M3: Managing for Quality and high performance

Module No. Topic

3 Managing for Quality and High Performance

3.2Customer involvement and focus

3.3Designing product and process for quality

3.4Developing supplier partnership, customer services

3.5Employee involvement and empowerment

3.6Quality at the source

3.7Quality circles, TQM models, quality standards and awards

3.8ISO 9001 – 2000, ISO 14000, QS 9000

3.9Deming Prize, Malcolm Baldrige Quality awards

3.10European quality awards

3.11Designing high performance work teams, training, team work and cooperation, compensation and recognition

3.12Overcoming resistance to change, employee motivation and performance

3.13Appraisal for achieving high quality performance.

3.14Case

Leadership

James MacGregor Burns

One who instills purposes,not one who controls by brute force

Daimler Chrysler’s CEO Bob Eton

“….Someone who can take a group of people to a place they don’t think they can go

Total Quality Mgmt Excellence Model

TQMEX Model• Is an integrated approach for managing quality• Used in order to support the transition to systems

management• Ongoing process of CI• Begins when the company commits itself to managing by

quality• The model illustrates the elements that form the basis of

TQM Philosophy• Thus the TQMEX model includes universally applicable

step-by-step guidelines by including the practices in TQM represented in the block diagram ( Fig3.1)

Total Quality Mgmt Excellence Model

5S

TQM

BPR

QCC

QMS ( ISO)

TPM

Fig 3.1 : TQMEX Model

OPERATIONS MANAGEMENT

QUALITY MANAGEMENT

Japanese 5S Practice

Business Process Reengineering

Quality Control Circles

Quality Mgmt Systems

Total Productive Mgmt

Japanese 5S practice

• Key to Total Quality Environment

• Technique used to establish and maintain quality environment in an organization

• Physical environment / Thinking environment

Japanese English Meaning

SEIRI Structurise Organize

SEITON Systemize Neatness

SEISO Sanitize Cleaning

SEIKETSU Standardize Stds

SHITSUKE Self - Discipline

Discipline

5S Practice

• Key to Total Quality environment• Technique used to establish and maintain quality environment in an

organization• Physical environment improves thinking process1. Seiri:Separating things which are necessaryNecessary vs unnecessaryConvenient locationAreas:• Work in process(WIP)• Unnecessary tools• Unused machinery• Defective products• Papers and documents• Stratify, differentiate between N&W. One is best.

5S Practice….2. Seiton:Orderly arrangement ………. To use when requiredNeatness …… increases efficiencyWays:s• Analyse the status quo• Decide where things belong• Decide how things should be put away• Obey the put away rules3. Seiso : Workplace cleanliness4. SeiketsuIndividual cleanliness and environmentEmphasize visual management and standardization

5S practice….

5. Shitsuke

Instill it is a habit

Discipline a process of repetition and practice

Instill it as a value

Quality Management Systems (QMS)

The International Standards Organization – ISO

( class presentation by student group)

Total Productive Management (TPM)

Note: This topic will be a separate lecture

Core concepts of TQM

• Quality for profit• Right first time• Acceptable Quality Levels• Cost of quality : 4 categories

1. Failure Costs

2. Appraisal Costs

3. Prevention Costs

4. Hidden Costs

TQM – 5 Pillars

Product

Process

System

People

Leadership

Fig 3.2 Five Pillars of TQM

Hard Aspects

Confluence

Soft AspectsSuitability

Effectiveness

Characteristics of Quality Leaders

• Priority Attention to External and Internal Customers• Empower Subordinates• Improvement than maintenance• Prevention than Cure• Coordination than Competition among Depts• Training & Guide than Directing and Controlling• Learn from problems• Communication –Top to lower Mgt- vice versa• Commitment to Quality• Suppliers Based Quality not Price• Organization Structure – Quality• Encourage Team Work

7 Habits of Highly Effective People By Dr. Stephen R.Covey

•Habit 1:-Be Proactive (“You are the Creator & In charge)

Reactive Proactive

There is nothing I can do Let’s Look at our alternatives

She makes me so mad I control my feelings

I have to do that. I will choose proper response

I can’t I choose

I must I prefer

Things are getting worse What initiative can we use ?

