1. 1 Why Quality really is Everybody’s Business Professor John Oakland 11 th November 2009

2. 2 The “Voice of Experience” informs new research The “Voice of Research” ensures we employ cutting edge practices How Oakland Consulting balance theory with practice

3. 3 Quality is high on the agenda everywhere... Financial Times 17 th October 2009 The Times 15 th October 2009

4. 4... but what sort of challenges do we face?

5. 5 † FES = Front End Sales, External System Integrators etc Quality in the 21 st Century – who is ‘Everybody’? Customers FES † BU1 BU2BU3 BU4 YOU Sub 2 Sub 1 Suppliers Orders/ Revenues/ CashGoods/Solutions/Services To achieve Quality across the entire business process chain we need to: Assess the customer needs & business value of meeting them Find the right processes & partners and select the optimum solution Prove and implement the right solutions Make the proven solutions sustainable and continuously improve Promote the spread of internal and external best practices

6. 6

7. 7 Life is complex for Everybody

8. 8 Blame for Everybody

9. 9 Get a Grip – Sort it out!

10. 10

11. 11 1. Clarity of direction & objectives 2. Insight into current situation and priorities 3. Implementation to deliver real business benefit People Process Technology The three part ‘scaffold’ for Everybody

12. 12 Vision & Mission CSFs, KPIs & Targets Process & organisational blueprint to deliver the CSFs Milestone plan, Activity & Resource plans Results Project Metrics Process and People Performance Business outcomes Strategic objectives Planning WHY - Purpose & Scope WHAT - Success factors & measures HOW - To deliver WHEN & WHO - will deliver Understand Customer Requirements Understand Customer Requirements Develop the top level process framework Strategic Alignment & Deployment

13. 13

14. 14 Value-adding processes for Everybody The leadership define the strategies and plans, and the value-adding processes form the links to the results The value-adding process need to be: – defined and documented – managed from end-to-end – measured and improved Functions Function A Function B Function C Function F Function E Key process Customer Satisfaction

15. 15 A top level process framework

16. 16 No wonder key processes involve Everybody New products on the market Ideas for new products Example – A new product development process MarketingR & DSales Manufacturing Define market opportunity Create marketing materials Launch Product Develop prototype product Test & validate product Product production Prepare sales force for launch

17. 17

18. 18 Assessment and Review Performance measurement through structured assessment and review is a critical component in effectively managing quality It provides a roadmap for the improvement and helps to deliver superior business results in the new global market place But failure to adopt this rigorous approach to quality management across complex supply chains can have disastrous consequences And who is responsible...? Everybody

19. 19 Measuring your performance Site ASite C Leadership Policy Organisation Manufacturing Supply People management Performance improvement Site-specific reports showing areas of strength and risk across 18 dimension of quality management, including:

20. 20 Understanding your performance Bringing together your performance measurement across the supply chain will highlight areas of priority and specific improvement actions

21. 21 Overcoming the global sourcing challenges of fast growth... BUT a lack of focus on quality during the same period meant: o Warranty costs soared to >10% of sales revenue o Key customer relationships & companies reputation seriously damaged o Survival threatened... BUT a lack of focus on quality during the same period meant: o Warranty costs soared to >10% of sales revenue o Key customer relationships & companies reputation seriously damaged o Survival threatened Client Growth (2003-2007) o Turnover increased by 150% o New factories were built in Europe, US and Asia o Average number of employees doubled Client Growth (2003-2007) o Turnover increased by 150% o New factories were built in Europe, US and Asia o Average number of employees doubled o A series of assessments of quality management practices were conducted in the manufacturing plants and key headquarter functions o Key problem areas were identified o Cross-business quality improvement teams put in place o A series of assessments of quality management practices were conducted in the manufacturing plants and key headquarter functions o Key problem areas were identified o Cross-business quality improvement teams put in place $20M in reduced failure costs Enabled global expansion Improved On Time, On Quality delivery Case Study -

