Chapter III

THE TQM PRACTICE

TQM practices of Lenovo

Lenovo is dedicated to building exceptionally engineered PCs and mobile internet

devices; Lenovo’s business is built on product innovation, a highly-efficient global supply chain

and strong strategic execution.

Constancy of purpose for Improvement

Innovation is in the DNA of Lenovo and with this value the company keeps on rapid but

smooth improvement. Lenovo’s commitment to innovation continues to deliver the best products

in the industry, and is at the heart of their business as a personal technology company. The

company will continue to leverage the spirit of innovation and history of our technological

breakthroughs into new product categories to drive future growth. Innovation is how Lenovo

achieves competitive differentiation and drives new market opportunities within the PC Plus

market. Lenovo is now investing more than ever in innovation that sets the standard for quality,

reliability, style and speed. Lenovo products consistently win awards and receive rave reviews.

They deliver the high quality, reliability and durability that meets our customers’ demands. The

ultimate goal of Lenovo’s R&D team is to improve the overall customer experience while

driving down the cost of ownership. The key to Lenovo’s success is the ability to strike the right

balance between innovation and efficiency: Efficiency gives us more resources for innovation,

and innovation drives higher margins and better efficiency We continue to invest in our end-to-
end business model by enhancing and growing vertical integration to drive innovation and

optimal efficiency

The company is rich in talent, employing more than 3,500 engineers, researchers and scientists.

For example, the Lenovo’s R&D teams have introduced many industry firsts supported by a

track record of innovation — including nearly 6,000 patents for the invention of new technology.

Last year alone, Lenovo registered over 1,000 new patents globally.

Supplier Partnership in the 4 basis of supply

As a member of the Electronic Industry Citizenship Coalition, Lenovo has implemented a

full EICC compliance program with our suppliers, using formal contractual agreements separate

from production or service agreements and statements of work.

The agreements require the supplier to:

• Comply with the EICC Code of Conduct

• Self-assess annually with EICC tools (EICC-ON)

• Effectuate audits bi-annually with EICC-approved auditors

• Provide audit reports and corrective action plans

• Require their own suppliers also to comply with the Code Key statistics are as follows:

• At least 95 percent of our procurement spend is covered with EICC agreements

• 100 percent of targeted suppliers had executed agreements in place

• At least 95 percent of Lenovo suppliers are completing self-assessments on time

• At least 93 percent of suppliers are completing their audits on time

• No audits to date have resulted in any zero tolerance or high priority findings
• Compliance has improved 9 percent from the previous round of audits to current round of

audits

• Average major findings were reduced from 15 to five findings per audit

Encourage Education and Self improvement to everyone

One of the Deming 14 points for top management is that the company must encourage constant

learning in the workplace. Lenovo is committed to its investment in talent development, and has

a robust and systematic approach to employee, manager and executive development. Most

recently, Lenovo has implemented Learning@Lenovo, a suite of employee development

initiatives that reaches executives, people managers and individual contributors through four

global programs (Leading@Lenovo, Managing@Lenovo, For Those Who Manage and

Contributing@Lenovo). Lenovo also seeks the insights of its employees worldwide through its

Lenovo Listens employee engagement survey. The 2012 Lenovo Listens survey, which boasted a

94 percent participation rate (up from 84 percent in 2011), showed that Lenovo employees are

proud and see the positive impact their work has on customer satisfaction. There is an internal

atmosphere of cooperation and accountability. Managers provide clarity by being available to

employees who have questions. Scores on all 2012 survey items improved from the previous

year, most notably relating to positive perceptions of management, direction from managers,

pay-for-performance, and employee growth and development. As a result of the 2012 survey

feedback, over 1,200 managers created action plans to continue improving the workplace.

Additionally, the worldwide executive task forces that were created following the 2011 survey

remain a focus for enhancing both innovation capabilities and operational efficiencies around the

world.
Involvement of Stakeholders

Potential stakeholder input is evaluated by Lenovo subject matter experts including Lenovo’s

Sustainability Working Group, made up of representatives from most major business areas.

Currently, Lenovo engages with individual stakeholder groups on an ad-hoc basis as needed by

the subject matter and individual stakeholder concerns. For example, Lenovo’s sites in Beijing

have engaged with the World Bank in their “Spontaneous Promoting Green Travel” project. As

part of this project, Lenovo launched an employee carpooling communication platform and green

travel survey and has communicated to 10,000 Beijing employees about commuting alternatives

to minimize greenhouse gas emissions and improve air quality.

Giving Importance to the Employee

The company believes that employees are the most valuable strategic resource at Lenovo.

