This document is a project report submitted by Mr. A. Nagasudhakar to Jawaharlal Nehru Technological University in partial fulfillment of the requirements for a Master of Business Administration degree. The report focuses on quality circles at Bharat Heavy Electricals Limited (BHEL). It provides background information on quality circles, including their history and implementation in India. It also describes BHEL's quality circle program and covers common problem solving techniques used by quality circles such as brainstorming, data collection, and cause-and-effect diagrams.

1. A PROJECT REPORT ON
QUALITY CIRCLES AT BHEL
(A Report Submitted in Partial Fulfillment of the Requirements for the Degree of Master
of Business Administration in JNT University, Hyderabad.)
Submitted by
Mr.A.NAGASUDHAKAR
Enrolment No: 107R1E00F9
MBA: (HR)
Jawaharlal Nehru Technological University
Hyderabad – 500 085
2010-2012
1

2. A PROJECT REPORT ON
QUALITY CIRCLES AT BHEL
(A report submitted in partial fulfillment of requirement for the award of degree of
Master of Business Administration in JNTU Hyderabad)
Submitted by
Mr.A.NAGASUDHAKAR
107R1E00F9
MBA (HR)
Under the guidance of
Mrs.T.ROJA RANI
M.A,MBA
Asst.professor
CMR Technical Campus
School of management
Kandlakoya (v), Medchal
2010-2012
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3. DECLARATION
I,A.NAGASUDHAKAR hereby declare that the project work titled “A PROJECT ON
QUALITY CIRCLES” is an original work done by me and submitted to the JNTU in
partial fulfillment of requirements for the award of Master of Business Administration in
Human Resource Management is a original work done by me under the supervision of
Mr. SATYABABU ,Chief Welfare Officer Of BHEL and under the guidance of Mrs.
ROJA RANI of school of management, CMR technical campus, Medchal,Hyderabad
.
DATE: SIGNATURE
PLACE: (A.NAGASUDHAKAR)
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4. ACKNOWLEDGEMENT
I would like to express my deep gratitude to DR.R.PURNACHANDAR RAO Dean, for
providing remarkable support in doing this project work.
I would like to express my deep gratitude to Dr. JACQUELINE WILLIAMS, HOD, for
providing remarkable support in doing this project work.
I feel very good to have valuable guidance from my guide Mrs. T.ROJA RANI-
Ass.Professor, throughout the project period. I myself take a privilege to express my
sincere gratitude to my guide.
I express my sincere gratitude to Mr. B.SATYABABU, Chief Welfare Officer of BHEL
for guiding me to complete my project in their organization.
I felt it has privilege to express my sincere gratitude to my family members and friends
for their extended support all through the project period.
A.NAGASUDHAKAR
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5. CONTENTS
CHAPTER-I PAGE. NO.
INTRODUCTION 01-33
NEED FOR THE STUDY
SCOPE OF THE STUDY
OBJECTIVES OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY
CHAPTER-II
REVIEW OF LITERATURE 34-41
CHAPTER-III
COMPANY PROFILE 42-55
CHAPTER-IV
DATA ANALYSIS AND INTERPRETATION 56-71
CHAPTER-V
FINDINGS, CONCLUSIONS, SUGGESTIONS 72-74
BIBILIOGRAPHY
APPENDICES
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6. CHAPTER-I
INTRODUCTION
6