22. 22 Transformation & Continuous Improvement 3. Pragmatic, Fact-based Methodology Yielding Rapid Results Using proven methodologies, fact & data based, hands-on tools and techniques 3. Pragmatic, Fact-based Methodology Yielding Rapid Results Using proven methodologies, fact & data based, hands-on tools and techniques 1. Leadership & Top Down Cascade of Objectives OTOQOC Delivery performance Customer Confidence Efficiency Improvements 1. Leadership & Top Down Cascade of Objectives OTOQOC Delivery performance Customer Confidence Efficiency Improvements 4. Skilled Improvers People, trained, qualified and living in the organisation 4. Skilled Improvers People, trained, qualified and living in the organisation 5. Widely Shared Continual Improvement Culture Shared commitment to constant improvements in performance 5. Widely Shared Continual Improvement Culture Shared commitment to constant improvements in performance 6. Circulation of Talent 2. Supporting Infrastructure Programme management Effective communications and ‘Branding’ Supporting systems 2. Supporting Infrastructure Programme management Effective communications and ‘Branding’ Supporting systems 8. Sustained Improvement Continuation on a lifetime journey 8. Sustained Improvement Continuation on a lifetime journey 7. Measurable Improvements in the Service Delivery Areas

23. 23 Waste Removal Variation Reduction TIME COST £££ Improving customer satisfaction and increasing value for money QUALITY VALUE outputs Lean Six sigma Delivering sustained quality improvement

24. 24

25. 25 Improvement DRIVER for Everybody A structured and proven approach to continuous improvement that: Stops you jumping from the problem straight to the solution Generates improvements in On-Time, On-Quality, On-Cost Delivery Supports sustainable performance improvement

26. 26 Being Lean is Everybody’s Business! Do not focus on the value adding activities! Standardised Work Waste Elimination Parallel Processing Layout Batch Reduction Quick Changeover Line Balancing Visual Management Error Proofing Remove the non-value adding activities WASTE

27. 27 Six Sigma is effectively a zero-error process so we strive for perfection Reducing process variation (improving sigma) has direct effects on On-Time, On-Quality Delivery and Costs Pilot 1 – 3 sigma landingsPilot 2 – 6 sigma landings Which pilot would you rather fly with? Reducing variation is Everybody’s business!

28. 28 Which pilot would you rather fly with? Pilot 1 – 3 sigma landingsPilot 2 – 6 sigma landings

29. 29

30. 30 Process variation affects Everybody InputsProcess Processes should deliver outputs on target, every time Variation causes processes to miss targets Inputs Process Inputs Process Inputs Process

31. 31 DASHBOARD – Savings / Benefits (global) Total cumulative savings/ benefits: ca120m k€ Average saving per project : 309k€

32. 32 Successful change requires Everybody Implementing Change Readiness for Change Planning Leadership & Direction PROCESSES Organisation & Resources Behaviours Systems & Controls Need for Change External Events It requires “Readiness” and “Implementation” to be in balance Strategic Operational

33. 33... and as we deliver ‘carbon excellence’...... We all have a big role to play Getting C a r b o n R e a d y Leadership capability Carbon trading and offsetting Carbon footprint assessment Legislation watch Low carbon technology Carbon stream mapping Implementation plan Performance management Carbon briefings 3 rd Party verification

34. 34 Yes it really is Everybody’s business! The value-adding processes across all functions provide the link between the strategic plans and the results A critical component in effectively managing quality in the 21 st Century that involves the complete supply chain Developing a specific set of skills and knowledge across the organisation as we move towards a culture of continuous improvement

35. 35 Yes it really does mean Everybody!

36. 36 www.oaklandconsulting.com “No great improvements in the lot of mankind are possible, until a great change takes place in the fundamental constituting of their modes of thought” – John Stuart Mill That means EVERYBODY... including YOU!

37. 37 John Oakland is Executive Chairman of Oakland Consulting plc and Head of its Research and Education Division, the European Centre for Business Excellence. He is also Emeritus Professor of Business Excellence & Quality Management at Leeds University Business School. Over more than twenty five years he has consulted in all aspects of business excellence and improvement to literally thousands of organisations. He has directed several large business research projects in Europe, which have brought him into contact with a diverse range of organisations. His work on the requirements of industry, commerce and the public sector has been widely acknowledged and published. John has an international reputation for his work on performance improvement and he is author of several best selling books. He has written literally hundreds of papers, articles and reports on various topics in the field. John is a Fellow of the Institute of Directors, Chartered Quality Institute, American Society for Quality and Royal Statistical Society. Professor John Oakland