Habit-2 Begin with the end in mind

•Mental creation & Physical creation=Leadership & Management

Based on Personal philosophyHonestyPositive AttitudeRemember the peopleSense of humorDo not fear mistakesEncourage SubordinatesRead Books for leadership Developments

Habits-3 Put first Things First (Self Management)

Management of Time

•Urgent •Not Urgent

I II

IVIII

Imp

ort

an

tN

ot I

mpo

rtan

t

Crises,Firefight

Pressing Problems

Deadline Driven Projects(KEY ROLES)

Prevention,Preventive &

Corrective actions

Relationship Building

New Opportunities

(YOUR OBJECTIVE)

Interruptions,Pressing Matters

Some Mails,Calls,Reports

Popular Activities

Busy Work

Time Wasters

Pleasant Activities

(SCHEDULE TIME) (WEEKLY SCHEDULE)

Habit-4 Think Win Win (Benefit all Human Interactions)

Four step process:

See the Problem From Others View.

Identify Key Issues.

Determine and Analyze Results.

Seek New Options To Achieve Results.

Habit-5 Seek First to understand, then to be Understood

o Empathic Listening to what others SAY

o Understand Person’s Emotions and Intellectual, Credit or Character.

Habit-6 Synergy (Whole >Parts)

• Team Achieves More Than Individual Efforts

• Habits 5 Integrates towards Habits 6

• Coordination & Understanding Reaches Better Solutions.

Habit-7 Sharpen the Saw (Renewal)

Four Dimensions personal Nature Physical –Good nutrition,Rest &Relaxation Spiritual- Prayer,Meditation &Spiritual Reading Mental – Reading,seminars, & Writings Social/Emotional –Our Relationship with others.

Ethics

• Ethics is body of principles of human conduct that govern the behavior of individuals & organizations.

• Ethics Means something different to Different People, especially International Workforce & Vary Culture.

• Causes of unethical behaviour in organization :1. Favors their own interests

2. Sales – through false advertising

3. Individuals Abuse their position & power

4. Favors short term results

5. Decisions based on Assumptions

Ethics Management Program

An ethics management program needs to address pressure,

Opportunity and Attitude .

Three Steps in EMP:

• Appraisal -The analysis of the costs associated

with unethical behaviour.

• Prevention - The development of a system that will

minimize costs.

•Promotion - The continuous advertising of ethical behaviour

in order to develop an Organizational Culture.

What must organizations do for What must organizations do for quality to succeedquality to succeed

“Organizations must adopt a cultural change that appreciates the primary need to meet customer requirements, implements a management philosophy that acknowledges this emphasis, encourages employee involvement, and embraces the ethic of continuous improvement.”

International Economic Conference Board Report: May 1990

Transition to quality culture at XeroxTransition to quality culture at Xerox

TransitionTeam

TrainingSenior

ManagementBehavior

XeroxCultureChange

Tools andProcesses

CommunicationReward andRecognition

Allaire’s approachAllaire’s approach

Managing-by-process principlesManaging-by-process principles

1. Make all decision and perform all actions within the guidelines of the "what to's" of the core business processes and their impact on other core processes.

2. Establish owners for all core business processes and sub-processes.3. Designate these owners as responsible for the maintenance and use of that

process, with their reward tied to the successful functioning of that process for all Xerox personnel.

4. Empower the owners of the process with the responsibility for continuously improving those core processes, and reengineering them when necessary.

5. Constrain core process and sub-process owners from making changes to their core processes that may affect other core processes that are owned by other managers.

6. Designate responsibility for a change in a core process to the highest-level owner of a core process that is being changed because core sub-processes are being changed by lower-level process owners.

IBM’s market driven quality programIBM’s market driven quality program

LeadershipVisionInvolvementPolicyManagement

SystemsInformationPlanningHuman resourceQuality assurance

Quality ResultsImproved qualityLower costs

Cu

stom

er

Satisfa

ction

MarketSuccess

“Driver” SystemMeasures

of Progress Goal

IBM’s “new” CEQ initiativeIBM’s “new” CEQ initiative

“CEQ aims to instill a commitment in organizations to embrace quality as a guiding principle that touches every phase of the software development and deployment cycle.

