Fitting Quality Into Saudi Industry: The Road to Success

1
Fitting Quality IntoSaudi IndustryThe Road to
Success

• By
• Dr. Tarik Al-SulimaniAdvanced Electronics Co.

April 19, 2000
2
Introduction

• Change in the way business is done
• Competition
• Product Change
• Technology Impact
• Information Availability and its Use

3
Background

• More developing nations are advancing toward
  technological independence demanding for
  technology transfer
• Change in management style
• More focus on customer

4
Transition in Management Outlook
Old-World Organization
New-World Organization

• Managers supervise workers closely
• Measurements and rewards related to individual
  departments
• Motivation relates to pleasing the boss
• Steady customers
• Homogeneous localized workforce working with
  respective specialties

• Managers set directions, build and coach teams
• Measurements and rewards related to the whole
  organization
• Motivation related to pleasing the customer
• Globalization, multinational activities
• Heterogeneous multi-racial workforce working as
  multi-discipline teams.

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Transition in Management OutlookContd
Old-World Organization
New-World Organization

• Vertical-Horizontal-Geographical- External
  Boundaries
• Moderate use of information technology
• Focus on functional operations

• Tending to be boundaryless
• Explosion of boundless applications of IT
• Focus on process

6
Changes in Corporation
Explosive changes in technology
Fundamental changes in how people work
RE-INVENTION OF ENTERPRISE STRUCTURE
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Increase of Competitive Pressures

• Changing Technology
• Fast redesign of products
• Growth of high-tech countries
• Growth of cheap-labor countries (China, India,..)
• Increasing rate of change
• Shorter windows for opportunities

8
High-Speed Enterprise
FASTER PRODUCT DEVELOPMENT
Company Product Early 1990s Now
Honda Cars 5 years 2 years
Lucent Phones 2 years 6 months
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High-Speed Enterprise
FASTER PRODUCTION
(from order to finished goods)
Company Product Early 1990s Now
GE Circuit 3 Weeks 3 days breaker boxes
Motorola Pagers 3 weeks 2 hours
Hewlett Electronic 4 weeks 5 days Packard
Testers
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Changes in Corporation
HIGH SPEED
HIGH QUALITY
LOW COST
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Giants of the 21st Century

• East and Southwest Asia are the worlds fastest
  developing regions
• Japan The most developed country in the pacific
  rim
• South Korea now is challenging leading
  industrialized nations with export of consumer
  products

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Success of the Giants

• Major emphasis on EDUCATION
• In the US 44 of Asian-Americans hold college
  degrees
• In Japan, 94 of students stay in schools beyond
  the legal age
• About one-third of Korean young population goes
  on to universities

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Core Ideas of Quality
Customer Focus
Quality
Continuous Improvement
Use of Data for Decision-Making
EmployeeEmpowerment
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What is TQM?

• Total Quality Management is performance
  leadership in meeting customer requirements by
  doing the right things right the first time.

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The Quality Revolution

• More focus on quality approaches
• Deming, Juran, Crosby, and Hammer
• TQM in the Gulf, including ISO 9000
• TQM and the HR functions
• Establishing companys goal, and satisfying
  business needs
• Concentration on employees satisfaction

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Pillars of the House of Total Quality

• Customer satisfaction
• Continuous improvement
• Speaking with facts
• Respect for people
• Commitment

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Conditions for Excellence for Total Quality
Total Quality Requirements
Customer
Customer Orientation
Orientation
Human
Resources
Training
Participation
Motivation
Excellence
Product/Process
Processes/ Procedures
Products/ Services
Information
Suppliers
Leadership
Planning
Culture
Communications
Accountability
Management Leadership is the Foundation of Total
Quality
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HRS New Role

• Traditionally, HR undertakes training and
  developing employees to be managers/leaders in
  their respective disciplines.
• The new TQMized HR has to train itself become a
  functional leader in the organization.
• HR is poised now to provide functional leadership
  in attaining quality performance by the
  organization in delivering goods services.

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TQM and HR

• Development of human resources in the Gulf
  Organization
• The need for a more pro-active HR function
• TQMizing the HR function
• Bringing quality for continuous improvements in
  HR activities
• Integrating TQM with HR and making HR responsible
  for all TQM activities

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TQM HRM, A Natural Partnership

• Compatible or common aspects for partnership
  between TQM and HRM are
• Creating corporate culture
• Training and development
• Company policies and functional procedures
• Attainment of quality through personal
• Continuous improvement in the company's products,
  processes, procedures and services
• Customer satisfaction through employee
  satisfaction.

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What does a company looksfor in its employees?