7. 1.0 INTRODUCTION:
Organization development is an effort (1) Planned (2) Organization wide and (3)
managed from the top, to (4) Increase Organization effectiveness and health through (5)
Planned Interventions in the organization’s “process” using behavioral-science
knowledge.
-Richard Beckhard
“Organizational Development requires a plan approach to change based on meeting the
needs of both the people in the organization”
-Kilion &Harrrison(1990)
Due to globalization and redefining in the field of information Technology, the
advancement and applicability of Organizational Development has changed. Luckily,
most of the organizations are adopting various kinds of organizational changes which
are inevitable to survive in today’s competitive environment. In this regard, Employee
Involvement Interventions is adopted to improve the responsiveness and progress of the
members of the organization which directly improves organization’s effectiveness and
productivity.
OD is an effort planned organization wide, managed from the top, through planned
intervention, using processes of behavioral science
1.1 organizational development process:
The process, it takes minimum of one year and sometimes continues indefinitely. There
are different approaches to OD process but the typical process consists of seven steps,
viz., initial diagnosis, data collection, data feedback and confrontation, action planning
and problem solving, team building, inter group development and evaluation and follow”
up.
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8. If executives recognize that there are inadequacies within organization which can be
corrected by OD activities, it is necessary to find out the professional and competent
people within the organization to plan and execute OD activities. If competent people are
not available within the organization the services activities are to be taken. The
consultants adopt various methods including interviews, questionnaires, direct
observation, analysis of documents and reports for diagnosing the problem.
Survey method is used to collect the data and information for determining organizational
climate and identifying the behavioral problems.
Data collected are analyzed and reviewed by various work groups formed from this
purpose in order to mediate in the areas of disagreement or confrontation of ideas or
opinions and to establish priorities.
The interventions are the planned activities that are introduced into the system to
accomplish desired changes and improvements. At this stage the suitable interventions are
to be selected and designed.
1.2 Implementation of intervention:
The selected intervention should be implemented. Intervention may take the form of
workshops, feedback of data to the participants, group discussions, written exercises, on-
the-job activities, redesign of control system etc. Interventions are to be implemented
steadily as the process is not a one-short, quick cure for organizational malady. But it
achieves real and lasting change in the attitudes and behavior of employees.
Groups prepare recommendations and specific action planning to solve the specific and
identified problems by using data collected.
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9. The consultants encourage the employees throughout the process to form into groups and
teams by explaining the advantages of the teams in the OD process, by arranging joint
meetings with the managers, subordinates etc.
The consultants encourage the inter group meetings, interaction etc., after the formation
of groups/teams.
The organization finally has to evaluate the OD programs, find out their utility, and
develop the programs further for correcting the deviations and/or improved results. The
consultants help the organization in this respect. All the steps in the OD processes should
be followed by the organization in order to derive full range of OD benefits.
The following a few of most common OD Interventions, that most of the companies
practice:
1.3 Organizational interventions are
I. Survey Feed back
II. Quality Circles
III. Process Consultation
IV. Sensitivity training
V. The Managerial grid
VI. Goal setting and Planning
VII. Team building and management by objectives
VIII. Job enrichment, change in organizational structure and participative
management and, ISO, TQM
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10. 1.4 QUALITY CIRCLES
DEFINITION:
Quality Circle is a small group of 6 to 8 employees doing similar work who voluntarily
meet together on a regular basis to identify improvements in their respective work areas
using proven techniques for analyzing and solving work related problems coming in the
way of achieving and sustaining excellence leading to mutual up liftment of employees as
well as the organization.
It is "a way of capturing the creative and innovative power that lies within the work
force".
1.5 HISTORY OF THE QUALITY CIRCLES:
The history of Quality Circles cannot be discussed with- out discussing the country of its
Origin .The success of any concept or philosophy gains conviction and spreads only when
it was practiced sincerely .The Japanese have not merely evolved a concept but practiced
it with sincerity of purpose bringing forth amazing results .This has drawn the attention of
the nation the world over and they have found great potential in involving the people by
1947: General Douglas McArthur requested US Govt. to send experts to help Japanese
rejuvenate their industries.Dr.Edward Deming was sent.
1949: An Overseas Technical Research Committee was organized by the Union of
Japanese Scientists Engineers (JUSE)
1949: JUSE organized a seminar on “SQC”
1949: JUSE organized a seminar “Quality Control-Basic Course”
1950: JUSE published a magazine “SQC”
1950: Dr Deming invited to eight day Quality Control seminar organized by JUSE.
1951: Deming prize instituted.
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11. 1954: Dr Joseph Juran invited to Quality Control Management seminar organized
by JUSE.
1956: Japan’s radio started broadcasting a Quality Control Course organized by JUSE.
1960: Japanese Govt. declared November as Quality Month and Q-flag was adopted.
Quality Control Circles (Japan)
1962: First QC Circles was registered with Circle Head Quarters
1962: First annual QC Conference for Foremen was held
1964: Regional chapters of QC were organized in four different districts
1966: Dr.Juran observed QC Circles activities
1966: Special QC Circle session was organized at the 10th conference of European
Organization for Quality Control held in Stockholm, Sedan
1967: Number of registered QC Circles grew to 10000
1968: JUSE dispatched the first QC Circle Study Team overseas
1969: Registered Circles grew t 20000
1969: 100th QC Circle Conference was held in Tokyo
1970: Registered Circles grew to 30000
1971: JUSE organized the first QC Circle seminar
1971: 200thQC conference was held
1971: Registered QC Circles grew t 40000
1971: First National QC Circle Conference was held in Tokyo
1972: Regional Circles grew to 50,000
1973: 300th QC Circle Conference was held
1974: Registered circles grew to 60,000
1974: 400th QC Circle conference as held
1975: Registered Circes grew to 70,000.500th Conference held
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12. 1977: Registered Circles grew to 80,000.700th Conference was held
1978: Registered Circles grew t 90,000
1978: First international QC Circles Convention was held
1979: 800th QC Circles Conference was held
1979: Registered QC Circles Conference numbered 1000000
1980: 900th Conference was held
1981: International QC Circles Convention was held
1985: Third International QC Circles Convention was held
1988: More than one million Circles with over ten million members
QUALITY CIRCLES (OTHER THAN JAPAN)
1974: Lockheed Company, USA Started Quality Circles movement
1977: International Association of Quality Circles (IACC) was formed in USA
1980:230 Companies in USA has Quality Circles
1983: There were more than 500,000 known Quality active in the world
QUALITY CIRCLES (INDIA)
1980: BHEL, Hyderabad first in India to start Quality Circles
1982: Quality Circle Forum of India (QCFI) was founded
1983: Tata Motors (formerly Telco) started Circles by 1985 they had more than Circles
1985: BHEL had 1411 Circles covering around 13362 members
1.6 QUALITY CIRCLES IN INDIA
In India, Quality Circles movement was introduced in BHEL in January1981, after
preparing the ground in 1980.Its success in a large public enterprise like BHEL having
73000 employees naturally drew the attention of many organizations in the country and it
triggered off the spread of the movement in the country .BHEL kept its door open in
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13. sharing its experiences and organizing National Seminars in association with other
National Bodies and thus the Q.C movement started catching up.
FORMAL AND INFORMAL GROUPS
Formal Groups
• Family.
• Organization.
• Departments.
Informal Groups
• Employees meet near water cooler and gossip.
• Five salesmen from marketing department meet once a month for lunch to discuss
mutual concerns and to seek relief from tedious aspects of their job.
• Four computer programmers form a jogging club that meets three days per week
at lunch time to run two miles.
• All employees of a section meet and discuss how to improve and beautify office
layouts.
• Seven workers of a production shop floor meet once a week to solve their
technical problems.
• Maintenance department staff meets regularly to maintain machines in a better
way.
1.7 WHAT IS QUALITY CIRCLE (QC)?
Quality Circles are (informal) groups of employees who voluntarily meet together on a
regular basis to identify, define, analyze and solve work related problems.
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14. Usually the members of a particular team (quality circle) should be from the same work
area or who do similar work so that the problems they select will be familiar to all of
them. In addition, interdepartmental or cross functional quality circles may also be
formed.
An ideal size of quality circle is seven to eight members. But the number of members in a
quality circle can vary.
OTHER NAMES OF QUALITY CIRCLES
• Small Groups
• Action Circles
• Excellence Circles
• Human Resources Circles
• Productivity Circles
1.8 STRUCTURE OF QUALITY CIRCLES
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15. 1.9 Quality Circle Meetings
• Meetings are important part of quality circle's working.
• Meetings are attended by all the members of the quality circle.
• In general, meetings take place once a week or once in a fortnight.
• Each meeting lasts for approximately one hour, though variations are possible.
• Apart from the frequency of the meetings, what is important is the regularity of
the meetings.
1.10 What takes place during quality circle meetings?
Any of the several activities may occur during a meeting such as:
• Identifying a theme or a problem to work on.
• Getting training as required to enable members to analyze problems.
• Analyzing problem(s).
• Preparing recommendations for implementing solution(s).
• Follow up of implementation of suggestions.
• Prepare for a presentation to the management.
1.11 Pitfalls and problems
• Lack of faith in and support to Quality Circle activities among management
personnel
• Lack of interest or incompetence of leaders/facilitator
• Apathy, fear and misunderstanding among middle level executives
• Delay or non-implementation of Circle recommendations
• Irregularity of Quality Circle activities
• Lack of or non-participation by some members in the Circle activities
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16. 1.12 QUALITY CIRCLES IN BHEL
To facilitate the employees of grass root level to involve in improvement activities and
take-up problems related to their respective work area, analyze and solve them in a
systematic way to enable self development & mutual development of Quality circle Team
members.
PROBLEM SOLVING TECHNIQUES:
Quality commonly uses certain basics techniques to identify analyze and resolve
problems they are:
1) Brain storming
2) Data collection
3) Stratification
4) Pareto analysis
5) Cause and Effective diagram
6) Histogram
7) Scatter diagram
8) Graphs
These techniques through simple, but are very powerful ones and they help they quality
circles investigation the case for their work related problems and find solutions in
scientific way.
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17. 1. BRAIN STROMING:
Stimulating generation of ideas in a group is done through brain storming, which more
effective then is trying to generate ideas alone brain storming helps to realize the creative
power of the group. It is also helps effective group participation. Its effectiveness would
increase with the skill of application by the leader.
Brain storming generally usually three stages by quality circles.
1. While listing out the problem,
2. While listing out the probable causes influencing the effect,
3. While listing out the suggestions /recommendations,
Guidelines for brainstorming:
Each member, by rotating, is asked for ideas (this continues unit all ideas are exhausted),
only one idea is offered by individual per turn,
Member having no idea, just says ‘Pass’
No idea should be treated as stupid (criticizing or ridiculing any idea would in habit free
flow of ideas
Rigid formality may be avoided good natured humor would enthuse members to open up
freely,
Leader should help in summarizing an idea and guide members in clarity of expression,
No evaluation of ideas is done during brain storming,
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18. A black-board or a large sheet of paper could be used for listing out ideas.
Brain storming technique can be fruitfully used to identify problems effecting the work
area; factors which help prevent potential problem causes responsible for problems,
solutions to problems to etc.
2. DATA COLLECTION:
Data is nothing but collection of act in terms of figures, which gives a clear picture of any
work situation allows for comparison. data collection forms the first step in statistical
analysis of a problem. it would also form a sound basis for decision making and
corrective action. The analysis and solution would depends on the correctness and
accuracy of data must be related to the problem under review
Types of data
Generally data can be of two types one variable i.e. which is measurable, eg.length,
weight, time, etc, and the other attribute .i.e. which is countable data, is a example:
smooth running of a machine small etc,(attribute).
Source of data:
There are two sources f data, past data(previous record, previous feedback) and live data
(current observations).
Past data:
In many cases the required data will be ready available with some agency or the recorded
through a feedback system. The data so available is termed as “Past data”. The past data
helps to have a preliminary study and to understand the causes of the problem.
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19. Live Data:
Where such a recorded data is not available we have to systematically collect data
through observation over a period of time and this is termed as “Live data”.
Collection of data:
Before the start of the data collection, one should be clear in his mind about the
parameters or characteristics and their periodicity for which data is to collected. For easier
collection of data, a Pre-designed checklist/format/ check sheet or any designed format as
per the requirement could be used. This would simplify the process of analysis.
Data collection format:
No of components made
SI. Name of the Type of Any special
No machine operation Reminder
Accepted Rejected
Vertical Boring Bring
Horizontal Lathe Turning
Coil Winding Final Taping
Final
Grinding
Grinding
Length
Cutting
Cutting
Analysis of data
After the data is collected, it is analyzed and information is extracted by applying
statistical method. Decision making or further course of action should be based on
analyzed data.
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20. 3. STRATIFICATION:
The technique of data segregation based on segregated element is called stratification data
collected should be properly classified for giving meaningful and correct inference.