Organizations must build quality in, not treat it as an afterthought.

Every individual in an organization, from the business analyst to the IT operator, can improve application quality through vigilance and a shared sense of responsibility for business and customer success.”

What are some of the steps What are some of the steps organizations must take?organizations must take?

• Effectively develop and communicate quality policy, procedures and requirements across all company functions.

• Mobilize resources to solve quality-related problems.• Effectively coordinate quality requirements with

suppliers. (feed forward)• Maintain direct contact with customers (feedback).

Communicating quality Communicating quality requirementsrequirements

• Examples of formal communication:– Quality Policy Statement– Quality Manuals– ISO 9000 quality standards

• Examples of informal communication:– Word of mouth– Management actions

Quality - basic beliefsQuality - basic beliefs

Ford Quality is job one; there's a Ford in your future

Chrysler "If you find a better car, buy it!"  (Spoken by Lee Iacocca)

Serta “We make the world's best mattress”

Caterpillar Strong dealer support; 24-hour spare parts support around the world

McDonalds Fast service, consistent quality

Quality policy statementQuality policy statement

• Most companies today have a written quality policy or mission statement

– For example, “It is the established policy and intention of this company to provide its customers with products which conform to customer requirements and are delivered on time. This will be ensured through a defined quality program as detailed in the company quality manual.”

• Some companies rely on verbal quality policies. for example,

– “our goal is to ensure customer satisfaction and minimize rejects.”

Other examplesOther examples

• Goodyear: “our mission is constant improvement in products and services to meet our customers’ needs. This is the only means to business success for Goodyear and prosperity for its investors and employees.”

• Motorola - “all employees at Motorola must consistently strive for a six sigma target.”

• Motorola – “Doing the right thing.  Every day.  No excuses.”The bottom line:• Organizations must demonstrate what Deming termed

“constancy of purpose”.

Identifying and resolving quality Identifying and resolving quality problemsproblems

• Quality problems transcend individual and functional boundaries. Companies need multi-discipline problem solving.

Organizational approaches for Organizational approaches for multidiscipline problem solvingmultidiscipline problem solving

• Form cross functional teams.– Quality improvement teams– Quality circles

• Adopt matrix versus functional organizational structure.

• Co-locate engineering resources to open communication channels.– Engineering technical centers/Centers of

expertise

Coordinating quality requirements Coordinating quality requirements with supplierswith suppliers

• Importance of supply chain management– Many quality problems are caused by

defective purchased material (Crosby 50%).– Suppliers often represent a large % of

manufacturing costs.

Strategies for supplier relationshipsStrategies for supplier relationships

Criteria Traditional Approach

Long Term Partnership

Philosophy "keep suppliers on their toes" "mutual dependence"

Supply base Large supply base Few suppliers - "single sourcing"

Contract length Often short term contracts Often long term contracts

Awarding contracts

Low cost bid Negotiated

Supplier costs Either company or supplier wins

Share cost savings (win-win)

Cooperation Cooperation as needed; company protects knowledge

Frequent joint problem solving

Quality Improvement Teams:Quality Improvement Teams: Roles for QI Roles for QI teamsteams

• In addition to solving quality problems, QI teams help:

• provide a means of participation for employees in quality decision-making.

• aid employee development: leadership, problem-solving skills.

• lead to quality awareness which is essential for organizational culture change.

Types of quality improvement Types of quality improvement teamsteams

• Project teams

• Quality circles

Principle’s of Customer & Supplier Partnership by Dr Kaoru Ishikawa

• Customer & Supplier are fully Responsible for Control for Quality.

• Customer & Supplier are Independent of each other.

• Customer’s must be given full Information about the raw material, semi finished products (or) services required.

• Clear Contract regarding Quality, Quantity, Price, Delivery Modes, Etc.

Principle’s of Customer & Supplier Partnership by Dr Kaoru Ishikawa

• Evaluation of Same Quality Standards by Both the Customers & Suppliers

• Problem Solving By Discussion

• Exchange Information & Feed Back

• Both Customer & Supplier do Business transaction w.r.t. END USER.

