private, limited") is located in the business park called Ampang/Ulu Klang, near the zoo. It is one of the best examples in the world of the planned integration of self-managed work teams into a Total Quality Management (TQM) environment. At this plant, TQM is the main vehicle in the transition to business without bosses.

THE COMPANY: TEXAS INSTRUMENTS MALAYSIA (TIM)

Texas Instruments established a wholly owned subsidiary, Texas Instruments Malaysia Sdn. Bhd., in November 1972. On a 15-acre site near Kuala Lumpur, TI built a 250,000-square-foot facility to produce integrated circuits for use in computers and related products. More than twenty years later, Texas Instruments Malaysia, or TIM, produces about three million high-volume integrated circuits per day -- many of which are shipped to companies in Japan -- and employs 2,600 people, almost all Malaysian nationals.

Malaysia is a good place for multinational companies like TI to do business (see Figure 2). In addition to a favorable business climate, the Malaysian work force tends to be well-educated, hardworking, loyal, and dedicated to quality. Apparently the attraction is mutual. Results of TIM's annual employee attitude survey, in which 97 percent participate at TIM, show an overall favorable percentage of 89.2 in 1991 and 85.3 the year before. This represents the highest favorable percentage of all TI plants in East Asia and one of the highest worldwide.

On visiting the plant, the positive atmosphere and mutual respect are evident. Malaysian TI-ers (as employees call themselves) smile and greet visitors, even on the plant floor. The cafeteria -- itself quite an experience, with its indoor stalls selling foods from the three major ethnic cultures -- is often adorned with banners celebrating such holidays as Chinese New Year or the Hindu Deepavali Festival. There are frequent after-hours celebrations, such as family dinners recognizing company service anniversaries, the annual recreation committee ball, and the annual sports day. Employee quality awards are frequently given and an excellent company magazine, Gema TIM, comes out bimonthly with articles and scores of pictures of employees and customers. The company is also active as a corporate citizen, sponsoring such activities as blood drives and the Malaysian Young Enterprise Program.

Much of the atmosphere and success of TI Malaysia can be linked to Jerry W. Lee, the managing director. Jerry Lee apparently loves Malaysia and TIM. In June 1976 he moved his family to Kuala Lumpur when he became manufacturing manager. He stayed five years. Moving back to the U.S. for only two years, he returned to TIM in 1983 as operations manager and was then promoted to managing director in September 1985. Lee is active in the professional community and was voted Boss of the Year for 1988-89 by the Secretaries' Society of Malaysia. One of Jerry Lee's greatest contributions has been a dedicated focus on total quality and employee involvement.

THE EVOLUTION OF THE ORGANIZATIONAL STRUCTURE

Several factors characterize the local employees at TIM. First, the work force is relatively mature, with 60 percent having more than ten years of service, although most are relatively young. With cost improvement and "de-layering," the structure of the organization has been continually changing in the direction of a "flatter" structure. The future holds diminished opportunity for traditional organizational advancement "up the ladder." Second, the booming economy and industrialization of Malaysia projects a shortage of experienced professionals in the external labor market.

The aggregate meaning of all these factors is that TIM has been seeking a way to provide internal achievement opportunities for current employees while enhancing their skills and qualifications. The TIM answer has been to push responsibility to the lowest level. The story of how this was done is the theme of this article. Jerry Lee calls this "building the flexible organization."

Starting in 1972, the "baseline," or originating structure of the plant, was the traditional functional/vertical hierarchy, characterized by separate, specialized departments -- planning, manufacturing, control, and facilities maintenance -- and attitudes that can be described as "protectionist" and "cover your rear."

The plant remained organized this way for the next 15 years. In 1980, however, something began to change at TI Malaysia. People refer to it now as the beginning of the "Eleven-year Search" (see Figure 3). In 1980, Mohd Azmi Abdullah, the plant's TQM manager, read and began to discuss with others a chapter from a book by Peter Drucker in which the author argued the value of worker self-management. Of particular interest to TIM managers were the three prerequisites for self-management: productive work, continuous feedback enabling self-direction, and a continuous learning environment. As Mohd Azmi remembers, "We thought, `This looks very good, but how do you apply it?' We couldn't find any methodology to do it, so we weren't able to try it then." But a seed was planted.

By 1982, the structure had evolved to a matrix form, characterized by an intertwining of the traditional vertical organization with project management. This matrix structure was distinguished by the typical conflict between project management needs and the vertical hierarchy.

