Modern Management 9 th edition

1. . Modern Management9th edition

2. . Ü Objectives • An understanding of the relationship between quality and total quality management • An appreciation for the importance of quality • Insights into how to achieve quality • An understanding of how strategic planning can be used to promote quality • Knowledge about the quality improvement process

3. FUNDAMENTALS OF QUALITY . • Defining Total Quality Management • The Importance of Quality • Armand V. Feigenbaum (1990): “Quality. Remember it?” • High-quality goods and services results in: • 1. A positive company image • 2. Lower costs and higher market share • 3. Decreased product liability costs • Positive Company Image • Lower Costs and Higher Market Share • Decreased Product Liability Costs

4. FUNDAMENTALS OF QUALITY . TQM typically results in lower costs and greater market share Figure 22.1

5. FUNDAMENTALS OF QUALITY . • Established Quality Awards • Deming Award • Malcolm Baldrige National Quality Award • Shingo Prize for Excellence in American Manufacturing • Healthcare Forum/Witt Award: Commitment to Quality • Achieving Quality • Crosby’s Guidelines for Achieving Quality

6. FUNDAMENTALS OF QUALITY . Crosby’s Vaccination Serum for Preventing Poor Total Quality Management Table 22.1 Integrity A. The chief executive officer is dedicated to having the customer receive what was promised, believes that the company will prosper only when all employees feel the same way, and is determined that neither customers nor employees will be hassled B. The chief operating officer believes that management performance is a complete function requiring that quality be “first among equals”—schedule and cost C. The senior executives, who report to those in A and B, take requirements so seriously that they cannot stand deviations D. The managers, who work for the senior executives, know that the future rests with their abilities to get things done through people—right the first time E. The professional employees know that the accuracy and completeness of their work determine the effectiveness of the entire workforce F. The employees as a whole recognize that their individual commitments to the integrity of requirements are what make the company sound Systems A. The quality management function is dedicated to measuring conformance to requirements and reporting any differences accurately B. The quality education system (QES) ensures that all employees of the company have a common language of quality and understand their personal roles in causing quality to be routine C. The financial method of measuring nonconformance and conformance costs is used to evaluate processes D. The use of the company’s services or products by customers is measured and reported in a manner that causes corrective action to occur E. The companywide emphasis on defect prevention serves as a base for continual review and planning using current and past experience to keep the past from repeating itself Communications A. Information about the progress of quality improvement and achievement actions is continually supplied to all employees B. Recognition programs applicable to all levels of responsibility are a part of normal operations C. Each person in the company can, with very little effort, identify error, waste, opportunity, or any concern to top management quickly—and receive an immediate answer D. Each management status meeting begins with a factual and financial review of quality Operations A. Suppliers are educated and supported in order to ensure that they will deliver services and products that are dependable and on time B. Procedures, products, and systems are qualified and proven prior to implementation and then continually examined and officially modified when the opportunity for improvement is seen C. Training is a routine activity for all tasks and is particularly integrated into new processes and procedures Policies A. The policies on quality are clear and unambiguous B. The quality function reports on the same level as those functions that are being measured and has complete freedom of activity C. Advertising and all external communications must be completely in compliance with the requirements that the products and services must meet

7. FUNDAMENTALS OF QUALITY . • Achieving Quality (con’t) • Deming’s Guidelines for Achieving Quality • 1. Create and publish to all employees a statement of aims and purposes • 2. Learn new philosophy—this means top management and everybody else • 3. Understand purpose of inspection—for process improvement and cost reduction • 4. End practice of awarding business on basis of price tag alone • 5. Improve constantly and forever system of production and service • 6. Institute training • 7. Teach and institute leadership • 8. Drive out fear. Create trust. Create climate for innovation • 9. Optimize efforts of teams, groups, staff areas toward company aims and purposes • 10. Eliminate exhortations to workforce • 11. (a) Learn and institute methods for improvement (no numerical production quotas) • (b) learn capabilities of processes and how to improve them (no MBO) • 12. Remove barriers that rob people of pride of workmanship • 13. Encourage education and self-improvement for everyone • 14. Take action to accomplish transformation

