Organizing for Quality AgendaAgenda  Review homework  Desksides Organizing for Quality  Lecture/discussion Chapter 1 Organizing for Quality Chapter 1 TQM Week 3  Week 4 Assignments Read - Ch 2 Presentations: Deming Crosby Taguchi Juran Shewhart Ishikawa Feigenbaum Tom Peters Shigeo Shingo

Organizing for Quality Chapter One

Organizing for Quality Organizing for quality  ISO 9000/QS 9000  Continuous improvement  Six sigma - DMAIC  TQM - PDSA  Quality circles

Organizing for Quality Concept of TQM  TQM foundation: Any product, process, or service can be improved. A successful organization is one that consciously seeks and exploits opportunities for improvement at all levels. The load bearing structure is customer satisfaction. The watchword is continuous improvement.

Organizing for Quality What must organizations do for quality 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

Organizing for Quality Transition to quality culture at Xerox Transition Team Training Senior Management Behavior Xerox Culture Change Tools and Processes Communication Reward and Recognition

Organizing for Quality

Allaire’s approach

Organizing for Quality Managing-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.

Organizing for Quality IBM’s market driven quality program Leadership Vision Involvement Policy Management Systems Information Planning Human resource Quality assurance Quality Results Improved quality Lower costs Customer Satisfaction Market Success “Driver”System Measures of Progress Goal

Organizing for Quality IBM’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.”

Organizing for Quality What are some of the steps 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).

Organizing for Quality Communicating quality requirements  Examples of formal communication: Quality policy statement Quality manuals ISO 9000 quality standards  Examples of informal communication: Word of mouth Management actions

Organizing for Quality Quality - basic beliefs Ford Quality is job one; t here'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” CaterpillarStrong dealer support; 24-hour spare parts support around the world McDonaldsFast service, consistent quality SprintYou can hear a pin drop

Quality - basic beliefs  Lion Apparel - Continuous Improvement is a way of life at Lion.  Sager Electronics - our constant goal is to ensure that the services provided meet or exceed our customers' expectations.  Williams Advanced Materials - we are dedicated to providing ever improving exceptional products and services, and world-leading technologies. Organizing for Quality

Quality 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.”

Organizing for Quality Other 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.”

Organizing for Quality Other examples  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”.

Organizing for Quality Identifying and resolving quality problems  Quality problems transcend individual and functional boundaries. Companies need multi-discipline problem solving.

Organizing for Quality Organizational approaches for multidiscipline 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

Organizing for Quality Coordinating quality requirements with 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.

Organizing for Quality Strategies for supplier relationships

Organizing for Quality Managing 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.

Organizing for Quality 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.

Organizing for Quality Establishing a quality minded culture  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

Organizing for Quality 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 Quality Quality Improvement Teams Organizing for Quality

Roles for QI teams  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.

Organizing for Quality Types of quality improvement teams  Project teams  Quality circles

Organizing for Quality Project 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

Organizing for Quality Quality 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

Organizing for Quality Implementing 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

Organizing for Quality Implementation  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

Organizing for Quality Concurrent engineering project teams  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.