1. Total Quality Management BUS 3 – 142 Strategic Quality Management Week of Feb 7, 2011

2. Page 2 2 Case 1-2: Granite Rock Company, page 29

3. Page 3 3 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

4. Page 4 4 Deming’s “Plan-Do-Check-Act” "Continuous improvement is better than delayed perfection." - Mark Twain

5. Page 5 5 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 –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

6. Page 6 6 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

7. Page 7 7 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

8. Page 8 8 Leadership Skills (Table 4-1) * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

9. Page 9 9 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.

10. Page 10 10 Failure Costs (Table 4-4) * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

11. Page 11 11 Appraisal Costs (Table 4-3) * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

12. Page 12 12 Costs of Prevention (Table 4-2) * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

13. Page 13 13 Quality Cost Model (Conceptual) Balances Prevention Costs and Failure Costs. Can be useful in some cases, but NOT in matters of Safety or other risk to Human Life Annual Cost ($) failure costs Prevention / appraisal costs total cost CTmin Degree of Nonconformance

14. Page 14 14 Hoshin Planning

15. Page 15 15 Hoshin Planning

16. Page 16 16 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 –Measure against objective standards  Yields  Cycle time  Inventory  Profit