Total Quality Management in Engineering Part II – Continues from the previous Slides Sir. Eng. R. L. Nkumbwa™ www.nkumbwa.weebly.com © 2010 Nkumbwa™. All Rights Reserved.

What to Measure Key Success Drivers Performance to Plan Profitability Operational performance Customer satisfaction Quality Employee satisfaction Partnering effectiveness Performance to Plan Milestones Dollars © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Leadership Key Business Drivers Employees Focus On: Operational changes first Numeric goals second © 2010 Nkumbwa™. All Rights Reserved.

Customer Satisfaction Sustaining high levels of satisfaction requires performing well from the customer’s point of view. © 2010 Nkumbwa™. All Rights Reserved.

This Means You win customers by successfully identifying their needs and requirements. You keep customers by managing relationships that keep them satisfied. © 2010 Nkumbwa™. All Rights Reserved.

Successful Organizations Nurture a customer-focused culture. Research customer needs. Maximize customer value with product and service features. Know what factors drive customer satisfaction. Systematically create positive customer relationships. Actively communicate and set clear expectations Get customer feedback and use it to improve. © 2010 Nkumbwa™. All Rights Reserved.

Links Leadership priorities drive customer satisfaction priorities. Customer needs drive : strategic planning work process design performance management priorities and improvements training activities personnel evaluations and incentive compensation quality initiatives © 2010 Nkumbwa™. All Rights Reserved.

Action Steps All senior managers dedicate one day a month getting feedback from customers. Use consumer research. Listen to complaints. Visit all “NOs” Survey customer satisfaction. Review customer satisfaction results monthly. Improve weak areas. © 2010 Nkumbwa™. All Rights Reserved.

What to Measure Customer Satisfaction Referral rates Product Relationship Warranty service Referral rates © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Listen to customers Respond Proactive approaches—never reactionary © 2010 Nkumbwa™. All Rights Reserved.

Performance Management Performance excellence demands that work processes be designed, managed, and improved with the customer in mind. © 2010 Nkumbwa™. All Rights Reserved.

This Means Design of work processes is driven by customer needs for speed, efficiency, and performance. Manage and control performance using results data. Improve performance with systematic approaches. © 2010 Nkumbwa™. All Rights Reserved.

Successful Organizations Strive for performance excellence. Control outcomes by managing work processes. Employees understand how their work contributes to company performance. Work processes have productivity measurements tracked over time. Reward employees to systematically improve work processes. © 2010 Nkumbwa™. All Rights Reserved.

Links Leadership priorities drive process improvement priorities. Strategic plans drive process improvement priorities. Key success measurements drive process performance measurements. Customer expectations drives performance standards. © 2010 Nkumbwa™. All Rights Reserved.

Action Steps Establish a system for process improvement. Employees’ teams define how their work contributes to company performance. Get feedback on process performance from customer satisfaction surveys. Review work performance and improvements monthly. © 2010 Nkumbwa™. All Rights Reserved.

What to Measure Work process performance measurements are different for each process and link to key success drivers. Typical process measures: Cycle time Warranty service time On-time closings Sales conversion ratio Sales cancellation rate Advertising cost © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Focus on key success drivers. Performance measurements are simple and useful. © 2010 Nkumbwa™. All Rights Reserved.

Human Resources The human resource system must develop the full potential of employees and drive the right behaviors in support of company performance and learning objectives. © 2010 Nkumbwa™. All Rights Reserved.

This Means Development and training supports the future vision of the company. © 2010 Nkumbwa™. All Rights Reserved.

Successful Organizations Have a satisfying and productive teamwork culture. Empower employees and teams. Performance evaluations and bonuses are aligned with company priorities. Every employee has a development plan. Have a training budget. Have a prevention-based approach to safety. © 2010 Nkumbwa™. All Rights Reserved.

Links Leadership priorities and key success drivers define employee performance evaluation criteria. Strategic plans drive HR development of organizational competencies. HR training drives work process performance improvements. © 2010 Nkumbwa™. All Rights Reserved.

Action Steps Implement a “Reward & Recognition” Program. Make a greater percentage (up to 20%) of total compensation “at risk.” Develop a training curriculum for each position in the company. Create a development plan for every employee. © 2010 Nkumbwa™. All Rights Reserved.

What to Measure Employee Satisfaction Turnover Absenteeism Dollars spent on education and training Training effectiveness © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Employees understand what is required of them to be successful. They are fairly compensated and recognized for their efforts. © 2010 Nkumbwa™. All Rights Reserved.

