Total Quality Management BUS 3 – 142 Strategic Quality Management Jan 31, 2013

Designing and Assuring Quality Achieving quality results require INTENTIONAL planning and execution A business aligns its quality strategy with its overall strategy Differentiation on Quality and features Command price premiums If competing on price, must attack costs and productivity – improved quality address both Organizational Leaders create the atmosphere and priority for quality Quality is the RESULT of coordinated, fact-based, planning, execution, problem solving, and continuous improvement

Deming’s “Plan-Do-Check-Act” "Continuous improvement is better than delayed perfection." - Mark Twain

An Environment and Culture for Quality The right LEADERSHIP is critical to building & sustaining a Quality organization Establish quality as a “Way of Life” and not as a project or fad Keep activities focused on “superordinate” goals Customer and organization long term success Honest and respectful work environment Create an environment for Learning Provide time and dollars for Training Encourage diversity of opinions and problem solving approaches Plan-Do-Check-Act Be patient and don’t expect immediate results If employees are asked to make suggestions, implement the ideas that are offered Follow up to ensure results are achieved or if additional measures may be required

Beware of goals that are really “Wants” or Wishes” When goals are introduced without the systems, processes, and resources to achieve them, one of three outcomes will follow: People will achieve the goals and positive results People will distort the data People will distort the system Adapted from Donald Wheeler in Foster, Quality Management, Fifth Edition, Prentice Hall

Quality and Productivity A ratio of Inputs and Outputs “Total-factor” productivity Improvement projects sometimes reduce productivity in the early stages, before the longer term results are achieved Learning curve Resistance to change “One step back for two steps forward” Measure against objective standards Yields Cycle time Inventory Profit

Money must be spent to enable Quality Like any other business process, managing quality requires investment and incurs costs. Diligent business case development, project management, and cost management are necessary.

Quality Cost Model (“Lundvall-Juran” Model) Balances Prevention Costs and Failure Costs. Can be useful in some cases, but NOT in matters of Safety or other risk to Human Life Foster, Quality Management, Fifth Edition, Prentice Hall

Failure Costs (Table 4-4) * Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Appraisal Costs (Table 4-3) * Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Costs of Prevention (Table 4-2) * Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Individual Leadership and Quality As you develop EXPERTISE and CONFIDENCE in your profession, you become more equipped to provide the vision, direction, coaching, and challenge to your teams and organizations When people look up to you, and want to follow you, give them a GOOD REASON to follow

Individual Leadership and Quality Pick a leadership style that fits your personality and preferences Don’t assume that being “the boss” is a good enough reason to be followed Power of Expertise Be excellent at the content of the work being done by the people you lead Use your leverage as a skilled leader to make a bigger difference over a larger footprint Equip and enable your team to do more than you could possibly do yourself Understand how Rewards and Feedback influence Performance & Quality Don’t be afraid to communicate unpleasant news – it is feedback for better performance Mix positive comments with opportunities for improvement Recognize that not all people are self-motivated, or are motivated by the same levers Measure the right things

Leadership Skills (Table 4-1) * Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning: Logistics When shipments take place Modes of transportation How shipping practices can be optimized Outsource warehousing and fulfillment or keep in-house Product packaging Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning: Suppliers Preferred suppliers Supplier selection Supplier development Sole sourcing / single sourcing / multiple sourcing Technology linkage Global sourcing Supplier input to design Supplier cost cutting Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning: Inventory Mgmt Distribution Network Cost Service levels Lead Times Product Life Cycles Perishable and Hazardous Material Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning: Information Flows Data requirements System requirements Security Reliability Visibility upstream and downstream Access upstream and downstream Timing and governance Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning: Products Differentiation with competition Variety Manufacturability Components Life cycles Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall

Supply Chain Strategic Quality Planning: Services Service definition along the supply chain Customer requirements Cost Response time Refurbished replacements Repair vs. Replace Adapted from Foster, Quality Management, Fifth Edition, Prentice Hall