designing elements of a modern quality system

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Forum on Quality InnovationShanghai, China5 November 2008

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Designing the Elements of a Modern Quality System

Gregory H. WatsonBusiness Excellence Solutions, Ltd.

Helsinki, Finland

ABSTRACT

Since the mid-1980s there has been a consensual movement in the qualitymanagement field toward combining the three major quality managementsystems which had previously been perceived as “competing” for the affection orapproval Chief Quality Officers are architects of the system that will deliverquality outcomes to customers in a sustainable way. The three qualityapproaches that competed were: ISO9000, business excellence models (such asthe Malcolm Baldrige National Quality Award criteria), and Six Sigma methods.

This set of distinct choices was oft presented as alternative which are of equalvalue for achieving business results. The purpose of this paper is to succinctlydefine necessary ingredients of a comprehensive system of managing for qualityand to place these elements into a sound structure that can be used by mostorganizations. Additionally, the identified quality methods must be defined in thecontext of the culture in which it is going to be implemented as well as theorganizational level at which it is going to be operated. This paper will defineall of these different elements of a quality management system from the viewpointof the ‘atomic level’ of work that is done in an organization and present a simple

foundation or a “do-it-yourself” way to interpret the meaning of quality and give you the ability to make it a reality in your organization.

Keywords: Total Quality Management (TQM), ISO9000, Malcolm Baldrige National Quality Award, Lean Six Sigma, Process Benchmarking,Organizational Assessment, Performance Management, BusinessControls, Policy Deployment, Daily Management

Keywords: “We have to grasp not only the ‘know-how’ but also the ‘know-why.’”

“Those who are not dissatisfied will never make any progress.”

~ Shigeo Shingo, Toyota

Introduction

Quality is both: (1) the content or attributes of work that is delivered to meet an end and (2) themeans by which energy (human and mechanical, potential and kinetic) is focused to organizeresources to produce the desired outcome. Thus, quality is both process and content. A systemfor delivering quality is called a quality management system because it must coordinate themethodological aspect of quality by applying available resources to achieve the desired state ofthe quality result – which is one definition for the process of management. To assure thoroughunderstanding of the elements of design for a quality management system we will begin a simpleconstruct and build the entire system from one ingredient – the concept of work.


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What is Work?

Work is movement to accomplish a purpose, which may or may not have value. Some movement

is waste because no progress is made toward producing something that the customer of that workwould be willing to value. Some movement is process as it coordinates a sequence of action thattransforms inputs into desired outputs by coordinating or consuming resources (people, material,time, or energy).

The Essential Perspective for Value Judgment is External

Two external judgments by organizational stakeholders are the key determinants of value for anyorganization: shareholders determine financial value of the organization and customers determinethe market value of an organization. How important is the interaction between these elements?In a study conducted by the Wharton Graduate School of Business, called the Profit Impact ofMarket Strategy (PIMS) Study, a definitive relationship was established between market share,

financial value as measured by return on investment (ROI), and customer perceived performancesatisfaction relative to the competing organizations. This relationship is illustrated in the chart below in Figure 1:

0

5

10

15

20

25

30

35

40

Return on

Investment(ROI)

R e l a t i v e M a r k e t S h a r e

H i gh 6 0 % 2 5 % Lo w R

e l a t i v

e P e

r c e i v e

d Q

u a l i t

y

( P e r

c e n t i l e )

Superior

Inferior

67%

33%

* Bradley T. Gale, The PIMS (The Profit Impact of Market Strategy) Principles , Free Press, 1987.

Figure 1: Performance Dimensions of the Profit Impact of Market Strategy

This relationship identifies the critical factor that must be achieved through the output of work –the ability to influence customer perception in a way that is perceived as ‘better than’ that of anyalternative the customer has for choice. Thus, it is clear that judgments about the relative value ofwork accomplishments or outputs should be based on external commercial perspectives. To gaina proper external judgment of the value of work two questions must be addressed:


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(1) How is a customer-based identification of value defined?(2) How can attractive quality from the customer’s viewpoint be achieved regularly and

managed in the daily work environment?

Turning to the first of these questions we will address the nature of doing work right, then we willdiscuss the issue of creating attractive quality.

What is Work Done Wrong?

