Quality Management Practices

ABC (Pvt) Ltd - Thread Manufacturing Company

Department of Transport and Logistics Management
University of Moratuwa, Sri Lanka.

SUJEEWA LIYANAGE
Content Page

Executive summery ………………………………………………………………….. 1

1. Introduction to company……………………………………………………………… 2
1.1. Company Mission/common purpose………………………………………….. 3
1.2. Listen and respond. Make the best offer. Develop the best people…… 3
1.3. Organizational hierarchy……………………………………………………….4
1.4. Operations at ABC……………………………………………………………. 5
1.5. Key Products………………………………………………………………….. 6
1.6. Quality policy…………………………………………………………………..6
2. Strategic Aspect of Quality……………………………………………………………. 8
2.1. Quality strategies must be tied to broad business strategies (vision/mission)……9
2.2. Goals must be quantifiable and bench marking process……………………… 10
2.3. Planning must incorporate customer focus…………………………………… 11
2.4. Employees at many levels participate in the planning process……………… 12
2.5. level of priority given to continuous quality improvement and innovation…… 12
3. Management role in quality management………………………………………………14
3.1. Developing quality strategies………………………………………………… 14
3.2. Marketing Change…………………………………………………………… 15
3.3. Motivating People………………………………………………………… 15
3.4. Nothing is personal in Quality……………………………………………… 15
3.5. Bringing latest technology…………………………………………………… 16
3.6. Building confidence of customers………………………………………… 16
4. Products & Service Quality………………………………………………………… 17
5. Quality practices currently being used……………………………………………… 19
5.1. Employee empowerment…………………………………………………… 19
5.2. Management commitment…………………………………………………… 19
5.3. Employee involvement in decision making………………………………… 20
5.4. Training and aware employees……………………………………………… 20
5.5. Measurement of performances……………………………………………… 20
 5.6. Supplier selection…………………………………………………………… 21
5.7. 5s system……………………………………………………………………… 21
5.8. Six-sigma concept…………………………………………………………… 21
5.9. Quality cycles………………………………………………………………… 22
6. How quality helps to improve the performances of value chain…………………… 23
6.1. Primary Activities.............................................................................................. 23
6.1.1. Inbound Logistics.................................................................................. 23
6.1.2. Operations.............................................................................................. 23
6.1.3. Out bound Logistics.............................................................................. 24
6.1.4. Marketing and sales.............................................................................. 24
6.2. Support activities............................................................................................... 24
6.2.1. Procurement........................................................................................... 24
6.2.2. Technology development...................................................................... 24
6.2.3. Human resource management............................................................... 25
6.2.4. Firm Infrastructures............................................................................... 25
7. Quality issues of the organization………………………………………………… 26
8. Quality awards and certifications obtained…………………………………… 29
9. Conclusion.................................................................................................................... 30
 Executive summery

Quality is important to businesses but can be quite hard to define. Customers want quality that is
appropriate to the price that they are prepared to pay and the level of competition in the market.

“Value for money” is one aspect of quality which is important, because in most markets there is room
for products of different overall levels of quality, and the customer must be satisfied that the price
fairly reflects the quality.

However, firms have to work hard to maintain and improve their reputation for quality, which can
easily be damaged by a news story about a quality failure.

We have selected ABC (Pvt) Ltd to explore how quality practices are practically done in an
organization. In the report the actual name of the company will not be mentioned since we didn’t get
permission to use their company name at any place of the report.

The report contains an introduction to ABC (Pvt) Ltd. The grounds on which the ABC operates are
featured with specific reference to ABC values, mission, objectives, organizational hierarchy and
operation. An overview to ABC vision and mission developed based on people, customer and
environment are captured in this section. ABC always considers quality is the key to success and how
key quality objectives are framed in respect of customers, process, business and people are illustrated.

Report also covers a comprehensive literature on strategic aspect of quality and management role of
quality. Examples from ABC (Pvt) Ltd are used to illustrate the concepts.

At the latter part of the report it touches the product quality of ABC (Pvt) Ltd quality practices
currently being used, and how quality helps to improve the performance of value chain. Each place
examples are taken from ABC Company to support the concepts.

In the report Different attempts made to identify the quality issues faced by ABC at present. Finally
the report addresses the quality awards and certifications that ABC obtained for quality.
 1. Introduction to company

ABC (Pvt) Ltd is a leading manufacturer of sewing threads in Sri Lanka. ABC was stared a way back
in 1755 by James and Patrick of Paisley, Scotland as a small business to supply loom parts and needle
eyes. The business grew slowly but steadily and after 57 years, in 1812, they were able to put up a mill
in Paisley to manufacture cotton thread. By the year 2000, almost after two and half centuries later,
ABC was able to stand as number one sewing thread manufacturer in the world, claiming 25% of the
world share, operating in 66 countries around the globe. ABC worldwide produced textile, garments,
trims, zips and crafts and various kinds of apparel thread. In the year 2000, ABC took another strategic
decision to sell all its diversified businesses and to focus only on thread business. Today, ABC is
maintaining its world market share in sewing thread business has become the clear leader in the
business, employing nearly 30,000 employees all over the world.

ABC is the Sri Lankan subsidiary of ABC global company. It started operations in Sri Lanka in 1978
as a dealer for selling and marketing sewing thread manufactured by ABC. In 1981, ABC started its
factory in Millewa, Horana. During the past two decades ABC was able to become the market leader
in Sri Lankan sewing thread business holding approximately 65% of the market share. Today ABC
produces 40 Metric Tons of sewing thread per week, operating 24 hours a day and six days per week.
It employs approximately 500 people and caters for about 500 garment factories scattered in the island
including three major Free Trade Zones.

