Customer Relationship Management In
Content
Customer Relationship Management Customer Relationship Management in
Shaun Filaments A PROJECT REPORT Under the guidance Of Mr. Nilesh Kholkar , Marketing Manager, Shaun Filaments Pvt. Ltd. Submitted by Shweta Naik in partial fulfillment of the requirement for the award of the degree Of MBA IN Marketing Management
July 2011
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CHAPTER 1 Introduction 1. 1 BACKGROUND The primary purpose of TQM is to provide excellence in customer satisfaction through continuous improvements of products and processes by the total involvement and dedication of each individual who is in any way, a part of that product / process. The principles of TQM create the foundation for developing an organization’s system for planning, controlling, and improving quality (Deming 1993). Total quality management (TQM) is a philosophy for effective management. However, the contemporary quality management literature is overwhelmingly manufacturing oriented and there is a dearth of studies (from the construction and related industry perspective) addressing the implementation process of TQM that will depict a holistic TQM philosophy in construction organizations. The present work is an earnest effort to fill this void. TQM is a structured approach to improvement. If correctly applied, it will assist FSPL in improving its performance. It involves a strong commitment to two guiding principles:
•
Customer satisfaction and,
• Continuous improvement. Customer satisfaction factors for clients of the transportation, food, chemical and paper, utilities and other miscellaneous industries are timeliness; cost, quality, client orientation, communication skills, and response to complaints were most significant.
2
In 1992, the Construction Industry Institute, Austin, Texas, published Guidelines for Implementing Total Quality Management in the Engineering and Construction Industry. Their results show that TQM has resulted in improved customer satisfaction, reduced cycle times, documented cost savings, and more satisfied and productive work forces. Despite the above, Construction and related industry, generally, has lagged behind other industries in implementing TQM. The main reason for that has been the perception that TQM is for manufacturing only (Chase 1993). The other major factor inhibiting the implementation of TQM in the construction industry has been the notion that TQM is costly and requires a long time period for implementation. One aspect of TQM that has frustrated the construction industry the most has been “measurement” and “Implementation Procedure” (Hayden 1996). Many construction companies in the US, Singapore, UK, and other European countries have been using TQM successfully for a number of years now and reaping rich rewards in improved client, consultant, and supplier relations, reduced “cost of quality”, on time and within budget project completions, and a well informed and highly motivated team of staff. Inspection traditionally has been one of the key attributes of a quality assurance (QA) / quality control (QC) system in the construction industry. Regarding inspection, Deming says, “Routine 100% inspection is the same thing as planning for defects - acknowledgement that the process cannot make the product correctly, or that the specifications made no sense in the first place. Quality comes not from inspection, but from improvement
3
ABOUT THE ORGANISATION When the best names in the Indian corporate arena needs integrated solutions of fire protection, security and building management systems they rarely look beyond the name of Firepro Systems Pvt. Ltd. Incorporated in 1992, Firepro has been at the forefront of integrated solutions for fire protection, security and building management systems. In the short span of less than two decades, the company has established itself as a 'thought leader' in the safety and security space.
With a strong backend in place and a sharp customer focus, today Firepro is not only designing and building safety solutions but is integrating safety into your life and ensuring that your world is safe. Firepro is therefore creating a sense of future readiness through automated systems that ensure that we live and work in spaces that are intelligent and safe. Today Firepro is a leader in the Infrastructure Protection and Safety (IPS) space, and offers integrated services and solutions such as Fire Alarm and Detection, Fire Suppression, Access Control, Video Surveillance, Intrusion Alarm, Building Management Systems, Consumer Safety and Security along with complete managed services. The company has a proactive team of over 1,400 people having specialized backgrounds and strong domain expertise and operating through 14 offices country-wide. Firepro also executes its operations globally through offices in United Arab Emirates, Australia, Singapore, Malaysia and Germany. This dynamic company has successfully
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implemented over 1,500 projects that serve as a testimony to the company's philosophy of engineering excellence. To maintain its leadership in IPS sector, successful quality and safety management systems are the requirement of the day. As the organisation belongs to the construction and related industry, it faces same hindrances as construction industry in implementing TQM.
