Quality Excellence at RR and SBB

Operations Management

Kishor Chandra Das Page | i

Quality Excellence at

Rolls-Royce &

Swiss Federal Railway


Kishor Chandra Das Page | ii

Table of Contents

1 Introduction ................................................................................................ 1

2 Rolls-Royce Quality System ...................................................................... 1

3 SBB Passenger Traffic Quality System .................................................... 3

4 Customer Needs and Quality Process ..................................................... 4

4.1 Juran’s Trilogy vs RR-QMS & SBB QMS ................................................................ 4

4.2 Crosby’s 14 Steps vs RR-QMS & SBB QMS ............................................................ 5

5 Use of TQM and Six-Sigma in Rolls-Royce & SBB .................................. 8

5.1 Process Strategy ......................................................................................................... 8

5.2 Performance Management........................................................................................ 10

5.3 Supply Chain Management .......................................................................................11

6 Sustainability & Innovation .................................................................... 11

7 Conclusion .................................................................................................. 13

8 Appendices ................................................................................................ 14

8.1 Appendix 1 – Deming’s 14 Principles...................................................................... 14

8.2 Appendix 2 – Crosby’s 14 Steps .............................................................................. 14

8.3 Appendix 3 – Juran’s Trilogy ................................................................................... 15

8.4 Appendix 4 – Rolls-Royce Quality Targets ............................................................. 15

9 References .................................................................................................. 16


Kishor Chandra Das Page | 1

1 Introduction

Quality is the most important criteria to stay competitive in the market and to run a

sustainable business. Be it in service sector or in manufacturing, quality is very important to

meet the threshold of the competition and to maintain competitive advantage. This paper

discusses the applicability of the quality theories in services and manufacturing industries.

There are many theories of quality management but the top 3 theories that are regarded

most in the industry are called Deming model, Crosby model and Juran model. The Deming

model is based on the 14 principles (Appendix 1) laid and advocated by Dr W Edward

Deming. Philip B Crosby’s 14 steps (Appendix 2) to quality improvement are the basic

principles of Crosby model, which brought a significant change in quality management

practice in American companies. Dr Joseph M Juran developed the quality trilogy

(Appendix 3) of quality planning, quality control and quality improvement, which is the

basis of Juran model.

Processes of any company can be broadly categorised into 2 categories, Core Processes and

Support Processes. The core processes differ from a manufacturing organization to a service

organization and the quality approach also differs mainly due to two factors (1) nature of

output from the process (2) level of customer contact. In a service organization there is a

high level of customer contact throughout the service delivery period. This requires a

quality approach of high customer involvement and high level of process flexibility. A

customer’s contact with a manufacturing organization is primarily through the product that

the customer uses. So the quality approach in the manufacturing organization needs to be

primarily focused on the product quality and cost.

This report discusses the quality management processes in Rolls Royce, a manufacturing

company, and Swiss federal railway (SBB), a service company, and critically analyses

whether these processes are adequately designed to meet their customer needs. The next

section on this report discusses the quality approach in process strategy, performance

management and supply chain management and analyses the approach suitable for

innovation and sustainability.

2 Rolls-Royce Quality System

Rolls-Royce plc, the British engineering company, the foremost manufacturer of power

systems and services for use on land, sea and in the air. Rolls-Royce manufactures engines,

pressure vessels and turbines for transport, defence, aerospace and nuclear industries.

Because of the nature of the industry and the risks involved, quality of products and

services is a must to survive in the industry.

Rolls-Royce has 30,000 of its engines in service with its broad customer base comprising

more than 500 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160

armed forces and more than 2,000 marine customers, including 50 navies. Its customers’

needs are 100% reliability, minimum downtime and optimum lifetime operating cost of the

engine fleet. To meet its customer’s needs, Rolls-Royce’s quality management system

adequately covers the quality assurance and quality control in its supply chain and

manufacturing processes. Although the RRQMS is adequate to assure quality of the

products but there have instances of lapses in adherence to quality processes. There have



been lawsuits against Rolls-Royce alleging the company ignored quality inspections and

safety issues at one of its factories in the US (O’Doherty, 2011). The recent incident of Trent

900 engine failure was due to a manufacturing defect in the oil feeder tube, which did cost

£56 million to Rolls-Royce to fix the problem. Some of the instances show failure in

adherence to the quality processes but to ensure that its customers don’t face any

catastrophic failures, Rolls-Royce has implemented a very innovative technology to do a

real-time monitoring of performance of its engines in service. Rolls-Royce has adopted an

in-house developed quality management system (RRQMS) to integrate business

management, product and service quality. RRQMS ensures that controls are applied

consistently in business, design, manufacturing, servicing and supply chain activities all

across the company.

