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The Critical SuccessThe Critical SuccessFactors of OrganisationalFactors of Organisational
Quality PracticesQuality Practicesbyby
Toto H. SubagyoToto H. Subagyo
Global Quality SymposiumGlobal Quality Symposium
Kartika Chandra Hotel, JakartaKartika Chandra Hotel, Jakarta
8-9 September 20038-9 September 2003
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Profit through QualityProfit through Quality
OperatingOperating
CostCostAA
PP
ProfitProfit
SalesSales
BB
QualityQuality
ImprovementImprovement
Increased PROFIT through Quality improvement absorbs lessIncreased PROFIT through Quality improvement absorbs less
incremental operating cost than through organising more Sales.incremental operating cost than through organising more Sales.
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Profit through QualityProfit through Quality
CustomerCustomer
SatisfactionSatisfaction
Quality ImprovementQuality Improvement
SalesSales
CUSTOMER SATISFACTION through QualityCUSTOMER SATISFACTION through Quality
improvement carries its own acceleration resultingimprovement carries its own acceleration resulting
in increased sales at minimum incremental cost.in increased sales at minimum incremental cost.
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Current thinking . . .Current thinking . . .
. . . in business suggests that. . . in business suggests that organisationsorganisationsmust continuously improvemust continuously improvequalityquality ofof
theirtheirproductsproducts andand servicesservices, their, theirprocessesprocesses,,and theirand theirpeoplepeople. Failure to improve in all. Failure to improve in allthree areas leads to stagnation and thethree areas leads to stagnation and thedecline of any business.decline of any business.
Source:Source:
Earl Naumann and Steven H. Hoisington,Earl Naumann and Steven H. Hoisington, Customer Centered Six Sigma: LinkingCustomer Centered Six Sigma: LinkingCustomers, Process Improvement, and Financial ResultsCustomers, Process Improvement, and Financial Results (Milwaukee, Wisconsin: ASQ(Milwaukee, Wisconsin: ASQQuality Press, 2001).Quality Press, 2001).
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Otherwise . . . ?Otherwise . . . ?
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Quality Practices ~ FirmQuality Practices ~ Firms Performances Performance
IMPROVED PROFITABILITYIMPROVED PROFITABILITY
ImprovedImproved
AssetAsset
UtilisationUtilisation
ImprovedImproved
MarginMargin
LowerLower
CostsCosts
GreaterGreater
ProductivityProductivity
ReducedReduced
WasteWaste
RevenueRevenue
GrowthGrowth
GreaterGreater
ValueValue
IncreasedIncreased
MarketMarket
ShareShare
QUALITYQUALITY
ConformanceConformance PerceivedPerceived
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Quality Definition (cont.)Quality Definition (cont.)
the definition of quality should not bethe definition of quality should not be
associated with product quality aloneassociated with product quality alone
but also , more importantly, with abut also , more importantly, with a
process in which the quality of theprocess in which the quality of the
product can only be ensured by theproduct can only be ensured by the
process.process.
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Quality ManagementQuality Management
. . . managing a process of delivering. . . managing a process of delivering
quality to satisfy the requirements ofquality to satisfy the requirements of
customercustomerandand industry standardsindustry standards, in, in
which particularwhich particularmanagementmanagement
techniquestechniques and organisationand organisation
commitment throughcommitment through employeesemployees
involvementinvolvement are necessary.are necessary.
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Quality Practices inQuality Practices in
Airlines OperationsAirlines Operations
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The Airlines Operations functionThe Airlines Operations function
. . . to get people and goods to their. . . to get people and goods to their
destination, based on the schedule that itdestination, based on the schedule that it
publishespublishes ,,
the operations function flight and groundthe operations function flight and ground
operations and aircraft line maintenance,operations and aircraft line maintenance,will become the focus of this study.will become the focus of this study.
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The Airlines Operations function (cont.)The Airlines Operations function (cont.)
Also, because this function isAlso, because this function is a core activitya core activity
of an airlineof an airlines operational processs operational process,,
it can make a contribution to the success orit can make a contribution to the success or
failure offailure ofdelivering quality in the productdelivering quality in the product
and direct service to the customer.and direct service to the customer.
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The Operational FunctionThe Operational Function
Marketing, sales and servicesMarketing, sales and services make decisions aboutmake decisions aboutmarketing policy, so as to define the market sector andmarketing policy, so as to define the market sector anddemand, and develop the product specification, withdemand, and develop the product specification, with
reference to the ability of the production systems.reference to the ability of the production systems. Engineering and maintenanceEngineering and maintenance keep the companyskeep the companys
equipment in condition to provide safe and saleable airequipment in condition to provide safe and saleable airtransportation.transportation.
Flight and ground operationsFlight and ground operations are responsible for developingare responsible for developingflight operation policies, procedures, and techniques thatflight operation policies, procedures, and techniques thathave as their purpose the safe, efficient, and progressivehave as their purpose the safe, efficient, and progressiveoperation of aircraft.operation of aircraft.
