A Project Report on Quality Management at CAPARO_03

8/7/2019 A Project Report on Quality Management at CAPARO_03

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A PROJECT ON QUALITY

MANAGEMENT ATCAPARO

SUBMITTED TO:

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SUBMITTED BY:

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DECLARATION

I -------------- hereby declare that the project report titled Quality Management

at Caparo is my own work and has been carried out by me. All care has been

taken to keep this report error free and I sincerely regret for any unintended

discrepancies that might have crept into this report. I shall be highly obliged if

errors (if any) be brought to my attention.

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CERTIFICATE

I ------hereby certify that -------, Student at------------------- has completed the

Project on Quality Management at Caparo, under my guidance.

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ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude to all those

who have contributed significantly by sharing their knowledge and

experience in the completion of this project work.

I am greatly obliged to ----------------------- for providing me the right kind of

opportunity and

facilities to complete this venture.

My first word of gratitude is due to -----------, my industry guide, for her kind help

and support and for his valuable guidance throughout the project.

Finally, I would also like to thank all my dear friends for their kind cooperation,

advice and encouragement during the long and arduous task of preparing this

report and carrying out the project work.

At last but not the least, who are always at the top of my heart, my dear family

members whose blessings, inspiration and encouragement have resulted in the

successful completion of this project.

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CONTENTS

Page no.1. Introduction 6

2. Research Methodology

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3. Characteristics of TQM. 12

4. Fundamental Elements of TQM 13

5. Classification of TQM 14

6. Guideline to Improve Product Quality 31

7. Dr W. Edward Deming's 14 Principles 39

8. DMAIC Six Sigma approach 42

9. Advantages of TQM 48

10. Caparo at a glimpse 52

11. Recommendations and suggestions 73

12. Limitations of the study 74

13. Bibliography 75

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1.Introduction of Total Quality Management

Although the concept of quality is very old, today it is perhaps the major

preoccupation of organization world-wide. However, in the recent years, Total

Quality Management (TQM) has captured the world-wide attention and is being

adopted in many organizations, both profit & non-profit. TQM is being accepted

as a management philosophy. Many organizations around the globe are

conduction Organizational Development (OD) programmes to enhance quality

awareness and change the attitudes of their employees. These efforts towards

understandings, adopting and promoting TQM are primarily because of the

changes taking place in the global economy, changing market conditions and

customers expectations and increasing competitive pressure. Many large

organizations have recognized the important contributions that TQM can make in

dealing with these challenges.

The objectives of this chapter it to trace the evolution of TQM as a

general philosophy and a set of paradigms. Attempt is also made to discuss the

significant contributions of various pioneering promoters of TQM philosophy

towards the design, development and application of TQM systems. Various

definitions and models of TQM are also outlined is this chapter to have a

preliminary but fundamental grasp over the subject.

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MEANING OF TQM

TQM, thus, can be considered as being constituted of two composite elements

namely Quality Management meaning that aspect of the overall function that

determines and implements the quality policy ; and Quality Systems meaning the

collective plans, activities and events that are provided to ensure that a product,

Process or service will satisfy given needs.

TQM means many things to many organization. It has evolved itself to be

associated more often with statistical tools and process control, than with a method

of management. In its essential sense, TQM is a means of operating a business that

seeks to maximize an organizations value through maximizing customer

satisfaction at the lowest possible cost and is achieved by continuously improving

all processes within the organization and collaborating with people.

Total Quality Management is thus based on the concepts and philosophies

advocated by Juran, Deming, Crossby, and Feigenbaum. Conceptually, TQM

emphasizes on:

Top management commitment and support for quality improvement.

Creating a production oriented total quality culture.

Creating a Customer-oriented manufacturing environment.

Improving participation and teamwork

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Prevention of errors at source.

Respect for humanity.

Recongnition and reward for improvement efforts.

QUALITY DEFINED

Quality though familiar to everyone has a variety of uses and

meanings. The classic perception of quality is the position of a product attitude on

a good-bad scale. Most people associate it with defects in products. However,

quality relates not only to the product but also to the instruction for its use, toinstallations, to service, to marketing and so on. Quality has been defined in

various ways, Some of the important definitions of quality are presented below :

1. Quality is fitness for use (Juran, 1974).

2. Quality is conformance to requirements (Crossby, 1984).

3. Quality means The actual use and the selling price of the product

(Feigenbaum, 1961).

4. Quality is the capability composite of products or services to knowinglysatisfy those preconceived composite wants of the user(s) that are

intelligently related to the characteristics of performance, and do

not cause major overt or convert reaction or actions by other

people. (Johnson, 1987).

5. The Totality of features and characteristics of products or services that bears o

its ability to satisfy given needs (ANSI & ASAC, 1978).

` Quality is, thus, both a user-oriented and a production-oriented expression. From

the users point of view, quality is an expression of the products/services usefulnessin meeting the needs and expectations and its reliability, safety, durability and so

on. From the production point of view, the quality of a product is measured by the

quality of its performance which depends on the quality of design and the quality

of conformance. Quality of design is concerned with the stringency of the

specifications for manufacturing the product. The quality of conformance is

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concerned with how well the manufactured product conforms to the original

requirements.

Different views of quality are held by marketing, engineering and manufacturingdepartments. Garvin (1988) outlines these as :

Transcendent Qualtiy as a Simple analyzable property recognized onlythough experience.

Product based Quality as a precise and measurable variable.

User based Quality lies in the eyes of the beholder

Manufacturing based Quality as conformance to the requirements.

Value based Quality as performance or conformance at acceptable price or cost.

Quality, therefore, is

defined by the customers.

a measure of achievement of customer satisfaction.

fulfilling the customers needs/requirements.

value for money.

keeping ones word.

ensuring no defects.

image of the company and customer confidence in theorganisaton.

a precise and measuring variable.

utility to the society.

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2.RESEARCH AND HYPOTHESIS/PROBLEM DEFINITION

In todays world the quality is most important thing for any body. Because its

quality that makes the difference between each other. For managing the quality

there are so many technique and tools has been developed. This is an step to

understand and recommend the most active tools for quality management

1. OBJECTIVE OF RESEARCH PROJECT

I have undertaken the project quality mangement in order to learn and study the

quality management technique.

At the beginning of the century, social life was mostly local. It was followed by a

period in which commodities were produced on a mass scale. There were no any

tolls for quality checking most of the firm were competing each other on the basis

of low price distribution. But now a days we cannt get the work done only on the

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basis of the Price. So the main objective of this project is to understand and

analyse the implemenatation of the quality management technique at various

organization

RESEARCH DESIGN

Research is the systematic and objective identification, collection,analysis, discrimination, and use of information for the purpose of

improving decision making related to the identification and solution of

problem with respect to marketing.

