©2004 prentice-hall s. thomas foster, jr. boise state university powerpoint prepared by prepared by...

©2004 Prentice-Hall©2004 Prentice-Hall

S. Thomas Foster, Jr.S. Thomas Foster, Jr.Boise State UniversityBoise State University

PowerPointPowerPoint prepared byprepared byDave MageeDave Magee

University of KentuckyUniversity of KentuckyLexington Community CollegeLexington Community College

Chapter 3Chapter 3Global Quality and International Global Quality and International

Quality StandardsQuality Standards

2Slide 1-2© 2004 Prentice-Hall© 2004 Prentice-HallManaging Quality: An Integrative Approach; 2nd EditionManaging Quality: An Integrative Approach; 2nd Edition

Chapter OverviewChapter Overview

• Managing Quality for the Multinational Firm• Quality Improvement: The American Way• The Malcolm Baldrige National Quality Award• Quality Improvement: The Japanese Way• Quality Improvement: The European Way• ISO 9000:2000• Are Quality Approaches Influenced by Culture?


Managing Quality for the MNFManaging Quality for the MNFSlide 1 of 4Slide 1 of 4

• Mechanisms That Firms Use In Globalizing– Licensing

• By licensing, a U.S. corporation can allow foreign firms to sell in restricted markets while using the design of the original designer.

– Partnering• Firms also seek international markets through joint ventures or

partnering.

– Globalization• Globalization means that a firm fundamentally changes the

nature of its business by establishing production and marketing facilities in foreign countries.

• We refer to these firms as multinational corporations.



Global Factors That Affect Quality-Related Decisions

PhysicalEnvironment

SocialEnvironment

TaskEnvironment

QualityManagement

Figure 3.3



• Exporting– Another means of entering international markets is to not

globalize but become an exporter.

– Exporters produce their products and ship them internationally.

– Firms that are entrepreneurial in nature and plan their exports effectively tend to have higher quality

– For exporting firms, quality leads to lower price and greater export success



Export Quality Model

Firm Characteristics

Product Strategy Performance

Low PriceLow Price

High QualityHigh Quality

StandardizationStandardization

PromotionPromotion

Export SuccessExport Success

EntrepreneurshipEntrepreneurship

Export PlanningExport Planning

Figure 3.4


Malcolm Baldrige National Quality Malcolm Baldrige National Quality AwardAward

Slide 1 of 11Slide 1 of 11

• Malcolm Baldrige National Quality Award– The award is open to small (less than 500 employees) and

large firms (more than 500 employees) in the manufacturing and service sectors.

– It is not open to public-sector and not-for-profit organizations.

– There can be only two winners per category each year, which limits the number of yearly awards to six.

• Additional information on the Baldrige award– www.NIST.gov


• Key Characteristics of the MBNQA– The criteria focus on business results. Companies must

show outstanding results in a variety of areas to win.

– The Baldrige criteria are nonprescriptive and adaptive. Although the focus on the Baldrige is on results, the means for obtaining these results are not prescribed.

– The criteria support company-wide alignment of goals and processes.

– The criteria permit goal-based diagnosis. The criteria and scoring guidelines provide assessment dimensions.






Baldrige Award Framework

4Information and analysis

3Customer andmarket focus

6Process

management

1Leadership

7Businessresults

2Strategic planning

5HR develop. &management

Organizational Profile:Environment, Relationships and Challenges

Figure 3.5




MBNQA Categories

Category 1

Award criteria for leadership. The extent to which top management is involved in creating and reinforcing goals, values,

directions, customer involvement and other

issues.

Category 2

Focuses on how the company establishes

strategic directions and how it sets it tactical

actions plans to implement the strategic plans.

Concerned with methods, measures, deployment,

and evaluation.




MBNQA Categories

Category 3

Addresses the customer and market focus. The

processes for listening to and learning from

customers and markets must be evaluated, improved, and kept

current.

Category 4

Information and analysis relates to the firm’s

selection, management, and use of information to

support company processes and to improve

firm performance.