Figure 1: Rolls-Royce Core Processes

The Rolls-Royce QMS is based on 8 quality management principles

1. Customer Focus

2. Leadership

3. Involvement of People

4. Process Approach

5. System Approach to Management

6. Continual Improvement

7. Factual Approach to Decision Making

8. Mutually Beneficial Supplier Relationships

The framework of the RRQMS covers all aspects of the business processes, starting with

strategic planning and leadership, supply chain management, product engineering, product

delivery and services. These above 8 principles are applied at 5 different levels in the

RRQMS. The Figure 2 below depicts the 5 different levels in RRQMS



Figure 2 : 5 Levels of Rolls-Royce Quality Management System

3 SBB Passenger Traffic Quality System

Swiss federal railway (SBB) is regarded as the most reliable and most punctual railway

system in the world. SBB operates a 3000-kilometer network of tracks, 300 million travellers

and 60 million tons of freight is transported annually between 800 railway stations. SBB has

been consistently maintaining the track record of punctuality of its services, 95.7% of the

trains arrive within 5 minutes of delay (Weidmann et al., 2006). In order to fulfil the demand

for quality, customer satisfaction, productivity and profitability SBB implements its own

quality management system complying with the ISO9001 quality guidelines.

Figure 3: Swiss Federal Railway (SBB) Core Processes

The core operations in Passenger Traffic are Train Management, Rolling Stock Management

and Infrastructure Maintenance. SBB has 2,300 drivers to run over 6,000 trains safely,

efficiently and punctually. More than 80 planning, control, management and HR controlling

specialists ensure the correct deployment of locomotive crews. SBB also organises

locomotive crews to work special trains at short notice, as well as for managing day-to-day

business. SBB ran over 163 special trains for the affected customers due to the ash cloud



problem in 2010. The nature of the processes is such that it needs to be highly flexible to

accommodate for any real-time changes or emergencies.

Figure 4: Swiss Federal Railway (SBB) Train Management

The quality approach taken by SBB is an in-house developed system. Quality is ensured at

every stage form staff recruitment tests to online train management system. Despite the high

level of safety and quality assurance major accidents like the derailment in 2010 and minor

safety incidents with employees have also been reported.

4 Customer Needs and Quality Process

The primary objective of the quality process is to ensure consistency of quality that customer

needs. Processes and procedures is to defined to reduce the variability of the output

produced. This section analyses whether the quality processes at Rolls-Royce and SBB are

adequately designed to meet customer needs in comparison with the quality processes

proposed by Juran and Crosby.

4.1 Juran’s Trilogy vs RR-QMS & SBB QMS

The standards of compliance as defined in RRQMS are BS5750 (Detection of Defects or

Quality Control), ISO 9001/2/3 (Prevention of Defects or Quality Assurance and

Continuous Improvement or Quality Management). These standards of compliance are the

universal processes as defined in Juran’s quality trilogy. Juran’s trilogy does not explicitly

differentiate the quality assurance process. RRQMS defines the quality assurance as a

separate process in addition to the Juran’s trilogy. Quality planning at Rolls-Royce is done in

2 steps. The step 1 starts with planning the individual aspects of people, processes,



materials, equipments, and resources. In the 2nd step of quality planning, a systems

approach is taken to integrate the individual aspects quality. A robust quality control

process is implemented in all steps of a product cycle, in design, manufacturing, supply

chain and services. The 2 dimensions of the quality control processes are internal quality

and external quality. The external quality control is monitored through the supplier

relationship system called SABRe. The quality of suppliers’ products is controlled through

physical verification, witness of processes, review of quality documents and records.

Quality planning in Rolls-Royce starts at top level with strategic planning to achieve quality

goals, which is a continuous improvement process. As an example, Rolls-Royce targets to

reduce the delivered defects (measured as parts per million) by 10 times in every 2 years.

The quality assurance process in Rolls-Royce is a defect prevention technique. This

prevention technique applies to external defects as well as internal defects. This process

involves short listing and certification of suppliers, plant maintenance, process monitoring,

technology upgrades, etc.