3. SAMPLING & DATA COLLECTION

SAMPLING

A sample is a part of population from which the desired information is taken. The

sample should be representative of the population and the information obtained

must be reliable. In any survey where reliability is desired, the error and variances

have to be controlled, measured and interpreted. Its not possible to analyse all the

organization in india which has implementated the quality management technique

at their organization thats why a few company will be selected to analyse their

quality management.

DATA COLLECTION METHOD

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1. Primary Sources: a questionnaire has been developed to know the management

thinking about quality management.

2. Secondary Data:

Secondary Data is collected from the web site and the companys publication

3.CHARACTERISTICS OF TQM:

The Characteristics of TQM, as revealed from the above definitions and models are as

follows:

1. TQM is customer oriented.

2. TQM requires a long term commitment for continuous improvement of all processes.

3. The success of TQM demands the leadership of top management and continuous

involvement.

4. Responsibility for establishment and improvement of system lies with the

management of an organisation.

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5. TQM is a strategy for continuously improving performance at all levels and in all

areas of responsibility.

4.FOLLOWING AS THE FOUNDATIONAL ELEMENTS OF

TQM.

1. People: TQM aims at empowering people so as to accomplish optimal business

results through teamwork. This involves training that focusses on communication

skills, interactive skills and effective meeting skills. Such training enables people

to be actively involved in the continuous improvement of products and processes

and leads to improved teamwork.

2. Continuous improvement: It involves the fundamental principle of quality, the

Daming cycle and th4e PDCA (Plan, Do, Check, Action) cycle. The iteration of

cycle is the never ending pursuit of excellence.

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3. Process : The use of problem solving process as a guide to analyze a problem,

choose a solution, develop an action plan and evaluate implementation results ; and

the use of quality improvement process for reducing customer requirements to a

specification and specification to a defined work process so as to focus attention on

the customer and customer requirements.

4. Customer: TQMs primary focus is the customer and customer satisfaction.

Customer perceptions of quality that correlates with customers satisfaction are

expected quality, satisfying quality, delightful quality, indifferent quality and

reverse quality. These must be aimed at to prevent customer dissatisfaction, to

meet customers expectations and delighted them.

5.CLASSIFICATION OF TOTAL QUALITY MANAGEMNT

Quality management evolution

Quality management is not a recent phenomenon. Advanced civilizations that supported

the arts and crafts allowed clients to choose goods meeting higher quality standards

than normal goods. In societies where art and craft (and craftsmanship) were valued,

one of the responsibilities of a master craftsman (and similarly for artists) was to lead

their studio, train and supervise the work of their craftsmen and apprentices. The master

craftsman set standards, reviewed the work of others and ordered rework and revision

as necessary. One of the limitations of the craft approach was that relatively few goods

could be produced, on the other hand an advantage was that each item produced could

be individually shaped to suit the client. This craft based approach to quality and the

practices used were major inputs when quality management was created as a

management science.

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During the industrial revolution, the importance of craftsmen was diminished as mass

production and repetitive work practices were instituted. The aim was to produce large

numbers of the same goods. The first proponent in the US for this approach was Eli

Whitney who proposed (interchangeable) parts manufacture for muskets, hence

producing the identical components and creating a musket assembly line. The next step

forward was promoted by several people including Frederick Winslow Taylor a

mechanical engineer who sought to improve industrial efficiency. He is sometimes

called "the father of scientific management." He was one of the intellectual leaders of

the Efficiency Movement and part of his approach laid a further foundation for quality

management, including aspects like standardization and adopting improved practices.

Henry Ford also was important in bringing process and quality management practices

into operation in his assembly lines. In Germany, Karl Friedrich Benz, often called the

inventor of the motor car, was pursuing similar assembly and production practices,

although real mass production was properly initiated in Volkswagen after world war

two. From this period onwards, north American companies focused predominantly upon

production against lower cost with increased efficiency.

Walter A. Shewhart made a major step in the evolution towards quality management by

creating a method for quality control for production, using statistical methods, first

proposed in 1924. This became the foundation for his ongoing work on statistical

quality control. W. Edwards Deming later applied statistical process control methods in

the United States during World War II, thereby successfully improving quality in the

manufacture of munitions and other strategically important products.

Quality leadership from a national perspective has changed over the past five to six

decades. After the second world war, Japan decided to make quality improvement a

national imperative as part of rebuilding their economy, and sought the help of

Shewhart, Deming and Juran, amongst others. W. Edwards Deming championed

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Shewhart's ideas in Japan from 1950 onwards. He is probably best known for his

management philosophy establishing quality, productivity, and competitive position. He

has formulated 14 points of attention for managers, which are a high level abstraction of

many of his deep insights. They should be interpreted by learning and understanding the

deeper insights and include:

Break down barriers between departments

Management should learn their responsibilities, and take on leadership

Improve constantly

Institute a programme of education and self-improvement

In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low

quality, but over time their quality initiatives began to be successful, with Japan

achieving very high levels of quality in products from the 1970s onward. For example,

Japanese cars regularly top the J.D. Powercustomer satisfaction ratings. In the 1980s

Deming was asked by Ford Motor Company to start a quality initiative after they

realized that they were falling behind Japanese manufacturers. A number of highly

successful quality initiatives have been invented by the Japanese (see for example on

this page: Taguchi, QFD, Toyota Production System. Many of the methods not only

provide techniques but also have associated quality culture aspects (i.e. people factors).

These methods are now adopted by the same western countries that decades earlier

derided Japanese methods.

Customers recognize that quality is an important attribute in products and services.Suppliers recognize that quality can be an important differentiator between their own

offerings and those of competitors (quality differentiation is also called the quality gap).

In the past two decades this quality gap has been greatly reduced between competitive

products and services. This is partly due to the contracting (also called outsourcing) of

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manufacture to countries like India and China, as well internationalization of trade and

competition. These countries amongst many others have raised their own standards of

quality in order to meet International standards and customer demands. The ISO 9000

series of standards are probably the best known International standards for quality

management.

There are a huge number of books available on quality. In recent times some themes

have become more significant including quality culture, the importance of knowledge

management, and the role of leadership in promoting and achieving high quality.

Disciplines like systems thinking are bringing more holistic approaches to quality so

that people, process and products are considered together rather than independent

factors in quality management.

Quality improvement

There are many methods for quality improvement. These cover product improvement,

process improvement and people based improvement. In the following list are methods

of quality management and techniques that incorporate and drive quality improvement

1. ISO 9004:2000 Guidelines for performance improvement.

2. ISO 15504-4: 2005 Information technology Process assessment

Part 4: Guidance on use for process improvement and process capability

determination.

3. QFD Quality Function Deployment, also known as the House of Quality

approach.

4. Kaizen , Japanese for change for the better; the common English

usage is continual improvement.

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5. Zero Defect Program created by NEC Corporation of Japan, based upon

Statistical Process Control and one of the inputs for the inventors of Six Sigma.