The stratification of data is nothing but segregation of are groping the data. machine wise,
operator wise, shift wise etc,. for identifying the influencing the factors
• Material Base:
data is stratified n the basis of the supplier of the materials, delivery lot of the materials,
preliminary process etc, by this the effects of the materials have on the quality of the final
product.
• Quality Base:
Data is stratified by kind’s f products specification etc. if phenomenon inherent to a
special group of product can thus be traced.
• Work Base:
Stratification on the basis of worker is often very effective.
• Time base:
Data is stratified by the seasons, day-and-night, atmospheric conditions such as
temperature, humidity and physiological conditions of the workers differ from time to
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21. time. the influence of these elements on quality is sometimes founded by time based
stratification .
• Surrounding conditions:
The quality of product may be influenced by such surrounding conditions as weather,
productions schedules, tightness r slowness of the market etc.
• Processing:
Element such as production equipment, measuring instrument, manufacturing methods
etc. There are more stratification bases other than the listed above.
4. PARETO ANALYSIS:
Pareto was an Italian economist who discovered a universal relationship between value
and quantity and he used this technique for assessing uneven distribution of wealth.
Pareto analysis helps in the identification of “the vital few trivial many” at a glance hen
projected, using the column graph named after Pareto diagrams are frequently used to
select the few important problems out of many.
What is Pareto Diagram:
Pareto diagram is a column graph, drawn after data collection for the purpose of:-
a. Differentiating the major factors (vital) that contributes most to the
unsatisfactory situation from other minor ones (trivial).
b. Trackling the major factors responsible for any problem.
How to prepare Pareto diagram:
Stratify the problem points according to purpose (by causes, by phenomena, by
equipment) and represent them numerically,
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22. Preferably data should be expressed in monetary values rather than quantity, counts or
percentage,
Select a data period proper for the purpose,
Arrange the stratified items in descending order of value and bar chart ,in descending
order of value and draw a bar chart,(on a graph paper)
PARETO CHART
Simple example of a Pareto chart using hypothetical data showing the relative frequency
of reasons for arriving late at work.
A Pareto chart is a special type of bar chart where the values being plotted are arranged in
descending order. The graph is accompanied by a line graph which shows the cumulative
totals of each category, left to right. The chart is named after Vilfredo Pareto, and its use
in quality assurance was popularized by Joseph M. Juran and Kaoru Ishikawa.
Typically on the left vertical axis is frequency of occurrence, but it can
alternatively represent cost or other important unit of measure. The right vertical axis is
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23. the cumulative percentage of the total number of occurrences, total cost, or total of the
particular unit of measure. The purpose is to highlight the most important among a
(typically large) set of factors. In quality control, the Pareto chart often represents the
most common sources of defects, the highest occurring type of defect, or the most
frequent reasons for customer complaints, etc.
The Pareto chart was developed to illustrate the 80-20 Rule that 80 percent of the
problems stem from 20 percent of the various causes.
5).CAUSE& EFFECTIVE DIAGRAM
Ishikawa diagram
Ishikawa diagram, in fishbone shape, showing factors of men, machines, milieu
(workplace), materials, methods, measurement, all affecting the overall problem. Smaller
arrows connect the sub-causes to major causes.
The Ishikawa diagram (or fishbone diagram or also cause-and-effect diagram) are
diagrams, that shows the causes of a certain event. A common use of the Ishikawa
diagram is in product design, to identify potential factors causing an overall effect.
Overview
Ishikawa diagrams were proposed by Kaoru Ishikawa in the 1960s, who pioneered quality
management processes in the Kawasaki shipyards, and in the process became one of the
founding fathers of modern management.
It was first used in the 1960s, and is considered one of the seven basic tools of quality
management, along with the histogram, Pareto chart, check sheet, control chart,
flowchart, and scatter diagram. See Quality Management Glossary. It is known as a
fishbone diagram because of its shape, similar to the side view of a fish skeleton.
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24. Mazda Motors famously used an Ishikawa diagram in the development of the Miata
sports car, where the required result was "Jinba Ittai" or "Horse and Rider as One". The
main causes included such aspects as "touch" and "braking" with the lesser causes
including highly granular factors such as "50/50 weight distribution" and "able to rest
elbow on top of driver's door". Every factor identified in the diagram was included in the
final design.
Causes
Causes in the diagram are often based on a certain set of causes, such as the 6 M's, 8 P's
or 4 S's, described below. Cause-and-effect diagrams can reveal key relationships among
various variables, and the possible causes provide additional insight into process
behavior.
Causes in a typical diagram are normally grouped into categories, the main ones of which
are:
The 6 m's
Machine, Method, Materials, Maintenance, Man and Mother Nature (Environment)
(recommended for the manufacturing industry).
Note: a more modern selection of categories used in manufacturing includes Equipment,
Process, People, Materials, Environment, and Management.
The 8 p's
Price, Promotion, People, Processes, Place/Plant, Policies, Procedures, and Product (or
Service) (recommended for the administration and service industries).
THE 4 S'S
Surroundings, Suppliers, Systems, Skills (recommended for the service industry).
Causes should be derived from brainstorming sessions. Then causes should be sorted
through affinity-grouping to collect similar ideas together. These groups should then be
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25. labeled as categories of the fishbone. They will typically be one of the traditional
categories mentioned above but may be something unique to your application of this tool.
Causes should be specific, measurable, and controllable. Appearance
A generic Ishikawa diagram showing general (red) and more refined (blue) causes for an
event.
Most Ishikawa diagrams have a box at the right hand side, where the effect to be
examined is written. The main body of the diagram is a horizontal lines from which stem
the general causes, represented as "bones". These are drawn towards the left-hand side of
the paper and are each labeled with the causes to be investigated often brainstormed
beforehand and based on the major causes listed above.
Off each of the large bones there may be smaller bones highlighting more specific aspects
of a certain cause, and sometimes there may be a third level of bones or more. These can
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26. be found using the '5 Whys' technique. When the most probable causes have been
identified, they are written in the box along with the original effect. The more populated
bones generally outline more influential factors, with the opposite applying to bones with
fewer "branches". Further analysis of the diagram can be achieved with a Pareto chart.
6).HISTOGRAM:
In statistics, a histogram is a graphical display of tabulated frequencies, shown as bars. It
shows what proportion of cases fall into each of several categories. The categories are
usually specified as non-overlapping intervals of some variable. The categories (bars)
must be adjacent. The intervals (or bands) should ideally be of the same size.
Histograms are used to plot density. The total area of a histogram always equals 1. If the
length of the intervals on the x-axis is all 1, then a histogram is identical to a relative
frequency plot.
The word histogram is derived from Greek: histos 'anything set upright' (as the masts of a
ship, the bar of a loom, or the vertical bars of a histogram); gramma 'drawing, record, and
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27. writing’. A generalization of the histogram is kernel smoothing techniques. This will
construct a very smooth probability density function from the supplied data.
Examples
As an example we consider data collected by the U.S. Census Bureau on time to travel to
work (2000 census, [1], Table 2). The census found that there were 124 million people
who work outside of their homes. This rounding is a common phenomenon when
collecting data from people.
In other words a histogram represents a frequency distribution by means of rectangles
whose widths represent class intervals and whose areas are proportional to the
corresponding frequencies. They only place the bars together to make it easier to compare
data.
Check sheet
The check sheet is a simple document that is used for collecting data in real-time and at
the location where the data is generated. The document is typically a blank form that is
designed for the quick, easy, and efficient recording of the desired information, which can
be either quantitative or qualitative. When the information is quantitative, the check sheet
is sometimes called a tally sheet.
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28. A defining characteristic of a check sheet is that data is recorded by making marks
("checks") on it. A typical check sheet is divided into regions, and marks made in
different regions have different significance. Data is read by observing the location and
number of marks on the sheet. 5 Basic types of Check Sheets:
Classification:
A trait such as a defect or failure mode must be classified into a category.
Location:
The physical location of a trait is indicated on a picture of a part or item being evaluated.
Frequency:
The presence or absence of a trait or combination of traits is indicated. Also number of
occurrences of a trait on a part can be indicated.
Measurement Scale:
A measurement scale is divided into intervals, and measurements are indicated by
checking an appropriate interval.
Check List:
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29. The items to be performed for a task are listed so that, as each is accomplished, it can be
indicated as having been completed.
7).CONTROL CHART
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30. The control chart, also known as the Stewart chart or process-behavior chart, in
statistical process control is a tool used to determine whether a manufacturing or business
process is in a state of statistical control or not.
Overview
If the chart indicates that the process is currently under control then it can be used
with confidence to predict the future performance of the process. If the chart indicates
that the process being monitored is not in control, the pattern it reveals can help determine
the source of variation to be eliminated to bring the process back into control. A control
chart is a specific kind of run chart that allows significant change to be differentiated
from the natural variability of the process.
This is a key to effective process control and improvement. On a practical level the
control chart can be seen as part of an objective disciplined approach that facilitates the
decision as to whether process performance warrants attention or not.
Types of Control charts: A Control chart form Varies According to Kind of data it
contains .For variable data the following charts are used
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31. 1. P-chart=Fraction defective,
2. np-chart=No. of defectives,
3. c-chart=No. of defects.
Here the quality circles are coordination by the quality
assurance in BHEL, Hyderabad.
1.13 Quality assurance co-ordination activities:
a) Formation of Quality Circles & Registration
b) Re-organization of circles (based on the need)
c) Maintaining data base of circles (Membership data)
d) Providing necessary inputs to circles like arranging training, Meeting register,
QC related books, formats etc.,
e) Maintaining performance record of Quality Circles( SIPs : Small Improvement
Projects, MMPs :Middle Management Presentations)
f) Keeping records of active circles (Active circles shall have Minimum of24
Meetings ,2 Case studies, & one Middle Management Presentation made in a
calendar year)
g) Conducting Annual Unit Quality Circle Convention (AUQCC).
h) Nomination for External Conventions (Facilitating QCs to participating in
external Conventions)
i) Republic day, EDs Rolling shield for best performing Quality circle by
Evaluating the case studies and performance of the previous year.
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32. j) Procurement and performance of mementoes to active Circles.
k) Reporting the performance of Quality circles to corporate Quality from time to
time.
l) Facilitate Quality Circle teams to participate in International Conventions as
per corporate guide lines.
1.14 Formation of new circles:
Max 5 members Minimum 4 employees (worker category, supervisor category) working
at a particular function /area can form Quality Circles(QC).The Quality Circles also have
to select an Executive Guide(preferably from their work centre).
The proposed Team Members shall fill up the registration form(Format No : QA/QCC-
001) available with a QA-Quality Circles coordination centre. Members shall give
consent by signing on the form. After obtaining the signatures of area Co-ordinator
and facilitator f the concerned work area/product/service group, form to be submitted to
Quality circle coordination (QA).
QA shall Register the Quality Circle and allocate “Quality circle Number” and issue
meeting Register, copies of “handbook n Quality circles” to the newly formed Quality
Circles All the New Quality circles formed shall be encouraged with a welcome Memento
to each member f the team (including Executive Guide)
1.15 Re-organization of quality circles:
If the circle strength is reduced due to retirement or transfer of team members or
otherwise, shall fill in the Form (Format No: QA/QCC-001) with revised Team and
indicate “Re-organization of Quality Circles” with the consent of members and with the
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33. signature of area Co-ordinator and facilitator of concerned work area/Product/Service
Group and submit to Quality Circle Co-ordination (QA)
Quality Circle Coordination shall update the data base accordingly.
Maintaining performance record of Quality Circles (Small problems solved, MMPs
(Middle Management Presentation).MMP Format No: QA/QCC-04, Rev-00and SIP
Format No: QA/QCC-03, Rev: 00
Based on the Submitted documents (Filled in signed SIP booklets &MMP Booklets) QA
shall update the data on problems solved by teams. Solved problems also can registered
as IMPRESS project by respective Quality Circle Team.
Keeping Records of Active Circles (Min.24 Meetings I a year, 2 case studies (SIPs) &ne
middle management Presentation in a calendar year). QA shall prepare the list of active
circles for calendar year based on SIPs and MMPs data received from Teams.
1.16 Annual unit quality circle convention:
The QA shall organize Annual Unit Quality Circle convention to provide a platform to
present the case studies by Quality Circles. The case studies shall be evaluated by
external Judges and winning Quality Circles Teams shall be awarded.
The Category for participation are: (a) Manufacturing (b) Support Services (c)
Manufacturing-New Circle (d) Support Services-New Circle.
Qualification for a New Circle is “First time participation in the Annual Unit Quality
Circle convention” and “Should have formed in the past calendar years”
1.17 Key activities of quality circles coordination:
Quality Assurance is the coordination agency for promoting, monitoring the quality
circles in the unit.
To encourage the formation of QC Circles by potential members
33

34. To organize 2 day training program for all Newly joined members and also to organize
refresher program to existing members.
1. All the Ne Members shall be given a 2 day class room training on simple problem
solving Tools, Presentation techniques.
2. As per training need identified by area co-ordinator, one day refresher programs
shall be organized to members of Existing Circles.
3. Organizing appreciation programs t area coordinators, Facilitators.
4. Training Shall be planned based on the requirement as at pint 4 above, and get
incorporated in HRDC Calendar.
5. In addition to HRDC Calendar programs, need based programs shall be organize
with due approvals.
To organize to review of Quality Circles functioning by verifying meeting registers,
collecting Small Improvement Project (SIPs), facilitating Middle management
Presentations (MMPs) at function/shop level.
To plan to conducting steering committee meetings (twice a year)t discuss the status of
Quality circles movements and achievements and obtain directions for improvement.
Members of Steering committee: All GMs and DRO of unit.
ED is the chairman and Head/QS will be the convener.
Measurement parameters for Quality circles are:
1).No. of Circles formed
2).No. of dormant circles made active
3).No. of Awards on in external conventions
(Prizes in IUQCC, CCQC, NCQC, ICQCC, APPC, CII etc.,)
4).No. of Training imparted-No of Man days
34

35. To plan the budget and obtain financial concurrence towards “Delegation fee” for Quality
Circles participation in External conventions, and for organizing AUQCC for the year. To
plan, get approved for the procurement of mementos for distribution to eligible quality
circles as per norms.
To plan the budget and obtain financial concurrence towards inter unit Quality
Circle Convention f BHEL (On rotation of Major Units of BHEL,BHEL Hyderabad may
have to host once in 5 years)
1.18 Roles and responsibilities of quality circle members
Quality Circle: Circle consist of Leader, Dy.Leader, 4members (Total QC Team
members=6) from working class (workers &Supervisors) and an Executives will be an
Executive guide from work area of team
Leader: Quality circle leader organizes and conducts quality circle meetings /activities
as per schedule and records meeting notes in the meeting register. Leads the team in all
activities.
Dy.Leader: In the absence of leader, Dy.Leader will take over as leader role.
Members: All members including leader, Dy.Leader are equal in sharing, discussing
problems, coming out with solutions and implementations of solution for the problem
with the consent of concerned work centre in-charge. Through the Quality Circles are
voluntary, they have responsibility of functioning with in a frame work of rules of
company for the improvement.
Executive Guide: The person chosen to guide the team possessing-work area job
knowledge, Basic SQC skills and PPT skills. Executive Guide shall support the circle in
implementation of solution, providing technical inputs, preparation of presentation etc.
35

36. Area Coordinator: The person nominated by the respective product/service GM to
act as a link between Quality Assurance & Quality Circle of the product/Functional area.
The area coordinator will liaisons with work centre in-charge of concerned circles and
provide facility for conducting weekly meetings.
Facilitator: Facilitator shall be nominated by concerned product/Service GM. He/She
coordinates the several quality circles through the circle leaders. the facilitator shall
provide resources for model making, trail implementation of solutions fund by Quality
circle team. Encouraging the Quality circles for greater involvement. The vetting of gains
of the projects shall be done by work centre in-charge &Facilitator.
Steering committee: Steering Committee consists of Unit head as Chairman, all
product& Service GMs& DROs as members and head of Quality Assurance shall be the
convener for committee meetings.
1.19 Terms of reference for steering Committee are:
• To set goals and objectives for the Movement of Quality Circles.
• To formulate/revise the policies for development of the Quality Circles
• Approve the guide lines for measuring the effectiveness of Quality Circles
• Review the Performance and progress of Quality Circles periodically
• To provide all support and encouragement to Quality Circle movement in the
organization
• Recommend for monetary benefits for nurturing the Quality Circles
&Encouraging the Best performing Quality Circles.
QA-Quality Circle coordination shall organize Steering Committee meeting periodically
(once in a Quarter)
36

37. 1.20 NEED FOR THE STUDY
• Self development.
• Promotes leadership qualities among participants.
• Recognition.
• Achievement satisfaction.
• Promotes group/team working.
• Promotes continuous improvement in products and services.
1.21 SCOPE OF THE STUDY
Facilitating all the eligible employees of BHEL, Hyderabad to participate in the
Quality Circle movement. Though, the participation by workers in Quality Circles is
voluntary, the role of QA is to encourage the formation of Quality Circles and to nurture
them to take up improvement activities /solving the problem in their respective functions.
Providing platform for presenting the Improvement made.
BHEL Hyderabad initiated the first five quality circles in the country on 5 th
January 1981. 3 circles were started in manufacturing area and two circles in materials
management function of pump shop. this five circles presented their case studies within
three months i.e. on 20th march1981in the presence of sri.M.R.Naidu,the then executive
director one of the circles made a presentation on “ work place improvement”
BHEL, Hyderabad facilitated starting of Quality circles in other sister units in 1981
BHEL, Hyderabad played a key roll in organizing first inter unit Quality circle
convention at R&D, in august 1981.
37

38. First annual unit Quality circle convention was held in august 1985.
BHEL, Hyderabad as adjudged as the “Best organization for promoting Quality circles”
for seven consecutive years from Andhra Pradesh productivity council (1997-2003).
“Best organization for promoting quality circles” from QCFI from 2003 onwards
BHEL, Hyderabad initiated student quality circles first time in schools of township.
BHEL, Hyderabad circles participated in international Quality circles conventions held at
Bangkok (2004), Bali (2006-Silvel medal) Beijing (2007-Gold medal) and Singapore
(2008)
1.22 OBJECTIVES OF THE STUDY
1. Create problem solving capability, Improve communication, Promote leadership
qualities & personal development.
2. Improve morale through closer identity of employee objectives with organization's
objectives, Enhance quality, and awareness for cleanliness &Reduce errors.
3. Build an attitude of problem prevention, Job involvement, harmonious
relationship between supervisor and worker.
4. Improve productivity, Reduce downtime of machines and equipment &Increase
employee motivation
RESEARCH METHOLOGY
As the organization identified human resource as their asset, taking care of them is very
important to make them motivate for the achievement of the goal. How welfare activities
to be structured so that it should be up to the satisfactory level of the employees is very
critical.
Quality Circles are to know the Quality circle activities and hoe it is practiced, and to
know whether the employees are aware of it and availing the benefits.
38

39. The main objective of Quality Circles is “self” and mutual development, cohesive team
work and engaged in continuous improvement activities, thus improving their quality of
work life”.
METHODOLOGY:
The methodology used in this project has been that of unstructured interview of the guide,
which has facilitated the extractions of information. Although there has been a structured
questionnaire to capture the information.
DATA COLLECTION
Primary data
Collected through responses of employees related to the topic with the help of the
structure questionnaire.
Secondary data
Collected through Broachers’ news magazines, Hand Books, corporate journals and apex
manuals, web sites.
SELECTION OF THE MEASUREMENT TECHNIQUE
1. Fully aware 2.Aware 3.only basics 4.Not aware
5 Frequently 6.Sometimes 7.rarely 8.Never
9 Fully agree 10.To some extent 11.satisfied
12. Fully satisfied 13strongly disagree 14.Important 15. Very important
SAMPLING
Population – employees of BHEL, Hyderabad
Sample size – 100 employees from all categories.
ANALYTICAL APPROACH
39

40. The assumption has been carried out with the help of chi – square method, presuming
hypothesis for each question. Pie chart representation shows the percentage responses
received from the questionnaire.
ASSUMPTIONS
The study assumes that the information revealed by the respondents is authentic and not
misleading.
1.23 LIMITATIONS OF THE STUDY
• The experimenters had no control over the extent to which managerial support of
the QC programs differed in the work groups and organizations under the study
• As the Quality Training was provided by the base of QC Facilitator, the
experimenters had no control over any differences in training emphasis and/or technique
to which the various QC were exposed.
• Non-attitudinal measures of QC outcomes (such as number of problem solutions
suggested or implemented) were not investigated.
40

41. CHAPTER-II
REVIEW OF LITERATURE
41

42. 2.0 LITERATURE REVIEW
Quality Circles (QC), participative decision making (with selected consideration of the
broader area of decision making in organization), Job Involvement, communication
climate and job satisfaction,
Literature concerning participating decision making, decision making, job involvement,
communication climate and job satisfaction is reviewed because this study seeks to
determine whether QC membership results many changes with respect to these work
attitudes (as measured by the AFIT survey of the work attitude). Each of the above listed
topics is reviewed separately.
Quality circles research:
Few studies have attempted to evaluate the attitudinal or behavioral outcomes associated
with participation in a QC program. Also, there is a severe shortage of research involving
quantitative assessments of factors which are considered necessary for success. It is with
a discussion of the suggested “basic elements” necessary for a successful QC program
that this review of the literature will begin.
The most notable listing of significant factors related to QC success arises from the
results of a survey administered to 50 QC experts attending the third annual conference of
42

43. the International Association of Quality Circles (Stevens&Moore, 1981).Ranked
according to frequency of mention, these factors are:
1. Management acceptance/support/understanding
2. Training for the circle leader(s) and facilitator(s)
3. Voluntary participation
4. A. “people-building” managerial philosophy
5. Allowance of sufficient time for assessment of results and return on investment
6. Open channels of communication with upper management
7. A “team effort” approach to problem solving
8. Team member and management participation
9. Recognition
10. Confining circle activities to work-related problems
Stevens and Moore believe that the presence of each of the above 10 factors is crucial for
the survival of a QC program.
Metz (1980) and Cole ((1980) have warned that failure to include and /or educate
middle management personnel when QC programs are initiated can lead to oppositional
when QC programs are initiated can lead to oppositional and obstructional attitudes and
behaviors on the part of supervisors. these attitudes and behaviors stem from the belief
the circle activities are an infringement on their ( the supervisors’) own job
responsibilities and/or QC suggestions are a reflection of their own inadequate job
performance (and hence represent a threat to their job security) Burck (1981) points to
the importance of a trusting relationship between management and employees as a
necessary ingredient for QC success. Cole (1980b) further emphasizes the importance of
financial incentives and recognition as additional motivators for QC members.
43

44. These impressions of QC experts concerning the necessary ingredients for QC
success all assume that QC programs indeed result in improvements related to the
increased organizational effectiveness. However, given the lack of research on the subject
even this most basic of assumptions cannot be made. Despite the assertion by Rieker and
Sullivan (1981) that assessing QC effectiveness may cannot be possible or cost effective
in the near term because of the difficulty in isolating the effects of one relatively small
component of an integrated organizational structure, research must be conducted in to the
area if the QC concept is to be anything more than merely a passing fad (Ouchi, 1981)
Only four studies QC outcomes presently appear in the literature. The first, an
uncontrolled field experiment conducted by general dynamic Pomona Division (Hunt,
1981) reports the results of a six month pilot program, the purpose of which was to
provide information for management as an aid for the evaluation of the long range
potential of QC’s within the firm. Several morale, motivation and performance criteria
were monitored with “before” and “after” comparisons made for Quality Circle members
and other employees. No mention was made of controls for possible differences between
members of the QC group and the “other employees” comparison group; nor were there
indications of controls made for changing group composition. Though the author noted
that Quality circle members demonstrated superior performance on measures of product
Quality, error reduction job involvement and problem-solving capabilities when
contrasted with other employees, these conclusions must be viewed with caution due to
the limitations of the experimental design. Results of this study therefore should not be
generalized to other organizations. The value of the experiment is that it demonstrates an
interest by management in empirically evaluating QC success before organization-wide
adoption of the QC concept.
44

45. In noting the need for QC program evolution, Donovan and Van Horn (1980) have
provided the following suggestions:
1. Measuring of “multiple levels which includes objective measures of
productivity and quality (such as hours/unit and defects/.unit) and assessment which
provide an overview of program coats.
2. Effective research tools including surveys and questionnaires which provide
information concerning job and climate variables related to high productivity and
satisfaction.
3. Adequate research. Designs providing pre-and post circle implementation
comparisons and, where possible, control group of baseline information.
The authors conducted five independent studies of QC effectiveness at Honeywell, Inc.
upon which they concluded that the intervention was responsible for dramatic
performance and efficiency improvements. However, due to significant flaws in study
design, it is impossible to assess the true impact of the circles. No controls for the
changing memberships of the QC and control groups were incorporated into the study.
Further, the authors made no specific mention of the composition of the various circle and
control groups if circles membership was voluntary; it was likely that the circle member
exhibited differences of personality and motivation which distinguished them from those
who chose not to participate. If the composition of the QC group was not a representative
sample of employees performing similar work at Honeywell, Inc., then no generalization
of the study result can be made which will apply to others organizational employee
groups. On the other hand, if existing work groups were designated as QC groups and
controls , group equivalence is not assured through randomization through pretests were
administrated to both QC and control groups; no mantion was made as to whether pretest
45

46. observations were used to develop correction factors to be used to compensate for pre-
existing group differences.
Tortorich at all (1981) developed a method of QC evaluation at Martin Marietta
Corporation Michoud Assembly division which avoid some of the pitfalls discussed
above .the following three categories of effectiveness measures were developed for
internal use by managers, program administrators’, facilitators and the circles themselves.
1. Program measures are obtained which are direct measures of QC growth and efficiency
and include assessments of the number of supervisors and management personnel
completing circle leadership training, the number of employees completing circle
training, the number of circles formed, the average circle membership size, success rate,
the ratio of trained employees volunteering for circle activity, the number and rate of
presentations made by circles to management, the percentage of approved proposals , and
the direct cost savings. Resulting from circles activities.
2. Personnel outcomes are asses; these are defined as the effect of QCs on employees’
attitudes concerning their job situation as measured by various attitude questionnaires.
3. Organizational outcomes are also evaluated Organizational outcomes are the effects of
QCs on such cost related criteria as performance rates, defect rates, scrap rates, attrition
rates, lost time, grievance rates and accident rates.
Depending on need, assessment information is calculated monthly or at six-month
intervals. The former approach is use to identified and quickly respond to problems or to
provide managers with summery information about circle related variables. Six month
data interval is use to contrast the personal and organizational outcomes of QC Groups
members with those of non-circle employees. The effectiveness of the QC programs is
also analyzed in terms of individual changes on measure of personal and organizational
outcomes which are attributed to the effects of circle membership or non membership. To
46

47. performed this analysis, performance data for each circle member is analyzed in six-
month intervals using the data of entry into the circle as the point of reference. Hence,
data collected six-months prior to entry in to a QC group is compared with data collected
six months following initial circle membership. A similar analysis is conducted on
performance. Information collected on employees not joining circles within the same time
frame under study for circle members. Therefore, for both circle and non circles
employees, data are collected for staggered, but identical, time intervals thud controlling
for the fact that circle members join and resign QC group at difference times during the
life of the program. Circles effectiveness can then be analyzed by calculating the
difference with in circles members’ six-months before and six-months after entry in to the
QC program while concurrently performing a similar analysis of non circle members over
the identical six months intervals. Group and individual comparisons can then be made.
Summary data is presented in Tortorich et al paper through rigorous statistical analysis
is not included, between 90 to 100% of the suggestions offered to management by the QC
groups in the areas of Quality improvement, cost reduction, tooling and training were
approved over the January, 1980 to june,1981 time period.
Employee attitudes, as measured by a survey, were assessed When the work attitudes of
those who had participated in QC activity for at least six-months were concurrently
compared with the work attitudes of untrained QC members,the formed were found by
Tortorich et al. to demonstrate a number of more positive work attitudes. For the year
1980, significant differences (P=.05) were found between the comparisons groups for the
following job related attitudes: employee supervisor relations, satisfaction which
supervisor, employee influence, internal motivation, job satisfaction, team climate,
47

48. growth satisfaction and job performance. In short, the results suggested that QC groups
can provide potentially help full inputs to the managerial decision making process as well
as promote improved employee work attitudes.
The most rigorous evaluation of QC outcomes in the literature is reported by Steel,
Lloyd, Ovalle and Hendrix (1982) and Steel, Ovalle and Lloyd (1982). The
organizational assessment package (OAP), a survey questionnaire consisting of 109 items
(rating scales) and 24 factors, was administered to all members of a base civil engineering
division at a Department of Defense installation shortly before a QC program was
initiated in December, 1980.
Employees of 14 departments were trained in QC techniques and then offered the
opportunity to participate in one of several QC groups. Members of an additional 37
Departments from the same division were provided no direct exposure to the Qc program
and served as the control group for this study. There were no controls for changing group
membership this is a serious methodological limitation but one which difficult to
incorporate in field study research. Considerable fluctuations in the demographic
measures during the six-to-nine month’s interval between administrations of the preset
measures suggest changes in the composition of treatment groups during the course of
this experiment the absence of controls for changing group membership such as those
employed by Tortorich et al.(1981) are likely to limit the interpretability of findings for
any study where QC and control groups are characterized by high mortality of subjects.
Utilization of intact work group as experimental (QC) and control subjects necessitated
48

49. the use of the non equivalent control group design (Campbell & Stanley, 1963). This
quasi-experimental design is characterized by taking preset of both experimental and
control groups before the intervention is initiated A statistical correction adjusting for
pretest differences was then made group differences on the posttest were evaluated in
order to compensate for pre-existing group differences. The data were analyzed
employing stepwise hierarchical regression analysis with the result that no significant
increases in R2 were observed for the 23 OAP attitudinal measures. This suggests that
QC participation did not significance impact employee work attitude through the authors’
state that the following methodological limitations severely impacted study results:
1. Because QC groups were formed at staggered intervals, some did not have enough
time to reach maturity prior to post test data collection. Three of the six QC groups
functioned for less than one month when post test data was collected.
2. Experimental mortality (discussed above)
3. Several significant demographic differences existed between the treatment and control
groups at the study’s outset.
4. Behavioral and group effectiveness outcomes of QC participation were not measured.
5. The sample size was small: the treatment condition contained only 14 functional work
units, enhancing the likelihood of Type II errors.
The interpretability and generalized of findings are restricted by these limitations, yet this
study is important from a historical perspective. It is the first research reported by these
limitations, yet this study is important from a historical perspective. It is the first research
reported in the QC literature that assesses attitudinal outcomes of QC activity while
employing an experimental design that incorporates control group comparisons and
statistical control for non Equivalent of matched groups.
Whereas research regarding the outcomes associated with the QC approach to employee
49

50. participation in decision making is quite in both its scope and methodology, much work
has been coming the more general area of participative decision making. It is to the body
of Literature addressing this topic that we now turn.
CHAPTER-III
COMPANY PROFILE
50

51. COMPANY PROFILE
BHEL (Bharat Heavy Electricals Limited) is the largest engineering and manufacturing
enterprise in India in the energy-related/infrastructure sector.
2.1 Manufacturing
• Establishments in the Manufacturing sector are often described as plants, factories, or
mills and characteristically use power-driven machines and materials-handling
equipment.
• Manufacturing establishments may process materials or may contract with other
establishments to process their materials for them. Both types of establishments are
included in manufacturing.
• BHEL was founded in 1950s.Its operations are organized around three business sectors:
• Power.
• Industry-including Transmission, Transportation, and Telecommunication &
Renewable Energy.
• Overseas Business.
2.2 Industry
51

52. • BHEL has also emerged as a major supplier of controls and instrumentation systems
especially distributed digital control systems for industries, and simulators for various
applications.
• BHEL is supplying X'mas tree valves and well heads up to a rating of 10,000 psi to
ONGC and Oil India. It can also supply on-shore drilling rigs, sub-sea well heads, super
deep drilling rigs, desert rigs and heli-rigs.
2.3 Transmission
• BHEL supplies a wide range of transmission products and systems of up to 400 kV
class. Those include: high-voltage power and distribution transformers, instrument
transformers, dry-type transformers, SF6 switchgear, capacitors and ceramic insulators.
• Equipment for high-voltage direct current (HVDC) systems are also supplied, for
economic transmission of bulk power over long distances. Series and shunt
compensation systems are also manufactured to minimize transmission losses.
• BHEL has developed and commercialized the country’s first indigenous 36 kV Gas
Insulated Substation and has also developed 145 kV Gas Insulated Substation (GIS)
which has undergone successful testing at CESI, Italy.
• BHEL has also established its capability in the area of Flexible AC Transmission
systems (FACTS).
2.4 Transportation
• Most of the trains of the Indian Railways are equipped with BHELs traction and
traction control equipment.
52

53. • India's first underground metro at Calcutta runs on drives and controls supplied by
BHEL.
• The Company has developed and supplied broad gauge 3900 HP AC locomotives,
5000/4600 HP AC/DC locomotives, diesel shunting locomotives of up to 2600 HP,
battery powered road vehicles, including electrics & control electronics.
• BHEL has acquired the technology for 6000 HP 3-phase AC Locos and started
manufacturing the electrics & controls as well as those for 3-phase AC EMUs, Diesel
EMUs and OHE cars.
2.5 Telecommunication
• BHEL manufactures telecom switching equipment based on C-DOT technology, the
major products being MAX-XL of up to 40,000 lines capacity and Single Base Module
RAX for rural applications.
2.6 Renewable Energy
• Technologies have been developed and commercialized for exploiting non-conventional
and renewable sources of energy.
• These include photovoltaic cells and modules, solar lanterns, grid-interactive PV Power
Plants and solar heating systems.
• BHEL has emerged as a major manufacturer of wind electric generators of up to 250
kW unit size. The Company has set up its own wind farms of 3000 kW capacity
(12x250 kW) at Ramgiri (A.P.) and another of 4000 kW capacity (16x250 kW) at
Kadavakkallu (A.P.).
53

54. • Today, BHEL has a wide-spread network comprising 14 manufacturing divisions, 8
service centers, 4 power sector regional centers, 18 regional offices, and a large number
of project sites spread all over India and abroad.
• This enables BHEL to have a strong customer orientation, to be sensitive to his needs
and respond quickly to the changes in the market.
• It manufactures over 180 products under 30 major product groups and caters to sectors
including power generation and transmission, transportation, and renewable energy,
among others.
2.7 Profits and losses of BHEL
• The company recorded revenues of INR331, 544.8 million ($6,962.4 million) during the
financial year ended March 2010 (FY2010), an increase of 25.2% over FY2009.
• The operating profit of the company was INR55, 957.7 million ($1,175.1 million)
during FY2010, a decrease of 8.3% compared to FY2009.
• The net profit was INR43, 269.2 million ($908.7 million) in FY2010, an increase of
38.9% over FY2009.
• Bharat Heavy Electricals Limited (BHEL) - SWOT Analysis examines the company's
key business structure and operations, history and products, and provides summary
analysis of its key revenue lines and strategy.
54

55. 2.8 Strengths
• The company has 180 products under 30 major product groups that cater to the needs of
the core sector like power, industry, transmission, transportation, defense,
telecommunications and oil business.
• BHEL's ability to acquire modern technology and make it suitable to Indian conditions
has been an exceptional strength of the company.
• Strong relationship with NTPC is strength as NTPC is planning a capacity expansion of
Rs. 52 bn and based on the past, 85% of NTPC projects have been bagged by BHEL.
The company also enjoys purchase price preference.
• Huge investment in R&D.
• Merger & Acquisition – The Company has taken over the Management & Control of
Bharat Pumps & Compressors Ltd and completely taken over M/s- Bharat Heavy Plate
& Vessels Ltd.
2.9 Opportunities
• The power sector reforms are expected to pick up in the near future in India, which
would directly benefit BHEL.
• Increase in defense budget will increase the top line for the company.
• NTPC is planning additional capacities to the tune of 2,800 MW, at a cost of Rs 52 bn.
• BHEL could benefit a lot as it has happened in the past that significant portion of the
project of NTPC is handled by BHEL. Nearly 85% of the NTPC projects were assigned
to BHEL only.
• Huge order for setting up of nuclear power plant
2.10 Competitors of BHEL
55

56.  L&T
 SUZLON
 BEML
 BGR ENERGY
 AIA ENGINEERING
 ALFA LAVAL
 PRAJ INDUSTRIES
 SANGHVL MOTORS
 WALCHAND NAGAR
VISION
A World-class Engineering Enterprise Committed to enhancing Stakeholder Value.
MISSION
To be an Indian Multinational Engineering Enterprise providing Total Business
Solutions through Quality Products, Systems and Services in the fields of Energy,
Industry, Transportation, Infrastructure and other potential areas
BHEL has been a pioneer in the area of Human Resource Development, being the
first Public Sector Undertaking of its kind, in India, to have setup an extensive HRD
infrastructure as way back as the early sixties. Human Resource Development Centre
(HRDC) of BHEL R.C.Puram, Hyderabad occupies a significant place not only among
56

57. other HRDCs of BHEL but also as an important Training and Development Centre in the
twin cities of Hyderabad [Andhra Pradesh].
VALUES
Zeal to Excel and Zest for Change
Integrity and Fairness in all Matters
Respect for Dignity and Potential of Individuals
Strict Adherence to Commitments
Ensure Speed of Response
Foster learning, Creativity and Team-Work
Loyalty and Pride in the Company
OVERVIEW OF BHEL
Established in the mid fifties, Bharat Heavy Electricals Limited-BHEL, has today
emerged as the largest engineering and manufacturing enterprise of its kind in India and
ranks amongst the top ten power generation equipment manufacturers in the world.
BHEL has diversified its product base over the years and today caters to the needs of
almost all the key sectors of the economy. In addition to the power generation equipment,
BHEL products cater to a wide spectrum of customers encompassing various fields of
operation, like Fertilizers & Petrochemicals, Refineries, Oil Exploration and production,
57

58. steel and metals, cement, sugar and paper plants, transportation and non-conventional
energy sources etc.
With a massive network of 14 manufacturing Units located at various important
centers all over India, BHEL manufactures almost all critical high technology products
required for power sector like Gas Turbines, Steam Turbines, Turbo generators, Boilers,
Pumps and Heat exchangers, Pulverizes and electrical switch gears.
With strategic alliances and technological collaborations with world leaders for its
products, BHEL's technological strength is today on par with the best in the world.
The BHEL, which set up it’s first in Bhopal was established in the year 1956. It is
the first and largest industrial undertaking in the country manufacturing power equipment.
It has now 4 Regional Centers, 8 Service Centers and 18 Regional Offices. The
corporate head-quarters is located in New Delhi. In the early sixties three major plants
were set up at Haridwar, Hyderabad and Tiruchirapalli. It’s products cover a wide range
like power, transmission, industry, transportation, oil and gas, telecommunication etc.,
besides non-conventional energy systems. The other areas covered by the BHEL includes
defense and civil aviation. It’s services extend from Project Feasibility Studies to after
sales service including undertaking turn-key projects. It’s credibility and standing in the
industrial scene of the country is evident from the report of the World Bank as the Indian
Public Sector wherein it is described as “ One of the most efficient enterprises in the
industrial sector, at par with international standards of efficiency. BHEL has acquired the
ISO-9000 Certification for most of its operations”.
According to the organization’s vision 2002, it aims to become a world class,
innovative, competitive and profitable engineering enterprise providing total business
solutions. It’s declared mission is to acquired the status of leading engineering enterprise
58

59. providing quality products, systems and services in the field of energy, transportation,
industry, infra-structure and other areas covered by the electricity industry.
The value system of the organization envisages meeting commitments to
customers, both internal and external, faster learning experiences and creativity among
the work force, maintain the dignity of the individuals working in the organization as well
as customers and outsiders, promote loyalty and a sense of pride among the workers,
encourage team spirit, create a zeal to excel and follow a policy of fairness among all
those with whom it deals.
The leadership styles in the organization are oriented towards fostering and
sustaining organizational values, empowering everyone with responsibility but ensuring
accountability at all levels. The leadership styles include a vision, courage, credibility,
versatility with due importance given to recognition of merit, acting on feedback from the
lower levels and counseling those who need it, adopt a system of information sharing and
consultation. In short, it would like to project itself as a role model for others.
The organizational objectives of BHEL has been carefully and judiciously formulated to
ensure study growth in the current global environment of competition, secure a
reasonable and adequate return on the capital invested, ensure a high degree customer
satisfaction, to motivate it’s employees for performance of improvement and aim as a
career growth within the organization to achieve technological up gradation and to fulfill
the expectations of it’s share holders, customers and the BHEL manufactures wide range
of transmission equipment such as transformers, reactors, switches, control relay panel,
insulators, capacitors, instrument transformer sets etc. It has developed capability to
provide a wide variety of electrical, electronic and mechanical equipment for industrial
requirements particularly fertilizers, petrochemicals, coal mining etc. It’s role in the
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60. transportation sector as today over 60% of the Indian Railways is equipped with the
traction equipment manufactured by the BHEL. It’s investment in the development of oil
and gas industry in the country, both on shore and off shore is considerable. Its entry into
the telecommunication industry has given India an Electronic Private Automatic Branch
Exchange (EPABX) system, the Rural Automatic Exchange (RAX) based on indigenous
technology from C-Dot. The latest digital switching used in these exchanges and their
network capability opens up endless possibilities.
BHEL’s engineering and R&D efforts are focused on improving the quality of it’s
products, upgrading the existing technologies, accelerating the process of indigenization
and diversifying its products.
It is a matter of pride to the country that BHEL’s products and services are used in
over 50 countries all over the world. It caters to export orders ranging from individual
specified products to complete power stations.
BHEL’s future plans include up gradation of its product engineering manufacturing
technology through induction of the state of the art technologies and absorption of
knowhow and know why its collaborators form.
BHEL’s strength lies in its dedicated work force, of about 63,000 employees who
undergo entry and on the job training to promote appropriate work culture through
participatory management techniques to meet the challenges of the current millennium.
BHEL - Hyderabad (Ramachandrapuram) Unit:
BHEL’s Ramachandrapuram Unit located in the out skirts of Hyderabad city was
established in the early sixties to “bring power to the people”. The products of the unit
include TG sets up to 200 mw, industrial TG sets, gas turbines, turbo-compressor
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61. systems, heat exchangers, switch gears etc. Around 7000 employees work in the
Hyderabad unit of whom about 1500 are executives, 1200 supervisors and 4300 others.
As a member of the prestigious 'BHEL family', BHEL-Hyderabad has earned a reputation
as one of its most important manufacturing units, contributing its lion's share in BHEL
Corporation's overall business operations.
The Hyderabad unit was set up in 1963 and started its operations with manufacture of
Turbo-generator sets and auxiliaries for 60 and 110 MW thermal utility sets. Over the
years it has increased its capacity range and diversified its operations to many other areas.
Today, a wide range of products are manufactured in this unit, catering to the needs of
variety of industries like Fertilizers & Chemicals, Petrochemicals & Refineries, Paper,
sugar, steel, etc.
BHEL-Hyderabad unit has collaborations with world renowned MNCs like M/S
General Electric, USA, M/S Siemens, Germany, M/S Nuovo Pignone, etc BHEL is the
largest engineering and manufacturing enterprise in India in the energy-
related/infrastructure sector, today. BHEL was established more than 40 years ago,
ushering in the indigenous Heavy Electrical Equipment industry in India - a dream that
has been more than realized with a well-recognized track record of performance. The
company has been earning profits continuously since 1971-72 and paying dividends since
1976-77.
BHEL manufactures over 180 products under 30 major product groups and caters
to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry,
Transportation, Telecommunication, Renewable Energy, etc. The wide network of
BHEL's 14 manufacturing divisions, four Power Sector regional centre’s, over 100
project sites, eight service centers and 18 regional offices, enables the Company to
promptly serve its customers and provide them with suitable products, systems and
61

