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Essentials of Excellence in Quality Management: Using the Baldrige Criteria for Performance Excellence as a Model for Management & Improvement. Workshop Objectives. Show how the Baldrige criteria can be used as a management framework, and the value of doing so

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Essentials of Excellence in Quality Management:

Using the Baldrige Criteria for Performance Excellence as a Model for Management & Improvement


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Workshop Objectives

Show how the Baldrige criteria can be used as a management framework, and the value of doing so

Discuss relationship of Baldrige to quality improvement approaches

Show various approaches in using criteria


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Today’s Agenda

  • The case for the Baldrige model

  • Baldrige Business Model & Criteria Structure

  • Graded approaches to use:

    • Organizational Profile

    • Self-Assessment Matrix

    • Baldrige Express

    • Quality Award Application

  • Wrap up - evaluation


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The Case for MBNQA Model

  • Provides QM perspective for entire organization, not just specific elements

  • Integrating framework for illustrating and understanding organizational relationships

  • Provides QM focus on critical aspects of Leadership system, including governance


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Baldrige Performance Excellence Criteria

Purpose: to recognize U.S. organizations for their achievements in quality and performance and to raise awareness about the importance of quality and performance excellence as a competitive edge

Attributes:

  • Framework and criteria to assess the enterprise’s performance and quality improvement efforts

  • Criteria evaluated and improved each year - annual improvement cycle (16 cycles 1988-2004)

Keeping Score:

  • Score (0-1000) provided along with strengths and opportunities for improvement


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Some Evidence

Source: Kevin B. Hendricks and Vinod R. Singhal, “Don’t Count TQM Out,” Quality Progress, April 1999


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more of the Evidence…

Source: Q100 Index, Robinson Capital Management


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Employee

Selection

Illustration of Process-based Enterprise

Management

Reporting

Training &

Development

  • Customers

  • Asset Owners

  • Public

Planning

Core Business Processes

Objectives

& Goals

Budgeting

Recognition

& Rewards

Communication

Performance

Management


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Alignment of Soft Systems

?

Reward

?

Recognition

  • Goals

  • Individual

  • Team

  • Organizational

?

Communication

Promotion

?


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Customer

To achieve our vision, how should

we appear to our customers?

Strategy

&

Vision

Financial

To succeed financially, how should

we appear to our stakeholders?

Internal Process

To satisfy our customers, what

business processes must we excel at?

Innovation and Learning

To achieve our vision, how will we

sustain our ability to change & improve?

BSC Perspectives


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Increased Customer Revenue

Financial

Loyalty

Customer

On Time Quality Delivery

Internal

Process Quality

Cycle Time

Learning/Growth

Employee Skills

“The chain of cause and effect should pervade all four perspectives of the BSC.”

Cause & Effect

Lagging

Results

LeadingIndicators


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Profile

Organizational Description

Organizational Relationships

Organizational Challenges

Process categories: Categories 1 through 6

Leadership

Strategic Planning

Customer and Market Focus

Measurement, Analysis, and Knowledge Management

Human Resource Focus

Process Management

Results: Category 7

Business Results

Baldrige Categories:Profile, Process and Results


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Profile

  • Identifies Key Factors: attributes of an organization and its environment that help evaluators assess the organization

    • Main products or services; how they’re delivered to customers

    • Culture (mission, vision, values)

    • Employee profile (how many, what kinds, educational levels, demographics)

    • Technologies, equipment, facilities

    • Regulatory environment

    • Structure and governance

    • Key customers and their requirements

    • Suppliers and partners and their role

    • Competitive environment

    • Strategic challenges (business, operational, human resource)

    • Performance improvement system


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Criteria Structure

  • Seven Categories focusing on the major components of the framework

    • 19 Items focusing on a major requirement of their respective Categories

      • 32 Areas to Address focusing on specific requirements of their respective Items

  • Item Notes

    • Clarifying terms or requirements

    • Giving instructions on responding to Item requirements

    • Indicating key linkages to other Items


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Baldrige Criteria for Performance Excellence

Leadership

StaffFocus

People

Focus

Customer

& Market

Focus

Organizational Results

Work Core

Strategic

Planning

ProcessManagement

Driver Triad

Process

Focus

which bring about results here

guide changes here

Changeshere

Measurement, Analysis, and Knowledge Management


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Measurement, Analysis, and Knowledge Management

