Total Quality.People-focused management system.Focus on increasing customer satisfaction and reducing costs.A systems approach that integrates organizational functions and the entire supply chain.Stresses learning and adaptation to change.Based on the scientific method

Principles of Total Quality Customer and stakeholder focus Participation and teamwork Process focus and continuous improvement...supported by an integrated organizational infrastructure, a set of management practices, and a set of tools and techniques

Customer and Stakeholder Focus Customer is principal judge of quality Organizations must first understand customers’ needs and expectations in order to meet and exceed them Organizations must build relationships with customers Customers include employees and society at large

Key Idea To meet or exceed customer expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty.

Participation and Teamwork Employees know their jobs best and therefore, how to improve them Management must develop the systems and procedures that foster participation and teamwork Empowerment better serves customers, and creates trust and motivation Teamwork and partnerships must exist both horizontally and vertically

Key Idea In any organization, the person who best understands his or her job and how to improve both the product and the process is the one performing it.

Process Focus and Continuous Improvement A process is a sequence of activities that is intended to achieve some result

Continuous Improvement Enhancing value through new products and services Reducing errors, defects, waste, and costs Increasing productivity and effectiveness Improving responsiveness and cycle time performance

Learning The foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches Learning cycle: Planning Execution of plans Assessment of progress Revision of plans based on assessment findings

TQ Infrastructure Customer relationship management Leadership and strategic planning Human resources management Process management Data, information and knowledge management

Competitive Advantage Is driven by customer wants and needs Makes significant contribution to business success Matches organization’s unique resources with opportunities Is durable and lasting Provides basis for further improvement Provides direction and motivation Quality supports each of these characteristics

Key Idea An organization that is committed to total quality must apply it at three levels: the organizational level, the process level, and the performer/job level.

Three Levels of Quality Organizational level: meeting external customer requirements Process level: linking external and internal customer requirements Performer/job level: meeting internal customer requirements

Quality and Personal Values Personal initiative has a positive impact on business success Quality begins with personal attitudes Quality-focused individuals often exceed customer expectations Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

Key Idea In the daily attempt to bring about change in the individual parts of the organizational universe, managers, employees, professors, and students can find that personal quality is the key to unlock the door to a wider understanding of what the concept really is all about. Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).

Chapter 2 Total Quality in Organizations

Key Idea As consumer expectations have risen, a focus on quality has permeated other key sectors of the economy, most notably health care, education, not-for-profits, and government.

Systems Thinking A system is the functions or activities within an organization that work together for the aim of the organization. Subsystems of an organization are linked together as internal customers and suppliers. A systems perspective acknowledges the importance of the interactions of subsystems, not the actions of them individually.

Key Idea Successful management relies on a systems perspective, one of the most important elements of total quality.

Manufacturing Systems (1 of 2) Marketing and sales Product design and engineering Purchasing and receiving Production planning and scheduling Manufacturing and assembly Tool engineering

Manufacturing Systems (2 of 2) Industrial engineering and process design Finished goods inspection and test Packaging, shipping, and warehousing Installation and service

Quality in Services Service is defined as “any primary or complementary activity that does not directly produce a physical product – that is, the non-goods part of the transaction between buyer (customer) and seller (provider).”

Critical Differences between Service and Manufacturing (1 of 2) Customer needs and performance standards are more difficult to identify and measure Services requires a higher degree of customization Output is intangible

Critical Differences between Service and Manufacturing (2 of 2) Services are produced and consumed simultaneously Customers are often involved in actual process Services are more labor-intensive than manufacturing Services handle large numbers of transactions

Key Idea The American Management Association estimates that the average company loses as many as 35 percent of its customers each year, and that about two-thirds of these are lost because of poor customer service

Components of Service System Quality Employees Information technology

The Ritz-Carlton Hotel Co.

Quality Issues in Health Care Avoidable errors Underutilization of services Overuse of services Variation in services

Quality in Education Active involvement of whole school community Committed leadership System for continuous improvement Environment that celebrates success

Quality in the Public Sector Quality in the Federal Government State and Local Quality Efforts