5
OBJECTIVES OF PROJECT TQM places emphasis on prevention, not correction. The goal is work that is 100% free of errors, free of accidents, and 100% free of waste. The name of the game is to do things right the first time, eliminating waste / scrap and rework. To do this, it is necessary to focus on “processes.” Basically, a process is a task or a series of tasks. A process might be the bidding for a project, preparation of drawings, procurement of materials, erection of system, or a way in which the project manager deals with a client and with other members of the team. The primary objective of this study would be to develop a measurement model - with tools and methodologies for the identification and measurement of FSPL operational processes for customer satisfaction and continuous improvement and to develop a procedure for implementation of TQM. This in turn will lead to an overall improvement of quality, productivity and the competitiveness of the FSPL. Specifically, the aims and objectives of this project are to:
a. Determine the processes (“what to measure”) that are most suitable
and appropriate for measurement during the project life-cycle and;
b. Develop a model (“how to measure”) for the measurement and
evaluation of the quality performances of the processes identified in (b) above as a tool for continuous improvement.
c. Investigate the adoption and implementation of TQM in FSPL. 6
4 SCOPE OF STUDY This project proposes to investigate the adoption and implementation of TQM in Firepro Systems Pvt. Ltd., and develop a “measurement methodology” of operational processes for customer satisfaction and continuous improvement. The main thrust of this project will be to identify “what” processes can be measured and “how” to measure them. To realize the above objectives, literature search, questionnaires and interviews will be used. The tools used in the measurement will be one or several of the “Tools of Total Quality” such as control and run charts, cause and effect diagrams, flowcharts, check sheets, Pareto diagrams, and histograms. This project has the potential of demonstrating tangible benefits of using TQM by showing that quality improvement efforts can be quantified, measured, and analyzed thereby enabling FSPL to continuously improve its projects and services to meet and even exceed customer requirements.
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5 ORGANIZATION OF THE REPORT [FSPL] The report is logically organized into seven (7) chapters and appendices: Chapter 1 is the introduction and is composed of background, introduction about Firepro, objectives of study and scope of study. Chapter 2 comprises literature review of all terminologies of TQM, Quality Evolution, Analysis of Management Characteristics, Historical Perspective of TQM, Critical Success Factors in TQM, General Model for Implementing TQM, Other Quality Systems and Quality Improvement Techniques. Chapter 3 describes in detail the methodology followed in this research study. Chapter 4 investigates the adoption and implementation of TQM in FSPL industry based on the results of the first questionnaire. Chapter 5 identifies the processes for improvement through a customer survey. The survey asked the customer to rate (on a scale of 1-5) FSPL on timely completion of project phases, adequacy of safety program, adherence to project budget, and quality of workmanship. From these customer satisfaction ratings, a customer satisfaction index was developed to measure the company’s overall performance in the eyes of its customers. Based on
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the data obtained in the last step, a graphical tool in the form of a cause and effect diagram was used in studying and improving the processes to determine the root cause. Finally, a questionnaire was prepared to develop an improvement index. Chapter 6 suggests a procedure for implementing TQM in Firepro Systems Pvt. Ltd. Chapter 7 summarizes the conclusions of this study and recommendations for further research based on the research findings and insight developed during the course of this study. The appendices include the questionnaires and bibliography.
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TERMINOLOGIES 2. 2. 1 Quality ISO 8402 defines quality as the degree of excellence in a competitive sense, such as reliability, serviceability, maintainability or even individual characteristics. 2. 2. 2 Quality Systems Quality systems refer to the organizational structure, procedures, processes and resources needed to implement quality management. 2. 2. 3 Quality Assurance Quality assurance is the planned and systematic activities implemented within quality system and demonstrated, as needed, to provide adequate confidence that an entity will fulfill requirements for quality.
