1. Strategic Quality Planning
Chapter 4
Strategic Quality Planning
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2. Strategic Quality Planning Chapter 4
Strategy Content
The importance of time in quality improvement
Leadership for quality
Quality and ethics
Quality as a strategy
Quality strategy process
Deploying quality
Does quality lead to better business results?
Supply chain strategy
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3. Strategy content
Quality improvement-identifying potential improvements, prioritizing potential area for improvement and planning for improvement.
Core competency in quality planning: time, leadership, quality cost, generic strategies, order winners and quality.

4. What is Strategic ?

5. What is Strategic ? Quality is strategic. Strategic
Forming part of plan
Tactical
Quality
Customer satisfaction
Definitions of strategic
adjective
relating to the identification of long-term or overall aims and interests and the means of achieving them.

6. Strategic Planning
Strategic planning have 2 dimensions; Content and Process
Content: What is to be contained in strategic plan? Time, leadership, quality costs, generic strategies (cost, differentiation and focus) and quality.
Process: Steps for developing strategy within organization
Quality results: Is it improve bottom line results? Quality, productivity, Profitability

7. Strategic Quality Planning Strategy Content
Quality improvement involves identifying potential areas for improvement and planning the implementation of projects and improvements
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8. How long it takes to obtain to see improvement in strategic management?

9. Strategic Quality Planning Strategy Content (Time)
The importance of time in quality improvement
Strategic planning implies planning for the long term
Takes time (2-4 years) to see the results
Shigeo Shingo stated that Toyota required 25 years to achieve significant improvement.
Creating goals without providing good system will not improved the performance.
Deming stated continuous improvement required commitment of resource and time.
Improved quality will increase market share and sales.
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10. Strategic Quality Planning The importance of time in quality improvement
There are two aspects of time:
The time it takes to achieve business goals as a result of quality
Foster and Adam (1996) study shows that
The speed at which companies improve
study shows that those plants that
improved quality conformance more
quickly did not see cost improve as much
as plants improved more slowly.
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11. What happen if management creating goals and but not providing systems to achieve goals?

12. Strategic Quality Planning The importance of time in quality improvement
When goals are set, one of three things will occur:
People will achieve the goals and incur positive results
People will distort the data
People will distort the system
The problem happen when creating goals and but not providing systems to achieve goals (Base on Deming)
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13. Strategic Quality Planning Leadership for quality
Leadership is the process by which a leader influences a group to move towards the attainment of superordinate goals.
Superordinate is goals-higher achievement that benefit to individual and organisation.
Definitions of superordinate
noun
a thing that represents a superior order or category within a system of classification.
"a pair of compatibles must have a common superordinate"
adjective
superior in status.
"senior staff's superordinate position"
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14. Strategic Quality Planning Leadership for quality
Key strategic variable for quality improvement
Organizes, plans, controls, communicates, teaches, advises and delegates
For followers to have power, leadership must share power. As a result leadership is about the sharing of power.
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15. Strategic Quality Planning Leadership for quality
This power takes many forms:
The power of expertise (Special knowledge)
Reward power ( power to reward subordinates)
Promotions, rewards, recognition and incentives
Coercive power (Power to punish the follower for not following rules and guidelines)
Referent power (Charismatic or charming)
He or she is liked.
Legitimate power ( Power to obligate subordinates and they should comply the request). Comes from position.
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16. Strategic Quality Planning Leadership for quality
What are Leadership Skills:
Knowledge (Competence, ethics, ..)
Communication with others (Effective speaking, writing..)
Planning (Task and time management, decision making…)
Vision (Identify the opportunities)
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17. Strategic Quality Planning Quality and Ethics
Quality appears to be good business
Quality is also good ethics
Reliable products and low defect rates reflect an ethical approach for its customers.
“We build good ships. At a profit if we can, at a loss if we must. But, we build good ships”
From Shipbuilder, Massachusetts
Ethics reflected to its customers and employees; education, training, health, wellness, recycling programs and improve environmental practices, customer, employees satisfaction, environment
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18. Is quality sufficient to win orders in the marketplace?

19. Is quality sufficient to win orders in the marketplace?
Quality as a strategy
Is quality sufficient to win orders in the marketplace?
Quality is effective tools in successfully exporting in the international market.
Quality as a strategy from the perspective of generic strategies; cost, differentiation and focus

