1. Strategic Quality Planning
By Taylor Ellis-Sherinian

2. Strategic Quality Planning Overview
What is Strategic Quality Planning
Brainstorming Exercise
What is a Strategic Quality Plan
How is it developed and implemented
How does it work
Real World Example
Strategic Quality Plan Practice Exercise

3. Strategic Planning
The process in which an organization will identify its business strategies.
Once an organization has defined its strategy, the organization must devise and develop a plan to implement its strategy.
Strategic planning is the process that organizations will use to identify its strategy or strategies. With a strategy identified, the organization then needs to develop and devise a plan on how it will achieve and maintain this strategy.
Think of the strategy as a goal. What does the organization want to do? Does it want to manufacture high quality parts or does it want to improve customer satisfaction? Now that a goal (strategy) has been defined, how will the organization obtain this goal? A plan must be developed that will enable an organization to take the necessary steps towards achieving the goal. The plan provides direction and understanding to the organization of how it will achieve the strategy.

4. Strategic Quality Planning
The process in which an organization will identify its business strategies.
A major part in Strategic Quality Planning (SQP) is emphasizing quality improvement in the process as the organization works towards its strategy.
The difference between strategic planning and strategic quality planning is the emphasis on improving quality.
Strategic Quality Planning, often referred to as SQP, is the process in which an organization will define business strategy/goals. These strategy/goals include goals to improve quality and a plan with steps that need to be implement in the process to achieve the organizations strategy/goals.
David A Garvin stated, “…strategic quality plans are the glue holding together an organization’s quality improvement efforts.”

5. Strategic Quality Planning should…
Identify potential improvements
Prioritize potential areas for improvement
Plan how improvements can be made to achieve business strategies that improve quality
Dr. S Thomas Foster in his book Managing Quality: Integrating the Supply Chain 4 Edition, teaches that quality improvements involve identifying potential improvements, prioritizing potential area for improvement, and planning the implementation of projects and improvements. (Foster 102)
In identifying these areas and topics an organization will determine ideas and direction for what critical steps should be focused on or improved to help the entire process improve quality.
Every process can be improved. It is essential that the SQP identifies potential improvements, prioritize potential areas for improvement, and plans how improvements can be made to achieve business strategies that improve quality.

6. Brainstorming Exercise
Mind Map
Taking a single idea and writing as many concepts that come to mind in response to the initial concept.
Create your own Mind Map of a current process in your department or in the organization that you feel can be improved.
Mind mapping is a great brainstorming exercise to get everyone looking for areas of improvement. Every process can be improved. No one process is 100% complete or has no area for improvement to implemented.
The concept of mind mapping is simple. Mind mapping allows for everyone to brainstorm and interactive in a group setting or one can be created individually. Here is how it works.
A single topic is selected and put in the middle of the paper with a circle around it.
Lines are drawn from the main circle to small circles. The small circles are concepts that relate to the main circle.
These are ideas and things that contribute to the main concept
Lines are then drawn off the 2nd concept circle to smaller circles. The second set of smaller circles are concepts that relate. to the 2nd concept circle
These are ideas and things that contribute to the 2nd concept which contributes to the main concept.
Divide up into teams of 3 or 4 member. Have the groups create their own Mind Map of a current process in their department or in the entire organization that they feel can be changed and improved.
Show them the example of the mind map on the next page before they start, so they have a visual of what a mind map is.

7. An Example of Mind Mapping
The take away lesson from mind mapping is that one concept can have a large amount of other concepts that can be a result, a cause, or a affect to the concept. There is no one right answer to mind mapping. It is a great way to list several ideas and see the relationship they have to each other.
So let’s say that we used the mind mapping example listed above. We want to create a Software Upgrading Plan. There are many ideas and key concepts that we need to consider to develop a Software Upgrade Planning, but where do we start with all this information? How do we organization and evaluate what information is most essential to developing the plan?
Strategic Quality Planning is an excellent tool to utilize in a situation like this. The organization or department knows that it wants to make improves to a quality process, but it does not know what are the best steps to take. The organization may have great ideas and suggestion from employees, but which ideas or suggestions should be used that are value-add processes? SQP can help create a successful plan from top to bottom that can help improve quality.