6. Six Sigma 6, Six Sigma combines established methods such as

Statistical Process Control, Design of Experiments and FMEA in an overall

framework.

7. PDCA Plan, Do, Check, Act cycle for quality control purposes. (Six

Sigma's DMAIC method (Design, Measure, Analyze, Improve, Control) may be

viewed as a particular implementation of this.)

8. Quality circle a group (people oriented) approach to improvement.

9. Taguchi methods statistical oriented methods including Quality

robustness, Quality loss function and Target specifications.

10. The Toyota Production System reworked in the west into Lean

Manufacturing.

11. Kansei Engineering an approach that focuses on capturing customer

emotional feedback about products to drive improvement.

12. TQM Total Quality Management is a management strategy aimed at

embedding awareness of quality in all organizational processes. First promoted in

Japan with the Deming prize which was adopted and adapted in USA as the

Malcolm Baldrige National Quality Award and in Europe as the European

Foundation for Quality Management award (each with their own variations).

13. TRIZ meaning "Theory of inventive problem solving"

14. BPR Business process reengineering, a management approach aiming at

'clean slate' improvements (That is, ignoring existing practices).

Proponents of each approach have sought to improve them as well as apply them to

enterprise types not originally targeted. For example, Six Sigma was designed for

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manufacturing but has spread to service enterprises. Each of these approaches and

methods has met with success but also with failures.

Some of the common differentiators between success and failure include commitment,

knowledge and expertise to guide improvement, scope of change/improvement desired

(Big Bang type changes tend to fail more often compared to smaller changes) and

adaption to enterprise cultures. For example, quality circles do not work well in every

enterprise (and are even discouraged by some managers), and relatively few TQM-

participating enterprises have won the national quality awards.

There has been well publicized failures of BPR, as well as Six Sigma. Enterprisestherefore need to consider carefully which quality improvement methods to adopt, and

certainly should not adopt all those listed here.

It is important not to underestimate the people factors, such as culture, in selecting a

quality improvement approach. Any improvement (change) takes time to implement,

gain acceptance and stabilize as accepted practice. Improvement must allow pauses

between implementing new changes so that the change is stabilized and assessed as a

real improvement, before the next improvement is made (hence continual improvement,

not continuous improvement).

Improvements that change the culture take longer as they have to overcome greater

resistance to change. It is easier and often more effective to work within the existing

cultural boundaries and make small improvements (that is Kaizen) than to make major

transformational changes. Use of Kaizen in Japan was a major reason for the creation of

Japanese industrial and economic strength.

On the other hand, transformational change works best when an enterprise faces a crisis

and needs to make major changes in order to survive. In Japan, the land of Kaizen,

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Carlos Ghosn led a transformational change at Nissan Motor Company which was in a

financial and operational crisis. Well organized quality improvement programs take all

these factors into account when selecting the quality improvement methods.

Quality standards

The International Organization for Standardization (ISO) created the Quality

Management System (QMS) standards in 1987. These were the ISO 9000:1987 series

of standards comprising ISO 9001:1987, ISO 9002:1987 and ISO 9003:1987; which

were applicable in different types of industries, based on the type of activity or process:

designing, production or service delivery.

The standards have been regularly reviewed every few years by the International

Organization for Standardization. The version in 1994 and was called the ISO

9000:1994 series; comprising of the ISO 9001:1994, 9002:1994 and 9003:1994

versions.

The last revision was in the year 2000 and the series was called ISO 9000:2000 series.

However the ISO 9002 and 9003 standards were integrated and one single certifiable

standard was created under ISO 9001:2000. Since December 2003, ISO 9002 and 9003

standards are not valid, and the organizations previously holding these standards need

to do a transition from the old to the new standards.

The ISO 9004:2000 document gives guidelines for performance improvement over and

above the basic standard (ISO 9001:2000). This standard provides a measurement

framework for improved quality management, similar to and based upon the

measurement framework for process assessment.

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The Quality Management System standards created by ISO are meant to certify the

processes and the system of an organization and not the product or service itself. ISO

9000 standards do not certify the quality of the product or service.

Recently the International Organization for Standardization released a new standard,

ISO 22000, meant for the food industry. This standard covers the values and principles

of ISO 9000 and the HACCP standards. It gives one single integrated standard for the

food industry and is expected to become more popular in the coming years in such

industry.

ISO has a number of standards that support quality management. One group describes processes (including ISO 12207 & ISO 15288) and another describes process

assessment and improvement ISO 15504.

The Software Engineering Institute has its own process assessment and improvement

methods, called CMMi (Capability Maturity Model integrated) and IDEAL

respectively.

Business benefits of ISO 14000

This section identifies typical benefits for organizations of implementing ISO 14000

standards.

Most managers will try to avoid pollution that could cost the company a fine for

infringing environmental legislation. But better managers will agree that doing only

just enough to keep the company out of trouble with government inspectors is a rather

weak and reactive approach to business in today's environment-conscious world.

The ISO 14000 standards are practical tools for the manager who is not satisfied with

mere compliance with legislation which may be perceived as a cost of doing business.

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They are for the proactive manager with the vision to understand that implementing a

strategic approach can bring return on investment in environment-related measures.

The systematic ISO 14001:2004 approach requires the organization to take a hard look

at all areas where its activities have an environmental impact. And it can lead to

benefits like the following:

reduced cost of waste management

savings in consumption of energy and materials

lower distribution costs

improved corporate image among regulators, customers and the public framework forcontinual improvement of environmental performance.

The manager who is "too busy managing the business" to listen to good sense about

environmental management could actually be costing the business, instead ofachieving

benefits like those above.

Certification

i) Certification is not a requirement of any of ISO's management system

standards. This section provides a basic understanding of what certification and

related terms mean.

(b) Certification, registration and accreditation

In the context of ISO 9001:2000 or ISO 14001:2004, certification refers to the

issuing of written assurance (the certificate) by an independent external body that it has

audited a management system and verified that it conforms to the requirements

specified in the standard.

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Registration means that the auditing body then records the certification in its client

register. So, the organizations management system has been both certified and

registered.

Therefore, in the ISO 9001:2000 or ISO 14001:2004 context, the difference between the

two terms is not significant and both are acceptable for general use. Certification is

the term most widely used worldwide, although registration is often preferred in

North America, and the two are used interchangeably.

On the contrary, using accreditation as an interchangeable alternative for

certification or registration is a mistake, because it means something different.

In the ISO 9001:2000 or ISO 14001:2004 context, accreditation refers to the formal

recognition by a specialized body an accreditation body that a certification body

is competent to carry out ISO 9001:2000 or ISO 14001:2004 certification in specified

business sectors.

In simple terms, accreditation is like certification of the certification body.

Certificates issued by accredited certification bodies may be perceived on the

market as having increased credibility.

