Organizational Structures of Quality Management in Manufacturing Companies: a Status-Quo Analysis

Transcription

1 Organizational Structures of Quality Management in Manufacturing Companies: a Status-Quo Analysis Prof. Dr.-Ing. Roland Jochem Head of the Division Quality Management Fraunhofer-Institute for Production Systems and Design Technology IPK, Berlin Dipl.-Ing. Falk Behmer Senior Researcher, Division Quality Management Fraunhofer-Institute for Production Systems and Design Technology IPK, Berlin Henry Hanke M.Sc. Research Assistant, Division Quality Management Fraunhofer-Institute for Production Systems and Design Technology IPK, Berlin

2 Agenda Introduction and Purpose Methodology Findings Summary and Conclusion Page 2

3 Agenda Introduction and Purpose Methodology Findings Summary and Conclusion Page 3

4 Introduction and Purpose Setting up the right quality management organization (QMO) has become an essential managerial task: Key Organizational Tasks Stability Flexibility Foster effectiveness and efficient Globalization and technological evolution drives organizational complexity (Bullinger et al., 2009) Consequence: organizational capability to fulfill the three essential tasks decreases (A prominent example is the high number of recalls in the automotive sector 2014/15) Key Questions: 1. How is the quality management organization of manufacturing companies structured today? 2. Which structures seem to be most capable of fulfilling the requirements of today s business environment? Page 4

5 decentral central Three Basic Types of Quality Management Organizations 1 2 Line Organization Divisional Organization Matrix Organization Staff Line R & D Prod. Sales TM TM QM 4 TM R & D Prod. Sales QM Division 1 Division 2 Division 3 6 Product group 1 R & D TM Prod. Sales QM R & D Prod. Sales QM Product group 2 3 R & D Prod. TM Sales Log. 5 R & D Prod. TM Sales Log. 7 Product group 1 TM R & D Prod. Sales Log. Division 1 Division 2 Division 3 Product group 2 = Quality Management TM = Top Management (Schmitt et al, 2014)) Page 5

6 Agenda Introduction and Purpose Methodology Findings Summary and Conclusion Page 6

7 Methodology Design Online survey between December 20 th and December 3 rd 2014 Participants 1. From Germany, Austria or Switzerland 2. Manufacturing business in line with manufacturing sector classification of the German Census Bureau 3. More than EUR 10. Mio in annual sales Sample size 411 (2,24% return) Main Topics 1. Current QMO structure and design (Focus of this presentation) 2. QMO related planning activities and 3. QMO reorganization processes Page 7

8 Methodology Survey Participants by Industry (n=411) Machinery & Plant Engineering Electronics & Electrical Engineering Automotive Food Chemistry & Pharmaceuticals Rubber & Synthetics Steel and Metal Medical Equipment Textiles Sonstiges Page 8 0% 5% 10% 15% 20% 25% 30% 35%

9 Methodology Job title of participants (n=411) 11% Head of Quality Management 10% 37% Quality Management Representative 10% Quality Engineer Executive Board 32% Other Page 9

10 Agenda Introduction and Purpose Methodology Findings Summary and Conclusion Page 10

11 Findings DIN EN ISO 9001 certification by sector (n=411) Electronics & Electrical Engineering Automotive Steel & Metal Machinery & Plant Engineering Rubber & Synthetics Chemestry & Pharmaceuticals Medical Equipment Textiles yes no no, but intended Food Others Page 11 0% 20% 40% 60% 80% 100%

12 Findings Companies with a high process complexity in their systems were mostly certificated (e.g. Electronics & Electrical Engineering 100%) Lower percentages were observed at companies with a strong regulatory framework and industry-specific norms (e.g. food industry 46%) Strong regulatory frameworks and industry specific certicicates might be able to replace the functions of an ISO 9011 certification If the supply chain, product and process complexity is comparably low, a lower certification percentage was observed (e.g. textile sector) Majority of companies had established quality management as an autonomous function and structure within the organization Page 12

13 Findings Observed QMO structures (n=411) 90% 6% 5% 3% 2% central decentral other no information Page 13

14 Findings Majority of participating companies worked with a centralized QMO (90%) Shows that even though there has been an active discussion about whether decentralized or centralized structures are more suitable, especially in globalized context A centralized QMO approach still dominates Page 14

15 Findings QMO structures by Industry sector (n=411) Automotive Chemestry & Pharmaceuticals Electronics & Electrical Engineering Food Rubber & Synthetics Machinery & Plant Engineering Functional Divisioinal Matrix Medical Equipment Steel & Metal Textiles Page 15 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

16 Findings Majority of survey participants were small and medium size manufacturers Dominance of functional QMO types observed throughout all industry sectors Emphasizes the importance of organizational simplicity, clear hierarchy and specialization Functional organizations can be developed into matrix forms by adding a divisional dimension Page 16

17 QMO capability of task fulfillment [%] Findings Capability of Task Fulfillment in Dependence of the QMO age (n=392) <1 year <3 years <5 years <10 years >10 years Page 17 Age of the current Quality Management Organization