Then, in 1985, TIM was swept up in what was becoming a worldwide phenomenon: the "discovery" of and emphasis on total quality. At that time, the perspectives of W. Edwards Deming and Joseph M. Juran were most influential. The story of these two pioneers, of their initial rejection in the U.S. and their welcome in Japan, is well-known. It is important to note, however, that at TIM, perspectives and contributions from both American and Japanese management have always been considered and evaluated with some interest. Perhaps this is because of geographical and cultural proximity, or because Malaysians do not feel as threatened by Japanese economic growth as do Americans. Japanese ideas and phrases, particularly relating to quality, abound at TIM.

Time Line of Important Organizational Changes at TIM

Since 1980, total quality has been a focus of TI worldwide. In a company brochure called "Management Perspective: Customer Satisfaction Through Total Quality," chairman, president, and CEO Jerry R. Junkins writes, "Over the past few years, we have changed our culture within TI to focus on Total Quality. Today, this concept is well-established and the essentials of guaranteeing customer satisfaction are in place, but we must realize Total Quality is a continuous process and our journey along this path is never-ending."

At TI, the three components of customer satisfaction through total quality are customer focus, continuous improvement, and people involvement. Junkins writes, "More than any other factor, dedicated TI-ers contributing ideas through teamwork is vital to our continued success." This commitment to total quality on the part of the parent corporation was an important backdrop to the change at TIM.

MORE ABOUT PEOPLE INVOLVEMENT: QUALITY IMPROVEMENT TEAMS AND EFFECTIVENESS TEAMS

Among Juran's ideas, those addressing operator self-control especially captured the attention of Mohd Azmi Abdullah at TIM. Like Drucker, Juran stressed prerequisites to increased employee participation: knowledge of what one is supposed to do, the ability to monitor one's own performance, and the ability to regulate one's own activities through a decision-making process. Juran also proposed a model for building self-control into operations. At last, the seed at TIM was beginning to sprout. That initial seedling took the form of quality circles.

Quality circles -- and their close relative, quality improvement teams (QITs; see Figure 4 for a definition of this and other abbreviations) -- have taken different forms. Basic to all of them, however, is the aim to involve employees in ways that will improve quality and cut costs.

At TIM, QITs started not on the factory floor, but in the management and engineering offices. Mohd Azmi explains, "Why did we not start at the grass roots level? Because, according to Dr. Juran, 80 percent or more of problems are management-controllable problems. For example, many systems, design, and other problems are not operator-controllable." The first QITs were cross-functional, consisting of managers and professionals from different departments.

It worked like this: A QIT might be formed to look at reducing cycle time. The manufacturing manager, appointed to form the QIT, would have to recruit members from other departments. An accountant might be recruited to bring expertise to the QIT, as would someone from planning, production, facilities, and so forth. Mohd Azmi explains that in forming QITs this way, departmental barriers began to break down. Such myopic comments as "Reducing cycle time is not my problem" began to go away. Eventually breaking down interdepartmental barriers led to the actual removal of physical barriers. Today at TIM, individuals representing all functions sit together in a common area: assemblers, process engineers, manufacturing engineers, planners, and equipment engineers. "We literally make them sit in one place," says Mohd Azmi.

Following the success of QITs at the management and professional support levels, effectiveness teams (quality circles) were created among workers. Effectiveness teams (ETs) are made up of employees from the same area of the organization working together regularly to solve specific quality, productivity, and customer service problems. Sometimes viewed as a precursor to self-managed work teams, quality circles have contributed to several important "paradigm shifts" for companies that have used them successfully. Among these contributions are a realization of the value of worker input in solving work-related problems, the value of cross-functional problem solving, and a clear demonstration of how involved and committed most workers will become when they are invited into the decision-making process.

As in other companies that sponsor quality circles, TIM employees are encouraged to form ETs among themselves. A team leader is selected, and training in ET leadership is provided. Each team selects a work-related problem as a "project" and meets regularly to discuss it, following a problem-solving methodology. The team eventually devises recommendations to solve the problem, and, when ready, makes a formal presentation of its findings and recommendations to plant management.

An example of an ET in action is provided by a team from TIM's solder dip function (one of the steps in making semiconductors), who call themselves "Solder Human." The nine members -- technicians and expediters -- work on different shifts but still manage to meet weekly to work on their project. Encouraged by the results of their first task, which successfully solved a difficult production problem and won an incentive award, the team members selected a second project. This time they chose to look for ways to improve a process called the solder pot crank system. With experience gained from their first success, the team recommended changes that were again implemented, solving another production problem and saving the company more time and money. Again, team members were given an incentive award (an all-expenses paid weekend trip), were written up in Gema TIM, and made a presentation at the annual TI Malaysia/TI Singapore ET Presentation forum.

