FREE ESSAY ON TQM ANALYSIS OF LUCENT TECHNOLOGIES

TQM ANALYSIS OF LUCENT TECHNOLOGIES

Introduction
The following is an attempt to analyze AT&T's use of Total Quality Management throughout
its organization. Since AT&T is an elaborately enormous corporation I will focus my study
to AT&T Power Systems/Lucent Technologies. This division of AT&T has been the industry
standard for excellence since TQM was first introduced to the company. AT&T Power Systems
has become one the world's most dynamic companies because of its use of TQM. I will
provide a brief description of who AT&T Power Systems is, a description of the events
that lead up to its use of TQM, AT&T's TQM philosophy, and how this philosophy was
implemented. Finally I will discuss the benefits AT&T Power Systems realized through
their use of Total Quality Management.
Who is AT&T Power Systems?
AT&T Power Systems provides a verity of power products for the data processing and
telecommunications industries. Power System and its 4,200 employee's design, develop,
manufacture, and market electronic power systems, components, and power supplies to an
increasingly international marketplace. In the past ten years AT&T as a whole has gone
through a dramatic metamorphous. It was forced to change from a large telecommunications
monopoly providing universal telephone service, to a competitive global corporation
providing a full range of communication services and technologies. The new AT&T is a
potpourri of smaller, highly focussed entities. Each entity has its own customers,
competitors, and operational functions.
Power Systems is the pinnacle of the new AT&T. In less than five years Power Systems has
become the prototype for successfully implementing the cultural and organizational
revolution know as Total Quality Management. It has not only received internal
recognition, but external achievement as well. In 1994 Power Systems was the first
American company to win Japan's prestigious Deming Prize for Quality Management. In the
same year AT&T's long distance division won America's Malcolm Baldrige National Quality
Award. AT&T's TQM philosophy made it the first corporation to win these two awards.
Why did Power Systems change to TQM?
Prior to 1990 Power Systems provided equipment for only its parent company AT&T. Power
Systems was a lackluster division of AT&T that reported losses in numerous quarters. As
the scope AT&T and business as a whole changed Power Systems was forced to survive on its
own. No longer would losses be tolerated, if the work couldn't be completed in a
cost-effective manner the division would be sold and the work would be given to an
outsourcer. 
A.M. (Andy) Guarriello, Vice President & COO of Power Systems, was given the job of
implementing TQM. Guarriello along with Power Systems management team launched the Dallas
Vision project, an initiative involving physical, organizational, and philosophical
changes that soon led to the adoption of Total Quality Management as the management
system for the future. Power Systems consolidated several of its locations into several
small internal business units. These units would become to foundation that Power Systems
operated on. Each units is given the resources to develop, engineer, manufacture, and its
products. Functions such as human resources, finance, marketing, and sales are provided
by smaller organizations developed to support the internal units.
Power Systems Dallas unit was completely redesigned. This 900,000 square foot facility
was rearranged into what AT&T calls focused factories. Each focused factory has the
capability to accept incoming material, manufacture, and ship finished products. This
layout was designed much within the guidelines of the Japanese JIT system. Power Systems
took the Japanese approach to TQM and modified to fit the AT&T culture. The TQM criteria
developed within Power Systems were selected to ensure the company's ongoing focus on
high standards for customer orientation, process excellence, employee involvement and
continuous improvement.
What is AT&T's TQM philosophy?
AT&T's TQM philosophy has three main components Quality Policy Deployment, Daily Work
Management, and Quality Improvement. These three components combine to ensure robust
solutions and continuous improvements. Quality Policy Deployment is the process of
aligning the company's attention and resources on a few high-priority, customer-focused
issues. This is done to achieve to realize vast improvements in performance. Daily Work
Management is a process of defining, measuring, and managing the day-to-day work of
individuals and groups to obtain incremental improvements. This gives individual
employees the opportunity to see improvements in measures they understand. Quality
Improvement is a team-based problem-solving methodology that uses the seven-step process
known as the QI story process. The QI story process is designed to detect and eliminate
errors that cause defects. Together these three concepts formed an effective solution to
Power Systems earlier problems.