Juran’s Trilogy RR QMS SBB QMS

Quality Planning Quality targets are clearly

defined and reviewed every 2

years.

Performance targets are

agreed with government and

reviewed every 4 years.

Quality Control Inspection and verification

processes are in place to control

product quality.

Total quality assurance is

ensured at every stage in the

supply chain from

procurement, manufacturing

and engine testing.

Service quality monitoring is

done from the punctuality

and safety records and

customer feedback.

Employee training and

infrastructure maintenance

carried out to prevent errors

and customer dissatisfaction.

Quality Improvement Real-time engine performance

is monitored to detect engine

problems at early stages and

bring design improvements.

Projects undertaken to

improve the punctuality,

safety and customer

experience.

4.2 Crosby’s 14 Steps vs RR-QMS & SBB QMS

The Rolls-Royce QMS derives many of its principles from the Crosby’s 14 steps to quality.

The table 1 below draws a comparison of Crosby’s 14 steps and the equivalent processes in

Rolls-Royce QMS.

Crosby’s 14 Steps Rolls-Royce QMS SBB QMS

Step 1: Management

Commitment

The 2nd principle of Rolls-Royce

QMS is about leadership, which

has a direct correlation to the step

1 in Crosby’s 14 steps. There is a

formalised quality policy and

targets. Management’s

commitment is evidenced from

ISO 9001 compliance and

allocated budgets and

undertaken quality

improvement projects are

evidence of management

commitment.



the budgets allocated for plant

and technology improvements to

achieve the quality targets

(Appendix 4).

Step 2: Quality

Improvement Team

Rolls-Royce has quality

improvement teams comprising

participants from its suppliers,

employees from different

departments and customer

representatives drawing the

improvement plan and

monitoring the improvements all

thought out its supply chain and

delivery.

Quality compliance team

identifies the quality gaps and

improvement opportunities. It

is SBB’s internal team unlike

the team at Rolls-Royce.

Step 3: Quality

Measurement

The principles of process

approach and factual approach to

decision making derives this step

of quality measurement. Product

verification thorough automated

co-ordinate measuring machines

(CMM) tracks and monitors the

defects. Statistical process control

in the supply chain and

manufacturing line monitors the

current and potential problems.

Real-time onboard tools (as

shown in Figure 4) are used

for measuring service quality

and regular customer

feedback is collected to check

customer perspective of

quality of service.

Step 4: Cost of

Quality Evaluation

The principles of factual

approach to decision making and

systems approach to

management are implemented

through the processes of

measuring waste and potential

losses due to damage to the

reputation. Crosby’s step 4 is all

about measuring waste and using

it a tool for decision making.

SBB QMS does not have

provision for measuring cost

of quality.

Measuring cost of quality in a

service sector can be very

complex and difficult to

measure.

Step 5: Quality

Awareness

Employee trainings, internal and

external audits are examples in

Rolls-Royce that implements this

step 5 from Crosby’s 14 steps.

New and existing employees

are regularly trained on

various aspects of customer

interaction, safety and service

standards.

Step 6: Corrective

Action

Planned and ad-hoc plant

maintenance takes the corrective

action needed in its

manufacturing line.

Maintenance is one of the core

processes in SBB to ensure

quality of service.

Step 7: Establish an There is no direct evidence of ad- There is no evidence of SBB



Ad Hoc Committee

for the Zero Defects

Program

hoc committee and zero-defects

program process in RR-QMS. But

Rolls-Royce hosts a variety of

events to celebrate the excellence

and achievements in quality.

following step 7 as defined in

Crosby’s model.

Step 8: Supervisor

Training

Employees and Supervisors go

through cross skills trainings to

develop flexibility in workforce.

Through trainings and

restructuring Rolls-Royce has

been able to achieve 10% higher

output per operator (Llyod,

2003).

Trainings as described in step

4.

Step 9: Zero Defects

Day

There is no direct evidence of

celebrating zero-defects day in

RR-QMS. But Rolls-Royce hosts a

variety of events to celebrate the

excellence and achievements in

quality.

SBB does not follow a zero

defects day.

Step 10: Goal Setting Continuous improvement quality

targets drives innovation and

process improvement in Rolls-

Royce (Appendix 4)

Service agreements with Swiss

government and rail

companies.