Core Values: the Foundation of the Criteria

Leadership

StaffFocus

Customer

& Market

Focus

Organizational Results

Strategic

Planning

ProcessManagement

Visionary

Leadership

Customer-Driven

Excellence

Organizational &

Personal Learning

Valuing

EE’s & Partners

Social

Responsibility

Focus on the Future

Managing for

Innovation

Management by Fact

Agility

Focus on Results

and Creating Value

Systems

Perspective


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Bringing It All Together

Strategic

Planning

Human

Resource

Focus

  • Strategic Planning

    • Operational Plans/Goals

    • Financial Goals

    • Technology Needs

    • Initiatives/Supporting Actions

    • Differentiation/Competitive

    • Advantages

  • Deployment of Plan

  • Work Structures

  • Employee Performance Management

  • Hiring and Succession Planning

  • Education, Training, Development

  • Employee Well-being

  • EE Satisfaction

1. Leadership

Business

Results

  • Customer-Focused

  • Product and Service

  • Financial and Market

  • Human Resource

  • Organizational

  • Effectiveness

  • Governance and Social

  • Responsibility

  • Leadership M/V/V and Operating Principles

  • Governance

  • Performance Reviews

  • Social Responsibility

Customer &

Market Focus

Process

Management

  • Market Knowledge

  • Customer Requirements &

  • Segmentation

  • Relationship Management

  • Customer Satisfaction

  • Value Creation Processes

  • Support Processes

Measurement, Analysis, and Knowledge Management

  • Performance Measurement

  • Performance Analysis

  • Data and Information Availability

  • Organizational Knowledge


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  • Leading / Lagging

  • Number & phase of active projects being worked

  • Cycle time of projects

  • Dollar value & phase of projects being worked

  • Leading / Lagging

  • Quantity / quality of projects in pipeline

  • Age of projects by phase (DMAIC) in active pipeline

  • Leading

  • Quality & quantity of trained resources

  • Systems / infrastructure to ID, & act upon opportunities (VOC, E2E process management, OP Reviews)

University of MN Six Sigma Program Scorecard:

Leading & Lagging Indicators

Financial transformation

Operational & organizational transformation

  • The big “Y”

  • Projects closed with customer & / or dollar impact

You must manage the process since you cannot manage the outcome


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Mission

Mission

Vision

Vision

MBNQA

Baldrige Assessment

A Tool to Focus, Align, and Accelerate Performance Improvements Efforts

Limited Business Vision or Alignment:individuals work toward different goals; energy is diffused

Business Vision with Limited Departmental & Individual Alignment:energy is still diffused

Business Vision with Departmental & Individual Alignment:goals, objectives, and strategies are focused and mutually supported


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Baldrige Category 2.2 – Strategy Deployment Linkages

Illustration of System Interrelationships

P.1

7.6

P.2

7.5

1.1

7.4

1.2

7.3

2.1

7.2

2.2

7.1

3.1

6.2

3.2

6.1

4.1

5.3

5.2

4.2

5.1

Adapted from Insights to Performance Excellence 2004: An Inside Look at the 2004 Baldrige Award Criteria ASQ Press



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Use of Statistical Thinking

Depends on levels of activity and job responsibility.

Where we're

headed

Strategic

Executives

Managerial processes

to guide us

Managerial

Managers

Where the work

gets done

Operational

Workers


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Tournament

Scheduling

Hastings Basketball Boosters Program

Key Core and Support Processes

Tryouts &

Team Selection

Spiral

Tournament

Planning

Coaching Selection,

& Development

  • Community

  • Outcomes

  • Youth Players

  • Parent Support

  • HS Program

  • Success

Core Processes: Practice and

Tournament Play

Program

Objectives

& Goals

Communication

& Publicity

Volunteer

Coordination

Finance & Budgeting

Traveling and In-House

Program Management

and Improvement


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Approaches to use of Baldrige(at any level of organization)

  • Profile only

  • Business Process Design

  • Self-Assessment (scoring optional)

  • Baldrige Express

  • Award Application

    For more information on approaches to using criteria, see description of “Business Excellence Assessments” at www.dhutton.com/baldrige/assessme.html )


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Conduct

Site Visit

Prepare

Narrative

Review

Independently

Reach

Consensus

Plan &

Take Action

Conduct

Site Visit

Prepare

Inputs

Review

Independently

Reach

Consensus

Plan &

Take Action

“Baldrige Express” vs. Traditional

  • The survey-based Baldrige Express approach:

  • The “traditional” narrative-based approach:

  • Organization Profile

  • Survey

  • Organization Performance Results


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So What?What Do I Do Now?