62. services -- efficiently and at competitive prices. The high level of quality & reliability of
its products is due to the emphasis on design, engineering and manufacturing to
international standards by acquiring and adapting some of the best technologies from
leading companies in the world, together with technologies developed in its own R&D
centers
Product Profile:
• Gas turbines • Heat Exchangers • Steam turbines
• Pumps • Pulverizes • Turbo generators
• Compressors • Switch Gears • Gear Boxes
• Oil Rigs • Project Engineering
BHEL HRDC
BHEL has been a pioneer in the area of Human Resource Development, being the first
Public Sector Undertaking of its kind, in India, to have setup an extensive HRD
infrastructure as way back as the early sixties. Human Resource Development Centre
(HRDC) of BHEL R.C.Puram, Hyderabad occupies a significant place not only among
other HRDCs of BHEL but also as an important Training and Development Centre in the
twin cities of Hyderabad [Andhra Pradesh].
Since its inauguration (earlier known as Technical Training School) on 8th July
1963 by Sri K.Kamaraj, the then Chief Minister, Madras, today's HRDC, R C Puram,
Hyderabad has come a long way, bagging the prestigious Golden Peacock National
Training Award .
We organize and conduct different kinds of Training and Development programs for our
employees, customers, suppliers, and others. The spirit at our HRDC is continuous
learning and "the learning" which move towards focussed Individual and Organizational
Growth.
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63. BHEL’s Human Resource Development Institute endeavors to –
BHEL has a Human Resource Development Center the provision of knowledge, skills
and appropriate attitudes among it’s work force. They are trained through General
Management, Behavioural, Safety, Computer, Customer and other general programmes.
Besides, the center provides opportunities for training students from the universities and
colleges to do their project work in fulfillment of their academic requirement.
(i) Help formulate Human Resource Development Policies to meet the present
and future needs of the organization as well as promote an organizational
culture emphasizing team work.
(ii) Integrate and co-ordinate Human Resource Development activities of various
units to provide necessary corporate guidelines required from time to time.
(iii) Help the executives to improve their managerial effectiveness to take up new
responsibility and face the current and future challenges.
(iv) Strengthen organization’s value system.
(v) Collaborate with academic institutions and professional bodies of repute both
in and out side India for knowledge sharing.
It’s track record can boast of continuous profits from 1971 and paying dividends from
1976.
BHEL has installed equipment for over 62000 mw of power generation for utilities,
captive and industrial users. Supplied 2,00,000 MVA Transformer capacity and sustained
equipment operating in transmission and distribution network up to 400 kv – AC and DC.
Supplied over 25,000 motors with drive control system to power projects, petrochemicals,
refineries, steel, aluminum, fertilizers, cement plants, etc. Supplied traction electrics and
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64. AC/DC locos to power over 17000 km railway networks. Supplied over one million
valves to power plants and other industries.
The capital employed rose from Rs.23,707 millions in 1995-96 to Rs.35,985 millions in
1999-2000. The value of sales increased from Rs.48,335 millions to Rs.66,340 millions
during the same period. Thus, while the capital employed rose by about 52% the sales
rose by only 31%. The Company’s profit was Rs.5, 994 millions after tax in 1999-2000
while it was only Rs.3, 502 millions in 1995-96 thus registering an increase of over 70%
(71%). In 2000-01 the company’s after tax was Rs. 3,126 millions. It will be seen that
the profits of the company declined 2000-01 compared what it earned in 1995-96 and
1999-2000.
These in brief study of BHEL an electrical industry of international repute and a bright
jewel among the public sector undertakings in the country.
BHEL - OVERSEAS BUSINESS
BHEL, Ranking among the major power plant equipment suppliers in the world, is one of
the largest exporters of engineering products and services from India. Over the years,
BHEL has established its reference in around 60 countries of the world, ranging from the
united state in the west to new Zealand In the far east. BHEL’s exports range cover
individual product to complete power stations, turnkey contracts for power plants, EPC
contracts, HV/EHV substations, O&M services for familiar technologies, specialized
after- market service like residual life assessment (RLA) studies and retrofitting,
refurbishing and overhauling, and supplies to manufacturers and EPC contractors.
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65. BHEL has assimilated and updated / adopted the state-of-the-art technologies in the
power and industrial equipment sectors acquired from world leaders. BHEL has
successfully undertaken turnkey projects on its own and possesses the requisite flexibility
to interface and compliment international companies for large projects, and has exhibited
adaptability by manufacturing and supplying intermediate products to the design of other
manufacturer and original equipment manufacturers (OEMs)
The success in the area of rehabilitation and life extension of power projects has
established BHEL as a reliable alternative to the OEMs for such power plants.
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66. CHAPTER-IV
DATA ANALYSIS AND INTERPRETATION
Q.1 Since how many years have you been working with this organization?
No. of
S. No Opinion Percentage
respondents
1 0-5 Years 28 28
2 5-10 Years 47 47
3 10-15 Years 14 14
More than 15
4 11 11
Years
Total 100 100
66

67. INFERENCE:
1. 0-5 Years (28%)
2. 5-10 Years (47%)
3. 10-15 Years (14%)
4. More than 15 Years (11%)
Q.2 Are you aware of Quality Circles?
No. of
S. No Opinion Percentage
respondents
1 Fully Aware 44 44
2 Partially aware 31 31
3 only basics 21 21
4 Not aware 4 4
Total 100 100
67

68. INTERPRETATION:
Most of the employees are aware of the Quality Circles.
Q.3 Do you involve in Quality circles teams working in your work area?
No. of
S. No Opinion Percentage
respondents
1 Frequently 28 28
2 Some times 47 47
3 Rarely 14 14
4 Never 11 11
Total 100 100
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69. INTERPRETATION:
The Majority of the respondents i.e. 47% agree and only 11% disagree with the statement
Q4. Are you a member of any Quality Circle?
No. of
S. No Opinion Percentage
respondents
1 Yes 67 67
2 No 33 33
Total 100 100
69

70. INTERPRETATION:
Most of the employees are having membership in “Quality Circles”
Q.5 What is the main purpose of Quality Circles in your Organization?
S. No. of
Opinion Percentage
No respondents
Improvement in
1 1 1
Human Relations
Promotion of Work
2 2 2
Culture
3 Develop Team Work 19 19
4 Improve Productivity 13 13
Enhance Problem
5 12 12
Solving Capacity
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71. 6 All of the Above 53 53
Total 100 100
INTERPRETATION:
The majority of the respondents’ i.e. 53% agree and only1% of respondent wants to make
some improvement in human relations.
Q.6 Do you think quality circle develops a participative environment in the
Organization?
No. of
S. No Opinion Percentage
respondents
1 Fully agree 55 55
2 To Some extent 38 38
3 Does not 4 4
4 Not aware 3 3
Total 100 100
71

72. INTERPRETATION:
Regarding feedback 55% of the employees are fully agree where as 3% of the employees
are not aware of quality circles.
Q.7 Do you think that quality circles team can solve the problems of your
work area?
No. of
S. No Opinion Percentage
respondents
1 Fully agree 39 39
2 To Some extent 55 55
3 Never 6 6
Total 100 100
72

73. INTERPRATATION:
Most of the employees are agree to take active part in quality circles team to solve the
problems in that work area
Q.8 Do you think that Quality Circles are helpful in Cost Reduction?
No. of
S. No Opinion Percentage
respondents
1 Fully agree 59 59
2 To Some extent 37 37
3 Never 4 4
Total 100 100
73

74. INTERPRETATION:
Out of 100 employees 59% of the employees are agree to belive Quality Circles are
helpful in Cost Reduction.
Q.9 Do you think that Quality Circles are helpful in increasing Productivity?
No. of
S. No Opinion Percentage
respondents
1 Yes 66 65
2 To Some extent 32 32
3 Never 2 2
Total 100 100
74

75. INTERPRETATION:
Out of the 100 employees 66% percent of the employees are agree to declare Quality
Circles are helpful in increasing Productivity
Q10. Do you think that Quality Circles are helpful in building a Positive
Work Culture?
No. of
S. No Opinion Percentage
respondents
1 Yes 70 70
2 To Some extent 28 28
3 Never 2 2
75

76. Total 100 100
INTERPRETATION:
Regarding feed back 70% of the employees are satisfied whereas 2% of the employees
are not satisfied with this statement.
Q11. Does the management keep track on the activities of Quality Circles?
No. of
S. No Opinion Percentage
respondents
1 Yes 56 56
2 To Some extent 41 41
3 Never 1 1
Total 100 100
76

77. INTERPRETATION:
Out of 100 employees 56% of the employees are agree to say the management keep track
on the activities of Quality Circles
Q12. Are you satisfied with the Quality Circle Movement in your
organization?
No. of
S. No Opinion Percentage
respondents
1 Highly satisfied 25 25
2 Satisfied 70 70
3 dissatisfied 5 5
Total 100 100
77

78. INTERPRETATION:
Out of 100 employees are 70 % of the employees are Satisfied with the Quality Circle
Movement in BHEL, Hyderabad.
Q13. Rate the statement “Top Management is interested in motivating the
employees through Quality Circles”
No. of
S. No Opinion Percentage
respondents
1 Strongly agree 22 22
2 Agree 61 61
3 Disagree 14 14
78

79. Can't say 3 3
Total 100 100
INTERPRETATION:
The majority of respondents i.e 61%agree and only 3%of the employees are not able to
satisfied with this statement.
Q14. Do you think” quality circles” are important for the growth of the
company?
No. of
S. No Opinion Percentage
respondents
1 Very important 45 45
2 Important 51 51
3 Not important 2 2
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80. 4 Can't say 2 2
Total 100 100
INTERPRETATION:
The majority of respondents i.e 51% agree and only 2%of the employees are not able to
satisfied with this statement.
Q15. Rate the statement “Top Management Rewards the Quality Circle
Members for their Achievements”
No. of
S. No Opinion Percentage
respondents
1 Strongly agree 28 28
2 Agree 66 66
3 Disagree 2 2
80

81. 4 Can't say 4 4
Total 100 100
INTERPRETATIONS:
Out of the 100 employees 66% of the employees are agree and 28% of the employees are
strongly agree to say “Top Management Rewards the Quality Circle Members for their
Achievements”
Q16. Do you think involvement in Quality Circles is un-productive or waste
of time?
No. of
S. No Opinion Percentage
respondents
1 Strongly agree 0 0
2 Agree 4 4
3 Disagree 91 91
81