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Why Quality really is Everybody’s Business

Why Quality really is Everybody’s Business. Professor John Oakland 11 th November 2009. How Oakland Consulting balance theory with practice. The “Voice of Experience” informs new research. The “Voice of Research” ensures we employ cutting edge practices.

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Why Quality really is Everybody’s Business

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  1. Why Quality really is Everybody’s Business Professor John Oakland 11th November 2009

  2. How Oakland Consulting balance theory with practice The “Voice of Experience” informs new research The “Voice of Research” ensures we employ cutting edge practices

  3. Quality is high on the agenda everywhere ... The Times 15th October 2009 Financial Times 17th October 2009

  4. ... but what sort of challenges do we face?

  5. Orders/ Revenues/ Cash Goods/Solutions/Services Suppliers Sub 2 Sub 1 Quality in the 21st Century – who is ‘Everybody’? FES† YOU Customers BU1 BU2 BU3 BU4 FES† • To achieve Quality across the entire business process chain we need to: • Assess the customer needs & business value of meeting them • Find the right processes & partners and select the optimum solution • Prove and implement the right solutions • Make the proven solutions sustainable and continuously improve • Promote the spread of internal and external best practices † FES =Front End Sales, External System Integrators etc

  6. Life is complex for Everybody

  7. Blame for Everybody

  8. Get a Grip – Sort it out!

  9. The three part ‘scaffold’ for Everybody 3. Implementation to deliver real business benefit 1. Clarity of direction & objectives Transformation & Continuous Improvement Strategic Alignment & Deployment Assessment & Review 2. Insight into current situation and priorities

  10. Strategic Alignment & Deployment Planning Results Understand Customer Requirements Develop the top level process framework • WHY - Purpose & Scope Vision & Mission • Strategic objectives Transformation & CI Strategic Alignment & Deployment • WHAT -Success factors & measures CSFs, KPIs & Targets • Business outcomes Process & organisational blueprint to deliver the CSFs • Process and People Performance • HOW - • To deliver Assess & Review • WHEN & WHO - will deliver Milestone plan, Activity & Resource plans • Project Metrics

  11. Value-adding processes for Everybody Functions Function A Function F Function C Function E Function B Key process Key process Key process Key process Key process Key process • The leadership define the strategies and plans, and the value-adding processes form the links to the results • The value-adding process need to be: • defined and documented • managed from end-to-end • measured and improved Transformation & CI Strategic Alignment & Deployment Customer Satisfaction Assess & Review

  12. A top level process framework Transformation & CI Strategic Alignment & Deployment Assess & Review

  13. No wonder key processes involve Everybody Example – A new product development process Marketing R & D Manufacturing Sales Transformation & CI Strategic Alignment & Deployment Develop prototype product Define market opportunity Test & validate product Product production New products on the market Ideas for new products Create marketing materials Prepare sales force for launch Assess & Review Launch Product Launch Product Launch Product Launch Product

  14. Assessment and Review • Performance measurement through structured assessment and review is a critical component in effectively managing quality • It provides a roadmap for the improvement and helps to deliver superior business results in the new global market place Transformation & CI Strategic Alignment & Deployment Assess & Review But failure to adopt this rigorous approach to quality management across complex supply chains can have disastrous consequences And who is responsible ...? Everybody

  15. Measuring your performance Summary of Self-Assessment Scores Summary of Self-Assessment Scores Summary of Self-Assessment Scores Item # Item # Item # Level Level Level 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 Issue Issue Issue 1 1 1 Business commitment to quality Business commitment to quality Business commitment to quality 3 3 3 2 2 2 Quality objectives and targets Quality objectives and targets Quality objectives and targets 3 3 3 3 3 3 Quality performance reporting Quality performance reporting Quality performance reporting 3 3 3 4 4 4 Interface with HQ and global integration Interface with HQ and global integration Interface with HQ and global integration 2 2 2 5 5 5 Work organisation Work organisation Work organisation 2 2 2 6 6 6 Skills and competencies Skills and competencies Skills and competencies 3 3 3 7 7 7 Managing people's performance Managing people's performance Managing people's performance 1 1 1 8 8 8 Reward and recognition Reward and recognition Reward and recognition 2 2 2 9 9 9 Supplier selection, certification and management Supplier selection, certification and management Supplier selection, certification and management 1 1 1 10 10 10 Conformity of supplied product Conformity of supplied product Conformity of supplied product 2 2 2 11 11 11 Work environment Work environment Work environment 2 2 2 12 12 12 Managing and maintaining production assets Managing and maintaining production assets Managing and maintaining production assets 3 3 3 13 13 13 Material inventories Material inventories Material inventories 1 1 1 14 14 14 Process control and work instructions Process control and work instructions Process control and work instructions 2 2 2 15 15 15 Quality organisation, QA and QMS Quality organisation, QA and QMS Quality organisation, QA and QMS 2 2 2 16 16 16 QC QC QC 2 2 2 17 17 17 Quality improvement Quality improvement Quality improvement 2 2 2 18 18 18 Results Results Results 3 3 3 TOTAL (Max = 90) TOTAL (Max = 90) TOTAL (Max = 90) 39 39 39 Site A Site C Site C Transformation & CI Strategic Alignment & Deployment Site-specific reports showing areas of strength and risk across 18 dimension of quality management, including: • Leadership • Policy • Organisation • Manufacturing • Supply • People management • Performance improvement Assess & Review