Work done wrong falls into three categories of work: work that should not have been done in thefirst place (work as waste); work that should have been minimized (essential work but we put toomuch effort into accomplishing it given the level of value that it returns); and work that should beoptimized (essential work that customers value and are willing to pay for – perhaps even pay at a

premium rate).

What is Work as Waste?

The idea of waste has been thoroughly defined by workers at Toyota and other manufacturingactivities and can be generalized to all types of work: Transportation waste – the waste that occurs from movement of information or material from

one place to another without performing any activity that produces value (i.e.: moving anytype of inventory of material from one place to another without performing operations on it;moving information from one place to another without processing or analyzing it; moving

people from one place to another without doing any value-adding activity). This type ofwaste adds to the overhead cost of an organization by requiring additional support systems,storage locations, and indirect labor to support its movement.

Inventory waste – the waste that occurs from the accumulation of material, equipment, or

information that is not required for processing in a close time period (i.e.: raw materialinventory that is ordered before it is required for processing; work-in-process inventory that iswaiting for the next step in its processing activity; finished goods inventory that is availablefor shipment, but has not been assigned to a customer order; information inventory that is

being kept for ‘just-in-case’ usage, but is consuming computer memory or storage locations).This type of waste reduces the working capital of an organization by causing investments to

be made in materials that are not required to satisfy the demands of the order-to-cash cyclefor supporting customer orders on the organization.

Movement waste – the waste occurring by expending inefficient or unnecessary human effortto accomplish a specific task (i.e.: walking to out-of-the-way locations to find materials or toaccomplish a routine task; stretching or reaching beyond one’s normal comfort zone in orderto do repetitive work; moving materials or paperwork between tasks that are not adding any

substantive value). This type of waste increases the standard cost of a working activity byconsuming time, reducing efficiency, and thereby adding cost without contributing value tothe process.

Waiting waste – the waste occurring when transportation or movement activities in the work process is halted and people, equipment, material, or information become idle and must waitfor the next step in the work process (i.e.: inventory waiting for the next operation; peoplewaiting for work assignments; parts waiting for rework or other disposition; products waitingfor shipment; people waiting in queue for service; people waiting for testing information to

be able to make a determination on status). This type of waste increases indirect cost by


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requiring additional space for storage during the waiting time, decreases process throughput(productivity) by creating process bottlenecks due to work flow imbalance; decreases externalcustomer satisfaction from lack of responsiveness.

Over-production waste – the waste occurring from production of more output than required to

meet the immediately deliverable demand from external customers (i.e.; production of extra products due to seasonal demand fluctuations that exceed immediate production capacity; production of additional material or assemblies due to “economic order quality” thinking; production of products in anticipation of demand from “phantom orders” that are marketing place-holders for expected orders that have not been formally closed; production that occursdue to material requirements planning factors or production leveling requirements withoutconsideration of actual demand). This type of waste increases inventory levels and stimulatesadditional waste categories resulting in consumption of working capital, additional materialhandling costs, and potential write-offs of inventory that proves unable to be sold.

Over-processing waste – the waste occurring when excessive value is added while producinga product or service, that is value beyond requirements and which does not provide additionalsatisfaction to customers (i.e.: adding additional chemicals to a process beyond the point of a

reaction; selling high-octane gasoline at regular-octane prices; selling higher hardness steel atthe price of a lower specified hardness; transferring an incoming call to more than one agentin a call center). This type of waste increases the cost of the product or service in a way thatthese costs are not recoverable in the pricing, thereby reducing the gross margin from a sale.

Defect waste – the waste that occurs when work is not completed “right the first time” and itis necessary to redo, rework, or replace the outcome of the initial effort (i.e.: additional workthat is necessary for corrective action for problems in production; additional work required ifa second contact with customers is required to resolve a problem after the initial contact call;additional work that is required for replacement of defective products delivered to customers;additional work that is required when services are not performed properly during the initialcustomer experience). This type of waste increases the cost of the product or service, therebyreducing the gross margin of the sale while simultaneously undermining the consumer’s

confidence in the product and thereby putting at risk the company’s reputation and potentiallymaking the customer vulnerable to loss during any future sales solicitations. People waste – the waste that occurs when people are not properly engaged in their working

process (people are hired only for physical labor instead of actively engaging their intellect; people are engaged in silly, mindless work, instead of the performance of challenging jobs;the skills and competence of people are not taxed as they are employed doing work that is far

below their level of capability; the potential of people is not fully realized because they arenot given opportunity for self-development and are therefore bored and not fully engaged inthe work activity). This type of waste is particularly malicious as it undermines respect forthe individual workers and results in work slowdown, lack of motivation among the workers,increase of safety incidents and accidents, and lack of involvement by the workers in workimprovement activities – and the cost of these actions is difficult to detect or assess using a

system of standard cost accounting, but is seen in excessive incident/accident rates, high levelin both employee grievances and turnover, and increased training costs for new employees.

These eight types of waste should be eliminated from work activities as they are producing cost by consuming resources without producing value that customers can perceive.

What is Work that should be Minimized?

In addition to these eight types of waste that should be targeted for elimination, there is another


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category of inefficiency that must be addressed: any activity that does not add value in the work process (non-value-adding (NVA) work) yet is required for performance should be minimized.This includes movement necessary for production; queues necessary for leveling incoming callsin a call center; performance beyond minimum requirements for quality compliance, as well as

paperwork beyond what is necessary to document tasks, required essential records, or meet thecustomer requirements. This category of NVA work occurs when too much value is added to a process that does not differentiate a product or service from competitors and which the customeris unwilling to pay a premium price to obtain (although they may welcome the activity, they arenot willing to accept it as valuable in a financial sense).This type of work is waste because it willchange the way value-adding work can be prioritized as activity is drawn away by an internally-generated priority to deal with the “trivial many” NVA activities that we have set on our owndaily management agenda. It is particularly difficult to detect this type of waste as there seems to

be a requirement for the work and everyone wants to do their best job. However, when customersdo not appreciate the extra effort, then we must question if the work should be accomplished to ahigher-than-required level of performance excellence.

What is Work that should be Optimized?

All value-adding (VA) work that is performed on behalf of customers should be optimized. ThisVA process activity responds directly to customer requests or delivers differentiation in productsor services that are offered to customers and which customers sufficiently value to pay for as partof the price of the deliverable. However, VA work must also be performed without incurring any“loss premium” due to NVA activities or wastes in the process. In addition, the performance ofthis work must be synchronized to the incoming rate of customer orders, given the capability to

perform of the production system. Working on productivity optimization requires integration (orlinkage) of work process activities with a focus upon continuous improvement of the efficiencyand effectiveness of the daily operations in order that they might also be conducted in the mosteconomical manner. In other words, we must assure that work is always done right the first time.

How to Assure that Work is Done Right?

In working systems there are three levels of observing whether the outcome produced will beright from the viewpoint of the customer: judgment made at the source of the work; judgmentmade in the process of producing the work; and judgment made at the point of delivering thework. Each of these points should receive a different quality treatment in a management systemas the responsibility for preventive action shifts based on the point of the work and the timing andexpense of the corrective action when work goes wrong also changes significantly.

These three types of judgment are necessary as problems creep into work activities at these threelevels: the potential for inadvertent mistakes exists at the location of each worker or equipmentdevice; the potential for errors exists when individual mistakes are not identified and corrected atthe source and become compounded as they affect subsequent work processes; and finally the

potential for defects exists when errors are not detected within the entire work process and thesystems used for measurement are unable to find errors that escape to the external customer andare then observed as defects.

Doing defect-free work can be accomplished either doing work right the first time and notcreating the opportunities for subsequent errors or defects or by expending additional workingenergy to inspect and test the work product to assure that it is error-free or defect-free. This


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second type of approach to assuring work is done correctly produces a “hidden factory” that isrequired for in-process corrective action and thereby reduces productivity by consuming time thatcould be used for first-time production, increases standard cost by repeating work operations tocorrect the action, increases indirect overhead costs by adding to the cost of material handling and

expediting, increases the material cost of the product by adding scrap cost and additionaladministrative costs (even if claims for direct costs are recovered from suppliers), etc.

These costs are all additional costs beyond the initial production costs and many of them will beaccumulated into the standard cost of the product (or service) and therefore become “permanent”elements in the budgeting process of the organization – in effect all budgets based on the standardcost will then be inflated for these wasteful costs and will cause future estimates based on past

budgets to be exaggerated. Thus, one essential activity for all organizations that wish to improvetheir financial performance and maintain sound business controls is elimination of these wastedcosts from its processes for doing business.