2. 2. 4 Quality Control Both ANSI and ISO define quality control as the operational technique and activity; for example, providing a means to control and measure the characteristics of a material, structure, component, or system that are used to fulfil requirements for quality. 2. 2. 5 Quality Management Quality management refers to all activities of overall management functions, especially top management leadership, that determine quality policy objectives and responsibilities for all members of the organization. 2. 2. 6 Total Quality Management
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Total quality management is the management approach of an organization, which concentrates on quality based on the participation of its members and aims at long-term success through satisfaction and benefits to all members of the organization and society (ISO 8402 and Griffin 1990).
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Title of the project. 2. Review of literature and Problem Statement . 3. Objective of the proposed Study 4. Research Methodology (Sources of data, Sampling, Tools of analysis). 5. Scope/ Relevance of Proposed Study. 6. Proposed questionnaire(if any) 7. References.
Introduction - Details about the topic, industry, competitive companies and products, need of study and some history about the same etc. Problem Identification and Problem Formulation - Core area of problem and other related problems and their brief solutions. Same problem if studied prior to student’s study and its findings and results. c. Objective of Study - Objectives of the study shall be mentioned point wise. Student can also divide the broader and narrow areas of their objectives. The objectives of study must be near to the solution of the problem. Hypothesis - Student shall mention the various assumptions to be tested in their Research Study. Scope of Study - Student can also mention the scope of study. They can limit the companies, industry, time period and target group for their study. Data Collection - Data to be used for the Research Study can be primary or secondary. Data sources must be defined properly. Research Tools Applied - Student shall mention the tools and techniques applied to the study including the statistical tools, techniques and packages to be used to measure the efficiency, volatility, liquidity and marketability. Rationale of study. Organization of Study - The chapter wise categorization of study can be given under this topic. References and Bibliography - Details about source of material, reference books, articles, web resources etc. used for your research study.
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Shaun Filaments A PROJECT REPORT Under the guidance Of Mr. Nilesh Kholkar , Marketing Manager, Shaun Filaments Pvt. Ltd. Submitted by Shweta Naik in partial fulfillment of the requirement for the award of the degree Of MBA IN Marketing Management
July 2011
i
CHAPTER 1 Introduction 1. 1 BACKGROUND The primary purpose of TQM is to provide excellence in customer satisfaction through continuous improvements of products and processes by the total involvement and dedication of each individual who is in any way, a part of that product / process. The principles of TQM create the foundation for developing an organization’s system for planning, controlling, and improving quality (Deming 1993). Total quality management (TQM) is a philosophy for effective management. However, the contemporary quality management literature is overwhelmingly manufacturing oriented and there is a dearth of studies (from the construction and related industry perspective) addressing the implementation process of TQM that will depict a holistic TQM philosophy in construction organizations. The present work is an earnest effort to fill this void. TQM is a structured approach to improvement. If correctly applied, it will assist FSPL in improving its performance. It involves a strong commitment to two guiding principles:
•
Customer satisfaction and,
• Continuous improvement. Customer satisfaction factors for clients of the transportation, food, chemical and paper, utilities and other miscellaneous industries are timeliness; cost, quality, client orientation, communication skills, and response to complaints were most significant.