ABC was awarded ISO 9001:2000 certification for the quality management system established in 2004
by Sri Lanka Standard Institute. In 1998, ABC won the Sri Lanka National Quality Award for large
scale manufacturing sector. ABC manages its’ business with sound financial administration while
maintaining significant annual growth rate on sales volumes and values. ABC associates with world
renowned specifiers such as “sara lee”, “speedo”, “nike”, “levis”, “Jc Penny”, “Walt Disney”, “Little
woods”, “Guss”, “Mark & Spencer”, “Next”, “adidas”. “May”, “Calvin Klein” , “Tesco”, “Voctoria’s
Secret” etc.
 1.1. Company Mission/common purpose
ABC’ corporate philosophy consists of six tents that embody the very cornerstone of its existence. The
six links are firmly held together by strategic management. These links enables us to realize ABC
vision to

1.2. Listen and respond. Make the best offer. Develop the best people
And hence become the first choice of ABC customers all over the world.

Mission at ABC Sri Lanka is to ensure that all ABC products and services offer ABC customers total
satisfaction through the best performance delivery and price

ABC worldwide operates based on the following core values:

a. We know what we do
b. We take social, environment responsibilities seriously
c. We take considered risks
d. We imagine, innovate and improve
e. we compete as team
f. We keep ABC promises
g. We like what we do
h. We know customers pay for actions not for words
i. We take responsibility
j. We celebrate pride in collective achievement

ABC uses the following key quality parameters to help to retain ABC position as the Market Leader.
The key parameters are as follows:

1) Sustaining economical prices

11) Distributing effectively to ensure timely delivery

111) Minimizing customer complaints by maintaining product quality

Out of the above key parameters, ABC has identified the Customer Complaint as the deciding
parameter to replace ABC products by competitors’ products available in the market.
1.3. Organizational hierarchy
 1.4. Operations at ABC

Operations of a producing thread,

Spinning

Twisting

Dyeing

Finishing
Since ABC is multinational company their operations link with the other manufacturing countries like
India, UK, and Bangladesh…etc. so they don’t do every operation of producing threads. They are
doing spinning and twisting not in Sri Lanka they are done at India. In here they are doing dyeing and
finishing and distribution only. For the incoming thread they are check their quality by measuring
standards quality which approved by the head office of ABC. As example they measure strength and
TPM (twisted per meter) of cheese.

ABC brings thread which use big Cheese for produce threads. So they brought cheese from India (they
are not doing dyeing and finishing). Dye process which is one critical operation of their process. For
dyeing they use water, pressure, chemicals with correct temperature and PH. They use packaging
dyeing in which many packages of thread are dyed under pressure in a dye vat. Packages of synthetic
threads are dyed by a similar process that uses high temperature to ensure colorfastness, a key thread
performance characteristic. After dyeing they should check colour of thread is match with correct one.
Too do that they use spectrophotometer if the value of the meter exceeds 1.2 they reject that and do
operation again.

Once the thread is constructed, the thread may be finished in several different ways to enhance its
suitability for various end uses. Among that coats use applying lubricant (wax, silicon) they gird it to
small cones, length of that small thread vary 2500m, 5000m.

1.5. Key Products

ABC produce extensive product range covering thread used for heavy garments, baby wear,
foundation garments, denims, rain wear etc. which may need different features to suit the initial
sewing as well as end use. They supply sewing thread made out of Polyester, Nylon and Cotton to the
market. ABC managed to build a long term relationship with their customers by offering them the
world renowned brands such as “ astra”, “epic”, “ Seamsoft” , “dual duty”, “ grammex” , “Sylko”.
Consistent quality performances of ABC products have paid the way to win the confidence of
customers and also to penetrate deeper into the market. The following table captures the key products
and end users of ABC world renowned brands.

Table II – ABC key products and end users

Brand Name Generic Name End users
Shirts, Blouses, Over locking
Astra Staple Spun Polyester for thin fabric, Lingerie, Heavy
jean wear
Epic Polyester Polyester Core-spun Premium garments and labels
dual duty Polyester Cotton Core-spun Premium jeans labels, wallets,
bags etc.
sylko Trilobal Polyester Mainly for embroidery work
Gral Continuous Filament PolyesterLeather sewing
Gramax Micro Filament Polyester Leather sewing, underwear
Source: company documents

1.6. Quality policy

“We are committed to meet expectations of our internal and external customers by delivering world
class product and services”

We will achieve this by,

 Focusing on the external customers and recognizing that customers pay for actions not
words.
 Recognizing the needs of internal customers and working as a team whilst practicing quality
in everything we do
 Making collective decision, encouraging employee involvement and ownership in our
business
 Continually improving our quality management system through periodical reviews, our
customer service and relationship with all stakeholders.
 Taking social, ethical and environmental responsibilities seriously
 Using our capacity to imagine, innovative and improve.
 Benchmarking ourselves against world best business practices so that our quality standards
are never compromised.
 2. Strategic Aspect of Quality

Despite the increasing international evidence as well as local evidence that has identified quality of
product and service and a culture of continuous improvement to be essential for long-term competitive
advantage, many companies still remain unconvinced of the substantial gains available through a
focused commitment to quality and continuous improvement. This is mainly because of cost factor and
the malfunction of companies to integrate quality improvement programs with their strategic planning
activities.

