UNIVERSITY OF DHAKA

TQM Practices of

ACI Salt Industries Ltd. Bangladesh

Submitted to:

Monika Chakrabarti

Asst. Professor, Dept. of Management Studies

University of Dhaka

12/12/2012

University of Dhaka

Department of Management Studies

MBA (Evening Program) Fall, 2012

Term Paper

Course Title

Total Quality Management

Course code

EM 540

Course

Teacher Monika Chakrabarti

Topic TQM Practices of

ACI Salt Industries Ltd.

Bangladesh

Date

12-12- 2012

Submitted by

Nahid Rijwan 3-09-17-033

Bijoy Mohajan 3-11-21-050

Neaz Parvez 3-11-21-079

Md. Sujan Mahmud 3-10-19-049

Zahidul Islam 3-11-21-013

Table of Contents

Serial Topic Page No.

1 Organization Profile 01

2 Organogram 02

3 Production Flow Chart 03

4 PRE-requisites of TQM in ACI Salt Ind. 04

5 TQM Questionnaire 09

8 Concluding Remarks 18

1

Organization Profile:

ACI Salt was launched in August, 2005 and marketed and distributed by ACI Consumer

Brands through its network. ACI has set up its salt refining plant in Rupganj, on the banks of

the Shitalakhya River. The plant produce refined iodized salt through Thermal Evaporation

System. ACI has used technology from China Heavy Machineries Corporation (CHMC) in

establishing the plant. The end product will be of high quality, free-flowing salt with even,

crystallized grains. The iodine content of ACI salt will have a stability of more than 6

months. The project has been undertaken at an approximate cost of Taka 32 crores. Within

the very short period it has been enjoying the pride of the Brand Leader. The best in its kind,

ACI Salt is vacuum evaporated, free flowing and properly iodized. It is also very porous and

free flowing. Iodine is coated in every single grain which makes it an essential product for the

children; the absence of right quantity of iodine in their food may cause mental disability to

them. ACI Salt has won the "BEST BRAND OF BANGLADESH AWARD 2008" for

unparallel customer loyalty beating all the brands in Foods & Beverages category.

The comparative features of ACI Salt and other ordinary salts produced through washing

method are shown below:

Particulars Ordinary Salt ACI Salt

NaCl Content <85% 99.5%

Iodine Content 5-20 PPM 20-50 PPM

Soluble Impurities 1% Nil

Insoluble Impurities (Sulphur,

Calcium, Magnesium, Arsenic etc.)

2% Nil

Technology Washing-Crushing Vacuum Evaporation

2

Organogram:

3

Production Flow Chart:

4

PRE-requisites of TQM in ACI Salt Ind.:

• Commitment from Management

In order for any organizational effort to succeed, there must be a substantial

management commitment of management time and organizational resources. The

purpose must be clearly and continuously communicated to all personnel.

Management must consistently apply the principles of TQM.

ACI management is committed to provide quality products and for this management

is committed to –

� Allocate resources for providing quality products and/or services

� Reduce production cycle time

� Handle customer complaints efficiently

� Provide cost for failure

� Communicate strategic plans to the stakeholders

� Give importance to the quality of goods

• Ability to change Organizational culture

Changing an organization’s culture is difficult and will require as much as five years.

Individuals resist change – they become accustomed to doing a particular process and

it become the preferred way. Management must understand and utilize the basic

concepts of change. They are:

1. People change when they want to and to meet their own needs.

2. Never expect anyone to engage in behavior that serves the organization’s

values unless adequate reason has been given.

3. For change to be accepted, people must be moved from a state of fear to trust.

Impediments to a cultural change are the lack of effective communication and

emphasis on short-term results. Organization that spends more time planning for the

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cultural aspects of implementing a TQM program will improve their chances of

success.

ACI as an organization handle cultural change through –

� Communicating values throughout the organization. HR department conduct

session on values throughout the business units and factories and hang values

related poster in the organization premises.

� Providing training on quality

� Listening to the voice of the employees of the organization through biannual

MD’s address

� Providing trust by giving security of job; so that employees feel confident in

time of change.

• Proper planning

All constituents of the organization must be involved in the development of the

implementation plan and any modifications that occur as the plan evolves. Of

particular importance is the two-way communication of ideas by all personnel during

the development of the plan and its implementation. Customer satisfaction should be

the goal rather than financial or sales goals. Focus on quality and the other goals will

follow.