Team leader Lien S.S. is quoted in the article as saying, "ET has given us the opportunity to solve our work problem and made our work much easier. We also learned to solve problems systematically, which we were never taught in school. It brings us together as one family working for a common objective. Our communication has improved. We understand each other and there is better cooperation and, best of all, we are recognized!"

In this statement, Lien referred to learning to solve problems systematically. One of the major vehicles for this is the "Q.C. Story." TQM Manager Mohd Azmi describes the Q.C. story as a "very important" problem-solving procedure used extensively in Japan, noting, "It is like a detective going through the whole problem solving process systematically." In his 1986 book Kaizen, Masaaki Imai describes the steps usually employed in a Q.C. story:

Select a theme (problem). This includes a list of reasons why the quality circle chose this problem, a Pareto diagram (which shows key factors contributing to the problem), and specific goals for the team's activities.

Understand the situation. Team members use SPC tools such as histograms or cause-and-effect diagrams to analyze the current problem and identify variances in quality.

Set the target. Specific improvement targets (goals) and target dates are set based on the foregoing data.

Analyze factors and measures. Factors contributing to the problem are examined from the cause-and-effect diagram, and priority factors are identified. Analyses are then made and countermeasures applied to enable the quality circle members to attain their target.

Report results. Tangible results such as decreased or eliminated variances in quality are reported, as are intangible results such as an increase in realization by workers of the importance of daily quality controls or improved quality procedures.

Prevent backsliding. Team members develop countermeasures aimed at preventing any recurrence of the problem. Procedure manuals are often created or updated to standardize the improvements.

Develop insights and future directions. Each team member casts a critical eye inward and starts looking for ways to improve on the improvement. This is known as kaizen.

The response to ETs has been very positive. In December 1989, an ET Council was formed at TIM to coordinate current ET activities and promote expansion of the program. The council is responsible for providing support and encouragement to individual ETs, coordinating training for team leaders and members, and providing guidance as necessary to ensure completion of team projects. Among other things, the council plans to create an ET resource center with audiovisual equipment and reading material, foster awards for teams completing their projects, and organize rallies for ET members and an annual ET convention. ETs that complete their projects are also recognized in Gema TIM and can present their projects at the annual ET Presentation.

"QUALITY AT THE SOURCE"

The Q.C. story is just one of the tools used by employees at TIM. Beginning in 1985, acting on the insights from Juran and others, managers began to put operator self-control into practice. They did this in two ways: first, by teaching operators how to recognize problems and arrive at solutions; and second, by giving them the responsibility, discretion, and authority to do something about a problem when they discovered one.

Extensive training was begun at TIM to give operators the knowledge and skills needed to monitor their own work, look for and recognize variances in quality, and know what to do when they saw problems. In many cases, this training simply polished or standardized existing worker skills. At the beginning, TIM, like most other companies, had been set up in a line manufacturing format, with each operator on the line performing a specific job. At the end of the production line, quality control inspectors were responsible for catching quality problems. Workers on the line were not encouraged, even allowed, to point out problems they saw; that was the job of highly trained QC inspectors. Stories abound all over the world of line workers, "not paid to think," quietly watching defective materials go down the line. Sometimes it even became a game: Will the QC inspectors catch that piece of junk? Ha! They missed it! As a result, quality -- and the customer -- often suffered.

Juran had declared that for operator self-control to work, three requirements had to be met. The first, a knowledge of what one is supposed to do, was accomplished at TIM by expanding the jobs of each operator to include monitoring the quality of his own work. Now workers would be asked to think on the job and actively look for defects in their own work and the work being passed to them. Quality awareness training was given and job descriptions were changed to promote "quality at the source."

Juran's second prerequisite, the ability to monitor one's own performance, was accomplished through training that provided knowledge and skills in quality inspection and control. Statistical process control (SPC) techniques, developed in the 1950s in Japan, were taught to line operators, and such tools as Pareto analyses, control charts, fishbone or cause-and-effect diagrams, and run charts were introduced.

The third requirement, the ability to regulate one's own activities through a decision-making process, was taught through the use of Deming's PDCA (Plan-Do-Check-Act) cycle, the Q.C. story, and other frameworks for problem solving and decision making. QC inspectors carried out all this training. As a result, after much of the training was accomplished, many QC jobs were eliminated. The people who had formerly performed those jobs, however, were given new responsibilities at the plant, while the QC function became an integral part of each operator's job.