Quality terms

Quality Improvement can be distinguished from Quality Control in that

Quality Improvement is the purposeful change of a process to improve the

reliability of achieving an outcome.

Quality Control is the ongoing effort to maintain the integrity of a process to

maintain the reliability of achieving an outcome.

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Quality Assurance is the planned or systematic actions necessary to provide

enough confidence that a product or service will satisfy the given

requirements for quality.

Implementation of Total Quality Management (TQM)

Total Quality Management is a management approach that originated in the 1950's and

has steadily become more popular since the early 1980's. Total Quality is a description

of the culture, attitude and organization of a company that strives to provide customers

with products and services that satisfy their needs. The culture requires quality in all

aspects of the company's operations, with processes being done right the first time and

defects and waste eradicated from operations.

Total Quality Management, TQM, is a method by which management and employees

can become involved in the continuous improvement of the production of goods and

services. It is a combination of quality and management tools aimed at increasing

business and reducing losses due to wasteful practices.

Some of the companies who have implemented TQM include Ford Motor Company,

Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.

The Concept of Continuous Improvement by TQM

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TQM is mainly concerned with continuous improvement in all work, from high level

strategic planning and decision-making, to detailed execution of work elements on the

shop floor. It stems from the belief that mistakes can be avoided and defects can be

prevented. It leads to continuously improving results, in all aspects of work, as a result

of continuously improving capabilities, people, processes, technology and machine

capabilities.

Continuous improvement must deal not only with improving results, but more

importantly with improving capabilities to produce better results in the future. The five

major areas of focus for capability improvement are demand generation, supply

generation, technology, operations and people capability.

A central principle of TQM is that mistakes may be made by people, but most of them

are caused, or at least permitted, by faulty systems and processes. This means that the

root cause of such mistakes can be identified and eliminated, and repetition can be

prevented by changing the process.1

There are three major mechanisms of prevention:

1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-Yoke).

2. Where mistakes can't be absolutely prevented, detecting them early to prevent

them being passed down the value added chain (Inspection at source or by the next

operation).

3. Where mistakes recur, stopping production until the process can be corrected, to

prevent the production of more defects. (Stop in time).

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Implementation Principles and Processes

A preliminary step in TQM implementation is to assess the organization's current

reality. Relevant preconditions have to do with the organization's history, its current

needs, precipitating events leading to TQM, and the existing employee quality of

working life. If the current reality does not include important preconditions, TQM

implementation should be delayed until the organization is in a state in which TQM is

likely to succeed.

If an organization has a track record of effective responsiveness to the environment, and

if it has been able to successfully change the way it operates when needed, TQM will be

easier to implement. If an organization has been historically reactive and has no skill at

improving its operating systems, there will be both employee skepticism and a lack of

skilled change agents. If this condition prevails, a comprehensive program of

management and leadership development may be instituted. A management audit is a

good assessment tool to identify current levels of organizational functioning and areas

in need of change. An organization should be basically healthy before beginning TQM.

If it has significant problems such as a very unstable funding base, weak administrative

systems, lack of managerial skill, or poor employee morale, TQM would not be

appropriate.5

However, a certain level of stress is probably desirable to initiate TQM. People need to

feel a need for a change. Kanter (1983) addresses this phenomenon be describing

building blocks which are present in effective organizational change. These forces

include departures from tradition, a crisis or galvanizing event, strategic decisions,

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individual "prime movers," and action vehicles. Departures from tradition are activities,

usually at lower levels of the organization, which occur when entrepreneurs move

outside the normal ways of operating to solve a problem. A crisis, if it is not too

disabling, can also help create a sense of urgency which can mobilize people to act. In

the case of TQM, this may be a funding cut or threat, or demands from consumers or

other stakeholders for improved quality of service. After a crisis, a leader may intervene

strategically by articulating a new vision of the future to help the organization deal with

it. A plan to implement TQM may be such a strategic decision. Such a leader may then

become a prime mover, who takes charge in championing the new idea and showing

others how it will help them get where they want to go. Finally, action vehicles are

needed and mechanisms or structures to enable the change to occur and become

institutionalized.

Process Oriented Management V/S Result Oriented Management:

Lets consider this, said the professor. How is Process Oriented Management

(PROM) different from Result Oriented Management (ROM)? Is it that in Process

Oriented Management, you dont bother about the result? No. That is not the case.

Process oriented management is based on the paradigm (mindset) that the

result is the effect of a number of causes, If we concentrate on the causes an ensure that

the causes operate exactly as the way we want to, the result is bound to happen (barring

a random element that is uncontrollable by its very nature, such as major earthquake.)

Since results are bound to happen when the causes are perfected, Process Oriented

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Management recommends that we stop worrying about the result. (Incidentally, the

philosophy of karmanye wadhikaraste ma phaleshu kadachana implies the same thing;

concentrate on perfecting the causes in the process and the result is bound to come since

the result is bouondto be achieved, we can therefore, forget about it. This philosophy is

often misunderstood as keep working without caring for the result)

Process oriented management is deeply concerned about the result. An

analogy might help. A student is told Get good marks, I dont care how. What kind of

management is it Is it good?

Another student is told, You must get the marks, so find out the correct way

to study, and study with regularity and diligence. Would this policy work? Which kind

of management would you like to use in your organization? Western management has

gone too far with result oriented management; managers find that they have to produce

result by hook or by crook. Naturally they find that producing result is a marathon

exercise every time.

In Process Oriented Management, you first study the process.

What is the difference between a process and an operation?

A Process is summation of activities such as operations, inspections, delays,

storage, transports, and every thing else that happens between the beginning and the end

of the process. In contrast, an Operation does not include inspection, delays an all the

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other aspects. There are two types operations: Do and Make ready. For instance,

warming up an electric iron till it reaches the desired temperature is a make ready

operation, while ironing is a do operation.

There are tow types of activities: Value Adding Activities (VA) and NonValue Adding Activities (NVA).

By definition, Value Adding Activities are those that add value to product as

seen from the customers point of view. All others are Non Value Adding activities.

Even make ready operations are NVAs.

Process oriented management first classifies all activities performed as VA

or NVA and attacks Non Value Adding activities first! This is because if you conduct

actual studies on any process, you are most likely to find that the amount of time spent

of Non Value Adding activities exceeds the amount of time spent of Value Adding

activities.

Typically, result oriented management attacks Value Adding activities and

tries to make them more efficient in the belief that it is only the VA activities that

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matter. They often end up making VA more efficient and losing more than what was

gained because the NVA, that were ignored, increased enormously.

Many companies have increased production rate; simultaneously increasing

inventories (storage, delays and transports). They often find that the bottom line does

not improve; though the production rate has increase. They cant understand why. Now,

having learned about process oriented management, we can understand the reason.