PARTNERING

• Long Term Commitment• Trust• Shared Vision

SOURCINGSoleMultipleSingle

SUPPLIER SELECTION BASED ON

• Quality Philosophy of the Customer• Stable Management• High Technical Standards With Future • Raw materials & Parts Meet Quality Std• Delivery as per Schedule• Effective Quality System• Record of Customer Satisfaction Credibility in

Industries

Supplier Rating

• Quality

• On Time delivery

• Service

• Internal Structure

• Customer Satisfaction

• Review Reports

Potential Pitfalls of Partnership

• Fear of Unknown Concept• Starting Early• Poor Communication• Impatience• Mistrust• Over dependency• Time & Resources

Project team characteristicsProject team characteristics

• Teams address key organizational issues• concurrent engineering• ISO 9000 implementation

• membership - generally mandatory• temporary in nature• participation is cross-functional• team leaders have varying degrees of authority

Quality circle characteristicsQuality circle characteristics

• Voluntary groups of 6-8 members• Quality circle teams are semi-permanent• Teams are from single functional department• Members have equal status and select their own

project• Minimum pressure to solve problems with a set

time frame

Implementing quality circlesImplementing quality circles

• Quality circles require top management support• Personal characteristics of facilitators are critical• Scope of project needs to be small enough to

be capably addressed by the team• Success of other teams has positive peer

pressure effect

ImplementationImplementation

• Japan- highly successful– Widely publicized quality circles– Product development teams

• U.S. - marginal success– Product development teams have succeeded

more so than quality circle teams

Concurrent engineering project Concurrent engineering project teamsteams

• Concurrent engineering teams are having success - examples: Boeing, Chrysler– a concurrent process carried out by a multi-

functional product development team.– intended to replace sequential development

process.– they avoid potential quality problems by

integrating upstream and downstream functions in the preliminary design phase.

Managing Human Resources & TQMManaging Human Resources & TQM

• Growing research indicates that TQM has not achieved its objectives due to human resource management (HRM) problems.

• Failures occur when management falls short in their efforts to adopt a corporate culture fully embracing TQM.

What makes TQM an HR problem?What makes TQM an HR problem?

• TQM requires employee development & employee cooperation.

• Thus, the task of top management is to:– provide workers with the necessary skills and

knowledge.– create a quality-minded culture among employees.

• A quality culture that:– nurtures high-trust relationships.– has a shared sense of commitment.– believes that continuous improvement is for the

common good.

Establishing a quality minded Establishing a quality minded cultureculture

• Formation of a quality minded culture is a human interaction issue.

• Therefore, quality management systems must provide:– channels of communication for product-quality

information among all concerned employees. – means of participation for employees so

employees feel they’re part of the system

Some HR challenges?Some HR challenges?

• Is company culture a subset of national culture?• Should companies encourage TQM participation

via monetary incentives?• Do workers want to be involved in the quality

management process - – Actually, some want to have input.– many others do not want any increased

responsibility.

Organizing for qualityOrganizing for quality

• ISO 9000/QS 9000• Continuous improvement• Six sigma - DMAIC• TQM – PDSA ( Plan, Do, Study, Act)• Quality circles

CMR IT- JESSY NAIR IV Sem – A & B ‘09

KEY ISSUES• Communication• Cross functional Cooperation• Team Work• Mutual understanding and trust• Customer focus• Policies and Procedures (Control)• Empowerment• Accountability

Continuous Improvement

Continuous improvement of processes, people, and product

CMR IT- JESSY NAIR IV Sem – A & B ‘09

THE ROAD TO QUALITY MANAGEMENT

QCInspection

QAStrategies for Effective QC

QM

Changing Work Habits to do the Right things Right the First time,

Everytime

Principles of TQM

The Principles of TQM are as follows: 1. Quality can and must be managed. 2. Everyone has a customer and is a supplier. 3. Processes, not people are the problem. 4. Every employee is responsible for quality. 5. Problems must be prevented, not just fixed. 6. Quality must be measured. 7. Quality improvements must be continuous. 8. The quality standard is defect free. 9. Goals are based on requirements, not negotiated. 10.Life cycle costs, not front end costs. 11.Management must be involved and lead. 12.Plan and organize for quality improvement