Step 11: Error Cause

Removal

Monitoring the performance of its

engines through the EHM

(Engine Health Monitoring)

system helps in identifying

potential design problems and

fixing them before engines reach

to the fatigue stage.

Any reported incident in the

service disruption is

investigated by a panel of

experts to identify the error

cause and actions are taken to

remove the error cause.

Step 12: Recognition Rolls-Royce recognises and

rewards its suppliers and

employees every year through

award ceremonies. The principle

of employee involvement and

mutually beneficial supplier

relationship are behind the

process of recognising and

rewarding employees and

suppliers.

Various employee awards and

team awards distributed

annually to recognise the

innovation and improvements

brought by high performers.

Step 13: Quality

Councils

Quality improvement

information is shared across all

departments but RR-QMS does

not directly address

establishment of quality councils

SBB quality management

system does not have

provision for quality councils.



within the organisation for the

purpose of sharing quality

improvement information.

Step 14: Do It Over

Again

The principle of continuous

improvement and quality targets,

technology and process

improvements establishes this

14th step in Rolls-Royce.

Incremental improvements

and regular projects

undertaken to repeat the cycle

of quality improvements.

5 Use of TQM and Six-Sigma in Rolls-Royce & SBB

The philosophy of TQM is implemented in most of today’s organisations but also it is

misinterpreted very often. TQM is a culture of managing to improve the effectiveness,

flexibility, competitiveness of an organisation. Quality has always been at the forefront for

Rolls Royce and it started adopting the principles of TQM in the year 1979 (Martínez-

Lorente et al., 2000) and in the 100 year old history of SBB, achieving service excellence has

always been in the blood of the business. TQM principles are based on three things (i)

Customer Satisfaction (ii) Employee Satisfaction and (iii) Continuous Improvement, where

as Six-Sigma is about variability of any process output. The three levels of Six Sigma

implementation are (i) As a Metric (ii) As a Methodology (iii) As a Management System. Six

Sigma underpins the TQM principles, Statistical Process Control and the other principles of

quality management. Rolls Royce has a robust and mature Six Sigma program. Roll-Royce's

improvement journey to performance excellence has the broad leadership support

throughout the company to ensure true cultural change to embrace quality throughout the

production and delivery process to please Rolls-Royce customers (Dave, 2011). Six Sigma’s

emphasis on defects measurement makes it relevant for manufacturing industry where the

process steps are well defined and repetitive and defects can be measured. Measuring

defects in a service process can be illogical to assume that all defects are equal. Though SBB

does not implement the statistical definition of Six Sigma, which is 3.4 defects per million

opportunities, it implements the core principles of continuous improvement for growth and

productivity.

5.1 Process Strategy

Process based approaches and process based management are helping organizations

improve and gain a competitive advantage. The process strategy at Rolls Royce is primarily

focused on the repetitive nature of the assembly line work and testing of the assembled

engines where as the process strategy at SBB is focused on the process flexibility to make the

customer experience delightful while availing its services at the railway stations or the

onboard services. There are some many sub processes within these organizations which

follow the product focus strategy and mass production strategy.

Continuous improvement at Rolls Royce is essential to meet the increasing expectations of

its customers and to maintain competitiveness. Rolls Royce uses consistent methods for

improvement, which include Define Measure Analyze Improve Control (DMAIC).

Embarking on a Six Sigma program means delivering top-quality service and products

while virtually eliminating all internal inefficiencies. The process strategy at Rolls Royce is



aimed at achieving the goal of 40 day engine delivery through process optimization and

efficient production. Each engine series is a different product but the new engine

development follows a similar cycle. The core engine common technology is the same for all

engines. The process strategy for the core engine constituent components is mass

production focused to gain reduced costs that are achievable from volumes. The Figure 5

below shows the 4 elements for achieving process excellence at Rolls Royce.

Figure 5: Rolls-Royce Process Maturity Cycle

The Six Sigma program at Rolls Royce has been able to achieve

95%+ component delivery performance. Customer delays are a rare event.

Less inventory and improved stock turns through the ERP system that has enabled Rolls

Royce to shorten component manufacturing lead times.

The capacity and load mismatch has dropped by a factor of ten over recent years,

leading to not only easier planning but also a reduction in indirect labour and hence

costs.