We should first have a clear understanding of the entire process in terms of

all those activities, which are Value Adding and Non Value Adding. Normally the

NVA activities are much more in number and the time taken for the NVA activities is

also very large as compared to the VA activities.

The NVA activities should be eliminated be eliminated or mad efficient in

terms of time taken, till they become equivalent to the VA activities in terms of time

taken. Now, both the VA and NVA activities should be simultaneously considered for

improvement.

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6.GUIDELINES TO BE FOLLOW TO IMPROVE QUALITY OF

PRODUCT.

This document introduces the eight quality management principles on which the

quality management system standards of the revised ISO 9000:2000 series are based.

These principles can be used by senior management as a framework to guide their

organizations towards improved performance. The principles are derived from the

collective experience and knowledge of the international experts who participate in ISO

Technical Committee ISO/TC 176, Quality management and quality assurance, which

is responsible for developing and maintaining the ISO 9000 standards.

The eight quality management principles are defined in ISO 9000:2000, Quality

management systems Fundamentals and vocabulary, and in ISO 9004:2000, Quality

management systems Guidelines for performance improvements.

This document gives the standardized descriptions of the principles as they appear in

ISO 9000:2000 and ISO 9004:2000. In addition, it provides examples of the benefits

derived from their use and of actions that managers typically take in applying the

principles to improve their organizations' performance.

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Principle 1: Customer focus

Organizations depend on their customers and therefore should understand

current and future customer needs, should meet customer requirements and strive

to exceed customer expectations.

Key benefits:

Increased revenue and market share obtained through flexible and fast

responses to market opportunities.

Increased effectiveness in the use of the organization's resources to enhance

customer satisfaction.

Improved customer loyalty leading to repeat business.

Applying the principle of customer focus typically leads to:

Researching and understanding customer needs and expectations.

Ensuring that the objectives of the organization are linked to customer needs

and expectations.

Communicating customer needs and expectations throughout the

organization.

Measuring customer satisfaction and acting on the results.

Systematically managing customer relationships.

Ensuring a balanced approach between satisfying customers and other

interested parties (such as owners, employees, suppliers, financiers, local

communities and society as a whole).

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Principle 2: Leadership

Leaders establish unity of purpose and direction of the organization. They should

create and maintain the internal environment in which people can become fully

involved in achieving the organization's objectives.

Key benefits:

People will understand and be motivated towards the organization's goals

and objectives.

Activities are evaluated, aligned and implemented in a unified way.

Miscommunication between levels of an organization will be minimized.

Applying the principle of leadership typically leads to:

Considering the needs of all interested parties including customers, owners,

employees, suppliers, financiers, local communities and society as a whole.

Establishing a clear vision of the organization's future.

Setting challenging goals and targets.

Creating and sustaining shared values, fairness and ethical role models at all

levels of the organization.

Establishing trust and eliminating fear.

Providing people with the required resources, training and freedom to act

with responsibility and accountability.

Inspiring, encouraging and recognizing people's contributions.

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Principle 3: Involvement of people

People at all levels are the essence of an organization and their full involvement

enables their abilities to be used for the organization's benefit.

Key benefits:

Motivated, committed and involved people within the organization.

Innovation and creativity in furthering the organization's objectives.

People being accountable for their own performance.

People eager to participate in and contribute to continual improvement.

Applying the principle of involvement of people typically leads to:

People understanding the importance of their contribution and role in the

organization.

People identifying constraints to their performance.

People accepting ownership of problems and their responsibility for solving

them.

People evaluating their performance against their personal goals and

objectives.

People actively seeking opportunities to enhance their competence,

knowledge and experience.

People freely sharing knowledge and experience.

People openly discussing problems and issues.

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Principle 4: Process approach

A desired result is achieved more efficiently when activities and related resources

are managed as a process.

Key benefits:

Lower costs and shorter cycle times through effective use of resources.

Improved, consistent and predictable results.

Focused and prioritized improvement opportunities.

Applying the principle of process approach typically leads to:

Systematically defining the activities necessary to obtain a desired result.

Establishing clear responsibility and accountability for managing key

activities.

Analysing and measuring of the capability of key activities.

Identifying the interfaces of key activities within and between the functions

of the organization.

Focusing on the factors such as resources, methods, and materials that will

improve keyactivities of the organization.

Evaluating risks, consequences and impacts of activities on customers,

suppliers and other interested parties.

Principle 5: System approach to management

Identifying, understanding and managing interrelated processes as a system

contributes to the organization's effectiveness and efficiency in achieving its

objectives.

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Key benefits:

Integration and alignment of the processes that will best achieve the desired

results.

Ability to focus effort on the key processes.

Providing confidence to interested parties as to the consistency,

effectiveness and efficiency of the organization.

Applying the principle of system approach to management typically leads to:

Structuring a system to achieve the organization's objectives in the most

effective and efficient way.

Understanding the interdependencies between the processes of the system.

Structured approaches that harmonize and integrate processes.

Providing a better understanding of the roles and responsibilities necessary

for achieving common objectives and thereby reducing cross-

functional barriers.

Understanding organizational capabilities and establishing resource

constraints prior to action.

Targeting and defining how specific activities within a system should

operate.

Continually improving the system through measurement and evaluation.

Principle 6: Continual improvement

Continual improvement of the organization's overall performance should be a

permanent objective of the organization.

Key benefits:

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Performance advantage through improved organizational capabilities.

Alignment of improvement activities at all levels to an organization's

strategic intent.

Flexibility to react quickly to opportunities.

Applying the principle of continual improvement typically leads to:

Employing a consistent organization-wide approach to continual

improvement of the organization's performance.

Providing people with training in the methods and tools of continual

improvement. Making continual improvement of products, processes and systems an

objective for every individual in the organization.

Establishing goals to guide, and measures to track, continual improvement.

Recognizing and acknowledging improvements.

Principle 7: Factual approach to decision making

Effective decisions are based on the analysis of data and information

Key benefits:

Informed decisions.

An increased ability to demonstrate the effectiveness of past decisions

through reference to factual records.

Increased ability to review, challenge and change opinions and decisions.

Applying the principle of factual approach to decision making typically leads to:

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Ensuring that data and information are sufficiently accurate and reliable.

Making data accessible to those who need it.

Analysing data and information using valid methods.

Making decisions and taking action based on factual analysis, balanced with

experience and intuition.

Principle 8: Mutually beneficial supplier relationships

An organization and its suppliers are interdependent and a mutually beneficial

relationship enhances the ability of both to create value

Key benefits:

Increased ability to create value for both parties.

Flexibility and speed of joint responses to changing market or customer

needs and expectations.

Optimization of costs and resources.

Applying the principles of mutually beneficial supplier relationships typically

leads to:

Establishing relationships that balance short-term gains with long-term

considerations.

Pooling of expertise and resources with partners.

Identifying and selecting key suppliers.

Clear and open communication.

Sharing information and future plans.