• Emphasis on
• Team Player - Leadership Qualities
• Strong Communication - Result Oriented
• Take Ownership in Job
• Principles and Values
• To Act with Integrity - To be Fair
• To be Socially Responsible - To have fun
• Employee must have at least a Masters' Degree in
  Business Administration with a minimum of 10
  years experience.

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The Industrial Blast in Saudi Arabia

• Tremendous focus on industrialization
• Dependence on foreign expertise
• Private sector is still saturated with non-Saudi
  workforce
• The need for the development of the know-how

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Industrial Scenario in KSA
1. Over 2,100 Factories Production worth SR 30B
Export over SR 40B 2. No. of industries
2,000 Total capital SR 120B. 1,300 industrial
projects under study 350 projects implemented in
1992, joint ventures with foreign
countries 3. Investment in basic industries in
billions non-oil downstream industries SR 97B up
to 1990 4. Chemical industries 320 factories,
investment SR 60B building materials next _at_SR17B,
absorbing 38,000 laborers (25 of total
industrial labor)
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Quality Approach

• Religion as a way of life
• Stimulate industrial diversification beyond oil
• Develop an advanced private market economy
• Focus on local industries
• Focus on education

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Failure of Quality

• Lack or ignorance of objectives
• No clear vision is established for the
  organization
• gap in the management hierarchy
• More focus on quick profit and less focus on
  services
• No policies and procedures exist
• No feedback on customer needs and requirements
• No feedback on customer satisfaction
• Cultural handicaps
• Limited competition among companies
• No understanding of quality (TQM or BPR)

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Implementation of TQM

• Creating a cultural base
• Commitment from top management
• Developing a philosophy for Quality
• Training
• Developing teamwork
• Open lines of communications

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Advanced Electronics Company
A Successful Journey
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AEC VISION
It is AECs vision to become the regional
industry leader for Total Quality
Electronic Products and Services.
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Mission

• AEC is developing a comprehensive strategy for
  the 21st century that defines its market
• Challenging the organization to maintain an
  environment of continuous process improvement
• Providing increased company focus on meeting
  customer requirements
• Enhancing workforce knowledge and skills
• Supplying high quality products and services
• Creating Total Quality culture consistent with
  AEC style of management

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Executive Steering Committee
EXECUTIVE STEERING COMMITTEE
Develops the vision and mission and identifies
key customer issues monitors metrics and sets
goals/objectives for AEC

• President Chief Executive Officer
• Chief Operating Officer
• Chief Financial Officer
• Sr. V.P., Prog. Magmt. Contracts
• V.P. R D
• V.P., TQM-HR

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TQM Planning Council
Develops the action plan for achieving
goals/objectives set by the Executive Steering
Committee, for continues improvement sponsors
and recognizes quality improvement achievements
of teams and individuals.
TQM PLANNING COUNTIL

• Chief Operating Officer
• V.P., Research Development
• V.P., Program Mgmt Contracts
• V.P., TQM-HR
• Director, Facilities
• Director, IMIS
• Director, Quality Assurance
• Director, Materials
• Director, Contracts
• Director, Operations
• Director, HR

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Total Quality Fitness Review

• Yearly Evaluation
• Identifies strength and weak areas in the
  organization.
• Take action for improvement

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Quality Improvement Teams
1. Procedures Improvement 2. Productivity
Improvement 3. Vendor Payment Cycle
Improvement 4. Motivation Improvement 5. SPC -
reduction of defects to the assembly of
Radios 6. Career Development Procedure
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Quality Recognition

• Certified to Mil-I-45208, Mil-Std-45662,
  Mil-Std-20000A, Mil-Std-1686
• Certified to ISO 90001
• Obtained highest quality rating from leading
  international companies, examples
• - Boeing Gold Supplier
• - Lucent Technologies Grade A Supplier
• - Lockheed Martin Star Supplier

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Transition to Total Quality

• Is a culture change
• Is a continuous process and will not occur
  overnight
• Requires time and resources
• Requires involvement, persistence and dedication
  from all of us

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Are We Ready for the Change?

• The world is going through fierce changes and
  advances in technology
• We must prepare not just the resources of
  technology, but provide the appropriate culture
  of the changes
• Our dependence on industry will be a challenge
• The new generation must be ready for the 21st
  century

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New Concepts of Education and Management

• Increased knowledge of science and mathematics
  will be required to provide a scientific talented
  population
• The university of the future must focus on more
  hands-on and practical experience
• The gap between the university and the industry
  must be bridged
• More focus on English training must be done to
  allow students to be more prepared for the
  challenges in the future

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Conclusion

• Challenges of the 21st century
• Expectations of the coming generation of workers
• Challenges for the Gulf organizations
• Focus on quality for survival
• Focus on HR leadership for TQM

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Thank You