Improvement on engine lead time from 473 days to 40 days

(Llyod, 2003)

Although SBB never publicised its quality management and process strategy practices as Six

Sigma or TQM program but core principles and philosophies are inherent in its corporate

culture. The principles of TQM and Kaizen are more prevalent in SBB than the Six Sigma

approach. Some of the recent projects undertaken by SBB underpin their belief in TQM.

The Dynamic Railroad Traffic Management program is designed to increase operational

efficiency, network capacity and stability in heavily used mixed traffic networks while

minimizing the cost of new infrastructure. Every train always has an up-to-date, conflict

free schedule with an accuracy of seconds (Weidmann et al., 2006).

In order to fulfil demands relating to quality, customer safety and satisfaction,



productivity and profitability, the SBB implemented the Netbook mobile computing

project. This project replaced approximately 40 tons of paper daily, and has enabled SBB

to greatly reduce the preparation time necessary for Locomotive Crews prior to the start

of a trip, thus enabling a more effective and efficient use of their time. The philosophies

of TQM, customer satisfaction, employee engagement and continuous improvement, are

well adopted in this project.

The Taktfahrplan ("clockface timetable") project greatly in 1982 improved the connection

time at hub stations reducing the travel time for customers.

The Rail2000 project, an ambitious programme to improve the company's services, was

put into effect. It was the greatest timetable change since the introduction of the

Taktfahrplan

There are few projects that have resemblance to the Six Sigma methodology, e.g the safety

performance improvement project done by partnering with DuPont in 1993. The project

reduced the safety related incidents from 4,255 in 1993 to 2,220 by 1997 saving SBB CHF 6.6

million. DuPont is one of the early adopter of Six Sigma models and their experience in Six

Sigma projects helped SBB on this project. The Six Sigma culture is not very prevalent in SBB

for process strategy. Adopting Six Sigma methodology and culture would greatly enhance

the process strategy and measurement of process improvements and accuracy at SBB.

5.2 Performance Management

Performance management is all about execution, putting strategy to work (Horn, 2006). Be it

business performance or individual performance, a balanced scorecard monitors results and

identifies any areas for improvement. Performance management requires two elements as

inputs (a) strategic objectives and performance indicators (b) current and actual

performance against targets. Balanced scorecard has been in use for 2 decades and has

proven to be a useful tool for management to develop strategy and monitor progress.

Implementation, usefulness and accuracy of balanced scorecard at grass root level have been

questioned for practicality (Gupta, 2004).

Figure 6: Six Sigma Business Scorecard by Praveen Gupta



Rolls Royce has standard performance measures in every plant. The Key Performance

Indicators are focused on Quality Cost and Delivery. The same measures are used in every

cell, plant, business units and to the Rolls-Royce Board (Llyod, 2003). In a service industry

the key performance indicator is customer satisfaction. Swiss Federal Railway’s performance

indicators are customer satisfaction, safety, punctuality and environmental impact. Rolls

Royce and SBB have their respective performance scorecards defined and monitored

adopting the DMAIC methodology of Six-Sigma. All businesses, manufacturing and

services sector, need a tool that can provide a framework for energise the workforce and

continually improve the individual and organizational performance. For any Six Sigma

scorecard to be implemented successfully it must be built upon the basics of business. The

Six Sigma scorecard personifies leadership and management; aligns operations and drives

customer service and sales; and promotes employee excellence and innovation(Gupta, 2004).

5.3 Supply Chain Management

Supply chain management is becoming very important for the companies to stay ahead of

the competition. From the early 90s Six Sigma methodologies have been used to achieve

substantial improvement in the supply chain quality. Managing supply chain Six Sigma

projects is a very challenging as not only the direct suppliers but the supplier’s suppliers are

also required to be involved in the projects. GE, DuPont, Honeywell, Samsung, all these

companies have been able to gain their competitive advantage through their Six Sigma

projects. Samsung modified DMADOV framework to DMAEV by introducing the “Enable”

stage in place of Design and Optimise for their Six-Sigma supply chain projects.

The programme launched in 2003 at Rolls Royce aimed at simplifying the supply chain by

embarking on a process of “integrating” components into logical kits. This programme

greatly eliminated waste, reduced number of suppliers from 600 to 300 and enabled just in

time supply chain management. The Trent 500 engine is a good example of this Six Sigma

project, which uses 11,000 components covering 1,800 different parts. The kit now contains

30 logical packages requiring less space and cleaner floor halving the lead time and

requiring 1/7th of inventory in assembly line.