ACI implement planning by –

� Communicating yearly planning to all employees of ACI

� Giving production target for each product

� Furnish back up plan for any short comings of the yearly plan

• Continuous training and education

Training and education is an ongoing process for everyone in the organization. Needs

must be determined and a plan developed to achieve those needs. Training and

6

education are most effective when senior management conducts the training on the

principles of TQM. Informal training occurs by communicating the TQM effort to all

personnel on a continual basis.

ACI is giving continuous training on –

� Values and professionalism

� Communication techniques

� Teambuilding

� Decision making and problem solving method

� Behavioral improvement techniques

• Structured organization

Differences between departments and individuals can create implementation

problems. The use of multifunctional teams will help to break down long-standing

barriers. Restructuring to make the organization more responsive to customer needs

may be needed. Individuals who do not embrace the new philosophy can be required

to leave the organization. Adherence to the six basic concepts will minimize the

problems over time.

ACI is a structured organization as shown by –

� Function based organization

� Inter-department communication on problem solving

� Customers need are identified through cross functional teams

• Easy access to data and results

In managing quality, it is important for organizations to have a good system to

manage data and information on its operation and external environment, i.e.

process/product performance and their customer or market needs. Having sufficient

data and information on the process performance and operations, customers,

7

suppliers, and other stakeholders would help the organization and its employees to

continuously improve their decision and action in producing and delivering goods and

services that fulfill the standards and requirements. Therefore, access to data and

quick retrieval is necessary for effective processes.

ACI has given easy access of data and results through –

� Implement modern ERP system/MATPLAN for storing sales, customer and

stakeholders’ data and subsequently the employees have access to these data.

The data and results are than converted to future planning and execution of the

strategy to achieve goals.

• Measurement techniques

The organizational improvement program that matches output to customer needs,

requires teamwork and continuous improvement. TQM also involves strategic

planning. A key to assessing the progress of a TQM process is measurement. Today's

companies need performance measures that will allow them to effectively manage

their operations and meet business and financial goals. Defining current performance

in the elements of quality, cost, flexibility, reliability, and innovation allows

organizations to evaluate performance and to prioritize areas for initiating

improvement processes. Data analysis is the critical factor in determining how well an

institution is accomplishing its goals. Key characteristics of the organization should

be measured so that effective decisions can be made. In order to improve a process

you need to measure the effect of improvement ideas.

ACI measures key characteristics by –

� Balance Scorecard system for measuring job performance and improvement.

� Innovation prize is introduced to encourage process improvement

� Quality parameters are standardized by introducing ISO 9001:2008.

8

• Paying attention to internal and external customers

Organizations need to understand the changing needs and expectations of their

customers. Effective feedback mechanisms that provide data for decision making are

necessary for this understand. One way to overcome this obstacle is to give the right

people direct access to the customers.

ACI has prioritize the attention to customers by –

� Give orientation to the employees to identify the customers

� Introduce customer focus as one of the core values of the organization

� Customer survey and complaints are handled through proper supervision

• Use of empowerment and teamwork

Teams need to have the proper training and, at least in the beginning, a facilitator.

Whenever possible, the team’s recommendations should be followed. Individuals

should be empowered to make decisions that affect the efficiency of their process or

the satisfaction of their customers.

ACI provide both empowerment and teamwork by –

� Problem solving through forming teams and empower the team to formulate

solutions for the problems

• Desire for continuous improvement

It is tempting to sit back and reset on your laurels. However, a lack of continuous

improvement of the processes, product and/or service will even leave the leader of the

pack in the dust.

Continuous improvement is a priority for ACI as it is shown by –

� Providing innovation prize for the employees

9

� Introducing new technologies as available in the market

TQM Questionnaire:

1. What is the quality in your view?

The quality of a product or service refers to the perception of the degree to which the

product or service meets and exceeds the customer's expectations. Quality has no specific

meaning unless related to a specific function and/or object. Quality is a perceptual,

conditional and somewhat subjective attribute.

2. In your organization, do you have any practice of using employee suggestions?

Yes, we do have a suggestion box which is placed in a convenient place so that

employees can submit their suggestions for process improvement of the organization. We

also have web-based suggestions submission techniques which are attended or solved

through cross functional groups.