Defining Attractive Quality for Customers

In all of the considerations so far, there is one important standard for performance: doing what theexternal customer values. However as noted below in Figure 2, it should be clear that externalcustomers do not fully appreciate the complexity required within a company to achieve the resultsthey are requesting.

Looking outside-in: organizations are a black box!

$ €£

ProductsServices

Figure 2: The Outside-in View is Different from the Inside-out Perspective

From this discussion so far it is clear that we must learn about the customer’s sense of rightnessabout work and how they establish value for the outcomes that are delivered to them, as well asthe level of the value that is assigned. The best way to understand the customer dimension is by


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applying the “Theory of Attractive Quality” which was developed by Dr. Noriaki Kano (which isillustrated in Figure 3 below).

C o m p

e t i t i v

e Q u a

l i t y I n n o v a t

i v e Q u a l i t

y

C o m p l i a n c e

Q u a l i t y

Degree of Performance

Customer Satisfactio n

High

High

Low

Low* Noriaki Kano, “Attractive Quality and Must-Be Quality,” Quality Journal , JSQC, 1984, and Conti,Kondo and Watson, “Competitive Quality,” Quality into the 21 st Century (ASQ Quality Press, 2003).

Figure 3: Kano’s Theory of Attractive Quality

In Kano’s model there are two axes – the vertical “Y” axis represents the degree of satisfactionachieved by customers for the quality factor that is analyzed while the horizontal “X” axis is thedescription of the performance goodness of the design. Note that each axis is labeled from Lowto High and thus the center of the scale represents a “zone of relative indifference” for customers.Kano notes three functions relative to this model (labeled here compliance quality, competitivequality, and innovative quality). Competitive quality (equivalent to the model for competitionthat was defined by Michael Porter) represents the direct relationship between analyses of the

performance of an individual design function relative to its price (the so-called value propositionfor this feature/function).

Kano describes this relationship as “spoken quality” – a relationship where a customer describesthe dimension and degree of performance that is most desirable to them (and the customertherefore judges which functionality-to-price ratio provides a higher value so this option becomes

the commercial winner). The other two curves Kano calls “unspoken quality” or those qualityattributes that are not expressly within the conscience demands of a customer. The bottom curvenever achieves customer satisfaction and Kano described this function as “must be” quality or, asI have labeled it here compliance quality. This performance represents an emotional response bycustomers in reaction to “things gone wrong” with standard elements of work – when a product isunable to meet its core expectations for performance (e.g., a car that does not steer, stop, or drive).Any problems with functions or features that are so “must be” eliminates the positive effects ofall features that are “competitive” or “innovative.” The top curve Kano describes using the label“attractive quality” or as I have labeled it here innovative quality. This performance represents an


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desires of its customers, we should focus more on the activity of designing and delivering thework through our process. Over the past several years I have been writing about quality andusing a model that I call the “Quality Delivery Process” to describe the transformation of acommercial concept into a product or service reality (see Figure 5 below).

What theCustomer

Wants

What theCustomer

Wants

What theCustomer

is Promised

What theCustomer

is Promised

What theCustomer

Gets

What theCustomer

Gets

Design GapDesign Gap Conformity GapConformity Gap

Customer Entitlement

Customer Expectation

Quality in what i s del ivered Qual ity in how it is delivered

* Tito Conti, Yoshio Kondo, and Gregory H. Watson, “Competitive Quality,” Quality into the 21 stCentury (ASQ Quality Press, 2003).

Planning Doing

Figure 5: Watson Model for Quality Delivery Process

The SIPOC logic can be extended into a general model of the process for delivering quality tocustomers by focusing on this three-step process. The process begins by comprehending “whatthe customer wants” in order to fulfill the customer expectation about the deliverable. In this partof the model quality is achieved in what is delivered as a customer promise and represents the“planning” actions of the product or service design team, following the division of labor by AdamSmith and Frederick Taylor into tasks of management (planning) and tasks of workers (doing). Ifa problem exists with the quality of the promise made to customers, then this problem representsa design gap in the value proposition delivery process. Once a problem is made, then the second

part of the process is engaged for promise keeping. In the second half of the model products orservices are delivered to customer in order to fulfill the promise that has been made. In a reliableorganization promises are kept and the customer gets what is promised. In this part of the model

quality is achieved by what the customer gets and its ability to satisfy their needs to “get the jobdone” – thus quality is evaluated in terms of how the customer experiences the product or service(the doing of the job). Note that customer experience is the final judge of quality (following thePIMS model discovery) and that the customer is entitled to 100% fulfillment of promises made.