Baldrige

Balanced

Score-

card

Six

Sigma.

ISO

9000

Lean

Mfg.


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“Breakthrough Thinking”: Gerald Nadler & Shozo Hibino - - the Purpose Hierarchy

I

II

III

IV

V


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Scoring

Sample Assessment Scoring Summary

Score

# of Points

1

Leadership

1.1

1.2

Organizational Leadership (70 points)

Social Responsibility (50 points)

30%

40%

21

20

2

Strategic Planning

2.1

2.2

Strategy Development (40 points)

Strategy Deployment (45 points)

20%

20%

8

9

3

Customer and Market Focus

3.1

3.2

Customer and Market Knowledge (40 points)

Customer Relationships and Satisfaction (45 points)

12

13

30%

30%

4

Information and Analysis

4.1

4.2

Measurement/Analysis of Organizational Performance (45 pts)

Information and Knowledge Management (45 pts)

30%

50%

14

22

5

Human Resource Focus

5.1

5.2

5.3

Work Systems (35 pts)

Employee Learning and Motivation (25 pts)

Employee Well-Being and Satisfaction (25 pts)

14

13

8

40%

50%

30%

6

Process Management

6.1

6.2

Value Creation Processes (50 pts)

Support Processes (35 pts)

30%

20%

15

7

7

Results

Customer Focused Results (75 pts)

Product and Service Results (75 pts)

Financial and Market Results (75 pts)

Human Resource Results (75 pts)

Organizational Effectiveness Results (75 pts)

Governance and Social Responsibility (75 pts)

20%

20%

30%

30%

30%

40%

15

15

23

23

23

30

7.1

7.2

7.3

7.4

7.5

7.6


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Baldrige Item Scores: example

503

points

(MB)

%

Process

(550 points)

Results

(450 points)

50%

Process Mgmt

Customer/Mkt

Measure, KM

Leadership

HR Focus

Planning

Results


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Process:

Effective, systematic approaches, responsive to the overall requirements

Approaches well-deployed, although deployment may vary in some areas

Fact-based systematic evaluation and improvement process in place and some organizational learning apparent

Approaches are aligned with organizational needs

Results

Improvement trends and/or good performance levels for most areas of requirements

No pattern of adverse trends or poor performance levels

Some trends/levels show good relative performance (comparisons)

Business results address most key customer, market, and process requirements

What can you say about a MB 500 point organization?


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What can you say about a 500 point organization?

  • The organization demonstrates effective, systematic approaches to the overall requirements of the Items, but deployment may vary in some areas or work units. Fact-based evaluation and improvement address the efficiency and effectiveness of key processes. Results address key customer/stakeholder, market, and process requirements, and they demonstrate some areas of strength and/or good performance.


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What can you say about an organization that:

  • Is ISO 9000:2000 certified?

  • Is Level 4 on Software CMM?

  • Has saved $2.5M from process improvements this past fiscal year?

  • Has 1 Quality Tools expert for every 250 employees in the organization?

  • Has reduced cycle times by 20% each of the past 2 years in its product development cycle?

  • Has aligned its recognition system with its core values?


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The Quality Journey

Desired future state

Some means to measure overall progress

Now

Start

Time


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The Quality Journey

Desired future state

Business Baldrige Journey

700

Some means to measure overall progress

600

500

400

MB Points

300

200

Where do we

want to be &

How do we

measure

progress?

Now

100

0

2000

2001

2002

2003

2004

2005

2006

Start

Time


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What are the roadblocks?