Product Quality Systematic quality management approaches are necessary to ensure high performing, trouble-free products and services. © 2010 Nkumbwa™. All Rights Reserved.

This Means Production processes must have the capability to do it right the first time, every time. Quality assurance controls the production process, verifies results, and prevents problems. © 2010 Nkumbwa™. All Rights Reserved.

Successful Organizations Proactively manage resources for quality results Spell out responsibilities with the trades Inspect Attack recurring problems Have warranty tracking systems Measure quality performance and track trends © 2010 Nkumbwa™. All Rights Reserved.

Links Customer expectations drive quality standards. HR develops workforce capabilities to meet quality standards. Strategic planning drives quality improvement priorities. © 2010 Nkumbwa™. All Rights Reserved.

Action Steps Collaborate to: Develop quality standards Prepare inspection checklists Quality performance measures Use the improvement system to attack defects. Incorporate product and service quality into the customer survey. Have a system for quality assurance. © 2010 Nkumbwa™. All Rights Reserved.

What to Measure Customer satisfaction Inspection items Final QA items Zero defect products Warranty calls © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Collaboration with various functions Well defined quality assurance system Relentless attack on root causes of defects © 2010 Nkumbwa™. All Rights Reserved.

Supplier Partnerships Partnering approaches are essential for high performance relationships with suppliers. © 2010 Nkumbwa™. All Rights Reserved.

This Means Manufacturers reach out beyond their organizational boundaries to leverage the capabilities of suppliers to achieve the company’s performance goals. © 2010 Nkumbwa™. All Rights Reserved.

Successful Organizations Partner with a win-win attitude. Select suppliers that have compatible values and goals. Develop suppliers into the kind of companies they want as partners. Integrate partners into company activities. Measure supplier performance. © 2010 Nkumbwa™. All Rights Reserved.

Links Leadership drive partnering priorities. Company values, key success drivers, and quality expectations drive supplier performance measures. © 2010 Nkumbwa™. All Rights Reserved.

Action Steps Establish a supplier council Develop report cards: Supplier performance Actively involve suppliers in Strategic planning Product design Material selection QC system development Work scheduling © 2010 Nkumbwa™. All Rights Reserved.

What to Measure Quality inspection performance Supplier satisfaction Customer satisfaction with supplier Prompt invoice payment Report card scores © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Values alignment Performance expectations are clearly defined and understood Win-win relationships © 2010 Nkumbwa™. All Rights Reserved.

Results High performance business practices are effective only if they translate into business benefits. © 2010 Nkumbwa™. All Rights Reserved.

This Means In the final analysis...what was accomplished? © 2010 Nkumbwa™. All Rights Reserved.

Successful Organizations Track key results monthly. Take corrective action for problem areas. © 2010 Nkumbwa™. All Rights Reserved.

Links Results are the report cards for each area of the business management system. © 2010 Nkumbwa™. All Rights Reserved.

Action Steps Develop a company scorecard. Communicate data in simple graphs. © 2010 Nkumbwa™. All Rights Reserved.

What to Measure A few key measures in each category: Customer satisfaction Financial results Operational measures Product/Service quality Employee satisfaction Public responsibility (optional) © 2010 Nkumbwa™. All Rights Reserved.

Critical Success Factors Results focused on key success drivers © 2010 Nkumbwa™. All Rights Reserved.

Launching a Formal Quality Management Initiative © 2010 Nkumbwa™. All Rights Reserved.

KEY ELEMENTS OF A QUALITY INITIATIVE Define the Vision, Mission Create the Culture Organize, Formalize the Initiative Select, Learn Process Improvement Method Focus on Customers Develop Great People Build Relationships with Business Partners Measure Everything © 2010 Nkumbwa™. All Rights Reserved.

CREATE THE CULTURE Communicate Actively, Relentlessly Hire, Promote the Right People Manage Performance around Culture Pay for Support of Culture Measure what’s Important Celebrate Successes © 2010 Nkumbwa™. All Rights Reserved.

ORGANIZE AND FORMALIZE THE INITIATIVE Select a Leader - “Quality Director” Establish a Quality Council Identify Improvement Priorities Form Improvement Teams Establish Approval, Reporting Mechanism © 2010 Nkumbwa™. All Rights Reserved.

SELECT PROCESS IMPROVEMENT METHOD It’s not just about Product Quality - Process Improvement is Key Many Methods Available Forming Training Teams Team Facilitators Institutionalize Improvement Process Establish Reporting Processes Focus on Implementation © 2010 Nkumbwa™. All Rights Reserved.