3. Do you provide any monetary incentives to encourage employee suggestions for

process improvement?

No, we do not have direct monetary incentives for encouraging employee suggestions.

But, ACI provide performance bonus to encourage employees to add value and

innovation in the individual job area.

4. If you do, are they individual – based or group – based or for the entire company

employees?

Individual – based.

5. Do you provide any non – monetary incentives to encourage employee suggestion for

process improvement?

10

Yes, we do have non – monetary incentives for providing suggestion for process

improvement. This scheme will cover all the employees working in the Company which

includes field employees also.

Key Criteria:

1. The innovative idea should bring value addition to the existing processes, products

and systems and results in substantial benefits to the Company in terms of finance,

image and productivity. The idea of encouraging innovation is to looking for ways

to improve things, solve problems and generally make things better, more efficient

and more convenient.

2. Before considered to be rewarded, the idea must be implemented at least for a

consecutive period of three months & the value addition to the company after

implementation must be calculated. Whilst accurate costs & benefits may not be

fully quantifiable, the Idea Evaluation Committee & the Value Addition

Calculation Committee will have the sole discretion to decide its merits.

3. The Value Addition Calculation Committee will be consisting of the Business

Manager, CB; Financial Controller & Corporate Finance Manager.

4. In the event a team submits a proposal, the total amount of award will be

distributed to the members by equal proportion.

5. More than one submission is permitted

6. Submissions must be practical and capable of being implemented

7. Ideas must be innovative- in the event that they are already being implemented or

is in the process of being implemented, or is under consideration for

implementation within ACI, they will not be considered as innovative ideas. This

decision will be at the sole discretion of the Idea Evaluation Committee.

Idea Submission Subjects:

Idea submissions may cover a broad range of subjects, including, but not restricted to:

1. Business proposals on new products and/or services

2. Marketing campaigns for existing products and/or services

11

3. Organizational and structural changes

4. Workflow and process improvements

5. Improving the customer services

6. Anything what you feel ACI is missing

7. Product improvement leading to increased profitability through design change,

recipe change etc.

8. Any breakthrough ideas in doing current jobs/practice differently or making deal

with outside parties differently which will bring savings to the company.

6. If you do, are they individual – based or group – based or for the entire company

employees?

The incentives are given as individual – based for best innovation for process

improvement. Ideas will be collected monthly and the idea evaluation committee will

determine which ideas will be forwarded to the concerned business heads for determining

the possibility of implementation. After three months of implementation, the Value

Addition Calculation Committee will calculate the net value addition of the idea to the

company against different set criteria. If the value addition is significant, the Value

Addition Calculation Committee will forward the idea along with value addition

calculations to the Management Committee. The Management Committee will be the

final authority to give decisions regarding the ideas to be selected for recognition &

reward in the forthcoming Managing Directors Address.

7. In your view, most problems in the production of products/services are related to:

a. The people who are engaged in producing the products/services

8. Which of the following does you organization use, if any:

a. JIT

b. Kaizen √

c. Business Process Reengineering

d. Benchmarking

12

e. None

9. If your organization uses any of the above concepts, please provide the situations

where the above are used.

Cross functional teams are formed to solve the problems and decision making. Moreover,

line managers meet monthly with the subordinates to solve problems.

10. Do you benchmark? Where do you get the data about the best performers in order

to benchmark?

Yes, Benchmarks are provided through evaluating Balance Scorecard of the employees.

11. What are the ways the organization attempts to involve lower level employees in

decision making? Please explain some methods.

12. Although Deming proposed that qualitative objectives, MBO and performance

appraisals should not be used in organizations if they are to focus on quality, what is

your opinion?

13. Circle the number that best describes the firm’s situation:

a. How flexible is the organization culture?

b. How much is the emphasis on policies, procedures as opposed to tolerating

deviations?

