Strategic Quality Planning

When an organizations chooses to make quality a major competitive edge (differentiation), it becomes the central issue in strategic planning.

This is especially reflected in vision, mission and policy guidelines of an organization.

An essential idea behind strategic quality planning is that the product is customer value rather than a physical product or service. This feat cannot be achieved unless an organization creates a culture of quality and no strategy and plan can be worthwhile unless it is carefully implemented

The process starts with the principles that quality and customer satisfaction are the center of an organization’s future.It brings together all the key stakeholders.It can be highly effective, allowing the organizations to do the right thing at the right time, every time.

There are seven steps to strategic Quality Planning:1.Discover customer needs2.Customer positioning3.Predict the future4.Gap analysis5.Closing the gap6.Alignment7.Implementation

1. Customer Needs: The first step is to discover the future needs of the customers. Who will they be? Will your customer base change? What will they want? How will they want? How will the organization meet and exceed expectations?

2. Customer Positioning:Next, the planners determine where organization wants to be in relation to the customers. Do they want to retain, reduce, or expand the customer base. Product or services with poor quality performance should be targeted for breakthrough or eliminated. The organization’s needs to concentrate its efforts on areas of excellence.

3. Predict the future: Predict the future conditions that will affect their product or service. Demographics, economics forecasts, and technical assessments or projections are tools that help predict the future.

4. Gap Analysis : This step requires the planner to identify the gaps between the current state and the future state of the organization. An analysis of the core values and concepts is an excellent technique for pinpointing  gaps.

5. Closing the Gap: The plan can now be developed to close the gap by establishing goals and responsibilities. All stakeholders should be included in the development of the plan.

6. Alignment: As the plan is developed, it must be aligned with the mission, vision, and core values and concepts of the organization. Without this alignment, the plan will have little chance of success.

7. Implementation: This last step is frequently the most difficult. Resources must be allocated to collecting data, designing changes, and overcoming resistance to change. Also part of this step is the monitoring activity to ensure that progress is being made. The planning group should meet at least once a year to assess progress and take any corrective action

TQM In Service Organisations

1. Top-management Commitment; 2. Customer Focus; 3. Continuous Improvement And Innovation; 4. Training And Education; 5. Benchmarking; 6. Quality Information 7. Performance Measurement; 8. Employee Involvement; 9. Employee Encouragement; 10.Supplier Management

Though the service sector lags behind manufacturing in the adoption of TQM but the increasing importance of the service sector in terms of employment potential and contribution to national income forms a backbone of social and economic development of a country and is emerging as the largest and fastest growing sector in the world economy.

It is widely believed that its principles are equally relevant to service organizations as both use facilities as inputs to satisfy customer’s needs.

Ex of service sectors:health-care, food supply and distribution, education, banking and information technology sectors

1. Reasons For Failure

2. Inadequate Attention To Different QM Practices During Tqm Implementation In The Service Organizations

3. Failure To Develop An Implementation Framework That Fits To A Specific Service Organization

4. Lack Of Top And Middle Management Commitment, 5. Unrealistic Expectations And Time-frame, And 6. Cost Of Tqm Implementation, Under-reliance On Statistical Methods, And Failure

To Develop And Sustain A Quality-oriented Culture 7. High Expectations Of Quick Results From Tqm Initiatives; 8. Management Reluctance In Imparting Training And Education Programs To

Employees For Better Understanding Of Tqm Philosophy And Use; 9. Lack Of Consensus, Lack Of Employee Empowerment, Poor Planning, Lack Of

Communication, Management Causing Confusion, Cross Functional Teams Are Not Employed, And Lack Of Direction And Purpose;

10.No Targets, No Attitude To Attain Higher Productivity, Lack Of Continuous Improvement Culture, Lack Of Coordination Between Department, Employee’s Resistance To Change, And Best Practices Of Other Companies Are Not Benchmarked

Why Training is important in TQM based organizations?As, at the heart of TQM is the concept of intrinsic motivation-involvement in decision making by the employees, it means more responsibility, which in turn requires a greater level of skill.This must be achieved through TRAINING.

Basic Steps of Effective Training Plans

The first step in training process is to make everyone aware of what the training is all about. Thoughts suggestions should be gathered.