The researches and studies say that there are very strong relationships between quality measures such
as scrap, rework and customer complaints; process utilization and output, manufacturing performance
and overall business performance. On the other hand it has identified that there are strong links
between productivity improvement and organizational success in such factors as customer satisfaction
programmes, product quality improvement, reduction in waste and strategic quality improvement.

During the visit to ABC (Pvt) Ltd, we got some idea about how important the quality is for a
manufacturing company, especially when the industry is competitive. Following is what we found
about the quality in relation with strategic planning during our interview with quality assurance
manager of ABC (Pvt) Ltd.

Here we have categorized the strategic aspects of quality and continues improvement into five major
indicator groups, related to their commitment to the integration of quality and strategic planning
initiatives.

• Quality strategies must be tied to broad business strategies and should be part of the
organization’s mission/vision statements.
• Goals must be quantifiable and the measurement/benchmarking process must provide clear
indications of progress towards the goal. These goals must be set aggressively in recognition
that competitors are also rapidly improving.
• Planning must incorporate customer focus as a central element and firms must recognize
different segments in their current and potential customer base.
• Employees at many levels participate in the planning process.
 • level of priority given to continuous quality improvement and innovation (innovation and
continuous improvement)

2.1. Quality strategies must be tied to broad business strategies and should be part of the
organization’s mission/vision statements.

To make the quality goals and objectives more efficient, the management should focuses on aligning
them with organizational common goals and objectives, simply with their vision and mission. Through
the vision and mission it should be implied the importance for the quality. The employees must have a
direct line of sight between quality expectations and the organization’s vision and mission.

In ABC (Pvt) Ltd, the vision and mission is totally based on quality. The mission at ABC (Pvt) Ltd is
to ensure that all their products and services offer their customers total satisfaction through the best
performance delivery and price.

What quality is, “delighting customer through meeting their requirements continually”

These links must be communicated to and understood by employees, enabling them to focus their
work effort on those quality factors which are most important to mission accomplishment. All
employees should be held accountable for achieving results that support the organizational strategic
plan goals and objectives. In ABC (Pvt) Ltd their primary concern is quality. All the employees are
made focus and concentrate on quality.

One of popular quality gurus, Edvad Deming addresses in the tenth of his 14 points; “eliminate
numerical goals for the work force and management.” Goals are necessary for all the employees in the
company, but those numerical goals set for the people, without provision for a road map to reach the
goal, have effects opposite to the effects sought. They generate frustration and resentment. So, setting
realistic goals and monitoring the performances are important. If we consider the way of ABC (Pvt)
Ltd, bottom line employees always have guidance to achieve the targets. The management most of the
times interacts with operational level employees.

Monitoring performance means measuring performance and providing feedback to employees. It’s
also important to get thoughts from bottom line employees who actually immerse in processors, for
continues improvements. This happens in ABC (Pvt) Ltd once a month, when they have quality
cycles. Employees always get feedback from management for what they have done.

2.2. Goals must be quantifiable and the measurement/benchmarking process must

provide clear indications of progress towards the goal. These goals must be set
aggressively in recognition that competitors are also rapidly improving.
A warning from the father of Total Quality Management, the late Dr. Deming: "Everyone propels
himself forward for his own good, on his own life preserver. The organization is the looser." Every
one should work collaboratively in order to attain organizational goals without prioritizing personal
goals and objectives.

Setting goals and continuously working on that will not bring you there. The organization has to
monitor to ensure that organization is going in the correct path. Here if the goals and objectives are
quantifiable only organization can see up to what extent they have achieved goals and what level of
effort that organization has to put more to achieve the objectives. For example ABC (Pvt) Ltd has set
following objectives for last year (2008).

• Right First Time (RFT) to be maintained at 97 % for all products

• To maintain machine utilization and efficiency above 95 % in all machines
• Reduced product cost by 1 % at the end of the year
• Zero industrial accidents – for the second half of the year

It is important to measure the level of achievement of goals / objectives in order to bring the
organization to correct track. At ABC (Pvt) Ltd, management have performance evaluation meeting in
each month to evaluate the performances with the participation of management.

If any goal or objective is not attained and if it seems difficult to achieve, examine how other
organizations have achieved improved performance would be useful.

Benchmarking is one of the most effective mean to identify improvements which can make a
significant difference to the organization. You may not be able to see the need for improvement by
looking internally. Look for opportunities in the widest context, e.g. what are your customers
expecting now, what are your competitors achieving, will lead huge advantage. For example, currently
ABC (Pvt) Ltd is looking at the methods of how western countries operating. They have gone for fully
automated operation system. Currently ABC (Pvt) Ltd is looking to bring that technology to Sri Lanka,
to face increasing labor cost. Here the organization must keen on what to bench mark and what to not,
because every thing will not suit to the organization. It depends on culture, attitude, market…etc.

2.3. Planning must incorporate customer focus as a central element and firms must
recognize different segments in their current and potential customer base.
A customer may be an individual or an enterprise that hires or purchases the product(s) or service(s)
from another person or business in exchange of money.

One of the most important factors for the success of an organization is its customers. Without them, a
business cannot exist. But to capture customers, a business must try to find out what people want, how
much and how often they will buy and how their post-purchase satisfaction will be ensured. ABC (Pvt)
Ltd always keeps very healthy relationship with their key customers. Management frequently visits
them and gets their thoughts on quality, delivery of goods. This has made it easy to meet customer
need more effectively. All the planning should aim to satisfy the customer. Today, quality of the
products has become significant customer decision factor. Organizations should keep on adjusting
their systems to meet customer requirements as sensitive as possible, to survive in the business.