Establishing joint development and improvement activities.

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Inspiring, encouraging and recognizing improvements and achievements by

suppliers.

7.Dr W. Edward Deming's 14 Principles

1. Constancy of purpose: Create constancy of purpose for continual improvement of

products and service to society, allocating resources to provide for long range

needs rather than only short term profitability, with a plan to become competitive,

to stay in business, and to provide jobs.

2. The new philosophy: Adopt the new philosophy. We are in a new economic age,

created in Japan. We can no longer live with commonly accepted levels of delays,

mistakes, defective materials and defective workmanship. Transformation of

Western management style is necessary to halt the continued decline of business

and industry.

3. Cease dependence on mass inspection: Eliminate the need for mass inspection as

the way of life to achieve quality by building quality into the product in the first

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place. Require statistical evidence of built in quality in both manufacturing and

purchasing functions.

4. End lowest tender contracts: End the practice of awarding business solely on the

basis of price tag. Instead require meaningful measures of quality along with price.

Reduce the number of suppliers for the same item by eliminating those that do not

qualify with statistical and other evidence of quality. The aim is to minimize total

cost, not merely initial cost, by minimizing variation. This may be achieved by

moving toward a single supplier for any one item, on a long term relationship of

loyalty and trust. Purchasing managers have a new job, and must learn it.

5. Improve every process: Improve constantly and forever every process for

planning, production, and service. Search continually for problems in order to

improve every activity in the company, to improve quality and productivity, and

thus to constantly decrease costs. Institute innovation and constant improvement of

product, service, and process. It is management's job to work continually on the

system (design, incoming materials, maintenance, improvement of machines,

supervision, training, retraining).

6. Institute training on the job: Institute modern methods of training on the job for

all, including management, to make better use of every employee. New skills are

required to keep up with changes in materials, methods, product and service

design, machinery, techniques, and service.

7. Institute leadership: Adopt and institute leadership aimed at helping people do a

better job. The responsibility of managers and supervisors must be changed from

sheer numbers to quality. Improvement of quality will automatically improve

productivity. Management must ensure that immediate action is taken on reports of

inherited defects, maintenance requirements, poor tools, fuzzy operational

definitions, and all conditions detrimental to quality.

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8. Drive out fear: Encourage effective two way communication and other means to

drive out fear throughout the organization so that everybody may work effectively

and more productively for the company.

9. Break down barriers: Break down barriers between departments and staff areas.

People in different areas, such as Leasing, Maintenance, Administration, must

work in teams to tackle problems that may be encountered with products or

service.

10. Eliminate exhortations: Eliminate the use of slogans, posters and exhortations for

the work force, demanding Zero Defects and new levels of productivity, without

providing methods. Such exhortations only create adversarial relationships; the

bulk of the causes of low quality and low productivity belong to the system, and

thus lie beyond the power of the work force.

11. Eliminate arbitrary numerical targets: Eliminate work standards that prescribe

quotas for the work force and numerical goals for people in management.

Substitute aids and helpful leadership in order to achieve continual improvement of

quality and productivity.

12. Permit pride of workmanship: Remove the barriers that rob hourly workers, and

people in management, of their right to pride of workmanship. This implies, among

other things, abolition of the annual merit rating (appraisal of performance) and of

Management by Objective. Again, the responsibility of managers, supervisors,

foremen must be changed from sheer numbers to quality.

13. Encourage education: Institute a vigorous program of education, and encourage

self improvement for everyone. What an organization needs is not just good

people; it needs people that are improving with education. Advances in

competitive position will have their roots in knowledge.

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14. Top management commitment and action: Clearly define top management's

permanent commitment to ever improving quality and productivity, and their

obligation to implement all of these principles. Indeed, it is not enough that top

management commit themselves for life to quality and productivity. They must

know what it is that they are committed to-that is, what they must do. Create a

structure in top management that will push every day on the preceding 13 Points,

and take action in order to accomplish the transformation. Support is not enough:

action is required!

8.DMAIC six sigma approach.

The six sigma approach for projects is DMAIC (define, measure, analyze, improve

and control). These steps are the most common six sigma approach to project work.

Some organizations omit the D in DMAIC because it is really management work. With

the D dropped from DMAIC the Black Belt is charged with MAIC only in that six

sigma approach. We believe define is too important be left out and sometimes

management does not do an adequate job of defining a project. Our six sigma

approach is the full DMAIC.

Define (DMAIC).

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Define is the first step in our six sigma approach of DMAIC. DMAIC first asks

leaders to define our core processes. It is important to define the selected project scope,

expectations, resources and timelines. The definition step in the six sigma approach

identifies specifically what is part of the project and what is not, and explains the scope

of the project. Many times the first passes at process documentation are at a general

level. Additional work is often required to adequately understand and correctly

document the processes. As the saying goes The devil is in the details.

Measure (DMAIC).

Many think when they start a journey the most important thing to know is where theyare going. While we agree knowing where you want to go is very important, we believe

some of the first information you need before starting any journey is your current

location. The six sigma approach asks the Black Belt project manager to quantify and

benchmark the process using actual data. At a minimum consider the mean or average

performance and some estimate of the dispersion or variation (maybe even calculate the

standard deviation). Trends and cycles can also be very revealing. The two data points

and extrapolate to infinity is not a six sigma approach. Process capabilities can be

calculated once there is performance data,

Analyze (DMAIC).

Once the project is understood and the baseline performance documented and verified

that there is real opportunity, it is time with the six sigma approach to do an analysis of

the process. In this step, the six sigma approach applies statistical tools to validate root

causes of problems. Any number of tools and tests can be used. The objective is to

understand the process at a level sufficient to be able to formulate options for

improvement. We should be able to compare the various options with each other to

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determine the most promising alternatives. As with many activities, balance must be

achieved. Superficial analysis and understanding will lead to unproductive options

being selected, forcing recycle through the process to make improvements. At the other

extreme is the paralysis of analysis. Striking the appropriate balance is what makes the

six sigma Black Belt highly valuable.

Improve (DMAIC).

During the improve step of the six sigma approach ideas and solutions are put to work.

The six sigma Black Belt has discovered and validated all known root causes for the

existing opportunity. The six sigma approach requires Black Belts to identifysolutions. Few ideas or opportunities are so good that all are an instant success. As part

of the six sigma approach there must be checks to assure that the desired results are

being achieved. Some experiments and trials may be required in order to find the best

solution. When making trials and experiments it is important that all project associates

understand that these are trials and really are part of the six sigma approach.

Control (DMAIC)

Many people believe the best performance you can ever get from a process is at the

very beginning. Over time there is an expectancy that slowly things will get a little

worse until finally it is time for another major effort towards improvement. Contrasted

with this is the Kaizen approach that seeks to make everything incrementally better on a

continuous basis. The sum of all these incremental improvements can be quite large.