After operators were taught the principles and tools of quality at the source, they were empowered to practice them. A major aspect of empowerment is the authority to act on decisions. At TIM, operators are now allowed to shut down the line when a defect is found. Previously, only QC inspectors could do this by formally writing out a machine shutdown tag.

SELF-MANAGED WORK TEAMS AS A TOTAL QUALITY TOOL

At Texas Instruments worldwide, the components of its goal of "Customer Satisfaction Through Total Quality" are customer focus, continuous improvement, and people involvement. TIM is now using self-managed work teams as an integral component of its evolution into a TQM culture. Mohd Azmi says, "All quality activities here are aimed at trying to satisfy customers. Customers look at quality, cost, service, and so forth. But at TIM, people development shares equal priority with customer satisfaction. Why? If our people are not developed and trained to deliver, you cannot have customer satisfaction. Personal development is the cause and customer satisfaction is the effect or result."

TI-ers in Malaysia are quite proud of their ability to satisfy the rigorous quality requirements of their Japanese customers. Mohd Azmi says, "It is not easy to penetrate the Japanese market. They'll come and audit you for months. They'll go out and inspect the road to your factory and if they find a cigarette butt, they'll chew you out, saying, 'You think your people can produce quality products and they have no discipline!' We listen to them, though, and make a lot of improvements." All over the TIM facility, one can see beautiful little brass name plates with the word KAIZEN. Here, however, they try to make continuous improvement more than a slogan. Another striking symbol of the commitment to total quality at TIM can be found near one of the main entrances to the plant. It is the Quality Garden, a lush and attractive garden surrounding a marble monument on which is inscribed TIM's commitment to TQM (see Figure 5). We were told that Japanese visitors are especially impressed by this beautiful and constant reminder.

After redesigning the work to integrate quality at the source, TIM managers went on in 1989 to begin implementing what they called the flexible organization. Plant manager Jerry Lee explains that operator self-control, though a step in this direction, did not fully meet the goal of empowering all employees. The design of the flexible organization is simple, involving three components: a quality steering team (Jerry Lee and his reports), a process management team (middle managers and engineers, chartered with providing guidance and expertise), and self-managed work teams. These three groups have two basic functions in common: maintain and improve -- the two pillars of continuous improvement. Following Juran's model, the maintain function guarantees the maintenance of processes, actively looks for problem situations, monitors quality, and promotes total participation. The improve function embodies kaizen, the continuous improvement of work standards and quality.

To begin the movement toward self-managed work teams, TIM first instituted total productive maintenance (TPM), another concept developed in Japan. TPM attempts to maximize effectiveness with a system of preventive maintenance covering the entire life of its equipment. People are motivated to achieve enhanced plant maintenance through small-group and voluntary activities. Like quality at the source, TPM is designed to include workers as more than mere equipment operators; they are charged with maintaining the working order of their own equipment.

Several steps are required to set up TPM. First, machine operators learn to clean and oil their machines using standard cleaning procedures. When they have mastered this, they learn to adjust the machine when something goes wrong. Previously, operators were instructed to stop a machine with even small maladjustments and tell their supervisor, who then filled out a maintenance request order, which was then sent to maintenance and answered perhaps the next day (or later!). Although many seasoned operators knew how to perform these minor adjustments, they were not permitted to do so.

Next, the workers become responsible for total inspection of the machine operation using the manual. They learn in detail how each machine operation affects the quality of their product so that they can be responsible for total preventive maintenance. It takes three years, on average, for a worker to become qualified in all levels of TPM.

Another manager at TIM, Murugan, explains, "In the early days, a machine was repaired only after it broke down. Then, time-based preventive maintenance was introduced. That was further improved by the addition of condition monitoring and reliability engineering. TPM is productive maintenance involving total participation. Its success depends on everyone's cooperation and participation." According to Murugan, the advantages of TPM are increased productivity through the elimination of equipment losses, better quality, a minimum inventory of spare parts, zero pollution, a safe working environment through elimination of accidents, and a pleasant working environment. As for the concept of TPM, he adds, "it's gaining popularity worldwide year by year."

At TI Malaysia, a TPM method called "The Five S's" is used. Each S represents a Japanese word and component of involvement: seiri (cleaning), seiton (tidiness), seiso (sweeping & washing), seiketsu (good housekeeping), and shitsuke (discipline). Murugan sums up the concept: "If you look at it critically you will realize that the Five S's are simple rules to keep any place clean and orderly, be it your house or workplace."