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Three Elements of OrganizationThree Elements of Organization
CCustomer -ustomer - are served and accommodated in interaction with theare served and accommodated in interaction with theoperatives, with or without using the equipment and facilities.operatives, with or without using the equipment and facilities.
EEquipment and Facility -quipment and Facility - includes the aircraft itself, aircraft groundincludes the aircraft itself, aircraft ground
support equipment, flight loading/unloading equipment, and airportsupport equipment, flight loading/unloading equipment, and airportterminal and ramp facilities related to the requirements of the flightterminal and ramp facilities related to the requirements of the flightconcerned.concerned.
OOperatives -peratives -persons who handle the various types of airlinepersons who handle the various types of airlineequipment, facilities, passengers and goods.equipment, facilities, passengers and goods.
C . E . OC . E . O
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Desk ResearchDesk Research
Quality Management Studies;Quality Management Studies; - Saraph et al.. (1989),Flynn et al.. (1991), Porter & Parker (1993), Black & Porter (1995),
and Ahire et al.. (1996).
Airlines Case Studies;Airlines Case Studies;- British Airways (Bank, 1992; Heskettet al., 1997), Singapore Airlines (Yun et al., 1996), KLM Royal Dutch
Airlines (Ran and Sluis, 1997), Scandinavian Airlines System
(Azhashemi and Ho, 1999), Southwest Airlines (Bunz and Maes,
1998; Laszlo, 1999), Federal Express (Binney, 1992), Malaysia
Airlines (Zaid, 1994), and Japan Air Lines (Rosander, 1985).
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7 Critical Success Factors & 37 Critical Success Factors & 3
Organizational Context VariablesOrganizational Context Variables1.1. CCustomer Relationshipustomer Relationship
1.1. ProcessProcess OOrientation &rientation &TechniqueTechnique
1.1. MMotivation and Skillotivation and Skill1.1. InforInformmation Utilization &ation Utilization &
AnalysisAnalysis
1.1. IInterdepartmental Interactionnterdepartmental Interaction
1.1. Technology & MarketTechnology & MarketTTurbulence Awarenessurbulence Awareness
2.2. ManageManagementment BehaviourBehaviour
COMMITMENTCOMMITMENT
1.1. Past qualityPast qualityperformanceperformance
2.2. External qualityExternal quality demanddemand
3.3. ManagementManagement knowledgeknowledge
PERFORMANCE DEMANDPERFORMANCE DEMANDKNOWLEDGEKNOWLEDGE
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2. Process2. Process OOrientation &rientation &
TechniqueTechnique ensures efficient work across variousensures efficient work across various
related functions within therelated functions within the
organisation, such asorganisation, such as organisationalorganisational
structuresstructures,,process managementprocess management,,
management systemsmanagement systems,, qualityquality
technologytechnology andand teamwork structuresteamwork structures..
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4. Infor4. Informmation Utilization & Analysisation Utilization & Analysis
make each function within themake each function within the
organisation aware of their weaknessesorganisation aware of their weaknesses
and strengths, as well as actions to beand strengths, as well as actions to betaken regarding the continuity andtaken regarding the continuity and
effectiveness of the organisationeffectiveness of the organisations processs process
chain as a whole, such aschain as a whole, such as quality data andquality data andreportingreporting,, communicationcommunication,, measurementmeasurement
systemssystems, and, andbenchmarkingbenchmarking..
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5.5. IInterdepartmental Interactionnterdepartmental Interaction
determine the ease of the flow of workdetermine the ease of the flow of work
from one function to another withinfrom one function to another within
the organisation, such asthe organisation, such as
interdepartmental connectedness andinterdepartmental connectedness and
conflictconflict..
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6. Technology & Market6. Technology & Market TTurbulenceurbulence
AwarenessAwareness enhance the employeesenhance the employees awareness inawareness in
pursuing quality for their product andpursuing quality for their product and
service, such asservice, such as awareness of changingawareness of changing
market demandmarket demand andand the development ofthe development of
technologytechnology in the industry.in the industry.
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7. Manage7. Managementment BehaviourBehaviour
makes a driver for the other factorsmakes a driver for the other factors
above, such asabove, such as the role of managementthe role of management
leadershipleadership,, top management supporttop management support
andand quality achievement rewardsquality achievement rewards..
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Three Organizational Context (cont)Three Organizational Context (cont)
External qualityExternal quality demanddemand is the area ofis the area of
quality of product or services to bequality of product or services to be
improved in order for the organisation toimproved in order for the organisation toremain in business. It will determineremain in business. It will determine thethe
quality requirement for the outputquality requirement for the output of theof the
operational functions.operational functions.
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Three Organizational Context (cont)Three Organizational Context (cont)
ManagementManagement knowledgeknowledge is a variable thatis a variable that
will influence how management leadwill influence how management lead
process quality improvement within theprocess quality improvement within theorganisation. It will determineorganisation. It will determine
commitment of the organisationcommitment of the organisations staffs staff
and the managementand the management, in particular., in particular.
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Terima Kasih
GATEGaruda Aviation Training and Education