As part of the six sigma approach performance tracking mechanisms and measurements

are in place to assure, at a minimum, that the gains made in the project are not lost over

a period of time. As part of the control step we encourage sharing with others in the

organization. With this the six sigma approach really starts to create phenomenal

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returns, ideas and projects in one part of the organization are translated in a very rapid

fashion to implementation in another part of the organization.

POTENTIAL BENEFITS OF TQM:

The advantages of adopting TQM system compared to conventional quality system

are

numerous and are outlined below:

TQM helps to focus clearly on the needs of the market. The traditional approach of

quality

control focuses on the technical details of a product so as to satisfy the customer.

However, the customer longs for different satisfaction perspectives which are

generally overlooked in the traditional approach. The needs change from person to

person and also from place to place. As TQM focuses on the concept of

universality, it tries to abstract the satisfaction perceptions of market and thus helps

the organisation to identify and meet the requirements of the market in a better

way.

2. TQM facilitates to aspire for a top quality performer in every sphere of activity. It

is a well accepted fact that the negative attitudes of employees and non-

participative culture of the organisations success, growth and prosperity. TQM

emphasises, on bringing about attitudinal and cultural change through promotion of

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participative work culture and effective team-work. This serves to satisfy the

higher human needs of recognition and self-development and enhances employees

interest in the job. The employees performance, thus, is not restricted to the

product or service areas but reflects in other spheres as well.

3. It channelises the procedures necessary to achieve quality performance. Quality in

its true sense can not be achieved instantly. It requires a systematic and a long-term

planning and strategic approach. By focusing on defining the quality policies, goals

and objectives, and communicating these properly to one and all in the

organisation, adopting SQC and SPC techniques and developing and using a

system of evaluation, the organisations can channelize their efforts to achieve the

desired and objectivated quality performance.

4. It helps examine critically and continuously all processes to remove non-

productive activities and waste. The organisations always aim at improving

productivity as it leads to reduction in cost resulting in increase in profitability.

The efforts in this direction are contributed because of the formation of quality

improvement teams which meet regularly and through a systematic approach

which tries to remove non-productive activity. A continuous effort to identify the

problems and resolve them helps to reduce the waste. The culture of well being

thus improves housekeeping, cost-effectiveness and safety.

5. It gears organisations to fully understand the competition and develop an effective

combating strategy. The dynamic changes in the global market and the open

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market policies adopted by a large number of organisations ha resulted in increased

competition and for many organisations the survival has become a key issue. For

this cause, it is essential for the organisations to understand the competitions and

develop and adopt suitable strategies to meet the challenge. As TQM helps to

understand the pulse of the customer and thus the market, it gives an edge to the

organisation to meet the competition.

6. It helps to develop good procedures for communication and acknowledging good

work. Improper procedure and inadequate communication are yet another bane of

many organisations, which result in misunderstanding, confusion, low

productivity, duplication of efforts, poor quality, low morale and so on. TQM

brings together members of various related sections, departments and different

levels of management thereby providing an effective vehicle of communication

and interaction.

7. It helps to review the process needed to develop the strategy of never ending

improvement. Quality improvement efforts cannot be restricted to any time period.

They nee to be continuous to meet the dynamic challenges. TQM emphasises on a

continuous and periodic review so as to make the required changes.

The benefits derived by the organisations, therefore, are many and multi-faceted.

Many of these can be measured in quantitative terms. However, the intangible

benefits, which include enrichment of the quality of the worklife and many more

are not quantifiable. At the same time, it has to be established whether they do

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occur or not in order to prove or disprove the efficacy of the concept. This can be

assessed by a well-planned research project or by carrying out an opinion survey

periodically. The tangible and intangible benefits of TQM are as presented

9.ADVANTAGES OF TOTAL QUALITY

MANAGEMENT.

TQM is a collaborative system. It can be conceptualized as a network of processesand activities through which various people in the organization can see different

aspects of a problem and can constructively explore their own limited vision of what

is possible.

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TQM thus is an interdepartmental and inter organizational effort to address problems

of improvement.

TQMprovides a foundation for moving towards answering the questions of why, how

and with what consequences people participate in multiple dimensional problem

solving.

TQM does not rely solely on the chain of command; it develops multi-channel

interactive networks throughout the organizations.

TQM is essential to establish cooperative links within the organization that can span

the various gaps among people to enable coordinate the action.

TQM can be viewed to play a transformational role within the organization.

Transformational changes occur only when hard issues like budget, manufacturing

marketing, disturbing and so on are blended with soft issues like values, culture,

vision, leadership style, innovative behavior and so on.

THE ISSUES ARE ( MAY BE USE FOR PRESENTATION)

HOW DO WE GET EVERYBODY TO WORK TOGETHER ( Team Player)

HOW DO WE MAINTIN THEIR INVOLVEMNT (Interest/Motivation)

HOW DO WE MAKE THEM CONTIBUTE THEIR BEST (10% stretch game)

HOW DO WE CREATE THEIR SATISFACTION

HOW DO WE CONTINUOUSLY IMPROVE

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Problems/Issues

Situation

ABC bank is one of the biggest banks in Asia established 85 years back. Recently it

was faced with some problems such as increased. Customer complaints, inconsistent

service at the front counter, unbalanced investment resulting in reduced profit margins

and a significant drop in customers.

Solution:

The Organization, therefore, set up a quality improvement team which took up a

Customer Care program to bring about a change in managing customer service. The

program primarily focused on trouble shooting, customer service improvement and

improving the management and staff relations. In building quality this, the groups were

composed of people from all levels and no status titles were assigned. Groups were set

up keeping in view the group dynamics and small group bonding principles in mind.

The workshops were arranged for the groups focusing on a super ordinate goal to putthe Customer First as a philosophy.

The workshops opened with personal value searching session so as to create a motive

for action. To further the value motive the prospects of personal growth were reviewed.

A congruence between personal value and organizational goal was established. The

workshop programmes emphasized on creative problem solving approach to permit

innovation, and challenge the existing cultural norms. During the workshops the

culture, work environment and attitudes towards customers in the banking section were

discussed openly, resulting in developing a sense of trust and commitment amongst

participants.

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Through these workshops a network of committed people was established

across the branches. To promote commitment and strong bonding, the rewards were

given. The process percolated downwards and the cultural change upwards. Thus, by

stepping outside the system and focusing on motivation and reward, the organization

brought about a necessary cultural change to keep the satisfaction of the customer as a

primary goal of all the employee.

TQM FAILURES CASE EXAMPLE:

Mr. Pandit, President of G.T. Electronics, read a lot about the TQM. He

instructed the subordinates to arrange a meeting with all department heads and plan to

implement TQM in G.T. Electronics. Mr. Pandit personally addressed the meeting and

subsequently also wrote an enthusiastic article about TQM in the company newsletter.

