Presentation on theme: "ENGM 620: Quality Management"— Presentation transcript:
1 ENGM 620: Quality Management Session Four – 18 September 2012Quality and Strategy
2 Mission & StrategyDef: The corporate mission outlines a firm’s values, intended markets and product, broad goals and objectives, core competencies, and strategic capabilities.Def: The corporate strategy states how a firm will achieve its goals and objectives
3 What is Strategy? Distinguishing strategy from tactics: Strategy is the overall plan for deploying resources to establish a favorable position.Tactic is a scheme for a specific maneuver.Characteristics of strategic decisions:Important.Involve a significant commitment of resources.Not easily reversible.
4 Sources of Competitive Advantage COSTADVANTAGESimilar productat lower costCOMPETITIVEADVANTAGEPrice premiumDifferentiation through qualityFocus through qualityQuality as a core competencyfrom unique productDIFFERENTIATIONADVANTAGE6
5 The Impact of Quality on Profitability ROI (%) Relative Price Relative Direct CostRelative product qualityLow 33% % HighRelative product qualityLow 33% % HighRelative product qualityLow 33% % HighLow 25% % HighRelative market shareLow 25% % HighRelative market shareLow 25% % HighRelative market shareConclusion: Increases in quality add more to price then they do to cost.34
6 Why is leadership crucial? When goals are set, one of three things will occur:People will achieve the goals and incur positive resultsPeople will distort the dataPeople will distort the systemFrom the textbook…
7 Effectiveness and Efficiency LeadersDoing Right ThingsIneffectiveEffectiveManagersDoing Things RightDeath(fast)Success(slow)Survival
9 Leading Practices (Leaders) They create a strategic vision and clear quality values that serve as a basis for business decisions at all levels of the organization.They set high expectations.They demonstrate substantial personal commitment and involvement in quality, often in a missionary-like fashion.They integrate quality values into daily leadership and management.They sustain an environment for quality excellence.Leadership is the process by which a leader influences a group to move towards the attainment of superordinate goals.
10 Power The many forms include: The power of expertise Reward power Coercive powerReferent powerLegitimate powerFor followers to have power, leadership must share power. As a result leadership is about the sharing of power.
12 DiscussionWhat are some of the ways leaders resolve conflict in organizations? Which of these seem to be more effective?Video – Stanford Executive Briefing, Implementing Strategy with Jennifer Chatman, edited to 15 minutesnorms
13 Costs of Quality Prevention Costs Appraisal Costs Failure Costs Failure costs – internal and external
17 One of the Tools Competitive Analysis SWOT Strengths Weaknesses OpportunitiesThreats
18 MacroprocessesInspectCustomerJurananatomy of macroprocess does not match that of the functional organizationFunctional goals often at a heavy price of macroprocessThere should be a clear responsibility for macroprocess
20 Hoshin Kanri or Policy Deployment The Company develops a year planThe Senior Executives develop the current years objectives.Catchball occursThe process is interactiveTeams report upManagement delivers feedbackHoshin is Japanese for a compass, a course, a policy, or a planKanri refers to management controlCatchballdescribes the interactive nature of the Hoshin planning processinvolves reporting from teams and feedback from management
21 Leading Practices (Strategic) Top management and employees all actively participate in the planning process.They customer wants and needs to drive the strategy.They involve suppliers in the strategic planning process.They have well-established feedback systems for continuous measurement and re-evaluation of the planning process.
22 Best (Better?) Practices Control the quality and operational performance of key processes used to produce and deliver productsIdentify root causes of variation, make corrections, verify resultsContinuously improve processes to achieve better quality, cycle time, and performanceSet “stretch goals” and make extensive use of benchmarking and reengineering
23 Strategy, Quality, and the Supply Chain Logistics?When shall we ship?What mode of transportation shall we use?How do we optimize our shipping practices?
24 Strategy, Quality, and the Supply Chain 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?
25 Strategy, Quality, and the Supply Chain Inventory management?Where do we optimally store inventoryHow much? How long?Do we have perishable stock?Do we carry safety stock?ARE we maintaining good levels of service?
26 DiscussionWhy might the forced choice model be useful for companies inexperienced in strategic planning?Video – Stanford Executive Briefing, Implementing Strategy with Jennifer Chatman, edited to 15 minutesnorms
27 Discussion What is the concept of catchball? Video – Stanford Executive Briefing, Implementing Strategy with Jennifer Chatman, edited to 15 minutesnorms
28 DiscussionJuran argues for both incremental improvements and breakthrough thinking in the strategic plan. Do you agree?Video – Stanford Executive Briefing, Implementing Strategy with Jennifer Chatman, edited to 15 minutesnorms