8. FUNDAMENTALS OF QUALITY . • Achieving Quality (con’t) • Juran’s Guidelines for Achieving Quality • 1. The mission of the firm as a whole to achieve • and maintain high quality • 2. The mission of individual departments within the firm • to achieve and maintain high quality • Shingo’s Guidelines for Achieving Quality • Poka yoke • Feigenbaum’s Guidelines For Achieving Quality • Total quality management (TQM)

9. FUNDAMENTALS OF QUALITY . Poka yoke device Figure 22.2

10. QUALITY THROUGHSTRATEGIC PLANNING . • Environmental • Analysis and Quality • Establishing Organizational • Direction and Quality

11. QUALITY THROUGHSTRATEGIC PLANNING . • Strategy Formulation and Quality • SWOT analysis • Improve and maintain high-quality operations and products: • Value adding • Leadership • Empowerment • Partnering • 1. Suppliers must prove themselves reliable and cost-effective • 2. Suppliers must prove the sustained quality of their products • Gathering correct and timely information • Continuous improvement and innovation

12. QUALITY THROUGHSTRATEGIC PLANNING . • Strategy Implementation and Quality • Policies for Quality • Organizing for Quality Improvement • Infrastructure of quality council includes: • 1. A process for nominating and selecting improvement projects • 2. A process for assigning project improvement teams • 3. A process for making improvements • 4. A variety of resources • 5. A process for review of progress • 6. A process for dissemination of results and for recognition • 7. Appropriate employee merit rating system to reward quality improvement • 8. Extension of business planning to include goals for quality improvement

13. QUALITY THROUGHSTRATEGIC PLANNING . • Strategic Control and Quality • Crosby's successive stages of quality maturity: • 1. Uncertainty • 2. Awakening • 3. Enlightenment • 4. Wisdom • 5. Certainty

14. THE QUALITY IMPROVEMENT PROCESS . The incremental approach to improving quality Figure 22.3

15. THE QUALITY IMPROVEMENT PROCESS . • The Incremental Improvement Process • Step 1: Choose area of improvement (improvement “theme”) • Examples are: • Reduction in production cycle time • Increase in the percentage of nondefective units produced • Reduction in the variability of raw material going into production • Increase in on-time deliveries • Reduction in machine downtime • Reduction in employee absenteeism

16. THE QUALITY IMPROVEMENT PROCESS . • The Incremental Improvement Process (con’t) • Step 2: Organize quality improvement team • Members might include: • One or more associates directly responsible for the work being done • One or more customers receiving the benefits of the work • One or more suppliers providing input into the work • A member of management • Perhaps one or more experts in areas particularly relevant to solving the problem and making the improvement

17. THE QUALITY IMPROVEMENT PROCESS . • The Incremental Improvement Process (con’t) • Step 3: “Benchmark” best performers • Step 4: Perform analysis to meet or beat benchmark • Factors to be analyzed: • Potential problems related to equipment • Materials • Work methods • People • Environment: • Legal constraints • Physical conditions • Weather • Step 5: Perform pilot study to test selected remedies • Step 6: Management implements improvements

18. THE QUALITY IMPROVEMENT PROCESS . • Reengineering Improvements • Hammer outlines principles of reengineering: • 1: Organize around outcomes, not tasks • 2: Have those who use the output of the process perform the process • 3: Subsume information-processing work into the real work that produces the information • 4: Treat geographically dispersed resources as though they were centralized • 5: Link parallel activities instead of integrating their results • 6: Put the decision point where the work is performed and build control into the process • 7: Capture information once and at the source

19. INNOVATION AND CREATIVITY . • Creativity in Individuals • Expertise • Creative thinking • Motivation • Encouraging Creativity in Organization Members • 1. Match individual expertise with work assignments • 2. Provide resources necessary for creativity • 3. Reward creativity

20. INNOVATION AND CREATIVITY . The three components of creativity Figure 22.4

21. Chapter Twenty-Two ? Questions