For example, all the customer complaints on defects, late deliveries, dimension issues…etc, are
analogous on to process variation. If variation that is non-conformance to the quality standards occurs,
it will ultimately affect the quality of the end product or service. In ABC (Pvt) Ltd monthly they
conduct meetings with functional group representatives to discuss about customer complains and the
acions that company can take to prevent those complain.

On the other hand all the customers do not demand the same quality level. Some segment might
demand less quality standards for lesser cost. Some might demand high quality products for premium
prices.

“Quality means delighting the customer by continually meeting and improving upon agreed
requirements” So organizations should plan to address all the segments of customers with relevant
standards.
Today ABC (Pvt) Ltd is seeking ways of reducing production cost further, because in a case if Sri
Lanka lost GSP plus advantage, garment factories will go for lowest cost materials to survive in global
market.

So, the management should ensure that all the strategic planning is done based on customers, to fit
with their requirements. Then only organization can delight their customers.

2.4. Employees at many levels participate in the planning process.

ABC (Pvt) Ltd believes that Participation of all the levels of employees in the process of decision
making and planning would lead to increase the productivity and also employee satisfaction, and
quality of work life. On the other hand it would also lead to meet customer requirements more
sensitively, since we can bring people from all the functional groups and levels of the organization
together. It is more important to involve the grass root level employees to planning process since they
are the people who mostly interact with processors.

The concept of Quality Cycles is a management technique which involves different segments of
employees in to decision making process. The utilization of quality circles has been advanced as an
effective participative management technique. The typical quality circle is made up of six to twelve
employees usually from the same work unit. These employee members volunteer to spend an average
of one to two hours a week of their work time identifying, analyzing, developing and recommending
solutions to workplace problems. At ABC (Pvt) Ltd, quality cycle is a frequently use quality practice
which is to get involve all levels of employees in decision making process.

Participation of Employees at many level is important when do planning, because it provides

information on the actual capabilities, capacities of the company. Other wise there will be plans which
can not practically implement in the organization.

2.5. level of priority given to continuous quality improvement and innovation (innovation
and continuous improvement)

In a simple word, continuous improvement means do something better continuously, without stopping.
It is a journey and a never ending process. Each element of an organization, i.e. the product, process,
and output should be continuously improved. This is a strategy which ABC (Pvt) Ltd practices and
strongly believes in. in threads manufacturing process, dying and finishing are two areas which get
more customer complains. ABC (Pvt) Ltd spends millions on bringing new machineries and
technology to improve the accuracy of those processors in many occasions. In the process of
lubrication, they have changed the technology use at three times during last five years. Currently they
are experimenting for some cost reduction methods to face the condition if Sri Lanka lost the
advantage of GSP plus.

There is one thing that management should clearly understand. Some improvements are invisible in
the short-term, but it is sometimes needed before the betterment can be realized. For those who are
skeptical and impatient toward the positive effects of some improvement initiatives, they might give
up midway. On the contrary, those who are passionate and knowledgeable about the principles of
continuous improvement would stick to the progress, although the progress would be relatively slow.
There is a good example in ABC (Pvt) Ltd. Earlier ABC (Pvt) Ltd had a manual system to place orders
to machines. Orders should place depending on volumes to the machines which has relevant capacity.
At that time ABC (Pvt) Ltd had fewer volumes. Top management wanted to implement SAP system
which sorts orders automatically and witch minimize human errors. At the beginning it was not that
productive since fewer volumes. But alone with the development of orders it made the process easy
and effective.

In ABC (Pvt) Ltd there is enough room provided for innovations. New ideas bring by employees are
implemented in the plant and they are rewarded.
 3. Management role in quality management

The senior management and executive level management have been recognized the competitive
advantage of quality improvements in their products and services. Their organization’s manufacturing
and delivery costs are reduced by increasing the conformance to the requirements and needs of
customers. These production costs savings can then be passed on to the customers by reducing the
selling price of the product or service. The companies improved performance of higher conformance
and reduced price enhances the customer’s perception of higher quality. For the companies like ABC
(Pvt) Ltd, this is really important since their main customer base, the garments sector companies are
primly seek higher quality with lowest cost. So, in this scenario, the role of management is heavily
impacting.

According to the Quality assurance manager of ABC (Pvt) Ltd, before and during the quality
improvement process, the management needs to ensure that there is a supportive environment to work.
Here in order to make these conditions ABC management considers two issues; management style and
participatory management activities.

According to the ABC management, developing strategies for the organization, continually motivate
people to support this process, and market change within the organization, bring new technologies to
the company, maintain strong relationship with customers are the principal roles of management.

3.1. Developing quality strategies:

For ABC (Pvt) Ltd, it is main responsibility of the management to develop long term quality plans and
objectives. The well defined goals and objectives lead to empower the employees since they can get a
clear idea of where the company is going and the best means to achieve the organizations goals.
Developing goals and objectives is even not enough if they are not communicated them to the
employees. So, in ABC Company they have displayed their quality goals in their plants where
employees can always see them.