They recognize the importance of each unique individual and their need to be recognized

frequently and rewarded fairly. A fully engaged workforce is the key to our differentiation and

exceptional business performance. Lenovo believes and invests heavily in the concept of Total

Rewards, which consists of five key elements: compensation, benefits, work-life balance,

performance and recognition, and development and career opportunities. They believe that

collectively, these five elements are critical to attract, motivate and retain the most valuable

strategic resource — of the people. Lenovo’s culture is to tie pay to performance. They believe

that exceptional individual performance will support and drive exceptional business

performance, which will result in exceptional pay for individuals. For example, all “Key

Performance Indicators” throughout the organization are linked to a business strategy. In terms

of the company pay practices, carefully monitor and evaluate market trends in each of the
geographic locations to ensure that we remain competitive. P3 stands for Priorities, Performance

and Pay and is closely aligned to The Lenovo Way, the touchstone of our company culture that

focuses us on delivering on the commitments and taking ownership in everything we do.

Training

Lenovo encourages mentoring relationships. They are an excellent way to grow an employee’s

skills and knowledge in order to develop his or her full potential. Mentees and mentors both gain

from participation in a mentoring relationship. Mentees can increase their understanding in the

targeted subject area, and mentors can sharpen their leadership and coaching skills. To aid

employees in the mentoring process, Lenovo provides two online courses: “Mentoring:

Identifying Your Goals” and “Mentoring: Developing Relationships.” Both courses include a

simulation. Orientation & Training New Lenovo employees attend a new employee orientation

program. This program introduces new employees to a wide variety of topics including Lenovo’s

history and culture, diversity, business policies and practices as well as the tools and resources

available to employees. Lenovo encourages cross-cultural development by means of diverse

experiences. Development is strengthened by the frequency and quality of the career-focused

discussions that employees have with their managers. For Example: The management

development program Managing@Lenovo has a particular focus on improving career

development discussions. The primary source of career development support comes from an

employee’s immediate manager. Employees are encouraged to take ownership of their careers

and utilize a mix of work experiences, education and relationship building to aid in their growth,

development and upward movement.

Responsible and ethical governance is the foundation of a sustainable company. Lenovo

provides detailed information about its governance structure. The Board and the Company’s

senior management strive to attain and uphold a high standard of corporate governance and to

maintain sound and well-established corporate governance practices in the interest of

shareholders and other stakeholders. For Example: The Company abides strictly by the

governing laws and regulations of the jurisdictions where it operates, and observes the applicable

guidelines and rules issued by regulatory authorities. The Company regularly reviews its

corporate governance system to ensure it is in line with international and local best practices.

Portability and Usability of the Product

Lenovo Group’s acquisition of the former IBM Personal Computing Division, the

company develops, manufactures and markets reliable, high-quality, secure and easy-to-use

technology products and services. Its product lines include legendary Think-branded commercial

PCs and Idea-branded consumer PCs, as well as servers, work-stations, and a family of mobile

internet devices, including tablets and smart phones. These gadgets are very handy for the

consumer. The Lenovo always assure that the product will not give burden to its user. The

Lenovo laptop such as Yoga is light to carry and can flip into different degrees. Also the Lenovo

is in 160 countries which means the transaction of this product is worldwide.

Creating Virtual Workplace through Online

increase their revenue/spend and obtain business intelligence to improve their online conversions

(chat and self-serve). So they came up the solution of implementing [24]7 Assist for the online

sales (chat) channel to provide predictive targeting: Model-based qualification of hot leads based

on buying propensity rather than rule trigger. Channel Optimization: Targeting only visitors with

incremental propensity to convert if assisted, without eliminating self-serve. Targeted

Performance Improvement: Upsell / cross-sell modeling to improve cart size. Automated

learning: 100% text mining and analytics to improve agent performance

With this virtual online workplace they had gain successful results such as: rapidly scaled the

chat program from 9% to 30% of total web revenues within 6 months. $60M annual incremental

revenues through chat. 4.5x higher revenues per agent per month.

Requirements to the Society

One of the dimensions of service quality is that the product should fulfill both the stated

and implied requirements imposed by the society. The Lenovo is doing recovery and recycling

trends. During the 2012 calendar year, Lenovo financed or managed the processing of more than

13,100 metric tons, equivalent to more than 24.5 million pounds, of Lenovo-owned and

customer-returned computer equipment. Of this total, 9.8 percent was reused as products or

parts, 84 percent was recycled as materials, 3.2 percent was incinerated with waste-to-energy

recovery, 0.3 percent was incinerated as disposal treatment and only 2.7 percent was disposed of

by landfill. As part of Lenovo’s continual improvement activities, the company looks for

opportunities to reduce the use of incineration and landfills, and maximize reuse and recycling.

