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Chapter Three Quality Management “Implementation of the quality principles in your organization requires time; however, the end result will bring customer loyalty, satisfaction, increased market share, and financial contribution.”

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“Implementation of the quality principles in your organization requires time; however, the end result will bring customer loyalty, satisfaction, increased market share, and financial contribution.”

Sue LantzschRegional Vice President OperationsHDS ServicesFarmington Hills, MI

quality is sustainable tangible value and it s worth repeating over and over if you care enough

“Quality is sustainable, tangible value and it’s worth repeating over and over if you care enough.”

Dan W. DarrowPresidentPalm Hospitality Company

Orlando, FL

learning objectives
Learning Objectives
  • Understand why and how shifts in paradigms occur and how to become a change maker
  • Contrast a traditional organization with a high- performance service organization
  • Understand process thinking and continuous improvement
learning objectives cont
Learning Objectives (cont.)
  • Define the core principles of quality and how needs and expectations equal requirements
  • Know the kinds of customers and the characteristics of each
paradigm shifts
Paradigms are how we view our environment

Paradigms are our reality

Change occurs out of necessity or persuasion

Paradigm Shifts
paradigm shifts cont
Leaders reduce resistance to change by developing positive attitudes in internal customers

Must overcome fear and insecurity

Good communication essential

Explain advantages of changes

Give others the chance to ask questions

Ensure understanding

Paradigm Shifts (cont.)
the hds example 1991 a testimonial
Several senior operations executives informed the president of HDS Services that HDS was falling behind in the area of quality services and products

This team convinced the president that there could be value in their attending a week-long presentation on the principles of quality improvement in Chicago

This presentation was virtually responsible for a massive paradigm shift within HDS Services

The HDS Example (1991): A Testimonial
the hds example 1991 a testimonial9
HDS was more than ready for a change and voted unanimously to adopt the proposed changes in management principles

The race for quality has no finish line!

The HDS Example (1991): A Testimonial
change fighters
People fight change for many reasons



The way we know is comfortable

Change means extra work

Some people simply like the old way

Change Fighters
change makers
Must overcome fear and insecurity

Spell out expectations exactly – good communication is essential

Explain the advantages of the proposed change

Ensure understanding

Change Makers
process thinking

Hassles across area

Traditional functional areas or departments

Process Thinking
process thinking cont
Process Thinking (cont.)
  • Goal of process thinking is to identify the root causes to eliminate hassles at the source
  • Cross-functional teams help identify the root causes
  • Input gathered from as many affected functional areas as possible
process thinking cont15
Process Thinking (cont.)
  • Critical processes add value to the customer’s experience with the organization:
    • Making hotel reservations
    • Maintaining required temperatures of food in a cafeteria
    • Cleaning a resort swimming pool
    • Filling a vending machine
continuous improvement
Continuous Improvement
  • A series of planned and monitored outcomes
  • A step-like incremental series of better results
  • It is not the same as a straight-line linear improvement
functional teams
Functional Teams
  • SQIT (Senior Quality Improvement Team)
    • The organization’s executive team
    • The overseer of quality improvement initiatives
  • QIT (Quality Improvement Team)
    • Composed of managers/workgroup leaders
    • Primary responsibility is to make decisions and monitor quality activities
functional teams20
Functional Teams
  • WGT (Work Group Team)
    • Based in the functional area in which they work
    • Goal is to have members become more self-directed by self-managing
  • AGT (Action Group Team)
    • Set up to work on a specific hassle or opportunity for improvement
    • Includes representatives from multiple departments
core principles of quality
Core Principles of Quality
  • Continuous Improvement
    • Of processes that make a difference to customers
  • Customer-First Orientation
    • Everything done must focus on the customer
  • Trust
    • Trust internal customers to perform the quality work they have been empowered to do
core principles of quality22
Core Principles of Quality
  • Teamwork
    • Use strengths of individuals and synergy of teams to serve customers
  • Management by Fact
    • Decisions fact based-not emotionally based
  • Preventing hassles/errors/defects
    • Do things right the first time
  • Celebration of Success
    • Recognition
customers first
Customers First
  • Who is the customer?
  • What are the requirements (i.e., needs, expectations) of the customer?
  • Quality management focuses on the importance of service
  • Level of service quality
    • is a part of the firm’s competitive advantage
    • combines the activities of both customer-contact and support staff
  • Quality is an overriding principle in the organization’s culture
  • The culture of a quality-driven organization utilizes teamwork with cross-functional teams
  • Culture embraces empowerment
external customers
External Customers
  • Those who give time and money for an organization’s products/services
  • Anyone outside the organization