Give this set of coordinated ideas up to this point in the progress of defining quality, it is clearthat a division of labor must be established within an organization in order to assure that this

process is able to work well. Therefore, the next question to be addressed is: how is this concepttransferred into organizational principals and operating methods in the workplace so that a quality


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delivery system operates effectively across the entire organization (this is a also called a totalquality approach to business management or Total Quality Management (TQM) for short).

Transcendent Quality – “Big Q vs. Little Q”

In describing his approach to quality system design, the late quality thinker Dr. Joseph M. Juranused a simple concept to describe two major focus areas in design of quality management systems.The allocation of tasks into these two focus areas follows a basic rule: “Big Q” describes strategicitems that are part of the overall quality framework and must be consistently managed throughoutthe entire quality system of the organization while “Little Q” describes operational quality itemswhich can be defined in different ways by local management teams. Thus, one must decide whatactivities should be delegated to the local level and what activities should be a central part of theorganization’s identity or culture? Figure 6 provides one approach to allocating these items:

Big Q – Strat egic Quality Little Q – Operational QualityCulture (Company)

Vision, Mission and ValuesPolicy and Philosophy

Competition (Business Learning)InnovationLeverageBenchmarking

Change (Renewal)StrategicOperational

Cascade (Alignment)Improvement ProjectsObjectives and TargetsMeasures

Communication (Awareness)MessageMedia

Competence (People)Individual and team developmentTraining/development program

Capability (Process)Daily process managementData bases and analytic software

Compliance (Product)Quality management systemPerformance agreements

Certification (Standardization)System certifications/standardsFunctional certifications/standardsIndustry certifications/standards

Conformity (Learning)Business and operational reviews

Correction (Repair & Improvement)Corrective / Preventive Actions

Figure 6: The C’s of Competitiveness – “Big Q” vs. “Little Q”

Activities that compromise “Big Q” focus on developing a cross-cultural organization (what Iwill subsequently call “transcendent quality”) which defines the common core elements of the

quality focus for the entire organization and all of its component parts. There are five major areaswhich should be kept as a common focus in any organization: culture or way of working in thecompany; competition or innovation in the approach to the organizational purpose; change orrenewal in the company’s way of performing its business activities; cascade or the degree ofalignment in direction, objectives, measures and coordinated projects that will help to move anorganization forward; and communication which assures that people know what is important fortheir common bond, shared values and mutually-supportive work environment.


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The second quality focus area is called “Little Q” and it describes a local culture of quality thatmust be cultivated in each operating unit and company team. There are six major areas that must

be defined at the local operating level to assure a fit with “Big Q” and to develop the local work processes to maximum effectiveness and efficiency under a viable economic control system:

competence in the people, capability in the processes, compliance in the products, certification tothe standard way of working, conformity by continually experimenting with improvement of procedures and processes, and correction to assure that operational performance is delivered in away that optimizes value to the customer (both financial and market customers). The focus ontranscendent culture and local culture is summarized in Figure 7.

Working rules and quality of working lifeProblem-Solving MethodologyRequired customer service levelGlobal Information and Logistics Systems

Attitude toward customer serviceProduct and Service Design Process Attitude toward social valuesRequirement for Continuous Improvement

Attitude toward personal developmentRequirement for Business Results Attitude toward teamworkRequirement for Customer Focus

Local Culture QualityTranscendent Culture Quality

Figure 7: Distinguishing Transcendental Quality from Local Quality

One of the key transcendent cultural element is the problem-solving process that the organizationapplies to address its performance issues and concerns. When the approach, logic and methods of

problem-solving are consistent across the organization, then significant strength is available for acoordinated attack on wasted work that be eliminated or minimized. When the problem-solving

process can be generalized to permit process improvement, then non-value adding work can also be eliminated from processes using the same approach. Consistency in this model is a critical

success factor in companies that achieve leading performance in their industry and most of theseorganizations find that their basic approach for improvement is based on the logical model that isreferred to as PDCA – standing for Plan-Do-Check-Act which is also called the Deming Cycleafter the work on this process by Dr. W. Edwards Deming. In fact, the PDCA logic is at the coreof most process models for work improvement which is illustrated in the next section.

