1.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 1 - 14- 1 Chapter 4 Strategic Quality Planning

2.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 2  Strategic Quality Planning Chapter 4  Strategy Content  The importance of time in quality improvement  Leadership for quality  Quality and ethics  Quality as a strategy  Quality strategy process  Deploying quality  Does quality lead to better business results?  Supply chain strategy

3.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 3 Strategic Quality Planning Strategy Content Quality improvement involves identifying potential areas for improvement and planning the implementation of projects and improvements

4.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 4 Strategic Quality Planning The importance of time in quality improvement There are two aspects of time:  The time it takes to achieve business goals as a result of quality  The speed at which companies improve

5.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 5 Strategic Quality Planning The importance of time in quality improvement When goals are set, one of three things will occur: 1. People will achieve the goals and incur positive results 2. People will distort the data 3. People will distort the system

6.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 6 Strategic Quality Planning Leadership for quality Leadership is the process by which a leader influences a group to move towards the attainment of superordinate goals.

7.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 7 Strategic Quality Planning Leadership for quality For followers to have power, leadership must share power. As a result leadership is about the sharing of power.

8.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 8 Strategic Quality Planning Leadership for quality This power takes many forms:  The power of expertise  Reward power  Coercive power  Referent power  Legitimate power

9.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 9 Strategic Quality Planning Quality and Ethics Quality appears to be good business Quality is also good ethics “We build good ships. At a profit if we can, at a loss if we must. But, we build good ships”

10.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 10 Strategic Quality Planning Quality as a strategy  Cost of Quality  PAF Paradigm  Prevention Costs  Appraisal Costs  Failure Costs

11.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 11 Strategic Quality Planning Quality as a strategy Failure Costs  Internal failure costs  External failure costs

12.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 12 Strategic Quality Planning Quality as a strategy  Differentiation through quality  Focus through quality  Quality as a core competency

13.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 13 Strategic Quality Planning Quality Strategy Process The Forced Choice Model 1. Statement of the mission 2. Interrelated financial and non- financial objectives 3. Statement of strengths and weaknesses 4. Forecast of operations

14.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 14 Strategic Quality Planning Quality Strategy Process The Forced Choice Model 5. Major future operations 6. Broad economic Assumptions 7. Key government/regulatory issues 8. Major technological forces

15.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 15 Strategic Quality Planning Quality Strategy Process The Forced Choice Model 9. Significant marketing opportunities/threats 10. Explicit competitor strategies for each competitor 11. Generating Strategic options

16.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 16 Strategic Quality Planning Deploying Quality Hoshin Kanri or Policy Deployment  The Company develops a 3 - 5 year plan  The Senior Executives develop the current years objectives.

17.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 17 Strategic Quality Planning Deploying Quality Hoshin Kanri or Policy Deployment Catchball occurs  The process is interactive  Teams report up  Management delivers feedback

18.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 18 Strategic Quality Planning Does Quality Lead to Better Business Results? Quality and  Price Cost Productivity Profitability Environment

19.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 19 Strategic Quality Planning Does Quality Lead to Better Business Results? Quality and  Price  Cost Productivity Profitability Environment

20.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 20 Strategic Quality Planning Does Quality Lead to Better Business Results? Quality and  Price  Cost  Productivity Profitability Environment

21.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 21 Strategic Quality Planning Does Quality Lead to Better Business Results? Quality and  Price  Cost  Productivity  Profitability Environment

22.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 22 Strategic Quality Planning Does Quality Lead to Better Business Results? Quality and  Price  Cost  Productivity  Profitability  Environment

23.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 23 Strategic Quality Planning Supply Chain Strategy Logistics?  When shall we ship?  What mode of transportation shall we use?  How do we optimize our shipping practices?

24.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 24 Strategic Quality Planning Supply Chain Strategy Suppliers?  Who are our preferred suppliers?  What is our process for supplier selection?  How do we develop suppliers?  How do we link with our suppliers?  Do we source globally?

25.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 25 Strategic Quality Planning Supply Chain Strategy Inventory management?  Where do we optimally store inventory  How much? How long?  Do we have perishable stock?  Do we carry safety stock?  ARE we maintaining good levels of service?

26.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 26 Strategic Quality Planning Supply Chain Strategy Products?  How much product do we stock?  What product variety is necessary?  How do we win orders?  Where are our products in their life cycles?

27.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 27 Strategic Quality Planning Supply Chain Strategy Service?  How do we define service along the supply chain?  What do our customers want?  can we segment the supply chain?  Who are our customers?

28.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4- 28 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.