2
In 1992, the Construction Industry Institute, Austin, Texas, published Guidelines for Implementing Total Quality Management in the Engineering and Construction Industry. Their results show that TQM has resulted in improved customer satisfaction, reduced cycle times, documented cost savings, and more satisfied and productive work forces. Despite the above, Construction and related industry, generally, has lagged behind other industries in implementing TQM. The main reason for that has been the perception that TQM is for manufacturing only (Chase 1993). The other major factor inhibiting the implementation of TQM in the construction industry has been the notion that TQM is costly and requires a long time period for implementation. One aspect of TQM that has frustrated the construction industry the most has been “measurement” and “Implementation Procedure” (Hayden 1996). Many construction companies in the US, Singapore, UK, and other European countries have been using TQM successfully for a number of years now and reaping rich rewards in improved client, consultant, and supplier relations, reduced “cost of quality”, on time and within budget project completions, and a well informed and highly motivated team of staff. Inspection traditionally has been one of the key attributes of a quality assurance (QA) / quality control (QC) system in the construction industry. Regarding inspection, Deming says, “Routine 100% inspection is the same thing as planning for defects - acknowledgement that the process cannot make the product correctly, or that the specifications made no sense in the first place. Quality comes not from inspection, but from improvement
3
ABOUT THE ORGANISATION When the best names in the Indian corporate arena needs integrated solutions of fire protection, security and building management systems they rarely look beyond the name of Firepro Systems Pvt. Ltd. Incorporated in 1992, Firepro has been at the forefront of integrated solutions for fire protection, security and building management systems. In the short span of less than two decades, the company has established itself as a 'thought leader' in the safety and security space.
With a strong backend in place and a sharp customer focus, today Firepro is not only designing and building safety solutions but is integrating safety into your life and ensuring that your world is safe. Firepro is therefore creating a sense of future readiness through automated systems that ensure that we live and work in spaces that are intelligent and safe. Today Firepro is a leader in the Infrastructure Protection and Safety (IPS) space, and offers integrated services and solutions such as Fire Alarm and Detection, Fire Suppression, Access Control, Video Surveillance, Intrusion Alarm, Building Management Systems, Consumer Safety and Security along with complete managed services. The company has a proactive team of over 1,400 people having specialized backgrounds and strong domain expertise and operating through 14 offices country-wide. Firepro also executes its operations globally through offices in United Arab Emirates, Australia, Singapore, Malaysia and Germany. This dynamic company has successfully
4
implemented over 1,500 projects that serve as a testimony to the company's philosophy of engineering excellence. To maintain its leadership in IPS sector, successful quality and safety management systems are the requirement of the day. As the organisation belongs to the construction and related industry, it faces same hindrances as construction industry in implementing TQM.
5
OBJECTIVES OF PROJECT TQM places emphasis on prevention, not correction. The goal is work that is 100% free of errors, free of accidents, and 100% free of waste. The name of the game is to do things right the first time, eliminating waste / scrap and rework. To do this, it is necessary to focus on “processes.” Basically, a process is a task or a series of tasks. A process might be the bidding for a project, preparation of drawings, procurement of materials, erection of system, or a way in which the project manager deals with a client and with other members of the team. The primary objective of this study would be to develop a measurement model - with tools and methodologies for the identification and measurement of FSPL operational processes for customer satisfaction and continuous improvement and to develop a procedure for implementation of TQM. This in turn will lead to an overall improvement of quality, productivity and the competitiveness of the FSPL. Specifically, the aims and objectives of this project are to:
a. Determine the processes (“what to measure”) that are most suitable
and appropriate for measurement during the project life-cycle and;
b. Develop a model (“how to measure”) for the measurement and
evaluation of the quality performances of the processes identified in (b) above as a tool for continuous improvement.
c. Investigate the adoption and implementation of TQM in FSPL. 6
4 SCOPE OF STUDY This project proposes to investigate the adoption and implementation of TQM in Firepro Systems Pvt. Ltd., and develop a “measurement methodology” of operational processes for customer satisfaction and continuous improvement. The main thrust of this project will be to identify “what” processes can be measured and “how” to measure them. To realize the above objectives, literature search, questionnaires and interviews will be used. The tools used in the measurement will be one or several of the “Tools of Total Quality” such as control and run charts, cause and effect diagrams, flowcharts, check sheets, Pareto diagrams, and histograms. This project has the potential of demonstrating tangible benefits of using TQM by showing that quality improvement efforts can be quantified, measured, and analyzed thereby enabling FSPL to continuously improve its projects and services to meet and even exceed customer requirements.