PDCA is Observed at the Core of the Process of Management

Following the division of labor into planning work and doing work, Walter Shewhart and others


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observed that there is a need for both a checking step to test the outcome of the work and see if itmatches the requirement, and a corrective action step whereby noncompliant work is corrected tomeet the customer requirement. In his Japan lectures in the early 1950s, W. Edwards Demingused the Shewhart Cycle and his own version of it to discuss the process of management. One of

his Japanese note-takers, Shigeru Mizuno, recognized that there were too many words and toomuch detail in the original Deming to be practical, so he shortened the four-step process to fourshort words, thereby creating the PDCA model which Deming then accepted as a better way totalk about the issue and then promoted the model as his own.

PDCA is a basic logical model and it is implicit in many other ways of describing the work that people do. Consider the following model created by Hewlett-Packard to describe a generic wayof managing any type of work at any organizational level – can you see the elements of the modelthat follow the PDCA logic (see Figure 8)?

Establish a Common Purpose

Build Shared Objectives

Develop an Integrated Plan

Lead the Local Action

Evaluate Results and Process

C o n

t i n u o u s

l y I m p r o v e

Adapted from Hewlett-Packard

Management is a process thatis distinct from its content(strategy and tactics) and themethods and tools enabling it(processes for planning andreview as well as toolkit for itsdiagnosis and improvement).

Process of Management (POM)can be exercised at all levels ofan organization.

Figure 8: The Essential Process of Management

Note that that the planning process is three steps long (establish a common purpose, build sharedobjectives and develop an integrated plan), while the second, third, and fourth steps of PDCA are

reflected in one-to-one relationship with the POM model. The conclusion drawn about the process of management is also important – the content of a plan is distinct from the process ofmanaging the plan into reality. How does this apply to developing an organization-wide systemof managing for quality?

A Systems Approach to Quality Management

The POM model is implicitly built into the structure of an organization’s system of managing forquality. The basic model of managing for quality includes three levels of system design. This


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system builds quality into an organization through the way work is stratified into tasks thataccomplish improvement. At the base level the typical solution is to apply the ISO9000 series ofstandards to work on maintaining consistent performance (or maintaining standard performance).At the other extreme judgments regarding excellence in performance provide an aspiration to

achieve exceptional results requires setting a vision for growth through the application of theBusiness Excellence process which is defined in the criteria for the Malcolm Baldrige NationalQuality Award in the United States or the European Quality Award. Bridging the gap betweenthe standard practice and exceptional practices is a series of management actions that define andexecute projects aimed at gap closure. The choice of projects is based on internal learning thatcomes from self-assessments and external lessons that are driven by benchmarking. All processimprovement are conducted using Lean Six Sigma (LSS) methods. Management combines theseLSS projects with worker defined improvement ideas to enhance the daily management of workactivities one improvement project at a time. This process is illustrated below in Figure 9.

ISO 9000 Standard

Business Excellence

Six Sigma Projects

Self-Assessment

Self-Assessment

Self-Assessment

Benchmarking

Benchmarking

Benchmarking

Operational linkage

Strategic linkage

Figure 9: Elements of a Modern Quality Management System

The deployment of both transcendent and local quality systems occurs through orchestration ofthis systemic quality management architecture.

Motivating People and Managing Change

Even if an organization creates a strong architecture capable of managing for quality, it will not be able to implement the architecture and assure performance, if it is unable to engage its peoplein a self-motivated pursuit of quality. Motivating people to produce value on behalf of customersis the same issue as overcoming the effects of inertia and entropy by removing complacency intheir will to change the quality of their working life and requires giving people a sense of prideand self-esteem in what they do and the feeling that their accomplishments are valued. These

barriers may be removed and a positive outcome can be created by establishing a supportive work


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environment whereby people do what they consider strategic work where they are delegated therights to make local decisions that drive the performance engine of the business in the daily work

processes and practices.

