1 - 2 Major Themes Today, supply chains compete, not individual firms. A firm’s supply chain, upstream and downstream, constrains and enables the firm. Firm’s must manage quality in their supply chain, upstream and downstream. Quality management is not “owned” by any one of the functional areas such as operations, HRM, marketing, etc. All functional areas must own their “quality management” processes. There is no one way to improve quality. Firms must use the contingency approach to assess the current position of the firm and identify an effective strategy for improvement based on a clear understanding of their company, market, customers, suppliers, and the quality management alternatives. Improvement is based on the contingent variables that are operative in the firm as it exists.
1 - 4 What is Quality? Cross-functional and Cross-firm Flows Quality management involves flows: process flows, information flows, material flows, and fund flows. Each of these flows has to operate efficiently, effectively, and with quality. Like a river, we have upstream and downstream flows. The sums of these flows make up the supply chain for a firm. Using the supply chain as the model for competition, we must internalize external upstream and downstream processes from raw materials to after-sale service. The firm must integrate differing functions, expertise, and dimensions of quality. This integration requires flexible, cross- functional, problem-solving and employees who can adapt to rapidly changing markets.
1 - 5 What is Quality? Product Quality Dimensions Garvin’s definitions of quality based on the perspective of the viewer (perception is reality) Transcendent - quality is intuitively understood but nearly impossible to communicate Product-based – quality is found in the components and attributes of a product User-based – if the customer is satisfied, the product has good quality Manufacturing-based – if the product conforms to design specifications, it has good quality Value-based – if the product is perceived as providing good value for the price, it has good quality
1 - 23 What is Quality? Differing Functional Perspectives on Quality Supply Chain Management (SCM) Perspective Supply chain management (SCM) grew out of the concept of the value chain. The value chain includes inbound logistics, core processes (operations and marketing), and outbound logistics – processes which directly add value to the product or service. Functions such as HRM, IS, and Purchasing support the core processes in the value chain – non-value added processes which provide a context for the value chain processes. Upstream activities include all of those activities involving interaction with suppliers. Downstream activities include shipping and logistics, customer support, and focusing on delivery reliability.
1 - 24 What is Quality? Differing Functional Perspectives on Quality Supply Chain Management (SCM) Perspective Supplier development activities include evaluating, training, and implementing systems with suppliers, such as electronic data interchange (EDI) to link customer purchasing systems to supplier enterprise resource planning systems (ERP). Supplier qualification involves evaluating supplier performance with regard to conformance rates, cost levels, delivery reliability, etc. using supplier filters, such as ISO/TS 16949 (an automotive standard), ISO 9000:2000, and QS9000. Value stream mapping flowcharts processes to determine where customer value is created as well as identifying non-value-added process steps. Value stream mapping also involves analyzing processes from a systems perspective such that upstream and downstream effects of core process changes can be evaluated.
1 - 25 What is Quality? Differing Functional Perspectives on Quality Operations Management (OM) Perspective The OM view of quality is rooted in the engineering approach and was the first functional field of management to adopt quality as its own. OM is concerned about product and process design. However, rather than focusing on only the technical aspects of these activities, OM concentrates on the management and continuous improvement of conversion processes. OM uses the systems view which is the basis for quality management. The systems view maintains that product quality is the result of the interactions of several variables (manpower, materials, methods, machinery, feedback, environment, time, and technology) which comprise a system, and these variables and their interactions are the cause of quality problems.
1 - 26 What is Quality? Differing Functional Perspectives on Quality Ferdows and Demeyer link the strategic view of OM to quality management with their sand-cone model: quality is the basis on which lasting improvement in other competitive dimensions (reliability - dependability, cycle time - speed of delivery of concept to market, and cost - efficiency) are accomplished. Operations Management (OM) Perspective Inputs Conversion Process OutputsCustomer Process Control Customer Feedback Planning Organizing Controlling OM has an operations-marketing interface which focuses priorities on the customer in the product and process design and operations decisions.