Underlying these three concepts are four principles that are the foundation of AT&T's TQM
philosophy. These four are customer satisfaction, management-by-fact, respect for people,
and P-D-C-A. P-D-C-A is Plan-Do-Check-Act developed by Shewhart. These four principles
helped Power Systems implement its cultural change. Without any one of these TQM will not
work, so Power Systems' management instituted a training regiment that had every employee
had at least two full days of training within the first year of implementation.
Power Systems has instilled pride in each one of its employees, which perpetuates outside
the business to their customers. Each manager, worker, team member, and internal group
believe that they can make a difference in the operation of the company. Each also
believes they have the responsibility to produce a quality product efficiently that not
only meets their customer's needs, but also makes profit. This attitude as propelled
Power Systems, or as it is now known Lucent Technologies, to the top of its industry.
What Benefits did Power Systems see from TQM?
Power Systems surpassed the expectations of management to realize colossal growth. Below
is a list of improvements from a 1994 AT&T press release. These improvements pertain
specifically to Power Systems.
? Number of customers increased by six times. 
? Sales revenue grown by 20 percent. 
? Operating return on assets (ROA) comparable to top 50 U.S. corporations. 
? Customer satisfaction improved to industry-leading position. 
? Product shipped to customers' request date 95 percent of the time. 
? Outgoing quality (ppm) improved by a factor of twenty. 
? New product introduction interval reduced by one-half. 
? Inventory and investment cut in half. 
? Quality Improvement teams grown from zero to almost 300. 
? Employee suggestions increased from 50 to 7000 per year. 
? ISO 9000 certification for all locations. 
? All chlorofluorocarbon (CFC) usage and toxic air emissions eliminated. 
? More than 98 percent of all possible items recycled. 
? Workplace of the Future a model of union-management cooperation.
Through the use of TQM Power Systems has thrust its way into the industry lead for
quality management. All of the above benefits are directly related to the implementation
of TQM and its philosophies. Power Systems took a stance against the traditional American
way of doing business. In this increasing global marketplace businesses must change or
they will become extinct. AT&T's Power Systems was one the first American companies to
adapt Japanese quality management styles to one that works here.
Further Findings
AT&T's Power Systems is now Lucent Technologies, one of the fastest growing companies in
the communication industry. AT&T is the leading American corporation in regards to
quality management. When asked to comment on AT&T being awarded both the Deming and
Baldrige Awards AT&T Chairman Robert E. Allen said, Receiving these awards is like
winning both the World Series and the World Cup on the same day. Allen went on to say, I
couldn't be more proud of the men and women of AT&T who earned this remarkable
achievement; they know that the real winners are our customers. I think the reason that
AT&T has been successful with its TQM is that this philosophy has become inbreed into the
culture at AT&T. Allen comments are a testament to that.
Andrew M. Guarriello's participation in AT&T's implementation has earned a spot in the
Shingo Prize Academy. The Shingo Prize Academy consists of individuals who have
distinguished themselves in the area of manufacturing excellence. Other members of the
Academy include Dr. Eliyahu M. Goldratt and Jerry J. Jasinowski.
Works Sited
Shingo Prize for Excellence in Manufacturing. Shingo Prize Manufacturing Academy.
[http://www.usu.edu/~shingo/academy.html]
AT&T. Welcome to AT&T MICROELECTRONICS.
[http://www.careermosaic.com/cm/att_micro/att_micro1.html]
Byrnes, and Adele Ambrose. AT&T wins Baldrige Award and Deming Prize in quality coup 
[http://www.att.com/press/1094/941018.chb.html]
Gualt, and Betsy Harrod. Power Systems is first U.S. manufacturer to win Deming Prize.
[http://www.att.com/press/1094/941018.meb.html]
Dean, Edwin. Total Quality Management. [http://akao.larc.nasa.gov/dfc/tqm.html]
An Analysis of TQM at AT&T's Power Systems/Lucent Technologies