8. Two Essential Parts
Dr. S. Thomas Foster teaches that SQP has two essential parts.
Content
Process
Content- strategy content helps to determine what is contained in the SQP
Process- the tools and steps are determined to develop the SQP
It is important to understand that SQP needs to be addressed using two parts: content and process. The strategy content is essential because these are types of areas that support developing a SQP. (Foster 102) Some key areas that Dr. S. Thomas Foster feels are the most important areas that need to addressed are time, leadership, quality costs, generic strategies, order winners, and quality as a core competency. Each area has the ability to greatly affect the final outcome of developing a successful SQP. (Foster 102)
Once the essential components, ideas, and variables are defined and selected in the content strategy, it is time to develop and implement the process. Here, the process steps are developed with the use of all the resources obtain in the content strategy. It is important that the process is developed off the information collected. Have you ever tried to make a cake without knowing before hand the recipe and the ingredients? You would not be very successful in making a delicious cake without this crucial information. The same standards are true for developing a SQP, the content strategy gives you the foundation to build the process on and then the process strategy builds upon the foundation to develop a quality SQP. (Foster 116)

9. How to Develop a SQP Develop a quality strategy
Establish goals and objectives
Identify specific quality initiatives
Implement a action plan
It is important when developing a SQP to follow the steps given by G. Dennis Beecroft at the University of Waterloo, Canada. He states, “ Quality, like any other dimension of business, must be managed strategically. Many quality improvement efforts focus solely on quality improvement tools and the methodology to improve specific processes and ignore their impact on the overall business. However, strategic quality planning should include: Develop a quality strategy, Establish goals and objectives, Identify specific quality initiatives, and Implement a action plan.” (Beecroft 500)
It is important to understand that an organization needs to understand the direction and destination it desires to reach with developing a SQP. Think of the importance of the SQP from this scenario. “If I were to say to you let’s drive to New York City right now. Quick Jump in the car, and we’ll drive their now. Grab some snacks.” What would the outcome be? More then likely would eventually arrive in New York, having had a interesting/eventful journey along the way without a plan, so it probably was not the best trip. Now imagine “Let’s drive to New York. Okay great. Let’s first map out a plan of how we are going to get there, where we are going to stop, and what we want to see along the way.” Now the idea of going to New York should be a better experience because we have Developed a quality strategy, established goals and objectives, Identify specific quality initiatives, and Implement a action plan.

10. Develop a Quality Strategy
Establish a vision and a mission for the Quality Strategy.
What do you want to accomplish?
What are your goals?
Do you want to base your strategy upon cost, differentiation, or focus?
Currently the organization is operating in the current state, but what is the future state that the organization desires to obtain? It’s important to develop a vision and a mission for the SQP that is trying to be achieved. A vision or mission gives the organizations something to strive for. In developing the SQP the questions can be asked “Does this step or idea help us to reach our vision and accomplish our mission for quality?” Checking against the vision and mission will help reduce/limit the amount of ineffective steps and ideas that are not value-added steps to the customer. “Quality strategies must be tied to broad business strategies and should be part of the organization’s mission/vision statement.” (Ross L. Chapman, Peter Charles Murray, Robert Mellor 433)
How can a plan be developed if no one knows what they want to accomplish? Brainstorm and discuss what the expected outcome or outcomes should be. “Planning must incorporate customer focus as a central element and firms must recognize different segments in their current and potential customer base.” (Ross L. Chapman, Peter Charles Murray, Robert Mellor 433)
It is essential that the organization take into consideration what the customers wants and needs are. If the process does not add a value-added process then why would the firm incorporate the process?
Dr. S. Thomas Foster teaches “…we stated that although quality can still win orders in some markets, in many markets quality has become an order qualifier.” (Foster 109) Quality now is another requirement just to have the opportunity to provide a customer with a good or service. It does not guarantee that a customer will choose the good or service. What strategic approach will be the best for the SQP? Does the organization want to compete on cost, differentiation, or focus? (Foster 109)
Cost- this refers to things such as service, maintenance, and operating costs. Today customers are mindful of the upfront cost and the cost of the product over its lifetime. Three major costs to consider here is prevention costs, appraisal costs, and failure costs. Prevention Costs- are the costs that occur with preventing defects and imperfections from occurring. (Foster 109) Appraisal costs- are the costs that occur with the direct costs of measuring quality. Failure costs- are broken down into two categories: Internal failure costs and external failure costs. Internal failure costs are the costs that occur with on-line failure, and external costs are the costs that occur with product failure after the production process. (Foster ) Differentiation- what makes our product or service unique in relation to other companies? What incentives do we offer to the customer that encourage them to choose our product or service? It is essential that the customer perceives the product or service that the organization offers as unique in comparison to the competition. (Foster 113) Focus- Who is our target market? What segment of the market does the organization want to capture or maintain. It’s important to have a focus as to not spread the company out to thin in the market. (Foster 114)
Each one of these strategy approaches is essential to consider and brainstorm as the organization develops a quality strategy.