20. What is cost of quality?

21. Strategic Quality Planning Quality as a strategy
Cost of quality
Traditionally, based on lowest price
New, cost are expansive (wide range), considering the summation of costs over the life of a product (life cycle cost)
Service, maintenance, operating cost, environmental costs
Definitions of expansive
adjective
covering a wide area in terms of space or scope; extensive or wide-ranging.
"deep, expansive canyons"
synonyms: extensive, sweeping, rolling; wide-ranging, extensive, broad, wide, comprehensive,thorough, full-scale
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22. Strategic Quality Planning Quality as a strategy
How quality can help decrease the cost of doing business?
Cost of Quality
PAF Paradigm
Prevention Costs
Appraisal Costs
Failure Costs
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23. Strategic Quality Planning Quality as a strategy
Cost of Quality
PAF Paradigm
Prevention Costs
Appraisal Costs
Failure Costs
Cost of preventing defects and imperfections from occurring
Quality training
Supplier quality assurance
Process Re-engineering
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24. Strategic Quality Planning Quality as a strategy
Cost of Quality
PAF Paradigm
Prevention Costs
Appraisal Costs
Failure Costs
Cost of measuring quality
Inspection and test
Product quality audit
Quality award assessment
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25. Strategic Quality Planning Quality as a strategy
Cost of Quality
PAF Paradigm
Prevention Costs
Appraisal Costs
Failure Costs
Cost of failure
Internal failure
External failure
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26. Strategic Quality Planning Quality as a strategy
Failure Costs
Internal failure costs
External failure costs
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28. Strategic Quality Planning Quality as a strategy
Differentiation through quality
(Customer the product or service is unique in an important way). A Rolex or iPod
Focus through quality; a product that is particularly regional or population
Quality as a core competency
Lunvall-Juran quality cost model
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29. Lunvall-Juran quality cost model
Prevention and appraisal activities increase,
quality conformance should increase.

30. Strategic Quality Planning Quality Strategy Process
The Forced Choice Model (Strategic Planning Model)-The model help to identify strengths and weaknesses, environment assessment.
Statement of the mission
Interrelated financial and non-financial objectives
Statement of strengths and weaknesses
Forecast of operations
Major future operations
Organizations position
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31. Strategic Quality Planning Quality Strategy Process
The Forced Choice Model
Broad economic Assumptions
Key government/regulatory issues
Major technological forces
Significant marketing opportunities/threats
Explicit competitor strategies for each competitor
Environment Assessment
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32. Strategic Quality Planning Quality Strategy Process
The Forced Choice Model
Generating Strategic options
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33. Strategic Quality Planning Deploying Quality
Hoshin Kanri or Policy Deployment
The Company develops a year plan
The Senior Executives develop the current years objectives.
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34. Strategic Quality Planning Deploying Quality
Hoshin Kanri or Policy Deployment
Catchball occurs
The process is interactive
Teams report up
Management delivers feedback
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35. Does Quality Lead to Better Business Results?

36. Does Quality Lead to Better Business Results?
The effect of quality on business result are mixed; Successful and unsuccessful.
2 reasons:
Many variables affect profitability besides quality such as economic factor and customer acceptance.
Many companies implement quality incorrectly. To be effective in a variety of cultures and industries if implemented correctly.

37. Strategic Quality Planning Does Quality Lead to Better Business Results?
Is it higher price product has higher quality?
Supply and demand laws; Superior product has higher price.
Kettinger (1995) study shows that different cultures have different customer priorities. Some study found differences cultures could perceive the relation positive or negative
Quality and
Price
Cost
Productivity
Profitability
Environment
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38. Strategic Quality Planning Does Quality Lead to Better Business Results?
Quality and
Price
Cost
Productivity
Profitability
Environment
Higher quality strategy to incur lower costs because high productivity and reduction of rework and scrap.
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39. Strategic Quality Planning Does Quality Lead to Better Business Results?
Quality and
Price
Cost
Productivity
Profitability
Environment
Quality has relation with productivity
The elimination of waste results in higher productivity.
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40. Strategic Quality Planning Does Quality Lead to Better Business Results?
Quality always result in improved profitability
Quality improvement improved employee relation, lower cost, greater customer satisfaction and improved market share.
Quality improve in long terms
Quality and
Price
Cost
Productivity
Profitability
Environment
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41. Strategic Quality Planning Does Quality Lead to Better Business Results?
Effect business on the environment
Regulatory pressures: Firms must integrate environmental concerns into their strategic plans such as reduction of pollution and emission
Environmental friendliness is a part of being a good corporate citizen. Environment management system
Quality and
Price
Cost
Productivity
Profitability
Environment
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43. Strategic Quality Planning Supply Chain Strategy
Supply chain strategy is important for effective supply change management (Raw material-customers)
Consideration in supply chain strategy
Understand the different classes of sources items
Identify your supply chain’s optimal performance levels
Understand your current level performance and where you can improve
Organize team projects and plan for achieve objective
Implement improvement
Monitor results and take corrective action if needed.

44. Strategic Quality Planning Supply Chain Strategy
Logistics?
When shall we ship?
What mode of transportation shall we use?
How do we optimize our shipping practices?
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45. Strategic Quality Planning Supply Chain Strategy
Suppliers?
Who are our preferred suppliers?
What is our process for supplier selection?
How do we develop suppliers?
How do we link with our suppliers?
Do we source globally?
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46. Strategic Quality Planning Supply Chain Strategy
Inventory management?
Where do we optimally store inventory
How much? How long?
Do we have perishable stock?
Do we carry safety stock?
ARE we maintaining good levels of service?
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47. Strategic Quality Planning Supply Chain Strategy
Products?
How much product do we stock?
What product variety is necessary?
How do we win orders?
Where are our products in their life cycles?
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48. Strategic Quality Planning Supply Chain Strategy
Service?
How do we define service along the supply chain?
What do our customers want?
can we segment the supply chain?
Who are our customers?
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