Case Study 4

TQM implementation and

policy deployment at
STMicroelectronics
Ellen Mae Reuyan
Genevieve Gasco
Christopher Pontejo

Time context of the Case

1987 Establishment of STMicroelectronics

1990 - There was a rapid downsizing
program which hit people, product portfolio
and, ultimately, market share.

1991 - ST launched a TQM initiative based

on the European Foundation for Quality
Management (EFQM) model.

December 1991 - framework was put in

place. TQM is a mandatory way of life in the
corporation which backed by action and
resource both financial and people.

1997 - the company won the European

Quality Award, EFQM (European Foundation for
Quality Management).

III. Perspective
ST Microelectronics believe that to be a total
quality company, strategy, philosophy, values and
goals must be transmitted down the organization,
from level to level in a systematic way, to provide
focus, clarity direction and alignment.

IV. Central Issue

(Statement of the
Problem)
The rapid advancement in
technology and high capital
intensity leads STMicroelectronics
to adopt TQM initiative.
How to implement TQM?

V. Statement of
Objectives
In order for the TQM program to be fully implemented it
needs to be driven from the top down by example. The key
components of successful implementation of TQM should
be:
Organization commitment from Top management
down to employees.
Common Framework the reformulation of mission
statement. Integration to day to day activities.
Local Initiatives all be adapting to change which
translates to local action plans.
Culture Change mind setting and acceptance to goals
that are both realistic and challenging.
Mechanisms necessary resources to be provided to
support the implementation of TQM.
Policy deployment backbone of TQM.

Detailed Goals

VI. Areas of
Considerations
Strengths
1. Broad Product category
2. Expansion into growing countries
3. Strong financial performance currently revenue is more than US $ 10
billion and employee strength more than 50,000.
Weaknesses
1. Dependence of very few customers
2. Spending on Research and development (R&D) about 14-16% of sales
3. Talent Crunch (Talent Shortage) for such specific skillset
Opportunities
1. Growing global semiconductor market
2. Growth in PV (photovoltaic) market
3. Product innovations
Threats
1. Technology becomes obsolete very quickly in the industry
2. Exchange rate fluctuation
3. Government regulations

VII. Alternative
Courses of Actions
1. Translate the corporate vision, objectives and
strategies into concrete specific goals, plans and
actions at the operative level.
2. Focus on everyones contributions in support of
employees empowerment.
3. Establishment of TQM support group that allocate
significant time to TQM implementation.
4. Integrate the entire organizations daily priority
activities with its long term goals.

VIII. Decision Matrix

IX. Conclusion
Just like in the case of audits, the company must
have designated audits to insure the compliance
of check and balances, conformance and correct
implementations. To make this thing possible, it is
a must to have internal auditors to oversee such
activities. Likewise, the establishment of TQM
support group shall be able to manage the
implementation of TQM.

X. Recommendations
The management of STM provided a mechanism
for real time visual follow-up of breakthrough
priorities to support very rapid progress and this
is the support group for TQM. Policy deployment
(PD) is the primary method used in STM to make
TQM the way we manage rather than something
added to operational management. In order to
make it effective, STM have simplified the
approach, combining as many existing initiatives
as possible, to leave only one set of key
improvement goals deriving from both internal
and external identified needs.

XI. Action Plan