11. Establish Goals and Objectives
Asses the current business situation.
What are the customer needs?
What objectives will enable the organization to develop the quality strategy?
“Goals, priorities and targets must be clear and unambiguous to all employees. They must be deployed throughout the organization while retaining alignment to organization-wide improvement strategies.” (Ross L. Chapman, Peter Charles Murray, Robert Mellor 433)
“Goals must be quantifiable and the measurement/benchmarking process must provide clear indications of progress towards the goal. These goals must be set aggressively in recognition that competitors are also rapidly improving.” (Ross L. Chapman, Peter Charles Murray, Robert Mellor 433)
In assessing the current business situation, the organization is looking for what is occurring in current and future business environment. What potential changes may cause issues or what adjustments will need to be made to the SQP. Where is the organization currently at? This is where the organization can determine what goals and objectives need to be established in order to achieve a SQP. Quality does not occur overnight, but it will take the organization time to develop. If there are already processes and steps in place that will help the organization achieve its desired future state, then do not re-invent the wheel. Rather incorporate and improve those processes and steps already in place.
Address the customers needs and how they can be fulfilled through the SQP. Each customer has a unique/specific set of needs that need to be met. How will the organizations goals and objectives align with the customers?

12. Identify Specific Quality Initiatives
What process can be improved?
What are the strengths and weaknesses?
What tools can be utilized to improve?
A great explanation of quality initiatives comes from the article titled Management Models and Quality Initiatives in Small Businesses. It states, “… quality initiatives such as Six Sigma, Strategic Quality Management, and Total Quality Management, and various organizational development initiatives relating to teams, empowerment, and other concepts that have the potential of improving all aspects of business.” (Mildred Golden Pryor)
Quality Initiatives may mean changing a standard that the organization pervious followed. Every process can be improved. For example, many times we try to find ways to do something faster or with more accuracy. If we know that something is slowing us down or not very efficient then we want to find a way to correct the process. This is process improvement, and we utilize it in our every day lives without much thought. A process or strategy can be improved by examining the strengths and weaknesses. With the help of a quality initiative changes can be made to improve these weaknesses.
It is essential that a organization recognize and understand that improvements can be made to every process to improve quality.

13. Implementing An Action Plan
Now bring together the strategy, the objectives and goals, and the quality initiatives.
Determine how and when the SQP will be implemented.
All the steps that were taken to develop a SQP all would be in vain if the plan cannot be implemented correctly. At this point it is essential the correct steps are taken to implement the plan. It is essential that the organization obtain employee buy-in to the SQP because without buy-in from employees the plan does not have a high chance of being successful.
An excellent way to deploy the SQP and obtain buy in from the organizations employees is by using a method called Hoshin Planning.