Here, in this case the management of ABC uses tools like affinity technique, force field analysis,
SWOT analysis, and strategic analysis, to get support to develop coherent strategies for the
organization.
 3.2. Marketing Change:

Quality is continues process. It’s about unrelenting readiness to make changes towards process
improvements. How ever according to the Quality assurance manager of ABC, this carries both
advantages and disadvantages alone with the human nature, the resistant to change. For people to
accept the change, the management has to convince that there are more advantages than disadvantages
for the company and for the employees. To promote the idea of change, it is management responsible
to market its advantages. In ABC (Pvt) Ltd, they normally have separate meetings for executives, and
bottom line employees to make aware about new machineries and systems that they are going to take
in. They also conduct training sessions for employees after they take new equipments in. all the
instructions that need to operate a machine are displayed near the machine.

3.3. Motivating People:

This is a prime role of management in any organization. The motive of employees at all the levels of
the organization is essential for the quality and productivity of products and the work place. During
our interview with ABC (Pvt) Ltd we identified that they take this as a very important role of top level
managers and executive level managers to motivate people to perform to the best of their capabilities
and the best interest of the organization. Here ABC has set very specific, clear objectives for the
whole company as well as for each department itself. If the company gets an urgent large order, all the
supervisors and middle level managers work very closely with bottom line employees. This
participatory supervision makes employees to be loyal and self motivated. ABC has reward system
based on the performances of the staff. After achieving the targets of each department (mostly when
they get urgent orders) they celebrate the achievement.

3.4. Nothing is personal in Quality:

Quality is not a finger-pointing exercise - for or about you or your employees. It is an honest and open
method of getting at solutions through objective observation, data collection and employee
participation.
 3.5. Bringing latest technology:

The Company ABC always tends to bring new technology in. in ABC Company they have four main
processors. Spinning, twisting, dying and finishing. Out of these four processors they normally get
more complains about dying. Earlier the color is tested manually. But today to minimize the customer
complains they have gone for electronic color checking machines (spectrophotometer) spending huge
amount of money, and today they are able to minimize the customer complaints. On the other hand, in
finishing process lubrication is an important part. This determines the strength of threads. 3 years back
ABC lubricate threads after looping them to corns. Here, the constancy of lubricant is not their. So,
they went to another system where the lubricant is done while thread is looping to another separate
corn. But here ABC has identified that this will increase lead time and cost for the company, and now
they do lubrication while it loop to the corn which goes to the customer. It has minimized intermediary
processors and also it leads to lower lead time and cost. Other than that ABC has invested huge on
machines which use to check the quality of row materials. Bringing all those technology which uses in
the industry is an important role of management to be competitive in the market by meeting customer
requirements.

3.6. Building confidence of customers:

ABC Company mainly caters to big garment manufactures like Mass Holdings, Brandix. They are
very much quality oriented companies. ABC management frequently visits those customers and gets
their feed back on products provided by ABC. On the other hand those companies are invited to visit
manufacturing plant of ABC. Here all the processors and technologies use are showed to customers.
This lead to build customer’s confidence on ABC and since they know how the product is made, they
think twice before make complain.
 4. Products & Service Quality
Quality has been defined as fitness for use, or the extent to which a product success fully serves the
purposes of consumers. While fitness for use captures the essence of quality, it is difficult to measure
quality using this broad definition. The quality literature provides more specific views, describing
quality in one of four general ways: as excellence, value, conformance to specifications, or meeting or
exceeding consumer expectations.

We assigned the latter two views of quality, conforming to specifications, and meeting or exceeding
consumer expectations. Producers and custodians favor the conformance to specifications definition
of quality since it usually can be defined and measured. Specifications are established to ensure
products and services are free of deficiencies that may interfere with their use. Thus, fitness for use
can be operational as meeting a specification, if the specification is adequately developed. For every
industry or business, to get increased sales and better name amongst consumers and fellow companies
it is important to maintain a high level of quality. Especially for the businesses engaged in more
competition business has to sustain a high level of quality to ensure better business globally.

ABC (Pvt) Ltd imports most of their materials from India and Bangladesh sister companies and for
dye they have their own suppliers. The main two activities of ABC (Pvt) Ltd are dying and finishing.
The main customers of ABC (Pvt) Ltd are Mass, Brandix and other garment manufactures. Since those
manufactures export apparel, they require high quality.

Generally quality control standards for export are set strictly, as this business also holds the prestige of
the country, whose company is doing the export. Export houses earn foreign exchange for the country,
so it becomes mandatory to have good quality control of their products. ABC (Pvt) Ltd and its related
industry product quality is calculated in terms of quality and standard of fibers, yarns, fabric
construction, colour fastness, surface designs and the final finished products. However quality
expectations for export are related to the type of customer segments and the retail outlets. Fitness of
quality is based on number of factors such as; performance, reliability, durability, visual and perceived
quality of the final product. Quality needs to be defined in terms of a particular framework of cost.

ABC (Pvt) Ltd has defined the product quality at each step. For example in dying process they need to
have maximum of 1.2 DE value. If the DE value is higher than 1.2 those volumes send to rework. In
finishing process their standard lubricant level is 3.7%. If the level is deviating from a big value, those
volumes do not send to the next stage.

The meeting or exceeding consumer expectations definition of quality assumes that simply
conforming to specifications is not adequate, and the product or service must meet or exceed consumer
expectations. Product and service designers and marketing professionals tend to take this view of
quality. While this definition may capture the essence of fitness for use, it can be difficult to measure
since consumer expectations may change over time.