70% of the initiatives fail:

Biggest obstacles that XXX faces are:

Lack of sustained management

commitment and leadership

Unrealistic scope

and expectations

3. Resistance to Change


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Transition to Baldrige requires Systems Thinking

Critical Mix of Skills and Behaviors

Top Level Management (Leadership)

Administrative and Conceptual Skills

(Systems Thinking)

Middle Management(Managers)

Interpersonal Skills

First-level Management (Supervisors)

Technical Skills

Adapted from One More Time: Preventing Managerial Failure Among Engineers and Scientists Van Nostrand Reinhold


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Value of being a Baldrige Evaluator

  • Strengthen Understanding of the Criteria for Performance Excellence…“best practices” that have been validated to drive organizational excellence

  • Improve ability to evaluate an organization’s management system

  • Improve transferable skills: communication (verbal and written), teamwork, investigative and analytic skills, and leadership

  • Network with professionals



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The Basis of Evaluation for Process Categories (1 through 6)

ADLI

Approach

Deployment

Learning

Integration


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Evaluating a Process Item:Approach

Definition: Methods or processes used to meet the requirements of the criteria

  • Systematic and fact-based

  • Appropriate for the Item requirements

  • Effective


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Evaluating a Process Item:Deployment

Definition: The extent to which an approach is applied in addressing the requirements of an Item

  • Used by or for all work units, locations, shifts, stakeholders, product lines, or employees, as appropriate

  • Consistent

  • Tip: Deployment opportunities are usually communicated to evaluators through the Organizational Profile


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Evaluating a Process Item:Learning

Definition: New knowledge or skills acquired through evaluation, study, experience, and innovation

  • Cycles of evaluation and improvement for individual approaches

  • Sometimes “breakthrough” improvement through innovation

  • Sharing of refinements and lessons learned throughout the organization


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Evaluating a Process Item:Integration

Definition: The harmonization of plans, processes, information, resource decisions, actions, results, and analysis to support key organization-wide goals

  • Alignment of approaches with organizational needs

  • Measures, information, and improvement systems are complementary across processes and work units


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The Basis of Evaluation for Results (Category 7)

  • Level of performance

  • Rate and breadth (trends)

  • Performance relative to comparisons and benchmarks

  • Linkage to important requirements


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Evaluating a Results Item:Level of Performance

Definition: Numerical information that places or positions an organization’s results and performance on a meaningful measurement scale.

  • Permit evaluation relative to past performance, projections, goals, and appropriate comparisons


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Evaluating a Results Item:Rate and Breadth (Trends)

Definition: Numerical information that shows the direction and rate of change for an organization’s performance, and how widely deployed or shared performance improvements are

  • Trends provide a time sequence of organizational performance

  • Minimum of three data points needed to demonstrate a trend; time periods can vary

  • May be positive or negative

  • Positive trends may be up or down, depending on what is being measured

  • Data may show no trend


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Evaluating a Results Item:Comparisons

Definition: Performance relative to appropriate comparisons and/or benchmarks

  • Benchmarks are processes and results that represent best practices and performance for similar activities, inside or outside an organization’s industry

  • Other comparisons might include industry data collected by a third party (e.g., industry averages), data on competitors’ performance, and comparisons with similar organizations in the same geographic area

  • Sometimes comparisons with Baldrige winners or other world-class organizations may be used

  • Performance may be worse than, the same as, or better than comparisons


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Evaluating a Results Item:Linkage

Definition: Linkage of results measures (often through segmentation) to important customer, product and service, market, process, and action plan performance requirements

  • These requirements are identified in the Organizational Profile and in process Items (Categories 1 through 6)


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Evaluating a Results Item: EXPECTED RESULTS

  • Data on topics listed in criteria for each item

  • Data related to strategic challenges reported in organizational profile

  • Appropriate segmentation of data

    • Customer/market segmentation

    • Workforce: employee types, locations, shifts

    • Product lines


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Sources of Expectations

  • Organizational profile

  • Strategic plan & action plans

  • Approaches described in process items


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Selecting Comments and Scoring

  • Key scoring concepts

    • Basic (0-40%)

      • Broad comments addressing systems at a high level and generally early deployment. Comments reflect few expectations regarding learning and alignment/integration

    • Overall (50-60%)

      • More detailed comments describing systems, deployment, learning, and alignment

    • Multiple (70-100%)

      • Detailed comments describing details of systems, deployment, learning, and integration


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