  • Hotel guests
  • Hotel suppliers
  • Regulating agencies
external customers28
External Customers
  • They want to know that the associates in the organization have their needs and expectations foremost in their minds
  • They want to know that the associates will do anything within reason to satisfy their needs
  • They want to be understood and satisfied
external customers cont
External Customers (cont.)
  • They expect decisions and plans made and executed are all in service of the person who is paying the bill
  • They want consistency
  • If a hassle occurs, they want it fixed quickly
internal customers
Internal Customers
  • Foremost focus since associates carry the culture of service to external customers
  • F&B outlets in the hotel are customers of the hotel’s purchasing department
  • Hotel’s front office is a customer of the accounting office
  • Restaurant servers are customers of the kitchen staff
internal customers cont
Internal Customers (cont.)
  • They want to be involved in the planning of the work that affects them
  • They do not want to be blamed if there is an ongoing problem with a process that cannot be fixed by them
  • Most want to contribute to planning the effort to continuously improve the levels of quality
internal customers cont32
Internal Customers (cont.)
  • They appreciate being involved in working on quality improvement teams
  • Associates need mentors
  • Mentors help build the necessary skills needed to provide external customers with a quality experience
existing customers
Existing Customers
  • Current users of the organization’s processes
  • The reason we create products and services


  • Hotel guests
  • Club members
  • Managed services business clients
former customers
Former Customers
  • They used to use the products and services of the organization
  • Important source of information on hassles
  • If hassles eliminated, they might return
indirect customers
Indirect Customers
  • Do not directly use the organization’s products and services, but they have an effect on these customers


  • Government regulators
  • Advocacy groups
potential customers
Potential Customers
  • They have never tried organization’s products and services
  • May be convinced to try products and services
  • Provide products, services, and information to the organization
  • They share in the quality creation and value determination when treated as strategic allies and partners
ultimate customers
Ultimate Customers
  • The customers who ultimately receive the products or services when the organization is part of a distribution network


  • Residents in an assisted living facility
  • People who purchase from vending machines
  • Each of us has paradigms that help us interpret the many kinds of information that we are exposed to each day
  • Our paradigms are either shifting or staying the same, depending on whether we are change makers or change fighters
  • In contrast to a traditional company, a high performance service organization is driven by the needs of both its internal and external customers
summary cont
Summary (cont.)
  • High performance service organizations understand the needs, wants, and expectations of their customers
  • In quality management, there has been a paradigm shift to the more successful high performance service organization
  • These organizations use various critical processes to meet and exceed customer needs and expectations
key terms
Action Group Team (AGT)

Celebration of Success

Continuous Improvement

Core Principles of Quality

Key Terms
key terms cont
Critical Processes

Customer Feedback

Customer-First Orientation


Key Terms (cont.)
key terms cont43
Key Terms (cont.)
  • High Performance Service Organization
  • Machiavellian Managers
  • Management by Fact
  • Preventing Hassles
key terms cont44
Key Terms (cont.)
  • Quality Improvement Team (QIT)
  • Senior Quality Improvement Team (SQIT)
  • Teamwork
  • The Better Way
key terms cont45
Key Terms (cont.)
  • Traditional Service Organizations
  • Work Group Team (WGT)
relevant web sites
Relevant Web Sites
  • Basic Requirements for High Performance Organizations:

  • High Performance Balance (Technology, Management, and Leadership) (by Jim Clemmer):

  • Quality Management Principles: