chapter 2 - strategic quality management and ope rationalizing quality
TRANSCRIPT
Chapter 2
Strategic Quality Management and
Operationalizing Quality
Objectives
Define strategic quality managementDiscuss the strategic management
processOperationalize the dimensions of
quality Discuss ways to develop quality
measures and metricsDiscuss ways in which customer input
may be obtained
Strategic Quality Management (SQM)
The term and concept is credited to Garvin (1988).
Juran (1988) defined SQM as a “systematic approach for setting and meeting quality goals throughout the company …with upper management participation in managing for quality to an unprecedented degree.”
Strategic Quality Management (SQM)
Madu and Kuei (1993) define the term as an extension of TQM.
SQM involves the incorporation of quality and continuous improvement as a strategic objective
Strategic Quality Management (SQM)
SQM is fully integrated into the three phases of the strategic management process: strategic planning strategic deployment evaluation and control
The Strategic Planning Process
Begins with the organization’s mission and vision statement.
SWOT Analysis Internal assessment (strengths and
weaknesses) External assessment (opportunities and
threats)
The Strategic Planning Process (Figure 2.2)
External factors compared to internal factors to determine strategic goals
Strategies developedDeliberate strategies formed to
realize planned intentionsEmergent strategies emerge from
unplanned events
Strategic Deployment
All members of organization are involved
The strategic plan is shared with all members of the organization
Projects and actions identify for implementation
Strategic Deployment (Figure 2.3)
Bronson Methodist Hospital 2005 Malcolm Baldrige National Quality
Award Plan for Excellence Plan deployed beginning with the
Bronson Leadership System
Evaluation and Control
Feedback SystemSystematic assessment system
Measures Metrics
What is important to the firm? How does the firm create value?
Provide effective feedbackFocus attention on gaps between current
level of performance and desired level
Approaches to Monitoring Progress toward Strategic Goals
Cost of Quality Measure of all costs Decline in costs indicates overall improvement in quality
Balanced Scorecard A management control system Focused on mission, strategy, and goals Assesses progress (4 perspectives)
Financial CustomerOrganizational learning and growthInternal business
Dimensions, Measures, and Metrics
Garvin’s Eight Dimensions are often used as a framework Metric has to be developed to operationalize the
dimensions. Customer input
Service quality Multidimensional Dimensions must be developed for each service
industry Usually more qualitative than quantitative
Dimensions, Measures, and Metrics
Importance of each dimension must be considered
Weight given to the dimension should reflect how vital it is to the product or service
Customer input should be used to determine how vital the dimension is
Example: Operationalizing the Dimensions of Quality
Consider the case of a laser printer for use with a personalcomputer. Garvin’s eight dimensions of product qualitymight be operationalized as follows.
Example: Operationalizing the Dimensions of Quality
Performance:Pages per minutePrint density
Features:Multiple paper traysColor capability
Reliability:Mean time between failures (MTBF)
Example: Operationalizing the Dimensions of Quality
Conformance:UL ratedCrispness of print relative to competitors
Durability:Estimated time to obsolescenceExpected life of major components
Serviceability:Availability of authorized repair centersNumber of copies per print cartridge
Example: Operationalizing the Dimensions of Quality
Aesthetics:Control button layoutCase style
Perceived Quality:Brand name recognitionRating in Consumer ReportsRating in Byte magazine
Example: Operationalizing the Dimensions of Quality
The relative importance of each dimension could beestablished by assigning each dimension a weightbetween 0 and 1 with the total weights = 1.
Dimension WeightPerformance 0.30Features 0.05Reliability 0.15Conformance 0.10Durability 0.15Serviceability 0.10Aesthetics 0.05Perceived Quality 0.10
TOTAL 1.00
Example: Operationalizing the Dimensions of Quality
Each printer to be evaluated would be tested usingthe measures or metrics established for eachdimension. Based on the test results a dimensionscore between 0 and 10 could be assignedwhere 10 indicates perfection and 0 indicatestotal absence of that dimension.
Example: Operationalizing the Dimensions of Quality
Dimension Weight Brand X Brand Y Score Score
Performance 0.30 8 7Features 0.05 6 2Reliability 0.15 5 6Conformance 0.10 8 7Durability 0.15 9 8Serviceability 0.10 6 9Aesthetics 0.05 7 9Perceived Quality 0.10 9 6
TOTAL 1.00
Example: Operationalizing the Dimensions of Quality
Multiplying the dimension score by the dimension weight yields a weighted dimensionscore. Summing these weighted scores overthe eight dimensions yields an overall relativequality rating for each copier.
NOTE: This process can be easily done usinga spreadsheet such as Excel.
Example: Operationalizing the Dimensions of Quality
Dimension Weight Brand X Brand Y Score Wtd. Score Wtd.
Performance 0.30 8 2.40 7 2.10Features 0.05 6 0.30 2 0.10Reliability 0.15 5 0.75 6 0.90Conformance 0.10 8 0.80 7 0.70Durability 0.15 9 1.35 8 1.20 Serviceability 0.10 6 0.60 9 0.90Aesthetics 0.05 7 0.35 9 0.45Perceived Quality 0.10 9 0.90 6 0.60
TOTAL 1.00 7.45 6.95
In this case, Brand X is determined to be superioroverall to Brand Y.
Methods of Obtaining Input from Customers
Customers provide source of the dimensions used
Validity and reliability Validity-what was intended to measured is
being measured Reliability-how consistent is the method
Focus Groups Surveys Combination (Focus Groups & Surveys)
Focus Group
Unstructured interview Trained moderator Homogenous respondents
Provides more information than survey
Analysis is more difficulty because much of the data is qualitative
Surveys
Questionnaires are given to a sample population
Usually in a prearranged order with predetermined set of responses
Concerns when using survey Question design, presentation order,
response scale, non-response bias, and data analysis
Focus Groups & Surveys in Combination
Focus groups can help determine key quality characteristics
Information from focus group used to design survey that will yield desired information
Summary
Quality should be in strategic plan if it is used as a source of competitive advantage
Strategic plans must be deployed and managed
Input from many sources is vital
Summary
Input can be obtained from customer surveys and/or focus groups
Validity and reliability should always be considered in data collection
Cost of Quality and The Balanced Scorecard can be used to determine the effectiveness of strategic quality plan deployment