HOW SELF-MANAGED TEAMS WORK AT TIM

The goal at TIM was to have all manufacturing people involved in self-managed work teams by 1993. As of June 1992, about 85 percent were members of self-managing teams. After quality circles, quality at the source, and TPM, the next important building blocks toward the flexible organization were daily administration and management of teams. Daily administration, explains A. Subramaniam, TIM's training manager, involves teams taking on routine activities formerly performed by supervisors. "Now," he says, "they are expected to take care of the daily operations like marking attendance, setup, control of material usage, quality control, monitoring cycle time, safety, and line audits."

"Subra," as he is called, mentions several American companies that TIM used as benchmarks for setting up daily administration for teams. For example, its flow-charting procedure comes from Milliken Textiles, which has very good flow and maintains that if a team does good flow charting, it can reduce problems by 50 percent. Florida Power & Light keeps customer satisfaction in mind in everything it does, so TIM challenges each person to continually keep the impact on the customer in focus.

Japanese companies were also used as benchmarks. Toyota, for example, maintains that people have to know why things are done the way they are. This inspired TIM to write down the whys and make certain team members knew them. There are written explanations at TIM even for such "minor" tasks as marking attendance and housekeeping.

Daily management, which comes closest to full self-management, is defined as a team of TIers working together and managing their process without any need for supervision. Daily management, says Mohd Azmi, involves "a control activity that incorporates quality, cost, delivery, and service as the customer satisfaction drivers that link all critical sources of problems, from management to the lowest organization level." He continues, "It involves a standardized procedure for identifying and solving problems, and is applicable to every level in the organization." Low Say Sun, training and development administrator, adds, "They [team members] are expected in daily management to detect abnormality and take corrective action as well as make improvements in their work area using problem-solving techniques and quality control tools. It will be just like running a business company. Of course," he adds, "there will be facilitators or managers whom they can turn to for help. In other words, there will be somebody to take care of the team. Training will be provided to enable them to manage their operation and process well."

To begin with, each team member at TIM receives about 50 hours of training in the Q.C. story, quality control tools for problem solving, team building, daily management, analysis, capacity, communication, and other areas. To accomplish this, the training function at TIM was increased by eight people whose purpose is to teach, coach, and support members toward maturity as fully functioning, self-managed teams. Incidentally, many of the trainers are former production supervisors who have been displaced by the changeover to self-managed teams.

DIFFICULTIES ALONG THE PATH

Was everyone equally on board when it became clear that self-managed teams were where TIM was headed? Subra answers, "There was concern that some of the senior technicians would not like self-management and would want to leave. What we found is that they actually enjoy the teaching aspects and find more fulfillment in doing that than in doing their old jobs. The most important thing in this or any program is good communication right from the start. Never hide anything from the workers. Tell them up front what is involved, how long it is going to take, what is their role, how they will be affected. Everything has to be told up front. Our plant manager meets every month, without fail, with all the employees. He has explained during these meetings the basics, and then I follow up with the workers in meetings of thirty people more of the details, answering their questions."

This issue of "senior technicians" is a problem that sometimes emerges with other organizations. Has every manager and supervisor been able to adapt to the new self-management system? The answer is no. Although the overwhelming majority is enthusiastic about the new system, some have not made the transition. Subra recounts how one manager "completely dominated his team with his self-centeredness. He never was able to adapt to the give-and-take of the team system and the sharing of authority. He wanted to make all the decisions himself." Eventually, this manager left TIM and was hired by another Kuala Lumpur electronics company with a traditional management style. "From a technical viewpoint, we regretted his loss," said Subra. "He was excellent at the technical side, but he was never able to accept the team system. I've talked to him recently, and he's much happier in a traditional management setting."

Another issue is the question of what to do with former supervisors. This group is quite vulnerable to anxieties about job security, which are not entirely unfounded. Many former supervisors have become trainers, facilitators, and technical specialists. Some, however, like the gentleman above, have chosen to leave TIM.

Did workers ask for more money when they realized self-management meant increased responsibility in their jobs? Subra explains, "We tell them up front that there will be no monetary incentive in going into self-management. Even if we were to divide the pay for the supervisory positions that are eliminated between the 1,600 manufacturing employees, it would come to only US$10 per employee. We talk more about the freedom and skill development that they will get." However, Gene Carlone, assistant plant manager, indicates that this may soon change. "We are considering a gain sharing approach," he says. "When aggressive improvement goals are exceeded, employees share the monetary gain." Does the existence SMWTs mean that supervisors, technicians, or others will lose their employment? "No," says Subra. "We never laid off a single employee as a result of SMWTs or any quality improvement activity."

ARE TEAMS WORKING?

How has the 11-year search fared? Mohd Azmi lights up. "I've got people who are so enthusiastic now," he answers. "Someone recently came to my office, a technician, who said, 'You know, Azmi, before these self-managed teams started, when I set up the equipment and I had problems, I just put a hold tag saying "Hold for Engineer" on that lot. The next day, the engineer would come and fix the problem. But you know, now that we have gone through all this training for self-managed teams, and I know why my job is so important in relationship to my customer, I feel very bad. Now I understand. Now I know that if I put the lot on hold for the engineer, I will create one more day of cycle time, which is not good for our customer. Now I know that customer satisfaction is our number one priority.' And he was so enthusiastic. He even suggested to me that we go to the next operation and tell them how to handle our units so that they don't break so many wires and we can have better yields. They are so excited."

Low S.S. explains, "Self-managed teams are the way most companies in the future will go. Today's workers are more educated, motivated, responsible, and capable of doing their jobs without being closely supervised. We can be proud that TI Malaysia is among the first in TI world-wide to have adopted SMWTs. It is a creative way for you to use your talents and it provides an opportunity to learn and develop yourself to be a better person, while at the same time makes life more interesting and rewarding." Mohd Azmi adds, "Technicians, in the past, some of them, as they stepped into the plant, parked their brains outside the fence. They came in with a body and hands and they went to work and they went home. But today, we have got technicians who come to work with a brain and work and also take home work. Can you believe it? And feel happy! I believe it is something the people want, something they really want.

"Now, by getting into the self-managed teams concept, we are creating an environment where there is a certain amount of freedom to choose what they want to do. I believe some of them who never enjoyed their jobs now have the opportunity to express themselves. And sometimes there are surprises. In the past, we had operators who we assumed were not very smart and could not contribute much. Today many of those same people come in and show fishbone diagrams and Pareto diagrams and ask why a certain lot has increased cycle time or why there are other problems. They come forward and show us analyses! We are very excited because there is a lot of potential we can tap if we provide the necessary training, coaching, and support."

PERFORMANCE OUTCOMES

As to the big question, the one everyone always asks regarding the numbers, people at TIM will tell you:

TIM attributes a savings of US$50 million in ten years to quality improvements alone.

There is a positive change in "attitude" among the TI-ers in Malaysia, demonstrated by the fact that annual attitude survey results improve each year, and for the last two years have been among the best within TI worldwide.

Today, 35 percent of TIM's production goes to Japanese customers, as opposed to 0 percent before 1985. Every major Japanese electronics company buys products from TIM, and several have exclaimed that quality at TIM rivals Deming Prize winners in Japan.

As a result of putting Juran's operator self-control into practice, sustainable increases in yield and quality have been recorded. The average outgoing quality "part-per-million defect" was reduced tenfold from 1982 to 1990.

In 1989, TIM was awarded both Malaysia's Award for Manufacturing Excellence and ISO 9002 certification from the International Standards Organization.

In December 1991, Prime Minister Dato Seri Dr. Mahathir presented TIM with the 1991 Ministry of International Trade and Industry Excellence Award for Quality Management.

From 1980 to 1991, the number of units shipped increased from 400 million to almost 1 billion per year, while the number of semiconductor employees decreased from 2,500 to 2,000, showing a dramatic increase in output per person.

The ratio of operators to supervisors increased from 60:1 to 200:1, whereas the number of supervisor positions decreased from 79 to 18; the plan is to reduce these positions even further.

Efforts have resulted in demonstrable increases in cleanliness and machine "up time." The equipment MTBF (mean time between failures) has increased fourfold, and "down time" is only 25 percent of what it was before.

Thirty-eight percent of the workers had perfect attendance in 1990.

Product cycle time has been cut in half.

As part of its guiding principles, Texas Instruments is committed to "achieving customer satisfaction through Total Quality." Part of the plan to accomplish this end is reflected in the corporate values: "We will create an environment where people are valued as individuals and treated with respect and dignity, fairness and equality. We will strive to create and to achieve their professional goals." TIM takes this philosophy even further with this statement: "Our policy is to foster an atmosphere in which every employee is motivated and capable of using his talent and skill to promote customer satisfaction and customer success." Most of all, one frequently hears the word "family" as a metaphor to describe the philosophy and practice at TIM.

Jerry Lee's concept of the attributes that contribute to the success of TIM are summarized in Figure 6. Note that the centerpiece of these attributes are the values that relate to the "people" part of the equation. Most of all, at TIM, under a TQM framework, one can see a historical evolution of quality circles into teams, and how this evolution has dramatically influenced productivity and quality.