Strategic work is valued by customers and the company and it makes employees feel appreciated.When strategic work is conducted within a supportive work environment, then people share acommon set of values (way of working), are informed about objectives and their reasons, are

provided with the skills and knowledge required to do their job, and are given appropriateauthority to make decisions that allow them to regulate the quality of their work, and finally, areinformed about the results that are achieved in the process. Strategic work is coordinated acrossthe functional boundaries of an organization by linking a process change model with a standardapproach to daily management – these processes apply the learning and sustaining models for

performance known as PDCA and it’s related process for Standardize-Do-Check-Act (SDCA).

The Learning and Preserving Quality Models

How does PDCA work? PDCA is a generic model for process learning and it is defined in Figure10 below:

Plan

Do ActCheck

Plan : Plan a change or test that is aimed at improv ement.Do : Carry out the change as a small scale experiment.

Check : Study the results – what was learned?

Act : Adopt the change or abandon it based on the results.

The PDCA Cycle – also called the Deming Cycle

Manage change by usin g the logic of:

Figure 10: PDCA is the Basic Experimental Learning Model

The PDCA process logic can be applied to product or service design, process improvement, project management, or process reengineering. The PDCA model is supplemented with analysistools that facilitate progress toward a successful change process. Once the PDCA cycle has beencompleted and the “Check” step reveals that the process has stabilized at the improved level of

performance, then the SDCA cycle is initiated. SDCA is a model used to sustain improvementgains in the daily management from change projects that have been executed using PDCA. The


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linkage of PDCA, as a continuous improvement methodology, to SDCA, as a daily work processto assure discipline, is illustrated in Figure 11 below.

Plan

Do ActCheck

StandardizeDo Act

Check

First, learn what needs to be improvedthen design a program to learn how toimprove it.

PDCA for continuous improvement:

SDCA for discip lined daily work:

Second, create standard work or a lowcost way to manage effective processcontrol and deliver predictable (that isminimum variation) results at the besttheoretical cycle time.

Figure 11: PDCA for Continuous Improvement – SDCA for Disciplined Daily Work

Additional details of a modern quality management system could be specified however thisdescription is complete for the architectural detail. Measurement system, analytical tools, andinformation technology support all could be incorporated into this model to provide a moredetailed specification of the total system.

Expected Outcomes of Implementing Transcendent Quality

What would be the result of doing work this way? There are a number of observations that wouldcharacterize an organization that fully implemented this type of comprehensive quality system:

Organizations will become intolerant to variation. Organization focus will shift to measuring inputs not outputs. Organizations will demand both measurement and accountability. Business processes will be owned by local managers to assure performance gains. Solutions will create sustainable performance gains not short-term band-aids for problems. Consistent delivery of customer satisfaction will build brand loyalty. Learning will be leveraged to appropriate areas as future strength demands consistency. Lateral and vertical organizational collaboration will be a standard operating procedure. Organizations will learn how to effectively engage the strength of their people. People will communicate using data to share profound knowledge about the business.


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Conclusions

Quality is contained in both the content of our work (the attributes that we deliver as an outcomeof our efforts to customers) and in the process by which we accomplish our work. Quality allows

us to see work through the eyes of our customers in order to deliver an exceptional experience tothem in the pursuit of the work that they need to get done. If we see differently, through the eyesof our customers, then we can achieve innovative results that deliver incomparable customer care.If we always do what we’ve always done, then we should never expect to get a significantlydifferent result from our work and our organization will be stuck in its legacy of poor processesand it will never arise to the premier levels in the global commercial battlefield. So, we need toexperiment in the way we work in order to find the pathway toward competitive advantage thatachieves the least wasteful working experiences. We must make frequent work experiments sowe can step-by-step, experiment-by-experiment, design a sound quality management system in alldimensions to prevent problems, correct problems rapidly (when they occur), and find the mosteconomical way to deliver extraordinary attractive quality to our customers.

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About the Author

Gregory H. Watson is Chairman of Business Excellence Solutions, Ltd., operating from Helsinki,Finland. Mr. Watson is also Adjunct Professor of Industrial Engineering and Management atOklahoma State University and President-elect of the International Academy for Quality. He is a

past-President and Fellow of the American Society for Quality.

designing elements of a modern quality system

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