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)

Two: Quality and Global Competitiveness MAJOR TOPICS The Relationship between Quality and Competitiveness Cost of Poor Quality Competitiveness and the U.S. Economy Factors Inhibiting Competitiveness Comparisons of International Competitors Human Resources and Competitiveness

Two: Quality and Global Competitiveness (Continued) Characteristics of World-Class Organizations Management by Accounting, Antithesis of Total Quality U.S. Companies: Global Strengths and Weaknesses Quality Management Practices in Asian Countries.

Two: Quality and Global Competitiveness (Continued) The relationship between quality and competitiveness can be summarized as follows: In a modern global marketplace, quality is the key to competitiveness. The costs of poor quality include the following: waste, rejects, retesting, rework, customer returns, inspection, recalls, excessive overtime, pricing errors, billing errors, excessive turnover, premium freight costs, development cost of the failed product, field service costs, overdue receivables, handling complaints, expediting, system costs, planning delays, late paperwork, lack of follow-up, excess inventory, customer allowances, and unused capacity.

Two: Quality and Global Competitiveness (Continued) The United States came out of World War II as the only major industrialized nation with its manufacturing sector completely intact. Germany and Japan were devastated by damage during the war. They rebuilt their manufacturing bases on the assumption that to compete globally, they would have to produce goods of world-class quality. That strategy helped them recover and become world leaders in manufacturing. Several factors can inhibit competitiveness, including those related to business and government, family, and education.

Two: Quality and Global Competitiveness (Continued) When making comparisons among internationally competing countries, the following indicators are usually used: standard of living, trade and export growth, and manufacturing productivity. The most important key in maximizing competitiveness is the human resource. Following World War II, this was the only resource that Germany and Japan had to draw on. Consequently, they built economic systems that encourage private employers to make business decisions that emphasize improved productivity and quality, rather than price.