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He sent the top managers for TQM training programs and declared that the TQM be

initiated. However, he himself later got involved with joint ventures in Europe. The

TQM program was forgotten. When he returned to the country. After few months, he

found that very few people showed interest in TQM. The earlier initiative and interest

waned out because of the CEOs lack of convication.

10.Caparo at a Glimpse

"Caparo is more than a successful business enterprise - it is a story of people, ofvalues and of human effort. Above all it is a story of faith and family" - Lord

Paul, Chairman and Founder.

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Caparo is a fast growing global association of businesses with over a 1bn Euro

turnover. With interests predominantly in the design, manufacture and marketing

of steel, automotive and general engineering products, Caparos wider activities

encompass also new product development, materials testing services, hotels,

media, furniture and interior design, financial services, energy, medical products

and private equity investment.

The Group was founded in 1968 by Indian born British Industrialist, the Rt. Hon.

Lord Paul of Marylebone, who remains Chairman. Today, Caparo and its

associates employ more than 9,000 people in their worldwide operations across

Europe, North America, Asia, the Middle and the Far East.

In 1968 Lord Paul took out a 5,000 loan and opened Natural Gas Tubes. The

company, based in Huntington in Cambridgeshire, manufactured spiral weld

tubes and achieved first year sales of 14,000. In 2006 Caparo groups sales

exceeded 625m.

Lord Paul's roots go back to the little Punjab town of Jalandhar in India where, in

1910, his father started by making steel buckets, tubs, trunks and agricultural

implements, and had a small foundry at the back of the family home. From this

modest undertaking Apeejay Surrendra Group has grown into one of India's

largest family owned industrial groups in a wide range of industries : steel,

engineering, pharmaceuticals, hotels, shipping and tea.

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Lord Paul and his brothers grew up surrounded by their father's small business

and succeeded him in its diversification and expansion.

From his father, Lord Paul and his brothers learnt three important business

lessons: integrity, hard work and the value of close family ties. Though the

business prospered, the family continued to live frugally, following the Hindu

prescription "simple living and high thinking". Anecdotes recall that when Lord

Paul's mother was asked why she wore no jewels, she would proudly declare:

"my sons are my jewels." This ethic of close family ties continued and Lord Paul

attributes much of his business success to the moral and emotional support he

received from his three brothers - Stya, Jit and Surrendra, and the happy home

life created by his wife, Aruna.

This web site provides an overview of the companies that make up the Caparo

Group today. It also aims to tell you something of the internal spirit, the "what

drives Caparo" story. Above all this is the story of a vision inspired by Lord

Pauls daughter Ambika, who was responsible for his move to England.

"Our success in the years to come will continue to depend on the skill of our

family and management in reacting to opportunities, whilst continuing with

determination, integrity and the principles that have carried us successfully this

far" Lord Paul.

The Caparo group has been built through a combination of acquisitions, organic

growth of established businesses and the development of greenfield projects. The

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Group is particularly proud of the latter, which demonstrates its skill at building

technology based steel product companies from scratch, and penetrating export

markets.

Under the leadership of Angad Paul, appointed as Chief Executive in 2002,

Caparo continues this successful formula for growth. The grouping of

independently managed business units, mainly operating in metal and related

markets, gives both critical mass and a stable platform for growth. A customer

oriented philosophy, striving to provide products, services and solutions of the

highest quality at competitive prices is coupled with a lean and flat corporate

structure ensuring low overheads and rapid decision making. These key features

are at the core of Caparos success.

"Success will happen so long as you work hard and with integrity" - Lord Paul.

Caparo has never been a company that is highly centralised and there is never

any intention of changing the individual character of each operating division bydictating a specific company mission statement or vision. However Caparo is

built upon some core values and beliefs and it is these that guide our decisions

and our attitudes.

These ethics were developed from Lord Pauls Anniversary speech in 1994

which celebrated 25 years of Caparo.

THE CAPARO ETHIC

Caparo is something more than a successful enterpriseit is a story of people,

of values and of human effort.

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Working together we can build Caparo with resolution, fortitude and ability.

The goodwill and confidence of Caparo employees, our suppliers, our

customers and our managers is the bedrock of our business

Always aspire for excellence; nothing else is good enough

Never abandon hope

There is no such thing as bad business; only bad management

What I like is people who are proud of what they do Lord Paul

Our aim is to always be in the top 10% of performers (measured against our

industry competitors)

Success will happen so long as you work hard, with integrity

Find excitement in industry and your own job in it

Cherish the enduring values of fidelity, truth and integrity

Guiding Principles

Upholding the Caparo name

Customers and suppliers trust Caparo based on our capability and integrity -

qualities that underpin our reputation.

We seek to work with only those customers and suppliers who share our

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standards of legitimacy and integrity.

We use all assets belonging to Caparo and to our customers and suppliers,

including tangible and intellectual assets, in a manner both responsible and

appropriate to the business.

Behaving Professionally

We offer only those services that we believe we can deliver.

We meet our contractual obligations.

We believe that leadership demands courage, vision and integrity.

We achieve excellence through innovation, learning, agility and team work.

Respecting Others

We take pride in the diversity of our workforce and view it as a competitive

advantage to be nurtured and expanded.

We try to balance work and private life and help others to do the same.

We invest in the continuing development of our skills and abilities to meet the

needs of the business.

Corporate Citizenship

We express support for fundamental human rights and avoid participating in

business activities that abuse human rights.

We act in a socially responsible manner, within the laws, customs and traditions

of the countries in which we operate, and contribute in a responsible manner to

the development of communities.

We aspire to act in a manner that minimises the detrimental environmental

impacts of our business operations.

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We encourage the support of charitable, educational and community service

activities.

In the Workplace

Professionalism

We disclose confidential information or personal data only when appropriate

approval to do so has been obtained, and/or we are compelled to do so by legal or

regulatory requirements.

We use all assets belonging to Caparo and to our customers and suppliers,

including tangible and intellectual assets, only for legal and authorised purposes.

We aim to avoid conflicts of interest. Where potential conflicts are identified

we discuss them with Senior Management to agree a framework for managing

the potential conflict.

We compete vigorously, engaging only in practices that are legal and ethical.

When faced with difficult issues or issues that place Caparo at risk, we consult

appropriate Caparo colleagues before taking action. It is unacceptable for us to receive or pay bribes, or to offer or receive any form

of inducement as a means to derive any un-worthy advantage, either over our

customers or suppliers.

Working together

We respect the confidentiality and privacy of our customers and suppliers, our

colleagues and others with whom we do business.

We treat our colleagues, customers and suppliers and others with whom we do

business with respect, dignity, fairness and courtesy.

We respect the experience and opinions of our colleagues.

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We recognise the need to communicate at all levels of the business.

We are committed to maintaining a work environment that is free from

discrimination or harassment.

We provide a safe worki

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