7
5 ORGANIZATION OF THE REPORT [FSPL] The report is logically organized into seven (7) chapters and appendices: Chapter 1 is the introduction and is composed of background, introduction about Firepro, objectives of study and scope of study. Chapter 2 comprises literature review of all terminologies of TQM, Quality Evolution, Analysis of Management Characteristics, Historical Perspective of TQM, Critical Success Factors in TQM, General Model for Implementing TQM, Other Quality Systems and Quality Improvement Techniques. Chapter 3 describes in detail the methodology followed in this research study. Chapter 4 investigates the adoption and implementation of TQM in FSPL industry based on the results of the first questionnaire. Chapter 5 identifies the processes for improvement through a customer survey. The survey asked the customer to rate (on a scale of 1-5) FSPL on timely completion of project phases, adequacy of safety program, adherence to project budget, and quality of workmanship. From these customer satisfaction ratings, a customer satisfaction index was developed to measure the company’s overall performance in the eyes of its customers. Based on
8
the data obtained in the last step, a graphical tool in the form of a cause and effect diagram was used in studying and improving the processes to determine the root cause. Finally, a questionnaire was prepared to develop an improvement index. Chapter 6 suggests a procedure for implementing TQM in Firepro Systems Pvt. Ltd. Chapter 7 summarizes the conclusions of this study and recommendations for further research based on the research findings and insight developed during the course of this study. The appendices include the questionnaires and bibliography.
9
TERMINOLOGIES 2. 2. 1 Quality ISO 8402 defines quality as the degree of excellence in a competitive sense, such as reliability, serviceability, maintainability or even individual characteristics. 2. 2. 2 Quality Systems Quality systems refer to the organizational structure, procedures, processes and resources needed to implement quality management. 2. 2. 3 Quality Assurance Quality assurance is the planned and systematic activities implemented within quality system and demonstrated, as needed, to provide adequate confidence that an entity will fulfill requirements for quality.
2. 2. 4 Quality Control Both ANSI and ISO define quality control as the operational technique and activity; for example, providing a means to control and measure the characteristics of a material, structure, component, or system that are used to fulfil requirements for quality. 2. 2. 5 Quality Management Quality management refers to all activities of overall management functions, especially top management leadership, that determine quality policy objectives and responsibilities for all members of the organization. 2. 2. 6 Total Quality Management
10
Total quality management is the management approach of an organization, which concentrates on quality based on the participation of its members and aims at long-term success through satisfaction and benefits to all members of the organization and society (ISO 8402 and Griffin 1990).
11
Title of the project. 2. Review of literature and Problem Statement . 3. Objective of the proposed Study 4. Research Methodology (Sources of data, Sampling, Tools of analysis). 5. Scope/ Relevance of Proposed Study. 6. Proposed questionnaire(if any) 7. References.
Introduction - Details about the topic, industry, competitive companies and products, need of study and some history about the same etc. Problem Identification and Problem Formulation - Core area of problem and other related problems and their brief solutions. Same problem if studied prior to student’s study and its findings and results. c. Objective of Study - Objectives of the study shall be mentioned point wise. Student can also divide the broader and narrow areas of their objectives. The objectives of study must be near to the solution of the problem. Hypothesis - Student shall mention the various assumptions to be tested in their Research Study. Scope of Study - Student can also mention the scope of study. They can limit the companies, industry, time period and target group for their study. Data Collection - Data to be used for the Research Study can be primary or secondary. Data sources must be defined properly. Research Tools Applied - Student shall mention the tools and techniques applied to the study including the statistical tools, techniques and packages to be used to measure the efficiency, volatility, liquidity and marketability. Rationale of study. Organization of Study - The chapter wise categorization of study can be given under this topic. References and Bibliography - Details about source of material, reference books, articles, web resources etc. used for your research study.
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