UNIVERSITI INDUSTRI SELANGOR QUALITY & CHANGE MANAGEMENT PMM 5453 ASSIGNMENT 2 “Implementing Total Quality Management at Thiokol Corporation”
PREPARED BY: MD KHAIRUL KHAILANI RAKMAD (6072012281) ABDUL MUTALIB DAUD (6081032571) NOR LELA AHMAD (6071041801) RAZIA BIBI (6082009391) SUBMISSION TO: PROF. DR KHAIRUL BAHAREIN MD NOR
THIOKOL COMPANY HISTORY TIMELINE* • • • • • • • • • • • • • • • • • •
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1929: Thiokol Chemical Company founded. 1945: Charles Bartley, working for the nascent Jet Propulsion Laboratory, discovers the use of thiokol as a stabilizer in solid-fuel rockets.[1] 1949: Thiokol produce the TX-18 Falcon missile, the world's first solid-fueled missile system. 1957: In anticipation of the forthcoming Minuteman contract, the company builds its plant at Brigham City, Utah. 1957: Thiokol Huntsville builds XM33 Pollux missile 1958: Merger with Reaction Motors Inc. (RMI), makers of liquid propellant rocket motor systems. 1958: Thiokol awarded contract to build the TU-122 rocket motor for the first stage of the LGM-30 Minuteman ICBM system. 1959: Thiokol Huntsville produces CASTOR strap-on booster rocket, used on the Atlas rocket. 1974: Thiokol wins the contract to build the solid rocket booster (SRB) for the Space Shuttle (Nov 29, 1973) 1978: The company sells its ski lift division to CTEC and its snow equipment division to Logan Manufacturing Company (LMC), owned by John DeLorean. 1980: Acquires Carlisle Chemical Company of Cincinnati, Ohio. 1982: Thiokol merges with Morton-Norwich products (owners of the Morton Salt concern, the Simoniz automotive products brand, and various chemical concerns). The merged company is called Morton Thiokol Incorporated (MTI). 1986: An O-ring fault in an MTI SRB destroys Space Shuttle Challenger in flight. The company is found at fault for the explosion and destruction of the Challenger and deaths of the astronauts. 1989: Morton Thiokol splits, with most of the chemical concern going with Morton. The propulsion systems division becomes Thiokol Inc. 1998: Thiokol changes name to Cordant Technologies. 1998: Thiokol branded polymer products purchased by PolySpec L.P., a Houston based manufacturer of Industrial Coatings, Marine Decking, and Subsea Insulation products. 2000: Thiokol merges with two divisions of Alcoa and with Howmet Castings and Huck Fasteners to become AIC Group (Alcoa Industrial Components). 2001: Alliant Techsystems (ATK) Inc. (a company formed when Honeywell spun off its defense division) spends $2.9 billion buying Thiokol and related businesses from AIC/Alcoa. ATK built the third stage of the Trident missile and had earlier bought Hercules Aerospace Co., builder of the second stage. With the purchase of Thiokol, who make the missile's first stage, ATK controls the lion's share of the US solid-rocket market. 2005, Thiokol wins the contract to produce the Ares I launch vehicle first stage for NASA's Project Constellation.[1] 2006, Alliant Techsystems (ATK) Inc. renamed ATK-Thiokol to ATK Launch Systems Group.
*Source : Wikipedia
Question 1 What are the factors of success in the Thiokol case? What did the firm do that led to improvements in performance? Thiokol has been implementing the TQ/CI (Total Quality/Continuous Improvement. To ensure that the process is consistent with business direction, they modified the five year strategic business plan. Workshops were conducted top down with most supervisors going through them twice. Process implementation teams were formed. There are departmental teams and critical process improvement teams. These teams are responsible to map out selected major processes, identify root causes of problems and waste, select solutions, and, most important oversee the effective implementation of those changes. Improved Processes:
Waste Throughput Inventory Operational expenses
Labor Wait
S Materials
Time
The effectiveness are measured and posted on special performance boards throughout the business unit. Some examples of the macro measures used by THD that showed improvements levels are rework cost with 63% improvement, customer complaints achieved 38% improvement, inventory improved 31%, employee suggestions improved 52%, worker-hours/unit has 13% improvement, electricity cost improved 23% and union grievances showed 35% improvement. They also implement Employee Attitude Survey and maintain focus on external elemant of the product and service chain, namely external customers and suppliers. THD also identified areas as targets for significant improvement such as: •
Integration across functional boundaries
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Compensation/reward system
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Recruitment/selection
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Individual job structure
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Training/skill development
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Organization structure
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Evaluation and recognition
Question 2 What strategy for change did the company use? Did the strategy for change have anything to do with the program’s success? The company use the Total Quality Management (TQM) as a strategy for change. Yes, the strategy for change have contributed towards the program’s success. Beginning with a definition of Total Quality, a Vision Statement was written, and a Total Quality/Continuous Improvement Executive Steering Council was established to oversee the TQ/CQI process. The process was added to the strategic plan, and employee training was used to encourage employee involvement, and to familiarize employees with the TQ/CQI process. A unique, cost-effective "just-in-time" training program was instituted. Departmental Teams formed to articulate supplier-customer relationships, define customer expectations, evaluate departmental processes, and establish improvement processes. Critical Process Improvement Teams formed to measure, evaluate, and improve processes. Customers and suppliers are involved in the design, concurrent engineering, and new product improvement. All of these TQ/CQI processes are ongoing at Thiokol. Results after two years include double-digit improvements in indicators, including a 40 percent reduction in quality costs, and significant reductions in union grievances, customer complaints, energy costs, and inventory. In addition, to assess the effectiveness of the total quality process, a variety of measures are used at both local and macro levels. The measures are posted on special performance boards throughout the business units and each manager is required to work with their people to establish improvement measures for their key activities and to keep progress chart visible in the work area. Measurements have also become the key to the process analysis that is done by the process improvement teams. As they map out their existing process, they assess the amount of time and cost associated with each step in the traditional approach.
Question 3 Can the increases in performance be sustained if the culture does not change? Explain your answer. There are a number of methodologies specifically dedicated to organizational culture change. These are also a variety of psychological approaches that have been developed into a system by THD in instilling the culture for specific outcomes such as the “corporate culture evolution.” Ideas and strategies, on the other hand, seem to vary according to particular influences that affect culture. The other argument is that it is 'leadership' that affects culture rather than 'management', and describe the difference. When one wants to change an aspect of the culture of an organization one has to keep in consideration that this is a long term project. Corporate culture is something that is very hard to change and employees need time to get used to the new way of organizing. For companies with a very strong and specific culture it will be even harder to change. 1. Formulate a clear strategic vision In order to make a cultural change effective a clear vision of the firm’s new strategy, shared values and behaviours is needed. This vision provides the intention and direction for the culture change. 2. Display Top-management commitment It is very important to keep in mind that culture change must be managed from the top of the organization, as willingness to change of the senior management is an important indicator. The top of the organization should be very much in favour of the change in order to actually implement the change in the rest of the organization.
3. Model culture change at the highest level In order to show that the management team is in favour of the change, the change has to be notable at first at this level. The behaviour of the management needs to symbolize the kinds of values and behaviours that should be realized in the rest of the company. It is important that the management shows the strengths of the current culture as well, it must be made clear that the current organizational does not need radical changes, but just a few adjustments.
4. Modify the organization to support organizational change The fourth step is to modify the organization to support organizational change. 5. Select and socialize newcomers and terminate deviants A way to implement a culture is to connect it to organizational membership, people can be selected and terminate in terms of their fit with the new culture. 6. Develop ethical and legal sensitivity Changes in culture can lead to tensions between organizational and individual interests, which can result in ethical and legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security. Change of culture in the organizations is very important and inevitable. Culture innovations is bound to be because it entails introducing something new and substantially different from what prevails in existing cultures. Cultural innovation is bound to be more difficult than cultural maintenance. People often resist changes hence it is the duty of the management to convince people that likely gain will outweigh the losses. Besides institutionalization, deification is another process that tends to occur in strongly developed organizational cultures. The organization itself may come to be regarded as precious in itself, as a source of pride, and in some sense unique. Organizational
members begin to feel a strong bond with it that transcends material returns given by the organization, and they begin to identify with in. The organization turns into a sort of clan. In the THD, in order to give a good atmosphere for cultural change the company has enhanced its strategy by implementing better compensation and reward program to the employees together with the good evaluation practice and reward system.
