Quality Management for Organizational Excellence Lecture/Presentation Notes By: Dr. David L. Goetsch and Stanley Davis Based on the book Quality Management for Organizational Excellence (Sixth Edition)

Five: Partnering and Strategic Alliances MAJOR TOPICS Partnering or Strategic Alliances Innovative Alliances and Partnerships Internal Partnering Partnering with Suppliers Partnering with Customers Partnering with Potential Competitors Global Partnering Education and Business Partnerships

Five: Partnering and Strategic Alliances (Continued) Partnering means working together for mutual benefit. It involves pooling resources, sharing costs, and cooperating in ways that mutually benefit all parties involved in the partnership. Partnerships may be formed internally (among employees) and externally with suppliers, customers, and potential competitors. The purpose of partnering is to enhance competitiveness. The formation of partnerships should be a systematic process involving such steps as development of a partnering briefing, identification of potential partners, identification of key decision makers, implementation of the partnership.

Five: Partnering and Strategic Alliances (Continued) Internal partnering operates on three levels: management-to-employees, team-to-team partnerships, and employee-to-employee partnerships. The purpose of internal partnering is to harness the full potential of the workforce and focus it on the continuous improvement of quality. Internal partnering is also called employee involvement and employee empowerment. Successful internal partnering requires a supportive environment, structured mechanisms, and mutually supportive alliances.

Five: Partnering and Strategic Alliances (Continued) The goal of a supplier partnership is to create and maintain loyal, trusting relationships that will allow both partners to win while promoting the continuous improvement of quality, productivity, and competitiveness. The requirements for success in supplier partnerships include the following: supplier personnel should interact with employees who actually use their products, the price-only criteria in the buyer-supplier relationship should be eliminated, the quality of products delivered should be guaranteed by the supplier, the supplier should be proficient in JIT, and both parties should be capable of sharing information electronically.

Five: Partnering and Strategic Alliances (Continued) (The Goal of a Supplier Partnership Continued) Supplier partnerships typically develop in the following stages: uncertainty and tentativeness, short-term pressure, realization of the need for new approaches, adoption of new paradigms, awareness of potential, adoption of new values, and mature partnering.

Five: Partnering and Strategic Alliances (Continued) The rationale for forming customer partnerships is customer satisfaction. The best way to ensure customer satisfaction is to involve customers as partners in the product development process. Doing so is, in turn, the best way to ensure competitiveness. Customer-defined quality is a fundamental aspect of total quality.

Five: Partnering and Strategic Alliances (Continued) Small- and medium-sized enterprises or SMEs, even those that compete in the same markets, can benefit from partnering. The most widely practiced form of partnership among SMEs is the manufacturing network. A manufacturing network is a group of SMEs that cooperate in ways that enhance their quality, productivity, and competitiveness. Mutual need and interdependence are the characteristics that make manufacturing networks succeed. Widely practiced network activities include joint production, education and training, marketing, product development, technology transfer, and purchasing.

Five: Partnering and Strategic Alliances (Continued) Education and business partnerships are formed to help organizations continually improve their people and how well they interact with process technologies. Services provided include on-site customized training, workshops, seminars, technical assistance, and consulting.