The second step is to get acceptance. The trainees must feel that training will be of value to them.

The third step is to adept to adapt the program. Is everyone ready to buy into it? Does everyone feel they are a part of what is going to take place?

The fourth step is to adept to what has been agreed upon. What changes must be made in behavior and attitudes.

Total Quality Management in Services (1)

• A user of service has a few characteristics and attributes in mind that he or she uses as a basis for comparison among alternatives. • Lack of one attribute may eliminate a specific service firm from

consideration. • Quality also may be perceived as a whole bundle of attributes where

many lesser characteristics are superior to those of competitors.

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Total Quality Management in Services (2)

• Extensive interviews with consumer focus groups identified the following conclusions: • Consumers’ perception of service quality results from a comparison of their

expectations before the service vs. their actual experience with the service • Quality perceptions are derived from the service process as well as from the

service outcome.

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Total Quality Management in Services (3)• The research also indicated that customers, across a broad range of

service businesses, have the following expectations in descending order of importance:

1. Reliability (consistency)2. Responsiveness (speed)3. Assurance (competence)4. Empathy (customer orientation)5. Tangibles (what he/she can see, feel, smell, hear, and taste)

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Total Quality Management in Services (4)• Service quality is of two types, normal and exceptional • Normal: the quality level at which the regular service is delivered • Exceptional: quality level at which “exceptions” or “problems” are handled

• This implies that a quality control system must recognize and have prepared a set of “plan Bs” for less-than-optimal operating conditions.

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Total Quality Management in Services (5)• There are five TQM tools:• Taguchi method • Pareto charts • Process charts • Cause-and-effects diagrams • Statistical process control.

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Total Quality Management in Services (6)• Three concepts are important to understanding Taguchi approach and

method • Quality Robustness – quality robust products/services are outputs that can be

produced with uniform consistency in adverse operating and environment conditions. • Quality Loss Function – identifies all costs connected with poor quality and

shows how these costs increase as the output moves away from being exactly what the customer wants.• Target Value is a philosophy of continuous improvement to bring the product

exactly on target.

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Total Quality Management in Services (7)• Pareto Charts- method of organizing errors, problems, or defects to

help focus on the “critical few factors” in problem-solving efforts. • Process Charts – are designed to help us understand a sequence of

events through which a product travels. The process chart graphs the steps of the process and their relationships. • Cause and Effect Diagrams – One of many available tools helpful in

identifying possible causes of quality problems.

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Total Quality Management in Service (8)

• Statistical process control is concerned with monitoring standards, making measurements and taking corrective actions as a product or service is being produced

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KaizenKaizen - Japanese for "improvement

When used in the business sense and applied to the workplace, kaizen refers to activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers.

It also applies to processes, such as purchasing and logistics, that cross organizational boundaries into the supply chain.

It has been applied in healthcare ,psychotherapy , life-coaching, government, banking, and other industries.

By improving standardized activities and processes, kaizen aims to eliminate waste

The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving production line in case of any abnormality and, along with their supervisor, suggest an improvement to resolve the abnormality which may initiate a kaizen. The PDCA cyclesThe cycle of kaizen activity can be defined as:

This is also known as the Shewhart cycle, Deming cycle, or PDCA.

Continuous improvement is based on a Japanese Concept called Kaizen, is the philosophy of continually seeking ways to improve operations.

It invloves identifying benchmarks of excellent practices and instilling a sense of employee ownership of the process.

The focus can be on:1. Reducing the length of time required to process requests for loans in

bank2. The amount of scrap generated at a milling machine or the number

of employee injuries.3. Continuous improvement can also focus on problems with customers

or suppliers, such as customers who request frequent changes in shipping quantities and suppliers that to maintain high quality.

Instilling a philosophy of continuous improvement in an organization may be a  lengthy process, and several steps are essential to its eventual success.1. Train employees in the methods of statistical process control (SPC)

and other tools for improvement quality.2. Make SPC methods a normal aspect of daily operations.3. Build work teams and employee involvement.4. Utilize problem-solving techniques within work teams.5. Develop a sense of operator ownership of the process.