1 2 3 4 5 6 7 8 9 10

Very Flexible Very Inflexible

1 2 3 4 5 6 7 8 9 10

Very Low Very High

7

8

6

13

c. How cautious is the firm about trying something new?

d. Top-down management and communication is strictly followed?

e. The organization trains everyone (not just new employees)?

f. Decision – making is centralized at the top?

g. Productivity and profitability is the primary focus of the organization.

h. Cross-functional teams are often created to identify and solve problems.

i. Employee turnover is tracked in order to control it

j. The organization accepts a certain margin of error in operations and processes.

k. Some conflict is allowed to occur in the organization

Very Cautious Not Cautious

Very Loosely Very Strictly

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

Never Always

1 2 3 4 5 6 7 8 9 10

Always Never

1 2 3 4 5 6 7 8 9 10

Always Never

1 2 3 4 5 6 7 8 9 10

Never Always

1 2 3 4 5 6 7 8 9 10

Never Always

1 2 3 4 5 6 7 8 9 10

Always Never

1 2 3 4 5 6 7 8 9 10

Always Never

1 2 3 4 5 6 7 8 9 10

5

7

10

7

8

7

9

14

l. Conflicts of any type are nullified

14. For the same type of products or services do you use –

a. One supplier

b. Few suppliers

c. Several suppliers √

d. Uncertain

15. Which in your view, is better to do?

a. Use one supplier

b. Use a few suppliers

c. Use several suppliers √

16. Please describe why?

Several suppliers will help to negotiate the cost acquiring raw materials.

17. Does the supplier organization representatives visit your

factory/plants/organization?

a. No, it is not necessary

b. Yes, every month on average

c. Yes, once a year on average

d. Yes, but not regularly √

18. Do you train the supplier organization so that it knows exactly what you want from

it?

a. No, it is not necessary

Always Never

1 2 3 4 5 6 7 8 9 10

15

b. Yes, rarely

c. Yes, occasionally √

d. Yes, often

19. Do you visit the supplier organization to know how they produce?

a. No, it is not necessary

b. Yes, every month on average

c. Yes, once a year on average

d. Yes, but not regularly √

20. Have you formed any sort of alliance with your suppliers (upstream or downstream,

e.g., product alliance, promotion alliance, logistic alliance, pricing alliance etc.)?

please describe.

No.

21. Does top management undergo any training in relation to quality improvement?

Yes

22. Does the top management themselves train others in any of the quality issues?

Yes

23. Does the top management spend time with front line employees face-to-face?

Yes

24. If so, how often?

a. One a year e. Everyday

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b. Once semi annually f. No fixed schedule

c. Once in a month √ g. Never directly

d. Once a week

25. Does the top management spend time with customers face-to-face?

Yes

26. If so, how often?

a. One a year e. Everyday

b. Once semi annually f. No fixed schedule √

c. Once in a month g. Never directly

d. Once a week

Questions the Interviewer should answer through observation and interview input

27. Provide a diagrammatic representation of the organization structure. Examine the

organization structure of the firm. State which type it is (e.g., function – based,

product – based, customer – based, geography – based, work – process based,

matrix etc.)

28. Do you think that the current organization structure of the firm is conductive to

TQM?

Yes

29. What artifacts, symbols and behaviors in the organization do you observe that tells

you that this organization’s culture is quality conscious? Explain.

List of symbols, artifacts:

17

a. Quality policy

b. Values posters

c. Safety posters

d. SOP/Written documents/procedures

e. Job rooster for production process

f. Notice board notifications

g. Important notices on the notice board

30. How much this organization spends on regular training annually?

Approximately 1,10,00 hours on

Operational knowledge and Skill

Managerial skill

Quality management system

Strategic Skill or conceptual skills

31. How much does this organization spend on management development annually?

BDT. 10,00,000.00

32. Does it appear to you that the organization treats spending on training and

development as cost or investment?

Investment

33. In your view, what is the level of partnership of the firm with its suppliers?

1 2 3 4 5 6 7 8 9 10

Low High

7

18

Concluding Remarks:

ACI's mission is to achieve business excellence through quality by understanding, accepting,

meeting and exceeding customer expectations.

ACI follows International Standards on Quality Management System to ensure consistent

quality of products and services to achieve customer satisfaction. ACI also meets all national

regulatory requirements relating to its current businesses and ensures that current Good

Manufacturing Practices (cGMP) as recommended by World Health Organization is followed

for its pharmaceutical operations.

The management of ACI commits itself to quality as the prime consideration in all its

business decisions. All employees of ACI must follow documented procedures to ensure

compliance with quality standards.

The pool of human resources of the company will be developed to their full potential and

harnessed through regular training and their participation in seeking continuous improvement

of work methods.