18 Findings Settling-in period for QMO in first three years causes increase in QMO capability Decrease of QMO capability after three years because of changings market condition Gap between current QMO setup and changed requirements forces companies to reorganize their QMO Observations shows that after organizations reach the age of five years the QMO capability decreases, followed by a re-increase after ten years. But this attunement is only possible if the factors that affect quality remain stable for long periods of time. The oldest QMO structures were found in industries that had comparably low changes, like the textile (57% >10y) and rubber/synthetics sectors (56% >10y). On the other hand, comparably young QMOs were observed in manufacturers from the machinery/plant engineering (44% < 5y) and food industries (49% < 5y). In these sectors changes were comparably high. Page 18

19 Findings Comparison of Central and Decentral QMO Structures (n= ) QMO reorganization is efficient & effective Capability of task fulfillment 90% 80% 70% 60% ISO 9001 certified 50% central QMO is being planned adequately 40% Flat hierarchiy decentral Use of performance KPIs for QMO Use of interdisciplinary project teams Page 19

20 Findings Percentage of ISO 9001 certified organizations is significantly higher for centralized than for decentralized QMOs. Possible reasons: standardizing allows companies to gain synergies and enforce cooperation with reliable standards that are supported by a certification Overall, the capability of task fulfillment is slightly higher in decentralized QMO structures: use of interdisciplinary teams is more prevalent decentralized structures require additional leadership positions => steeper hierarchy allows for a higher customer and product focus Page 20

21 Findings Comparison of Functional, Divisional and Matrix QMO Structures (n= ) QMO reorganization is efficient & effective QMO is being planned adequately Capability of task fulfillment 90% 80% 70% 60% 50% 40% ISO 9001 certified Flat hierarchiy Functional Divisional Matrix Use of performance KPIs for QMO Use of interdisciplinary project teams Page 21

22 Findings Divisional QMOs are superior in: capability of task fulfillment efficient and effective reorganization adequate planning the use of KPIs interdisciplinary teamwork Matrix QMOs: allowed flattest hierarchies had the highest ratio of ISO 9011 certifications caused by the complex form of organization Functional QMOs showed weakest results overall possible reasons could be long line of communications implicit slow decision-making narrow, department-focused thinking Page 22

23 Agreement [%] Findings Success factors in the QMO (Top 25% n=76; Bottom 25% n=76) based on capability of task 79% 74% 75% Top 25% Bottom 25% 64% 60% 41% 40% 43% 40% 26% Flat hierarchiy Use of KPIs for QMO QMO is being planned with foresight Implementation of interdisciplinary teamwork Quality Assurance is assigned to Manufacturing Page 23

24 Findings The top 25% used more QMO related KPIs (75% to 41%), foresight-oriented organizational Page 24 planning and interdisciplinary teamwork Most used KPIs were the rate of complaints (77%), failure costs (57%) and the total cost of quality to sales ratio (41%) The significant difference in KPI usage and planning activities is a key indicator that organizational foresight and systematic performance measurement are beneficial to QMO capability. Quality management is by its nature a comprehensive field of activity, so anchoring interdisciplinary teamwork in the QMO appears a logical step for increasing its performance. Companies that had assigned quality assurance (QA), which involves operative quality related tasks that are directly associated with the product and its manufacturing process, directly to manufacturing were more often in the bottom quartile (40%) than in the top (26%). Possible explanation: conflicting goals give the potential for conflicts between quality management on the one hand and superordinate-manufacturing functions on the other

25 Agenda Introduction and Purpose Methodology Findings Summary and Conclusion Page 25

26 Summary and Conclusion Divisional QMO structures appear superior to functional or matrix forms but used by the minority of survey participants In small and medium sized firms, QMO structures still follow traditional functional patterns Separation of business and engineering related tasks in the functional approach seems less suitable for today s complex market environment The primary QMO structure is to a large extent dependent on primary organization structure, but secondary organization in the form of quality task forces, project teams and so on, can be adjusted Planning the QMO with foresight to changes was identified as one of the key differentiating factors in regards to the degree of task fulfillment capability: Goal: Keep the gap between QMO capabilities, and internal and external requirements to a Page 26 minimum!

27 References Bullinger, H. J.; (2009) Westkämper, Engelbert: Handbuch Unternehmensorganisation. Strategien, Planung, Umsetzung, (VDI), Springer Berlin, Berlin, pp Keuper, F. ; Sauter, R.; (2014) Unternehmenssteuerung in der produzierenden Industrie. Konzepte und Best Practices, Wiesbaden, pp. 31. Schmitt et al.; (2014) Qualitätsgerechte Organisationsstrukturen, in: Masing, Walter; Pfeifer, Tilo; Schmitt, Robert: Handbuch Qualitätsmanagement, Hanser, München, pp Page 27

28 Research Team Thank you for your attention. Prof. Dr.-Ing. Roland Jochem Dipl.-Ing. Falk Behmer Henry Hanke M.Sc. Page 28