MBNQA Categories

Category 5

Deals with human resources focus. The

workforce is to be enabled to develop and use its full

potential, aligned with company objectives.

Category 6

Examines the key aspects of process management. This includes customer-focus in design, delivery

process design for services and products, support

processes, and processes relating to partners.




MBNQA Categories

Category 7

Documents the results of the other six categories and requires a series of tables and graphs that

demonstrate the operational and business

results of the firm.




• The Baldrige Process– The first step is eligibility determination.

– The completed application is sent to the National Institute of Standards and Technology (NIST).

– The application is reviewed by examiners and then by judges, who will determine whether the application will be given a consensus score by the examiners.

– Firms that are granted Baldrige site visits sometimes refer to themselves as “Baldrige Qualified.”

– The site visit consists of a team of 4 to 6 examiners visiting a company over a period not to exceed one week.

– One of the most important outcomes is examiner feedback.



Slide 9 of 11Slide 9 of 11Baldrige Evaluation Process

Receive applicationsReceive applications

Stage 1Independent review

Stage 1Independent review

Select forconsensus review?

Judges

Select forconsensus review?

Judges

Stage 2Consensus review

Stage 2Consensus review

Select for site visit?Judges

Select for site visit?Judges

Stage 3Site visit review

Stage 3Site visit review

Review and recommend winners

Judges

Review and recommend winners

Judges

Feedback report to applicant

Feedback reportYes

No


No

Yes

Yes


No

Figure 3.6




• Feedback Report– Scoring summary is a synthesis of the most important

strengths and areas for improvement.

– Individual scoring range provides insight concerning the relative areas of strength and areas for improvement.

– Scoring distribution provides the percentage of applicants for a particular year scoring in each of the eight scoring bands.

– Examiner comments give feedback concerning the organization.




• Being a Baldrige Examiner– Appointment to the board of Trustees for the MBNQA

Board of Examiners is a very prestigious designations.

– Examiners are unpaid volunteers, and must be willing to give up approximately 10% of their year to serve as an examiner.

• State Awards– Full-Baldrige approach

– Baldrige-lite approach

– Multilevel approach


Quality Improvement: The Japanese Quality Improvement: The Japanese WayWay

• Deming Prize– Awarded to individuals and groups who have contributed

to the field of quality control.

• Other Japanese Contributions to Quality Thought– Juran stated that the genius of the Japanese was in their

ability to maintain a focus on the minutia and detail associated with process improvement.

– There are several uniquely Japanese contributions that are a part of the Japanese approach to production and service.


Deming Prize for QualityDeming Prize for QualitySlide 1 of 7Slide 1 of 7

• Deming Prize– The Deming Prize for quality was established in 1951 by

the Japanese Union of Scientists and Engineers (JUSE).

– Three categories of awards• Deming Application Prize for Division

• Deming Application Prize for Small Business

• Quality Control Award for Factory

– There is no limit on the number of companies that can receive the award in a given year.

– The Deming Prize is much more focused on processes than is the Baldrige.


Deming Prize for Quality Deming Prize for Quality Slide 2 of 7Slide 2 of 7

• Deming Categories– Policy

– Organization and Operations

– Collecting and Using Information

– Analysis

– Planning for the Future

– Education and Training

– Quality Assurance

– Quality Effects– Standardization

– Control



Deming Categories

Policy Org. and Operations

The first category of the Deming Prize addresses

the areas of management of quality policy, quality

formation, policy correctness and

consistency, and related topics.

The organization and operations portion of the

Deming application requires the applicant to document processes for clarifying authority and

responsibility, and related topics.



Deming Categories

Information Analysis

The information that is collected for this item

includes information that is gathered on the outside

and inside.

The analysis category of the Deming Prize covers the areas of selection of priority problems and themes, correct use of

analytical methods, and use of statistical methods.



Deming Categories

Planning for the Future Education & Training

To plan well for the future, firms must

understand their present condition well, which is

the documentation required for this

category.

Applicants document plans and

accomplishments relating to education and

training.