Since Lenovo’s establishment as a global company in May 2005, we have processed more than
107,800 metric tons, or 238 million pounds, of computer equipment through our contracted

service providers.

Responsible for introducing total quality management

The Lenovo did not directly stated to whom the idea of TQM started, though with every

statement that they are sharing to the public by the means of internet or either case studies and

blogs about Lenovo, the TQM started with Liu Chuanzhi. Liu emphasized developing an

effective working relationship with his superiors at the CAS from the very start. Despite its

rhetoric of market-oriented reform, the Chinese government was reluctant to relax state control

of the economy. Liu feared that his company might fail due to government micromanagement.

Liu also worried about dealing with local government officials and party cadres. He said, "We

were totally immersed in the environment of a planned economy. I didn't care that the investment

was small, but I knew I must have control over finances, human resources and decision-making."

Liu's superiors immediately granted his request for autonomy. He is prioritizing to his people and

how the products can competitive in the market.

TQM Practices by the Copies of ISO Certification

because of the design, development, manufacturing fulfillment, marketing, sales and service of

Lenovo computer products and devices. Furthermore, this is a proof that the company is

performing into excellence with its boost of development rapidly. They never failed to surprise

people in the improvement that they are showing step by step.

Quality awards of Lenovo

Lean Six Sigma

Six Sigma at many organizations simply means a measure of quality that strives for near

perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating

defects (driving toward six standard deviations between the mean and the nearest specification

limit) in any process – from manufacturing to transactional and from product to service, Lenovo

lean Six Sigma master black belt. Take Lean Six Sigma, a popular method for driving continuous

improvement across a business. Individually, Lean and Six Sigma are both effective continuous

improvement methods. Lean focuses on improving process speed by eliminating non-value-

added activities in an end-to-end process. Six Sigma focuses on improving process quality by

eliminating defects through in-depth analysis of a problem’s root cause. Together, Lean and Six

Sigma enable Lenovo to examine end-to-end processes while doing in-depth analysis of problem

areas. The result? Increased value to customers, improved business results and establishment of a

high-performance culture – driving increased efficiencies and process improvements that Lenovo

will pass on to customers in the form of increased quality, improved order processing and shorter

delivery times. Like many successful businesses, Lenovo leveraged Lean Six Sigma and LSS
tools to enable modest improvements in its Reverse Logistics Operations. Successes since 2008

include:

• Creating Lenovo proprietary Shop Floor Control systems 

• Creating operation flexibility to handle all brands, models and platforms of products

• Creating universal packaging to support multiple platforms and models

• Creating alternate work schedules to implement a seven day per week operation, in lieu of

adding space or equipment costs

• Creating in-house Test capabilities for refurbishment of all systems

• Creating multiple re-sale vehicles (Web, Lots, Brokerage and Retail)

Industry Awards at International Consumer Electronics Show (2012)

Lenovo at the 2012 International Consumer Electronics Show (CES) that it has received

22 awards and honors highlighting innovation, design and versatility in the PC industry. Most

notably, the Lenovo IdeaPad Yoga won 11 awards from prominent industry publications

including PCMag.com, Popular Mechanics, LAPTOP and Tom’s Guide all highlighting its

groundbreaking hybrid functionality, distinctive design and innovative engineering. Lenovo’s

other featured product at CES this year, the Lenovo IdeaCentre A720 All-In-One won

PCWorld’s Best Desktop award for its advanced ergonomics and stylish design. 

Marketing Center Of Excellence (2012)

were given spreadsheets of cold contacts to follow-up on single touch, outbound emails or direct

mail “door openers”.  Lenovo had not implemented lead scoring, so sales had no way to

efficiently segment their list based upon demographics, and online behavior was not measured. 

Furthermore, Lenovo had not adopted a “demand waterfall”, so leads could not be efficiently

tracked through the funnel from prospect to win.  As a result, Lenovo had little ability to

effectively measure the effectiveness and return-on-investment (ROI) of its demand generation

programs. Lenovo’s implementation of Eloqua established a foundation for adopting a Marketing

Center of Excellence.  Lenovo now had a technology and business basis to establish demand

generation best practices in contact management, campaign management, lead management, and

ROI analyses. Finally, over the past 2 years, Lenovo has experienced explosive growth by

outpacing the PC market and exceeded our profit commitments. Lenovo expects to continue this

rapid growth in its pursuit to become the world largest PC vendor.   Lenovo’s Marketing COE

has greatly contributed to that growth in the top-line revenue and bottom-line margin.