14. Hoshin Planning
A great tool to use in deploying a successful SQP is the Japanese tool Hoshin Kanri. By definition Hoshin Kanri is a methodology for planning, implementing and reviewing quality plans that are critical to an organization. Hoshin planning takes the same steps explained in the previous slides to develop goals and then device specific plans to achieve these goals. (Beecroft 501)
Hoshin Planning uses a cascading model a.k.a. a top-to-bottom process that enables everyone to be involved in the planning and developing of the SQP. This is an effective approach to motivating employees because they are empowered to ask questions and present ideas to improve the SQP. The involvement of the entire organization top to bottom helps to ensure that the SQP can be successfully implemented and accepted throughout the organization. This is referred to as catch-ball.
Catch-ball is the communication that is shown on the outside of the model. Senior management is the first to devise new goals and ideas that they would like to use to create a new SQP. Once senior management has decided which direction and approaches they wish to incorporate they will present this information to middle management. Now middle management has the opportunity to go through the SQP and ask questions, make suggestions, and voice their opinions and concerns to upper management. From this senior management can make any necessary changes they see fit to the SQP before middle management presents the information to the implementation teams. The implementation team has the same opportunities to view the information, ask questions, make suggestions, and voice their opinions and concerns to middle management. This is how catch-ball works in Hoshin planning.
G. Dennis Beecroft explains the process of catch-ball in the following paragraph.
“While the Hoshin Kanri process starts with senior management assigning goals to middle management for them to determine specific projects and then to assign these projects to implementation teams, it is very much a “negotiated” process among the three groups. The process is termed catch-ball by the Japanese, as all three groups must negotiate back and fourth until they agree on goals and the action plans. If sufficient specific action plans can not be determined by middle management in order to achieve the initial goals set by senior management, the goals are then changed to reflect what is achievable.” (Beecroft 501)

15. Time Is Money It takes time to achieve business goals!
U.S. General Accounting Office study showed that it takes 3.5 years to see significant results.
A U.S. Auto Industry study found a year difference between customer recognition of quality improvement and quality improvement.
Dr. S Thomas Foster addresses time as his first point in Strategic Quality Planning. (Foster 102) He mentions that firms want to be able to rapidly improve quality, but it just does not happen. The studies of the U.S. General Accounting Office and the U.S. Auto Industry verify this fact. In fact, Dr. S Thomas Foster discourages companies from trying to implement quality improvements to fast because it could mean a great down fall for the organization. (Foster )
The end rule of thumb here is to be patient and persistent with the implementation of the SQP. Help the organization understand that it will take some time to see the results, but the results can be there if it done correctly.

16. How Does SQP Work Develop a quality strategy
Establish goals and objectives
Identify specific quality initiatives
Implement a action plan
Use a tool like Hoshin Kanri and catch-ball to help implement the SQP
After examining the last several slide, an organization should be able to identify what tools, processes and steps are needed to be incorporated to understand how a SQP works. If a certain step is still not clear re-examine the slide that explained the material.
Remember that S. Thomas Foster taught that there are two essential parts to developing a successful SQP. That is the content and the process.
The content section would include steps 1-3, and the process would include step 4.
Remember that great SQP are not implemented over night and it will take some time before you may see and receive results, but be patient and persistent with the new SQP.

17. A Real World Example
Over the years Harley-Davidson has built a strong reputation as one of the top motorcycle producers in the world. Today the Harley-Davidson brand is recognized as the 46th most valuable brand in the world. “Harley believes that is is not simply selling a product- it is selling a dream!” (Fawcett SE, Ellram LM, Ogden JA. 110) Along with being well know for its Harley-Davidson apparel, the company is also well known for the customization of its motorcycles. Consumers know that they can custom build their own bike and know that no other person will have the same identical bike. The consumers that own Harley-Davidson motorcycles are very loyal to the brand. This brand loyalty was achieved through high-quality products, customer service, and price.
However, Harley-Davidson has not always been at the top of the motorcycle industry. In the early 1980’s the company was on the verge of bankruptcy. American Machinery and Foundry (AMF) owned the company in the 1970’s; however, the company was not doing well in the market because of poor quality. Due to the reduction in sales, AMF decided to sale Harley-Davidson in 1981 to 13 members of the Harley-Davidson management team. The reduction in sales was due to a low level of quality in Harley’s bikes in comparison to Japanese manufactured bikes. Unfortunately, things did not pick up for the company at that point. Demand continue to fall in the motorcycle market and so did Harley’s market share. As demand fell drastically Harley was left with a large inventory of unsold products. Harley-Davidson knew that its business strategy was broken and had to let go of some 1,800 employees. In 1985 CEO Richard Teerlink developed a restructuring plan to save the company from bankruptcy. Then Harley implemented key management principles from the Japanese to create new marketing strategies, and manufacturing techniques to improve quality began its long climb back to the top. (Reginald A. Bruce)
Harley is well know in the manufacturing industry for its use of the just-in-time production method or as it is called at Harley materials as need.
In the beginning, Harley’s manufacturing plants had been designed to use a batch process in the flow of material on the plant floor. “The batch format has neither inflow or outflow of materials while the process is running, and has the disadvantage of high labor costs per unit production and is difficult with large-scale production” (Reginald A. Bruce) “Harley’s production system was a huge, maze-like operation in which parts were tooled in large batches and moved from one machine to another all over the plant.” (Reginald A. Bruce) The design of the plant had no straight flow process; thus, causing setup times to be very high and output rates to be very low. Something needed to change in the manufacturing planet. Harley’s drastically needed to identify specific areas of improvement if it had any hopes of restructuring its business strategy.
Harley adopted the method of just-in-time inventory to reduce its amount of waste in the its plants and improve the overall quality of its products. Just-in-time inventory “…was the driving for of Harley’s quality-improvement program. Very simply, as you operate with lower and lower inventories, it becomes essential that all your inventory is usable. If you’re only going to get a few parts, they all have to be good ones.” (Reginald A. Bruce) This change in Harley’s process also had a major impact on it suppliers. Suppliers too had to change their processes to just-in-time inventory to work correctly with Harley’s new process. The strategic quality plan for Harley-Davidson produced impressive results for the company. Record show that Harley had inventory turns up from 5 to 20, inventory levels down 75%, percentage of motorcycles coming off the line completed up from 76% to 99%, scrap and rework reduced by 68%, productivity up by 50%, and space requirements down by 24%. (Reginald A. Bruce)
This new SQP for Harley-Davidson was no small undertaking. The company understood that changes need to be made to the current process to improve the quality of its products and save the business. Harley-Davidson had to implement a SQP that would be able to significantly change the current process. Harley had to develop a strategic quality plan that would improve quality, reduce waste, and reduce inventory on hand.
Harley-Davidson implemented all of the steps reviewed in this training in order to be successful at change its plants manufacturing process. It need to Develop a quality strategy, Establish goals and objectives, Identify specific quality initiatives, Implement an action plan, and use a tool like Hoshin Kanri and catch-ball to help implement the SQP.
It is not by pure luck that Harley-Davidson stands tall and proud, as a symbol of what is American. Without the use of SQP it is very likely some other motorcycle company would be know has the industry leader, but Harley-Davidson understood and understands the importance of SQP.

18. Exercise How do you make toast?
List the steps that you need to followed to make the perfect plate of toast.
Now that we understand that every process can be improved here is an exercise that will allow members of the training to apply what they have learned today about SQP. This exercise is very straight forward. It takes a simple process and identifies where improvements can be made. This exercise can really be adjusted to work with a variety of different process if desired.
Have everyone divided up into teams of 3 to 4 depending on the size of the meeting. Have the group write down what they believe are the best steps to making the perfect plate of toast. Give them about 5 minutes to do this. (Remind the groups to use the tools that were presented earlier. The 4 steps to how to use SQP is what they should be using.)
An excellent tool that can be used to plan how to improve the quality process or help you plan out the steps of a process is process mapping. A process map would be very helpful for improving the quality of making toast. It creates a visual map of the process that allows you to visualize each step in the process.

19. Current Process
Here is what a potential list of the steps may look like to make the perfect plate of toast, using process mapping.
A process map enables the organization to visualize each step in the process. Each step has to been identified and planned in the process. A process map makes it easier to identify what steps need to be changed, removed, or improved to improve the quality of the entire process. A process map can been designed for a wide variety of things, not just an actual manufacturing processes.
Now the next step is to have each group plan ways to improve the quality of their process. (Remember every process can be improved.) Have them plan what types of changes should be made to the current process to make the perfect plate of toast even more efficiently. Give them 5 minutes to discuss a plan.
Next, have the groups implement their quality improvements or changes to their current process. Give them 5 minutes to make any necessary changes to the process.

20. Improved Process with SQP
Every process can be improved. Strategic quality planning can take a current process like making toast and identify areas where improvements can be made. There is not a specific right answer here. The idea is for the groups to see how a SQP can be made and then how improvements can be made.
SQP can be implemented on an organization wide level or it can be incorporated in departments as well to improve quality.
What plan or future plans for the organization’s strategy or strategies would benefit from SQP?

21. Key Takeaways The Content The Process Develop a quality strategy
Establish goals and objectives
Identify specific quality initiatives
The Process
Implement a action plan
Use a tool like Hoshin Kanri and catch-ball to help implement the SQP
As explained in the beginning of the presentation. It is essential to understand that a Strategic Quality Plan consists of two parts. Content is essential because it is where the strategy content is developed that will help to determine what is contained in the SQP. The key steps that occur in the content part are: Develop a quality strategy, Establish goals and objectives, and Identify specific quality initiatives.
During the process phase the steps from 1 through 3 are implemented into developing the SQP. Here the process steps are developed with the use of all the resources obtain in the content strategy. It is important that the process is developed off the information collected. Then Hoshin Planning is used to implement the SQP with a cascade approach. Hoshin planning is a great way for everyone to communicate and understand the direction the SQP is going. Employee buy-in is important when making quality improvements.

22. Key Takeaways Every process can be improved.
SQP involves a great deal of communication.
Map out the process.
There is always a way to improve the current state. SQP helps an organization to examine the current state and look for ways to improve the quality.
In order to develop a successful SQP a great deal of communication is required. A major part of communication is listening as well. It does not do any good to use the catch-ball technique if the suggestions and ideas are not going to be implemented into the SQP. Empowered employees with employee buy in can make the SQP and the organization in general much more successful.
From the example of mind mapping, Hoshin planning, and follow charting it is obvious that a visual picture makes it much easier to identify what is occurring in the processes. Mapping out the steps and process allows an organization to identify critical errors or steps that are not value added steps.

23. Reading list
Fawcett SE, Ellram LM, Ogden JA. The new product development process. In: Supply chain management: From vision to implementation. Upper Saddle River, NJ 07458: Pearson Education:110.
Foster S T. Strategic quality planning. In: Managing quality: Integrating the supply chain. Fourth Edition ed. Pearson Eduction, Inc.:102.
G. Dennis Beecroft, (1999),"The role of quality in strategic management", Management Decision, Vol. 37 Iss: 6 pp. 499 – 503
Ross L. Chapman, Peter Charles Murray, Robert Mellor, (1997),"Strategic quality management and financial performance indicators", International Journal of Quality & Reliability Management, Vol. 14 Iss: 4 pp. 432 – 448
Yoshio Kondo, (1998),"Hoshin kanri - a participative way of quality management in Japan", The TQM Magazine, Vol. 10 Iss: 6 pp. 425 – 431
A Case Study of Harley Davidson's Business Practices Accessed 11/19/2012, Reginald A. Bruce, College of Business and Public Administration University of Louisville. A case study of harley davidson's business practices. . TUESDAY, 25 NOVEMBER 2008.
Mildred Golden Pryor, Texas A & M University – Commerce, Leslie A. Toombs, University of Arkansas – Fort Smith. MANAGEMENT MODELS AND QUALITY INITIATIVES IN SMALL BUSINESS .