Kaizen: The Life Blood of Standardized WorkStandardized work and KAIZEN are the means by which people make the Toyota Production System work. People are by far the most important element of the entire system. Without the support of everyone involved, no part of the system will work. No matter how ingenious the method of production or service  may be,  for example, if the workers do not follow rules, the entire system of production control will fall apart

KAI” means change and “ZEN” means better.In other words it means change for betterment or improvement.

The Key Kaizen Practices • The key Kaizen practices are:• Mindset & Culture• v customer orientation• v quality control (QC) circles• v suggestion system• v discipline in the workplace• v small-group activities• v cooperative labor-management• v relations• v total quality control (TQC)• v quality improvement

Production Process • The production process are:• v automation & robotics• v autonomation• v zero defects• v total productive maintenance• v (TPM)• v kamban• v just-in-time (JIT)• v productivity improvementnew product development

Kaizen: Seven Key Concepts 1.Standardize-Do-Check-Act (SDCA) to Plan-DO-Check-Act (PDCA) - Follow theShewhart cycle 2.The next process is the customer – Ask what you can do to improve product or services that you pass along to the next process. 3.Quality first – Improving quality automatically improves cost and delivery, while focus on cost usually causes deterioration in quality and delivery.

4.Market-in, product out – Instead of pushing products into the market and hoping customers will buy them, ask potential customers what they need/want and develop products that meet these needs and wants. 5.Upstream management – The sooner in the design/pilot test/production/market cycle a problem can be found and corrected, the less time and money is wasted. 6.Speak with data – The statistical tools from Exhibit 4 will provide data for convincing arguments.

7.Variability control and recurrence prevention – Ask ‘Why?’ five times to get to the real cause of a problem and to avoid just treating the effect of the problem.

Kaizen’s Problem-Solving Tools • P – Plan Pick a project (Pareto Principle)Gather data (Histogram and Control Charts)Find cause (Process Flow Diagram and Cause/Effect DiagramPick likely causes (Pareto Principle and Scatter Diagrams)Try Solution (Cause/Effect 0who, what, why, when, where, how

• D – Do • Implement solution• C – Check • Monitor results (Pareto, Histograms, and Control Charts)• A – Act • Standardize on new process

Kaizen’s Seven Deadly Wastes 1.Overproduction – Production more than production schedule 2.Waiting – Poor balance of work; operator attention time 3.Transportation – Long moves; re-stacking; pick up/put down 4.Processing – Protecting parts for transport to another process 5.Inventory – Too much material ahead of process hides problems 6.Motion – Walking to get parts because of space taken by high WIP. 7.Defects – Material and labor are wasted; capacity is lost at bottleneck

PDSA TQM IMPLEMENTATIONShewhart developed a Plan, Do, Check, Act (PDCA) cycle for improvement process. Deming modified it as PDSA. There are four phases – Plan, Do, Study and Act shown in Fig. 4.1as follows:

ACT PLAN

DOSTUDY

Fig. 4.1 PDSA CYCLE

PDSA TQM IMPLEMENTATIONPLAN• Establish objectives• Establish a plan that will facilitate achieving goal• Establish a measurement system

DO• Plan for implementation• Implement the plan on pilot basis

STUDY• Compare the results with the objectives• Identify gaps• Analyze the causes for gaps and exeptional results, if any

ACT• Standardize the procedure that met or exceeded the goal• If there were gaps, improve the plan and carry out PDSA again.

BEGINNING PHASE OF TQM

The organization has decided to implement TQM after analyzing the pros and cons. The CEO is prepared to commit his time and resources, and therefore there should not be any reconsideration whether TQM or not at this stage. The prerequisite for the planning phase is that the organization has set its goal to achieve TQM for long-term success. 

PDSA for Continuous Improvement

Plan – The improvement team has to make a plan addressing the following points, in particular:~ What is the current situation/level of performance?~ What are they expected results/level of performance?~ How do they propose to go ahead to find out the best solution?

Do – After the QC has given its seal of approval, the approved action plan has to be implemented in the Do phase on a pilot basis.

Study Phase – Once an improvement action is implemented on a trial basis then the Do phase is completed and the study phase starts. In this phase, the improvement team members have to assess the effectiveness of the suggested solutions.

Act phase – If the QC is convinced that the process has been improved and expected results are achieved, then the Act phase commences. In this phase procedures are modified and issued.