  16. Understanding your performance Bringing together your performance measurement across the supply chain will highlight areas of priority and specific improvement actions Transformation & CI Strategic Alignment & Deployment Assess & Review

  17. Overcoming the global sourcing challenges of fast growth Case Study - • Client Growth (2003-2007) • Turnover increased by 150% • New factories were built in Europe, US and Asia • Average number of employees doubled THE SITUATION Transformation & CI Strategic Alignment & Deployment • ... BUT a lack of focus on quality during the same period meant: • Warranty costs soared to >10% of sales revenue • Key customer relationships & companies reputation seriously damaged • Survival threatened THE CHALLENGE Assess & Review • A series of assessments of quality management practices were • conducted in the manufacturing plants and key headquarter functions • Key problem areas were identified • Cross-business quality improvement teams put in place THE RESPONSE • $20M in reduced failure costs • Enabled global expansion • Improved On Time, On Quality delivery THE RESULTS

  18. Transformation & Continuous Improvement 6. Circulation of Talent 8. Sustained Improvement Continuation on a lifetime journey 5. Widely Shared Continual Improvement Culture Shared commitment to constant improvements in performance Transformation & CI Strategic Alignment & Deployment 1. Leadership & Top Down Cascade of Objectives OTOQOC Delivery performance Customer Confidence Efficiency Improvements 2. Supporting Infrastructure Programme management Effective communications and ‘Branding’ Supporting systems 4. Skilled Improvers People, trained, qualified and living in the organisation 7. Measurable Improvements in the Service Delivery Areas Assess & Review 3. Pragmatic, Fact-based Methodology Yielding Rapid Results Using proven methodologies, fact & data based, hands-on tools and techniques

  19. Delivering sustained quality improvement Waste Removal Variation Reduction Transformation & CI Strategic Alignment & Deployment TIME QUALITY Six sigma Lean VALUE outputs Assess & Review COST £££ Improving customer satisfaction and increasing value for money

  20. Improvement DRIVER for Everybody • A structured and proven approach to continuous improvement that: • Stops you jumping from the problem straight to the solution Transformation & CI Strategic Alignment & Deployment Assess & Review • Generates improvements in On-Time, On-Quality, On-Cost Delivery • Supports sustainable performance improvement

  21. Being Lean is Everybody’s Business! Do not focus on the value adding activities! • Parallel Processing Transformation & CI Strategic Alignment & Deployment • Standardised Work • Batch Reduction • Waste Elimination • Line Balancing • Error Proofing • Quick Changeover Assess & Review • Visual Management • Layout Remove the non-value adding activities WASTE

  22. Reducing variation is Everybody’s business! Pilot 2 – 6 sigma landings Pilot 1 – 3 sigma landings Transformation & CI Strategic Alignment & Deployment Assess & Review Which pilot would you rather fly with? • Six Sigma is effectively a zero-error process so we strive for perfection • Reducing process variation (improving sigma) has direct effects on On-Time, On-Quality Delivery and Costs

  23. Which pilot would you rather fly with? Transformation & CI Strategic Alignment & Deployment Assess & Review Pilot 1 – 3 sigma landings Pilot 2 – 6 sigma landings

  24. Process variation affects Everybody Inputs Process Inputs Inputs Inputs Process Process Process Processes should deliver outputs on target, every time Transformation & CI Strategic Alignment & Deployment Variation causes processes to miss targets Assess & Review

  25. DASHBOARD – Savings / Benefits (global) Total cumulative savings/ benefits: ca120m k€ Average saving per project : 309k€

  26. Successful change requires Everybody ‡ ‡ Readiness forChange ‡ ‡ ‡ ‡ ImplementingChange ‡ ‡ Leadership& Direction Planning Need forChange External Events Strategic PROCESSES Behaviours Organisation& Resources Operational Systems& Controls It requires “Readiness” and “Implementation” to be in balance

  27. ... and as we deliver ‘carbon excellence’ ... ... We all have a big role to play • Leadership capability • Carbon footprint assessment • Carbon stream mapping • Implementation plan • Legislation watch • Low carbon technology • Carbon briefings • Performance management • Carbon trading and offsetting Getting C a r b o n R e a d y • 3rd Party verification

  28. Yes it really is Everybody’s business! • Developing a specific set of skills and knowledge across the organisation as we move towards a culture of continuous improvement • The value-adding processes across all functions provide the link between the strategic plans and the results Transformation & Continuous Improvement Strategic Alignment & Deployment Assessment & Review • A critical component in effectively managing quality in the 21st Century that involves the complete supply chain

  29. Yes it really does mean Everybody!

  30. www.oaklandconsulting.com “No great improvements in the lot of mankind are possible, until a great change takes place in the fundamental constituting of their modes of thought” – John Stuart Mill That means EVERYBODY... including YOU!

  31. John Oakland is Executive Chairman of Oakland Consulting plc and Head of its Research and Education Division, the European Centre for Business Excellence. He is also Emeritus Professor of Business Excellence & Quality Management at Leeds University Business School. Over more than twenty five years he has consulted in all aspects of business excellence and improvement to literally thousands of organisations. He has directed several large business research projects in Europe, which have brought him into contact with a diverse range of organisations. His work on the requirements of industry, commerce and the public sector has been widely acknowledged and published. John has an international reputation for his work on performance improvement and he is author of several best selling books. He has written literally hundreds of papers, articles and reports on various topics in the field. John is a Fellow of the Institute of Directors, Chartered Quality Institute, American Society for Quality and Royal Statistical Society. Professor John Oakland

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