Edison Awards (2013 and 2014)

Yoga Tablet received top honors in San Francisco with a gold Edison Award for most

innovative computing solution.  In addition, Lenovo’s IdeaCentre Horizon Multimode Table PC

was recognized with a silver Edison Award in the computer and entertainment category. The

Edison Awards were inspired by Thomas Edison, to recognize innovation, creativity and

ingenuity in the global economy.  The Lenovo Yoga Tablet captivated the tablet market in 4Q

2013 with its three-mode kickstand, giving consumers a unique way to use a tablet.With hold,

tilt and stand modes, the tablet adapts to the way people use it and is packed with an amazing 18
hours of battery life1 for ultra mobile lifestyles. The 27-inch Horizon PC blew up CES 2013 as

Lenovo’s first “interpersonal” table PC; a multi-user, multi-touch and multi-mode device for the

home with the capability to easily shift from personal to shared computing use. Paired with a

special set of accessories including an e-dice, joysticks and strikers, the Horizon Table PC offers

a complete digital gaming experience.Edison Award nominees are judged by more than 3,000

senior business executives and academics from across the nation whose votes acknowledge the

finalists’ success in meeting the award’s stringent criteria of quality. The voting panel includes

members of the American Association of Advertising Agencies (4As), Chief Marketing Officer

Council (CMO), and Design Management Institute (DMI), among others.

Red Dot Award (2013)

Lenovo received the red dot awards from Germany in 2013, this red dot awards is one of

the most prestigious design awards in the world. It has recognized Lenovo's design achievements

by naming Lenovo in its annual list of red dot winners. Named among the award-winners for

Lenovo was IdeaPad U430s laptop PC, as: "red dot: best of the best”. In addition, and perhaps

even more significant, was an honorary award bestowed upon Lenovo's Design and User

Experience Team, who among a host of competitive distinctions, achieved the honour of “red

dot: design team of the year 2013." This unique title, to which no company or designer can

apply, honours a corporate strategy by which innovative and high quality products sustainably

influence the business success. A claim that – as the red dot organisation itself phrased it – “the

Lenovo Design and User Experience Team satisfy abundantly. For years, Lenovo has impressed

the expert jury of the red dot design award with its products and their outstanding design quality.

As a reward, it was chosen as red dot: design team of the year 2013”. To become the “red dot:
design team of the year”, Lenovo was measured against other design teams worldwide, weighing

such design criteria as innovation, technology, team work and performance. Since 1988, red dot

has been selecting one design team every year that shapes markets around the world through

consistently innovative design achievements. The list of winners in recent years included such

renowned companies as Nokia, Adidas, BMW, Bose and Porsche. Lenovo is the first Chinese

company to win the “red dot: design team of the year” title, which demonstrates the Company's

international innovation and design ability,  a significant advantage in both domestic and global

markets, as customers have shown time and again that good design matters. This particular honor

is a "breakthrough" moment for Lenovo, which is a household name in China, and quickly

gaining brand recognition for innovation, technology leadership and design in the rest of the

world.

CES Awards 2014

Lenovo has had a great track record every year at CES, winning 16 awards in 2012, 55

awards in 2013 and 61 awards in 2014. A true PC+ player offering new product categories to

enhance customer experience, Lenovo is always ahead of the technology curve. Lenovo’s

portfolio this year was exceptionally strong in terms of category leadership and breadth of

devices showcased at the event. Lenovo brought home 26 "Best of" awards for products ranging

from monitors to streaming media devices and from convertibles to tablets to PCs. These award

winning products stood out not just in their own category but also emerged clear winners amidst

competition. CES is a world renowned industry trade show and Lenovo has been an active

participant for the past 7 years. This year, the two products that fueled massive wins were
Windows 8 devices namely the new ThinkPad X1 Carbon with 17 awards and the newest

tablet, ThinkPad 8 with 11 awards. Also in the lineup was the Lenovo Vibe Zwhich won three

awards for "Best of" in the Smartphone category. Other products that brought home awards

included the home storage system, Lenovo Beacon, the Miix 2 10-inch and 12-inch tablets,

Horizon 2, and the Android all-in-one Lenovo N308.

Manufacturing Leadership Award (2014)

Lenovo, the largest PC company in the world, received top honors last at the 2014

Manufacturing Leadership Summit (MLS) during their Tenth Annual Manufacturing Leadership

Awards gala in Palm Beach, Florida. A cornerstone event of the Summit, the gala presentation

honors companies and individuals that are shaping the future of global manufacturing. Lenovo

took the spotlight with a Manufacturing Leadership Award win in Customer Value Leadership

category, recognizing Lenovo’s role in pioneering the return of U.S. computer manufacturing –

most notably through its U.S. Manufacturing and Fulfillment Center in Whitsett, North Carolina.

This particular award applauds new products and services provided to customers that enhance

customer experience and build a closer relationship with them.