Deming Categories

Quality Assurance Quality Effects

As discussed in Chapter 1, quality assurance has to

do with the design of products and the new product development

process.

Quality effects relate to the documentation of

benefits, outcomes, and results of quality

improvement.



Deming Categories

Standardization Control

The systems of setting standards, monitoring

performance against the standards, and revision of

standards are documented.

The applicants describe how they are using SQC,

control points, control items, statistical thinking, and the current state of control in the company.


Other Japanese Contributions to Quality Slide 1 of 7Slide 1 of 7

• Lean Production• Japanese Total Quality Control (TQC)• Visibility• In-Process Inspection• N = 2 Technique• Total Involvement of the Workforce• The Five Ss


Other Japanese Contributions to Other Japanese Contributions to QualityQuality Slide 2 of 7

• Lean Production– Two views emerge in the literature that pertain to Lean

(a.k.a. just-in-time (JIT) manufacturing).

– The first view of Lean is a philosophical view of waste reduction. This view asserts that anything in the process that does not add value for the customer should be eliminated.

– The second view of Lean is a systems view stating the JIT is a group of techniques or systems focused on optimizing quality processes.


Other Japanese Contributions to Other Japanese Contributions to Quality Quality Slide 3 of 7Slide 3 of 7

• Japanese Total Quality Control– Just as the Japanese Lean approach requires attention to

detail in every aspect of the process, so does the TQC approach.

– This attention to detail runs deep in the Japanese culture.


Other Japanese Contributions to Other Japanese Contributions to Quality Quality SlideSlide 4 of 74 of 7

• Visibility– Problems must be made visible before they can be

addressed.

– Andon or warning lights

– Line-stop authority

• In-Process Inspection– All work is inspected at each stage of the process.

– Workers inspect their own work.



• N = 2 Technique– The N = 2 technique is an alternative to acceptance sampling.

– Usually, an acceptance sampling plan involves rules such as:• If 2 or fewer defects, accept the lot.

• If more than 2 defects, reject the lot.

• Total Involvement of Workforce– Horizontal deployment means that all departments are involved

in quality.

– Vertical deployment means that all levels of management and workers are actively involved in quality.



• The Five S’s. The five Ss are a sequential process that companies follow to literally “clean up their acts.” The Ss are:– Seri: organizing by getting rid of the unnecessary.– Seiton: neatness that is achieved by straightening offices and

work areas.– Seiso: cleaning plant and equipment to eliminate dirtiness

that can hide or obscure problems.– Seiketsu: standardizing locations for tools, files, equipment,

and all other materials.– Shetsuke: discipline in maintain the prior four Ss.



• Quality Circles– Are natural work teams made up of workers that are

empowered to improve processes they use.

• Preventive Maintenance (PM)– The idea behind this concept is that the worst condition a

machine should ever by is on the day you purchase it.


Quality Improvement: The European Quality Improvement: The European WayWay

• ISO 9000:2000– Is the European standard for quality that has been expanded

worldwide.

• European Quality Award (EQA)– The highest level is the EQA for the most accomplished

applicant in a given year.

– The second level given is the European Quality Prize for other firms that meet the award criteria.


European Quality AwardEuropean Quality Award

European Quality Award Model Figure 3.7

Leadership

People management

ProcessesBusinessresults

Policy andstrategy

Resources

People satisfaction

Customersatisfaction

Impact onsociety

Enablers Results


ISO 9000:2000ISO 9000:2000Slide 1 of 11Slide 1 of 11

• Worldwide Impact– On a worldwide basis, ISO 9000:2000 has had a much more

significant impact than any of the quality awards in terms of the number of companies that have implemented the approach..

• Focus of ISO 9000:2000– The focus of ISO 9000:2000 is for companies to document

their quality systems in a series of manuals to facilitate trade through supplier conformance.

• ISO– Organization for International Standards



• Three Standards1. ISO 9000:2000 - Quality management systems -

Fundamentals and vocabulary.