When we concern on product quality we should not forget about intangible components of quality.
Lead time is a big concern of ABC (Pvt) Ltd customers. Now ABC (Pvt) Ltd minimum lead time is 3
days. Currently they are working to reduce it to two days.
 5. Quality practices currently being used

ABC privet Ltd plays a major role in garment industry. The quality of final product of garment
factories, primly depend on the materials provide by ABC (Pvt) Ltd. Thus they need to provide high
quality of products to ensure that their customers achieve the best standards of quality, cost and time.
So, the quality practices of ABC are vital to keep on climbing in the market by meeting customer
needs.

During our visit to ABC privet Ltd, we could identify few quality practices that they apply. Total
quality management practices that deal with company’s processes include leadership, or management
commitment, because the manager is responsible for the processes and resource allocation and
customer focus, which includes processes results. Practices that involve personnel management,
includes empowerment, which is the level of power granted to employees for decision making;
employee involvement, that has to do with human resource management in the company; and
employee training, to provide the necessary level of competence for employees to carry out their work.
Finally, we will focus on the supplier selection process of ABC, which is important for quality of final
output. Also we could see that ABC also tends towards six-sigma concept.

5.1. Employee empowerment:

In ABC (Pvt) Ltd, the authority for some extent is given to the employees at the operational level. The
supervisors can make instant decisions at the plant in any cases. So, the employees responsible for the
quality of service delivered to the customers. In order for the management to trust that the employees
are successful in dealing with their customers, the management has to give the employees the authority
and necessary support to succeed at it.

5.2. Management commitment:

Management commitment is a main practice of quality. For example top management commitment is
recognized by all quality gurus as being an essential precondition for the success of quality
management. In ABC (Pvt) Ltd, the management is well committed to keep quality standards. They do
quality planning, implementation, and review the system. ABC has their own formal and informal
ways of getting feedback from customers and employees. ABC (Pvt) Ltd top level management
always keeps eye on the global threads industry and what ever the new technologies coming, if it is
feasible they bring it to the plant, so that they can maintain international level of productivity, cost and
quality which customers always request.

5.3. Employee involvement in decision making:

ABC (Pvt) Ltd always tries to involve employees from all the levels for the process of decision
making. They have set a system to get the comments, feedbacks on the current systems from their
employees, so that to consider them at the place where decisions are made. According to the
management of ABC (Pvt) Ltd, when they involve these supervisors, operational level employees to
the process of decision making, the ownership of that decision passes to them also. So relatively
employees are committed to work.

5.4. Training and aware employees:

To improve the productivity and quality, employee training is important. Since ABC (Pvt) Ltd involve
in manufacturing threads, the training plays a major role, because a tiny error of the width or the color
will make a huge order rejected. In that case ABC (Pvt) Ltd spend more time and money on proper
training of all the employees especially who operates machines to meet exactly what the customer
need.

Another thing that ABC (Pvt) Ltd management strongly believe is, employees' productivity can be
further increased by measuring both individual and team performance against several objectives on a
regular basis. So they always make aware employees on their short-term objectives (day-today tasks)
that must be accomplished in order to achieve the company goals. Here in ABC (Pvt) Ltd the top
management does not act just as introducers like in most of the companies, they continuously monitor
the implementation. Here the quality has not become the agenda for a limited numbers of employees.
All the departments and employees have aware about the quality standards and its importance.

5.5. Measurement of performances:

This is important to make decisions on priorities. This is not only to prioritize services based on
demand and need, but also to assure that the resources put in to operations are used to the best
advantage, so that to meet all three qualities in Total quality management system, the quality returns
for share holders, quality products for customers, and quality life for employees.

In ABC (Pvt) Ltd, most of the times they have short term objectives like daily or weekly targets. After
each day, the line supervisors, executive level management and the middle management review the
performances of the day. This has made the production system to meet orders accurately without
delays all the times so that meet customer needs sensitively and continually.

ABC Company normally has frequent quality audits. The frequency depends on number of issues. If
company gets frequent customer complains or if Company have a big quality issue, safety audit is
conducted.

5.6. Supplier selection:

The main row materials of ABC Company are fiber and dye. Quality of those two directly affects the
quality of threads. So suppliers are important. There are dyes available for lower prices but still ABC
goes for high price quality suppliers since it affects the company image. For example, led contained
dyes are available for very cheaper prices which are harmful for skin. Due to the quality standards
maintain by ABC when selecting suppliers they have won the certificate of “Oeko-ten 100” in 2007.

5.7. 5s system:
ABC Company is maintaining 5s system for four years in their production plant. All employees
adjusted to the system. Pleasant, clear environment makes good working condition.

5.8. Six-sigma concept:

ABC has defined defect rates separately for Dying department and finishing department. In a six-
sigma company the defect rate should be around 3.4 per one million units. Even the ABC Company is
behind the standard of six-sigma, it is moving towards six-sigma. This year for their dying department
they have defined 12.4 defects per 100,000 units. Last year it was 7.5 per 10,000 and for next year
they have set a target of 6.5 per one million units.

In finishing department it is 0.4 defects per 100,000 units which is almost the six-sigma standard.

5.9. Quality cycles:

ABC Company is having quality cycles once a month. This is primly with the purpose of getting
bottom line employee’s comments and ideas on improvements. Representatives from all the
departments are attending to quality cycles. In ABC, they have implemented some of good ideas given
by employees and as an encouragement they are rewarded.
 6. How quality helps to improve the performances of value chain
The concept of value chain was developed by Michael Porter in 1980s in his book “competitive
advantage”

Value chain is a chain of activities. Products pass through all activities of the chain in order and at
each activity the product gains some value. The value chain categorizes the general value adding
activities o an organization. The “primary activities” include: inbound logistics, operations
(production), out bound logistics, marketing and sales, and service (maintenance). The “support
activities” include: administrative infrastructure management, human resource management,
technology (research and development) and procurement.

Here, we will concern on adding value to the product r service at each step of the value chain.

6.1. Primary Activities

6.1.1. Inbound Logistics
Here goods are received from suppliers. Row materials are stored until they are needed on the
production line. Since there are 5S system in the ABC (Pvt) Ltd damages that can be happened to row
materials are being minimized, so that wastage is minimized. On the other hand, since there is a good
supplier selection system, the volumes that have to reverse due to under standard are less. It prevents
adding additional cost to supply chain.

6.1.2. Operations
This is where goods are manufactured or assembled. Due to quality concerns here it prevents lots of
costs adding to the process. For example since ABC (Pvt) Ltd continuously improving the production
line, it reduces reworks, replacements, warranty claims…etc. on the other hand it reduces the lead time
by improving productivity and efficiency, which today’s customer’s one of prime concern. Well
trained employees will make fewer mistakes, and there productivity is high. So, there is a cost
reduction. ABC (Pvt) Ltd can pass that cost advantage to final customer.

Since new ideas are welcome, product life cycle is shorter. It would also lead increase the
responsiveness to customers.
 6.1.3. Out bound Logistics
The goods are now finished, and they need to be sent along the supply chain to the final consumer or
to finished goods warehouse. For ABC (Pvt) Ltd, it is Logiwiz Ltd. Earlier time, there ware few errors
in distribution system of ABC. Some times Logiwiz has shuffled the orders when distributing. So lots
of complains were there. It happened because there was no good inter relationship between Logiwiz
and ABC. But now ABC and Logiwiz are using a common information system call SAP. So, such
errors are minimized.

6.1.4. Marketing and sales

At this stage, the organization meets the customers. This area focuses strongly upon marketing,
communication and promotions mix. Most of big apparel manufactures come to ABC (Pvt) Ltd
because of high quality products. Quality of ABC is a marketing advantage for ABC (Pvt) Ltd. On the
other hand ABC is changing alone with the market. For example, in rescission time, ABC managed to
reduce their prices which customers requested through cost cutting strategies.

6.2. Support activities

6.2.1. Procurement
This function is responsible for all purchasing of goods, services and materials. The aim is to secure
the lowest possible price for purchases of the highest possible quality. Even companies seek for lowest
price materials; it is not good to sacrifice quality. For ABC Company, they can purchase led consisting
dye for half of price of what they currently purchase. But still they go for quality materials, since it
adds value to the product and there are customers who value it.

6.2.2. Technology development

Technology is an important source of competitive advantage. Companies need to innovate to reduce
costs and to protect and sustain competitive advantage. ABC could save a lot of money through
implementing new technologies to the plant. This is one reason which makes them able to provide
such quality goods for such competitive prices. At ABC production line they use latest machines with
advanced technologies. So, they could cut down unnecessary costs, and labor involvements. On the
other hand they use systems like SAP for communication among the stake holders. Some times it may
be costly to the company, but still it adds value since it makes the process reliable and speedy.
 6.2.3. Human resource management
Employees are an expensive and vital resource. An organization would manage recruitment and s
election, training and development, and rewards and remuneration. It is more important the function of
HRM for a company like ABC, since it is dynamic. Employees have to change accordingly. Here the
HR plan is important because if the relevant training did not received properly by employees it would
be a cost for the company. At ABC (Pvt) Ltd one quality factor is employee training and innovation.
This will lead maximum productivity of employees and new ideas.

6.2.4. Firm Infrastructures

This includes planning and control systems, such as finance, accounting, and corporate strategy. In
ABC (Pvt) Ltd they use SAP system.

So, here what we can see is, at each and every point of the value chain there is an extra value addition
for the product because of the quality practices. So quality provides a great support for value chain
improvements.
 7. Quality issues of the organization

ABC (Pvt) Ltd is highly concern on quality. On the other hand the customers of ABC (Pvt) Ltd are
also very quality sensitive. How ever still ABC (Pvt) Ltd facing quality issues. During our interview
with ABC quality assurance manager we have identified few issues they face.

The following are the major customer quality requirements from the organization. ABC (Pvt) Ltd has
to very keen on these requirements and must accurately meet.

(a) Colour: Matching to the required colour and colour consistency of different bathes to be
maintained accurately.
(b) Sewability: Another important parameter is sewability. ABC (Pvt) Ltd use expertise to
eliminate friction and heat at sewing and to maintain the high tensile strength of the thread,
which will give trouble free sewing.
(c) Colour Fastness: Colour fastness requirements vary from customer to customer. Various
processes have been developed to accommodate such varying requirements.
(d) Length: Company product varies +/-1 % from the standard.
(e) Human Ecological Needs: all dyes and chemicals used in the process are free from harmful
substances.

This Organization always committed to satisfy their customers’ expectations on consistent product
quality, at right price and at the correct time. Following table shows the number of customer
complaints received from 2004 to 2009 first quarter.
Customer complaints from 2004 to 2009 1st half

Year 2004 2005 2006 2007 2008 2009(H1)*

Number of complaints received

per 1000 dye lots
9.56 5.07 5.19 5.30 4.72 4.62

Source: Company Records * H1 – First half of the year

Meeting colour requirement is a real issue, since it depends how people see it. Even electronic devices
indicate the correct colour, sometimes customers are not satisfied.