1 - 27 What is Quality? Differing Functional Perspectives on Quality The Sand Cone Model for Priorities Cost (Efficiency) Cycle Time (Speed) Reliability (Dependability) Quality
1 - 29 What is Quality? Differing Functional Perspectives on Quality Strategic Management Perspective The ultimate goal of strategic quality planning is to aid an organization to achieve sustainable competitive advantage. Alignment refers to consistency between different operational sub- plans and the overall strategic plan. Madu and Kuei propose a strategy process based on plan-do- check-act: plan – strategy formulation do – implement strategy in a pilot check – evaluate pilot implementation and make adjustments act – full scale strategy implementation
1 - 31 What is Quality? Differing Functional Perspectives on Quality Financial Perspective - The Deming Value Chain Improve Quality Decrease Costs Improve Productivity Capture Market Stay in Business Provide More jobs
1 - 32 What is Quality? Differing Functional Perspectives on Quality Finance professionals believe the law of diminishing marginal returns applies to quality improvement. Minimum Cost Total Quality Costs = Sum of Losses + Costs of Improving Quality Optimum Quality Level Cost Quality Costs of Improving Quality Losses Due to Poor Quality The financial perspective on quality relies on quantified measurable, results oriented thinking. Minimum Sum of Losses + Costs
1 - 34 What is Quality? Differing Functional Perspectives on Quality HRM Perspective HRM Functions Job analysis involves collecting detailed information about each job. This information includes tasks, skills, abilities, and knowledge requirements for each job. This information is used to define a job description which is used to set pay levels. The bureaucratic delay in accomplishing job analysis to modify job descriptions can limit the ability of the organization to achieve the flexibility needed for quality management. Selection in recruitment and hiring decisions involves finding employees who have the technical and behavioral preparation to perform the tasks for a job, and who are fast learners during quality improvements. The selection process is critical because people, politics, and culture constrain and enable organizational change.
1 - 35 What is Quality? Differing Functional Perspectives on Quality HRM Perspective HRM Functions Effective training provides for standardizing methods for solving unstructured problems in quality management. Top managers and low-ranking employees should use similar processes for solving problems. This is called vertical deployment of quality management. Different departments should use similar processes for solving problems to achieve horizontal deployment of quality management. Performance appraisals and evaluations are key methods for motivating employees. Face-to-face reporting sessions and 360- degree evaluations (an employee’s peers, supervisors, and subordinates evaluate the employee) are used.
1 - 36 What is Quality? Differing Functional Perspectives on Quality HRM Perspective The following table distinguishes between traditional HRM and total quality human resources management. Traditional HRMTQHRM Process CharacteristicsUnilateral roleConsulting role Centralized Decentralized Push - DemandPull – Empower AdministrativeDevelopmental Content CharacteristicsSingle-mindednessPluralistic CompartmentalizedHolistic Worker-orientedSystem-oriented Performance Satisfaction Job-basedPerson-based
1 - 38 What is Quality? Differing Functional Perspectives on Quality Marketing Perspective Marketing systems involve interactions between the producing organizations, the intermediaries, and the final consumer, and it is often very difficult for firms to agree on who the customer is. Marketing is also focused on service at the time of the transaction and after- sales support. Marketing interacts closely with engineering and operations in product design to bring the voice of the customer into the design process. Customer service surveys are used for assessing the multiple dimensions of quality. The customer is the focus of marketing-related quality improvement in developing specialized products for different customers, which is in conflict with standardizing products to reduce complexity by operations.
1 - 39 What is Quality Management? The focus of quality management is to manage properly the interactions among people, technology, inputs, processes, and systems to provide outstanding products and services to customers. With total quality management (TQM), the role of the quality department has moved from a technical, inspection, policing role to a supportive training and coaching role. A strong knowledge of quality is best coupled with technical expertise in business disciplines such as materials management, supply chain management, finance, accounting, operations management, HRM, strategy, and industrial engineering. The goal is to completely immerse the organization in quality thinking and commitment.
1 - 41 What is Quality Management? Quality Control The control process is based on the scientific method which includes the phases of analysis, relation, and generalization. Analysis involves breaking the process into its fundamental pieces. Relation involves understanding the relationships between the parts. Generalization involves perceiving how interrelationships apply to the larger phenomenon of quality being studied.
1 - 42 What is Quality Management? Quality Control Activities relating to quality control include: Monitoring process capability and stability Measuring process performance Reducing process variability Optimizing processes to nominal measures Performance acceptance sampling Developing and maintaining control charts
1 - 43 What is Quality Management? Quality Assurance Assurance refers to proactive activities associated with guaranteeing the quality of a product or service, especially during the design phase. By contrast, quality control is reactive, rather than proactive, by detecting quality problems after they occur. Quality assurance activities include: Failure mode and effects analysis Concurrent engineering Experimental design Process improvement Design team formation and management Off-line experimentation Reliability/durability product testing
1 - 44 What is Quality Management? Quality Management The management processes that overarch and tie together the control and assurance activities make up quality management. The integrative view of quality management supports the idea that quality is the responsibility of all management, not just quality managers. All managers, supervisors, and employees are involved in the following quality management activities: Planning for quality management Creating a quality organizational culture Providing leadership and support Providing training and retraining Designing an organizational system that reinforces quality ideals Providing employee recognition Facilitating organizational communication