2. ISO 9001:2000 - Quality management systems - Requirements.

- These are used for internal implementation, contractual purposes, or for third-party registrations.

3. ISO 9004:2000 - Quality management - Guidelines for Performance Improvement

- These include continual improvement and enhancing overall performance.



• ISO 9001:2000 consists of 5 clauses.– Clause 4: Quality Management System

– Clause 5: Management System

– Clause 6: Resource Management

– Clause 7: Product Realization

– Clause 8: Measurement, Analysis and Improvement



• ISO 9001:2000 Clause 4– Quality Management System

– Includes development, design, implementation, and maintenance of quality management documents.

• ISO 9001:2000 Clause 5– Management System

– Outlines management’s responsibility in developing and maintaining a quality management system.



• ISO 9001:2000 Clause 6– Resource Management

– This includes providing needed resources, personnel, facilities, and the environment necessary to get the work done.

• ISO 9001:2000 Clause 7 – Product Realization

– These are all of the requirements, including processes, documents, customer requirements, specifications, designs, and quality processes needed to produce a product.

– This includes selecting and developing suppliers in a way that ensures that purchased components satisfy requirements.



• ISO 9001:2000 Clause 8 – Measurement, Analysis and Improvement

– This has to do with analyzing process data and using the data to improve operations and service to the customer.

– This includes performing internal audits and monitoring and measuring processes and products.

– Also included are corrective action preventive action for improvement.



• Underlying Quality Management Principles– Customer Focus

– Leadership

– Involvement of People

– The Process Approach

– A Systems Approach to Management

– Continual Improvement

– Factual Approach to Decision Making

– Mutually Beneficial Supplier Relationship



• ISO 9000:2000 Registration Process– Step 1: Inquiry

– Step 2: Contract with registrar

– Step 3: Phase 1 audit

– Step 4: Certification audit

– Step 5: Process audits (optional)

– Step 6: Final certification audit

– Step 7: Rolling certification (surveillance) audits



Step 1: Inquiry

Client contacts registrars to investigate the terms

for registration and makes a selection.

Step 2: Contract with registrar

Registration steps are determined and a price is negotiated. A pre-assessment or gap

analysis may be done.

ISO 9000:2000 Registration Process



Step 3: Phase 1 audit

Registrar performs an onsite audit of the

documented quality system against the

applicable standard.

Step 4: Certification audit

Every element of the ISO 9000 standard is audited several times during the

registration process. During each 3-year period, 100% of the

organization is audited.




Step 5: Process audits (optional)

The client may choose business processes for

auditing to the applicable standard, allowing the client to

learn and experience the registrar’s auditing

methods.

Step 6: Final certification audit

Once the client’s documented quality system has met the

applicable standard, the registrar will conduct an

audit to determine the system’s effective implementation.




Step 7: Rolling certification audits

The registrar returns on either 6 month or

annual cycle. Sometimes referred to as surveillance audits.



ISO 14000ISO 14000

• ISO 14000– A series of standards that provide guidelines and a

compliance standard for environmental compliance.

• ISO 14001 – The compliance standard for ISO 14000, Environmental

Management Systems.

– Uses the same basic approach as ISO 9000:2000 with documentation control, management system auditing, operational control, control of records, management policies, audits, training, statistical techniques, and corrective and preventive action.


Are Quality Approaches Influenced Are Quality Approaches Influenced By Culture?By Culture?

Quality Approaches are Influence by Culture

The US approach has historically been

command-and-control oriented.

The Japanese approach is based on

an ethic of consistency and emphasis on

reduction of waste.

The Europeans have adopted broad

standards that can be adapted to the diverse

nation states of the EC.


SummarySummary

• Managing Quality for the Multinational Firm• Quality Improvement: The American Way• The Malcolm Baldrige National Quality Award• Quality Improvement: The Japanese Way• Quality Improvement: The European Way• ISO 9000:2000• Are Quality Approaches Influenced by Culture?

©2004 prentice-hall s. thomas foster, jr. boise state university powerpoint prepared by prepared by...

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