6 Sustainability & Innovation

As the environment is becoming more and more competitive, innovation is no more a

differentiation, but a necessity, and as consumers’ expectations on CSR are increasing,

finding the balance between these variables is most likely to define how successful the

company is (Yamasaki, 2011). The only way to sustain business in today’s dynamic and

competitive environment is through continuous innovation. There are many empirical

evidences where the market leaders have lost their competitive advantage due to lack of

continuous innovation, e.g the Japanese DRAM industry lost its market position to the

Korean industry. Innovations can be radical or incremental and both are essential to stay

ahead of the competition. The internet protocol TCP/IP was a radical innovation but in the

early years of this innovation it was nowhere close to the quality benchmarks of telephony,

the subsequent incremental innovations made it a sustainable technology. The Six Sigma

approach has been very successful in generating incremental innovative ideas and projects.

On the other hand companies like SBB, who don’t follow the Six Sigma approach, are also



very successful in sustaining their business. Cost-effectiveness, environmental compatibility

and social responsibility are the three central pillars of SBB’s corporate strategy oriented

towards sustainability. Tourism industry plays a significant role in Switzerland’s economy

and nature and the environment play a significant role in growth of the tourism industry in

Switzerland. So sustainability of SBB cannot be achieved without taking care of the

environment in its strategy and actions. In recent years SBB has started energy saving and

climate protection programmes, which are continuous and ongoing. Sustainability in

manufacturing industry also cannot be achieved without taking care of the environmental

impact. The CO2 emission per passenger for a flight journey is 10 times higher than a train

journey. The Rolls Royce group measures both the emissions of its products and the

emissions of its manufacturing operations. As a power systems company Rolls-Royce’s

primary contribution to sustainability is to develop technologies and products with an

increasingly lower environmental impact. Rolls-Royce’s R&D investments are for

developing products for future to respond to several of the major environmental challenges,

through the provision of low-emissions, low-carbon and renewable energy solutions.

Radical innovations and future products build the foundation for long term sustainability.

Rolls-Royce’s tidal stream generator is such an example of radical innovation in renewable

energy sector.

Quality philosophies like Six Sigma and TQM can develop an organizational culture for

incremental innovations. Japanese car industry and technology industry gained its

competitive advantage through their quality

initiatives and incremental innovations. But in a

study conducted by Benner and Tushman in the

paint and photography industries shows that the

greater the number of ISO certifications, the fewer

the number of original patents. The risk averse

nature of quality process stops free thinking and

risk taking. For generating new ideas it requires a

free thinking environment. The creative workplace

at Google allows being yourself. Rolls-Royce’s

research wing employs creative and free thinking

professionals to develop products for future. It invested a total of £923 million in its research

and development activities. Research and development are fundamental to future success,

providing technologies and intellectual property that allows competing on a global basis in

highly competitive markets. Six Sigma culture of quality improvement and cost reduction,

with its rigorous analysis, constricts choice, and as such does not mesh well with the more

freethinking and risk-taking culture required for germinating new ideas (Cole &

Matsumiya, 2007).

The recommendation for Rolls-Royce is to continue with their TQM and Six Sigma

implementation in their established production process and supply chain process and invest

more in developing sustainable renewable energy products. SBB must continue with their

focus on making it a delightful experience for their customers and adopt the Six Sigma

principles to bring measurable, continuous and incremental innovations. Six Sigma trainings

for employees and a focus on measurable incremental improvements can help SBB attaining

higher quality goals.



7 Conclusion

The quality approach in an organization is driven by the level of customer involvement. In

manufacturing sector the process strategy is primarily product and mass production

focused whereas in service sector it is focused on process and flexibility of processes. Rolls-

Royce follows a dual strategy with product focus and mass production focus. Rolls-Royce

has a deep rooted culture of product excellence by adopting the principles of TQM and Six

Sigma. SBB follows its own quality principles of delightful customer experience and

continuous improvement, which has very close resemblance to the TQM principles. The

principles laid out by the quality gurus like Juran, Crosby and Deming have a very common

foundation which are applicable for manufacturing as well as service industries, Rolls-

Royce and SBB both follow these quality principles in their quality management system.

Analysis of the supplier relationship process at Rolls-Royce and the Train management

process at SBB shows that processes are designed keeping customer needs in view. But in

both organisations there are quality lapses observed in some instances. To prevent these

quality lapses and to improve on the observed quality gaps, it requires a process of

continuous improvement. The quality philosophies like Six Sigma and TQM, both address

the need for continuous improvement and build a culture of excellence. Rolls-Royce and

SBB, both have their own balanced performance scorecard and they are measured and

monitored against those scorecards.

Quality approach can help organizations to bring incremental innovations and stay

competitive with their competitors. Six Sigma approach can be applied to any of the core

processes or the support processes to bring incremental improvements, reducing cost and

increasing profitability. But researches and empirical evidences suggest that these quality

approaches develop risk averse culture in organisations and stops them taking risks. For

companies to stay ahead of the competition, sustainable and continuous radical innovations

are required. To bring the radical innovations forward it requires a free thinking culture,

which is beyond boundaries of quality and processes. Rolls-Royce spends huge money in its

research and development for developing sustainable products for future. SBB spends huge

money in its futuristic projects for making the Swiss and European railway services

sustainable making less impact to the nature and environment. The new products and

services from radical innovative thinking may lack the stability of quality of an established

product but the follow-up incremental innovations and quality improvements will make the

new products sustainable for future.



8 Appendices

8.1 Appendix 1 – Deming’s 14 Principles 1. Create constancy of purpose toward improvement of product and service, with the

aim to become competitive and to stay in business, and to provide jobs.

2. Adopt the new philosophy. We are in a new economic age. Western management must

awaken to the challenge, must learn their responsibilities, and take on leadership for

change.

3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection

on a mass basis by building quality into the product in the first place.

4. End the practice of awarding business on the basis of price tag. Instead, minimise total

cost. Move towards a single supplier for any one item, on a long-term relationship of

loyalty and trust.

5. Improve constantly and forever the system of production and service, to improve

quality and productivity, and thus constantly decrease costs.

6. Institute training on the job.

7. Institute leadership. The aim of supervision should be to help people and machines

and gadgets to do a better job. Supervision of management is in need of an overhaul,

as well as supervision of production workers.

8. Drive out fear, so that everyone may work effectively for the company.

9. Break down barriers between departments. People in research, design, sales, and

production must work as a team, to foresee problems of production and in use that

may be encountered with the product or service.

10. Eliminate slogans, exhortations, and targets for the workforce asking for zero defects

and new levels of productivity. Such exhortations only create adversarial relationships,

as 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. a) Eliminate work standards (quotas) on the factory floor. Substitute leadership.

b) Eliminate management by objective. Eliminate management by numbers, numerical

goals. Substitute leadership.

12. a) Remove barriers that rob the hourly paid worker of his right to pride in

workmanship. The responsibility of supervisors must be changed from sheer numbers

to quality.

b) Remove barriers that rob people in management and engineering of their right to

pride in workmanship. This means, inter alia, abolishment of the annual or merit

rating and management by objective.

13. Institute a vigorous program of education and self-improvement.

14. Put everybody in the company to work to accomplish the transformation. The

transformation is everybody's job.

8.2 Appendix 2 – Crosby’s 14 Steps

Step 1: Management Commitment

Step 2: Quality Improvement Team

Step 3: Quality Measurement



Step 4: Cost of Quality Evaluation

Step 5: Quality Awareness

Step 6: Corrective Action

Step 7: Establish an Ad Hoc Committee for the Zero Defects Program

Step 8: Supervisor Training

Step 9: Zero Defects Day

Step 10: Goal Setting

Step 11: Error Cause Removal

Step 12: Recognition

Step 13: Quality Councils

Step 14: Do It Over Again

8.3 Appendix 3 – Juran’s Trilogy

The concept of the quality trilogy is that managing for quality consists of three basic quality-

oriented processes.

Quality planning.

Quality control.

Quality improvement.

8.4 Appendix 4 – Rolls-Royce Quality Targets

Targets for continuous improvement are:

• Halve the rate of customer incidents every 3 years.

• Halve the cost of non-conformance from all business processes every 3 years.

• Ten times reduction in delivered defects every 2 years, measured as parts per million

(PPM) or defects per unit (DPU) as appropriate.

• Set benchmark lead times and achieve them including appropriate intermediate mile-

stones within 3 years.



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Documents

Quality Excellence at RR and SBB