Quality Management MNGT 420 Global Supply Chain Quality and International Quality Standards Chapter 3a Dr. Nitin Kumar Upadhye / Dr. Babeet Gupta

Chapter Overview Managing Quality for the Multinational Firm (MNF) Quality Improvement: The American Way The Malcolm Baldrige National Quality Award

Managing Quality for the MNF Slide 1 of 4 Mechanisms That Firms Use In Globalizing Licensing By licensing, a U.S. corporation can allow foreign firms to sell in restricted markets while using the design of the original designer. Partnering Firms also seek international markets through joint ventures or partnering. Globalization Globalization means that a firm fundamentally changes the nature of its business by establishing production and marketing facilities in foreign countries. We refer to these firms as multinational corporations.

Managing Quality for the MNF Slide 2 of 4 Global Factors That Affect Quality-Related Decisions Task Environment Physical Environment Quality Management Social Environment Figure 3.3 Important

Managing Quality for the MNF Slide 3 of 4 Exporting Another means of entering international markets is to not globalize but become an exporter. Exporters produce their products and ship them internationally. Firms that are entrepreneurial in nature and plan their exports effectively tend to have higher quality For exporting firms, quality leads to lower price and greater export success

Managing Quality for the MNF Slide 4 of 4 Export Quality Model Firm Characteristics Product Strategy Performance Low Price Entrepreneurship High Quality Export Planning Standardization Export Success Promotion Important

Malcolm Baldrige National Quality Award Slide 1 of 10 The award is open to small (less than 500 employees) and large firms (more than 500 employees) in the manufacturing and service sectors. It is not open to public-sector and not-for-profit organizations. There can be only two winners per category each year, which limits the number of yearly awards to six. Additional information on the Baldrige award www.NIST.gov Important

Malcolm Baldrige National Quality Award Slide 2 of 10 Key Characteristics of the MBNQA The criteria focus on business results. Companies must show outstanding results in a variety of areas to win. The Baldrige criteria are nonprescriptive and adaptive. Although the focus on the Baldrige is on results, the means for obtaining these results are not prescribed. The criteria support company-wide alignment of goals and processes. The criteria permit goal-based diagnosis. The criteria and scoring guidelines provide assessment dimensions. Important

Malcolm Baldrige National Quality Award Slide 3 of 10 Organizational Profile: Environment, Relationships and Challenges Baldrige Award Framework Figure 3.5 2 Strategic planning 5 HR develop. & management 7 Business results 1 Leadership 3 Customer and market focus 6 Process management 4 Information and analysis Important

Malcolm Baldrige National Quality Award Slide 4 of 10 MBNQA Categories Category 1 Award criteria for leadership. The extent to which top management is involved in creating and reinforcing goals, values, directions, customer involvement and other issues. Category 2 Focuses on how the company establishes strategic directions and how it sets it tactical actions plans to implement the strategic plans. Concerned with methods, measures, deployment, and evaluation.

Malcolm Baldrige National Quality Award Slide 5 of 10 MBNQA Categories Category 3 Addresses the customer and market focus. The processes for listening to and learning from customers and markets must be evaluated, improved, and kept current. Category 4 Information and analysis relates to the firm’s selection, management, and use of information to support company processes and to improve firm performance.

Malcolm Baldrige National Quality Award Slide 6 of 10 MBNQA Categories Category 5 Deals with human resources focus. The workforce is to be enabled to develop and use its full potential, aligned with company objectives. Category 6 Examines the key aspects of process management. This includes customer-focus in design, delivery process design for services and products, support processes, and processes relating to partners.

Malcolm Baldrige National Quality Award Slide 7 of 10 MBNQA Categories Category 7 Documents the results of the other six categories and requires a series of tables and graphs that demonstrate the operational and business results of the firm. EXAMPLE: PVHS: MBNQA Recipient https://www.youtube.com/watch?v=kHWDc7D9G-E&list=PLC494E149FABBCCE7

Malcolm Baldrige National Quality Award Slide 8 of 10 The Baldrige Process The first step is eligibility determination. The completed application is sent to the National Institute of Standards and Technology (NIST). The application is reviewed by examiners and then by judges, who will determine whether the application will be given a consensus score by the examiners. Firms that are granted Baldrige site visits sometimes refer to themselves as “Baldrige Qualified.” The site visit consists of a team of 4 to 6 examiners visiting a company over a period not to exceed one week. One of the most important outcomes is examiner feedback. Important

Malcolm Baldrige National Quality Award Slide 9 of 10 Baldrige Evaluation Process Figure 3.6 Receive applications Stage 2 Consensus review Stage 3 Site visit review Stage 1 Independent review Select for site visit? Judges Review and recommend winners Judges Yes No No Yes Select for consensus review? Judges Feedback report to applicant Feedback report to applicant Feedback report Yes No Feedback report to applicant

Malcolm Baldrige National Quality Award Slide 10 of 10 Feedback Report Scoring summary is a synthesis of the most important strengths and areas for improvement. Individual scoring range provides insight concerning the relative areas of strength and areas for improvement. Scoring distribution provides the percentage of applicants for a particular year scoring in each of the eight scoring bands. Examiner comments give feedback concerning the organization.

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