Figure 6

Attributes for Success

MODEL/DREAM                                PREPARATION

Clear objectives                                Training

Definable path                                    Procedures

Measurable                                        Organize

Check points                                      Improvement

                      VALUES

                       Respect for humanity

                       Every job is valuable

                       Sincerity, honesty, integrity

                     You get what you accept

                       Expect what you desire

INVOLVEMENT                                      DON'T GIVE UP

Practice at the top                                   Patience

Attack facts, not people                          Preparation

Team is responsible                               Persistence

TIM has provided an impressive model for combining TQM and teams. The accomplishments were driven by some overall themes that provide important lessons for other companies seeking the benefits of business without bosses:

Key to Important Abbreviations at TIM

TIM -- Texas Instruments Malaysia

The legal/organizational part of Texas Instruments, Inc., located in Kuala Lumpur, Malaysia, mainly engaged in producing semiconductors and semiconductor assemblies

QST -- Quality Steering Team

An ongoing team composed of TIM managers who have responsibility for defining overall policies and strategies

PMT -- Process Management Team

An ongoing team assigned to a specific area of operating responsibility within TIM typically composed of professionals with a high level of expertise for process management

SMWT -- Self-Managed Work Team

An ongoing team of operating-level employees assigned to a specific process, responsible for day-to-day management and improvement

QIT -- Quality Improvement Team

A temporary project team composed of operating-level employees drawn from one or a few areas who come together to resolve specific problems and issues

ET -- Effectiveness Team

Another, later name for Quality Improvement Team.

TPM -- Total Productive Maintenance

A system of preventive maintenance aimed at maximizing equipment effectiveness, especially by engaging production employees in preventive maintenance decisions and activities

References

Peter F. Drucker, Management: Tasks, Responsibilities, Practices (New York: Harper & Row, 1974).

Masaaki Imai, Kaizen: The Key to Japanese Competitive Success (New York: Random House Business Division, 1986).