That all customers complain based on some quality problems of the products.

a) Colour quality – Colour matching to given fabric or shade card

b) Sew ability - Thread breakage, excessive heat generation due to less lubricant application
c) Colour fastness – Colour migration during ironing, washing and drying operations
d) Finishing faults – wrong packing, wrong labeling, short packing, dirt marks
e) Other issues – late delivery, wrong delivery location, marketing faults etc.

After the colour, next contributor for complaint is sewing ability of thread. Customer complaints have
different impacts on various aspects of the business. Mainly, the credibility of the company is at stake
if the complaint rate is going up. Because of those quality problems it is badly effect to the company.
Those issues can describe as follows.

a) Customer Claims: In recent past, company has paid million of rupees as claims arisen out of
customer complaints. As most of top customers don’t do incoming inspection at the receipt,
they in turn use inferior quality thread to sew their garments resulting rejected goods at
buyers’ end. This problem is also a result of late deliveries as well. As a result, cost of the
rejected garments are charged from the supplier
b) Customer Returns: The number of cones returns as rejects are on increasing trend due to
inferior quality of sewing threads. This has contributed to increase overall reject rates of the
company affecting the profitability of the business
c) Drop in Productivity: In most cases, they have to replace all rejected goods in double quick
time to meet customers’ requirements. So, company does have to accommodate these orders
delaying all scheduled orders. As a consequence, the smooth implementations of production
schedules get affected.
d) Extra Transport Cost: In most cases, the company has to arrange special transport
arrangements to deliver all re-produced goods incurring additional cost to the company.
ABC (Pvt) Ltd had noticed a marked increase of customer returns due to inferior quality of goods. As
a preventive measure, they set their selves a target of making customer complaints due to colour
variation to 0.75/1000 dye lots. This will enhance the quality of products and high level of customer
satisfaction as well.
 8. Quality awards and certifications obtained

ABC total Lanka have obtain the SLS mark in 1991 (awarded by the Sri Lanka standard institute) to
its products, which will ensure high standard of quality of the product. Also they have obtained the
OKO text certification in 1996, which will ensure products are manufactured to meet the humano-
ecological requirements.

In 1997 June ABC total Lanka achieved an ISO 9002 accreditation, which will stamp the quality
management system in the company’s of high standard.

ABC total Lanka received the inaugural chairmen’s award for excellence in 1997 which was a
competition held amongst all ABC units in the world.

ABC total Lanka is the proud recipient of the national quality merit award for 1998, for the large scale
manufacturing sector.

ABC thread Lanka was accredited by gap ink as an “approved supplier” in 1999 and ABC laboratory
was accredited by marks and Spencer in year 2000.

ABC thread Lanka won three awards at the 4th National convention for productivity and quality
including best quality circle facilitator in 2003.

In 2004, ABC thread Lanka achieved the ISO 9001-2000 accreditations which will stamp the quality
management system in the company are of high standard.

ABC thread Lanka won the following five awards at the Asian region convention on quality and
productivity in 2004.

• Best quality circle – service sector

• Best continues improvement team – Manufacturing sector
• Merit award for best data collection and current situation analysis – Manufacturing
sector
• Merit award for most effective solution and implementation – Manufacturing sector.
• Quiz completion – 2nd runner up
 9. Conclusion
Through our visit to ABC (Pvt) Ltd, we could see how much they spend on quality improvements.
Both infrastructure development, bring new technologies in and employee training and development.
Here another main factor that we identified is the attitude of both top management and grass root
employees really matters for quality. ABC (Pvt) Ltd has focused more on this issue as well.

The vision and mission must cater the quality standards of the company. When the quality goals and
objectives are defined, they should in line with company goals and objectives. Even though goals and
objectives well defined, if they are not properly communicated to employees, it is not going to work.
So communicating quality goals and objectives to all the employees is vital. Here the guidance
provided to employees is also matter for the level of achievement. Continuously monitor the
performance makes employees aware on where are they now. For this a quality measurement system
should be there.

Bench marking is a frequently using strategy for quality improvements. Here company will observe
the best practices of other well performing organizations and grab them to the company. Here it
should be done carefully, since all those practices do not suit to the company. It depends on culture,
attitude of employees…etc.

Continues an improvement is another main concern in TQM. New technologies, techniques should
grab alone with the development. It helps to meet customer requirements more sensitively with
improved quality and productivity.

For any organization customer is the king. All the goal, objectives and strategies must focus on
customers. They must focus on cater customer requirements. How close to customer needs is how
successful the company is.

When making decisions it provides better results if all levels of employees contribute to process.
Examples of ABC (Pvt) Ltd illustrate the significance of it.

In the quality process management of the company has to play a vital role. Developing strategies,
make employees attitudes to accept the changes, motivating employees are roles of management.
In order to keep quality many quality practices are been used. Training and development of
employees, quality cycles, the concepts like six-sigma and 5s, supplier selection methods,
performance measurement are few of practices that companies use.

What ever the practices implement in the company, it is difficult to meet all requirements of
customers. When organization provides a certain standard of quality, customers need further more.
That’s the nature of human. In ABC Company what customers strongly require is the accuracy of
color and strength of threads. Here they still facing difficulties in meeting those needs even they spend
millions on improvements.

Depending on the level of quality maintain in the company, certain quality awards and certificates are
offered.

Finally what we saw was, quality has become one of “must have” factor to survive in any kind of
industry.