Henry P. Sims, Jr. and James W. Dean, "Beyond Quality Circles: Evolution into Self-Managing Teams," Personnel, January 1985, pp. 25-32.

~~~~~~~~

By Alan B. Cheney, Henry P. Sims, Jr., and Charles C. Manz

Alan B. Cheney is a senior associate of organization development at Air Products and Chemicals, Allentown, Pennsylvania. Henry P. Sims, Jr. is a professor of management and organization in the College of Business and Management, University of Maryland at College Park. Charles C. Manz is an associate professor of management at Arizona State University, Tempe

The authors are especially grateful to the staff at Texas Instruments Malaysia, especially Jerry Lee, Mohd Azmi Abdullah, A. Subramaniam, and Gene Carlone. This article is adapted from a chapter originally appearing in Charles C. Manz and Henry P. Sims, Jr., Business Without Bosses: How Self-Managing Teams are Building High Performing Companies (New York: Wiley, 1993).

MULTICULTURAL MALAYSIA

Malaysia, like its neighbor Singapore, is a multicultural nation from which we in the United States can probably learn much about race relations. Malaysia's 17 million people are divided between three major racial backgrounds in peninsular Malaysia: Malays, 55 percent; Chinese, 35 percent; and Tamil, 10 percent. Although the official language is Bahasa Malay, signs in all three languages abound, and many Malaysians speak three languages. English is also common. Members of the three groups often live in separate neighborhoods by choice, but a striking phenomenon is the presence of Hindu temples in Chinese neighborhoods and vice versa. One of us was told that parcels of land are often donated by the neighborhoods expressly for this purpose, as a gesture of tolerance and good will. Although officially a Muslim country, Malaysian officials apparently showcase anti promote the practice of other religions. Intermarriage, though not common, exists and is socially accepted.

The Malaysian Economy

Malaysia is one of the world's fastest growing economies, posting a 10 percent rise in real GDP in 199l. Like other East Asian newly industrialized countries (NICs), Malaysia is friendly to business and leaves very little of its economic growth to chance. The country attracts multinational corporations with its political stability and 10-year government plans for improving its physical and human resources. Last year, Prime Minister Mahathir Mohamad's government announced its "2020 Vision," which details Malaysia's plan for becoming a "fully developed nation" by 2020. Among other things, the plan proposes that manufacturing continue to be the primary means of economic growth by being the major vehicle for export earnings. It also proposes a broadening of Malaysia's industrial base beyond electronics and textiles, which now dominate. For example, Malaysia is now the world's third largest producer of computer chips, behind only the United States and Japan. TI was a relatively early foreign player in contemporary Malaysia; now foreign investment capital is pouring into the economy, much of it from North Asian companies. The Malaysian-American Electronics Industry Association (MAEI), recently chaired by TI Malaysia's Jerry Lee, represents 15 American manufacturers located in Malaysia.

MAP: Malaysia

THE QUALITY GARDEN

There is no question that the Texas Instruments Malaysia (TIM) plant is located in an exotic setting. Kuala Lumpur, with its lush tropical plants and rich cultural diversity, creates a fascinating backdrop for self-managing teams. When you enter the large industrial complex itself, however, at first it seems similar to a thousand other production facilities. There are several buildings with a factory setting appearance interwoven with paved parking lots filled with rows of employee cars. Inside, a honeycomb of work rooms are bustling with production activity. Long hallways equipped with periodic meeting rooms, rest rooms, drinking fountains, and many company displays create the familiar feel of a factory, albeit a very clean, well-kept one.

One could enter through a particular main factory entrance into this production environment and easily overlook a small green garden area immediately to the right of the door. A detour to this well-kept garden yields a beautiful display of carefully arranged native tropical plants, a lush green area that creates a natural picture that is visually pleasing.

You will also notice that at the center of the garden is a small stone structure that appears to be a compact monument of some kind. It is the plant’s “quality shrine”—a continual reminder and symbol of TIM’s commitment to quality. In many ways we found the garden to be a particularly appropriate symbol of the total quality emphasis at TIM. The garden and the stone form a natural blending of numerous living organisms to create a total quality product for all to see. Interestingly, we hadn’t really noticed the garden until the end of our last day visiting the plant, and we suspect most Americans would likely overlook it as well. We were told, however, that for the Japanese visitors, a visit to the Quality Garden is one of the most interesting and valued highlights of a visit to TIM. It represents in a creative and powerful way the plant’s dedication to total quality.

Copyright of Business Horizons is the property of Elsevier Science Publishing Company, Inc.. Copyright of PUBLICATION is the property of PUBLISHER. The copyright in an individual article may be maintained by the author in certain cases. Source: Business Horizons, Sep/Oct94, Vol. 37 Issue 5, p16, 10p
Item: 9410113171

Explanation / Answer

Q:What change in organizational structure accompanied the move to teams? Plea

Change management can be defined as a process which is required to Highly Effective organisational change or transformation inside an organisation which can be obtained with the help of the professional approaches which directly impacts the overall change inside the organisation effectively and smoothly.

Is a specific process includes all the approaches which are required to implement a change into a system.

Some implications which change manager faces in introducing the change into the organisation are as follows

• Communication

This is one of the main issues change manager faces inside an organisation, change in the organisation requires the proper communication which is mostly not done inside an organisation for implementing a specific change. Lack of communication creates confusion and also create disruptive results as there is no communication between the manager and employee which results into a problem inside an organisation.

• Providing explanations

Provision of explanations to the Employees about the change can be very difficult at the time. Most of the time it is really hard to explain to your employees about the specific change. Buying a proper strategy as well as pre decided system manager can easily increase its ability to grow the explanatory skills which can be used to explain the changes to the Employees.

• Implementing new tech

Implementation of the new technology inside an organisation could be very confusing as well as frustrating for the employees as it can change the hole pattern of the data management as well as the information flow. This specific change creates extreme frustration inside an organisation and lead change leader or manager into trouble. As the technology is totally new most of the managers are not aware of the specific results for the problems included in the new technology. They can be reduced by a learning the specific Technology before applying into the organisation.

• Conflict management

It is very usual that while implementing the change into the organisations, conflict happens. Managing the conflict is an essential quality of a change manager. Managing the specific conflict inside the company or the organisation is one of the most prominent issues while implementing a change. From a manager aspect there are so many conflicts going on inside an organisation along with the change happening so that the specific management of the conflict is really hard.

• Expecting the quick change

Most of the employees inside the organisation expect a larger benefit from the change provided at a very less period of time. This specific factor creates a feeling of failing in implementing change hence it creates a problem of demotivation inside the organisation and create complication for the change manager.

All in all we can say that most of the time change manager faces the extreme implications over the changes happening in the organisations . By maintaining a proper communication and being involved in the company's structure a change manager can easily reduce the overall effect of these implications and can provide support to the basic structure of its workplace.

Moving the structure to the team's definitely helps in acquiring a better approach for Change management. Akbarpur ENT Anantapur in 15 increases the overall efficiency of the organisation and that implemented change in a positive way overall, overall effectiveness of the chain management program increases by many folds. This type of approach also helps in reducing the overall cost involved in creating a change inside the organisation as teams are much efficient than implementing a structure wise change for improving the overall service quality and implementation of different Strategies for a better management and acquiring theme based Change management system.

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