Quality and OperationsManagement

MS&E269

Malcolm Baldrige

National Quality Award

Core Values• Customer-driven Quality• Leadership• Continuous Improvement and Learning• Employee Participation and Development• Fast Response• Design Quality and Prevention• Long-range View of the Future• Management by Fact• Partnership Development• Corporate Responsibility and Citizenship• Results Orientation

Award Categories

• 1994– Manufacturing

– Service

– Small Business

– 2 winners per category

• 2001– Business

– Service

– Small Business

– Education

– Health Care

– 3 winners per category

MBNQA Winners• 1988—Motorola Inc., Commercial Nuclear Fuel

Division of Westinghouse Electric Corp., and Globe Metallurgical Inc.

• 1990—Cadillac Motor Car Division, IBM Rochester, Federal Express Corp., and Wallace Co. Inc.

• 1992—AT&T Network Systems Group/ Transmission Systems Business Unit, Texas Instruments Inc. Defense Systems & Electronics Group, AT&T Universal Card Services, The Ritz-Carlton Hotel Co., and Granite Rock Co.

• 1994—AT&T Consumer Communications Services, GTE Directories Corp., and Wainwright Industries Inc.

• 1996—ADAC Laboratories, Dana Commercial Credit Corp., Custom Research Inc., and Trident Precision Manufacturing Inc.

• 1998—Boeing Airlift and Tanker Programs, Solar Turbines Inc., and Texas Nameplate Co., Inc.

• 2000—Dana Corp.-Spicer Driveshaft Division, KARLEE Company, Inc., Operations Management International, Inc., and Los Alamos National Bank

• 1989—Milliken & Co. and Xerox Corp. Business Products and Systems

• 1991—Solectron Corp., Zytec Corp., and Marlow Industries

• 1993—Eastman Chemical Co. and Ames Rubber Corp

• 1995—Armstrong World Industries Building Products Operation and Corning Telecommunications Products Division

• 1997—3M Dental Products Division, Solectron Corp., Merrill Lynch Credit Corp., and Xerox Business Services

• 1999—STMicroelectronics, Inc.-Region Americas, BI, The Ritz-Carlton Hotel Co., L.L.C., and Sunny Fresh Foods

Service

Manufacturing

Small Business

Changing Award Criteria

• 1991– Leadership, 100

– Information and Analysis, 70

– Strategic Quality Planning, 60

– Human Resource Util., 150

– Quality Assurance of Products/Services, 140

– Quality Results, 180

– Customer Satisfaction, 300

• 1994– Leadership, 95

– Information and Analysis, 75

– Strategic Quality Planning, 60

– Human Resource Devel., 150

– Management of Process Quality, 140

– Quality and Operational Results, 180

– Customer Focus/Satis., 300

Changing Award Criteria

• 1995– Leadership, 90

– Information and Analysis, 75

– Strategic Planning, 55

– Human Resource Devel. and Management , 140

– Process Management, 140

– Business Results, 250

– Customer Focus/Satisfaction, 250

• 2001 – Leadership, 120

– Information and Analysis, 90

– Strategic Planning, 85

– Human Resource Focus, 85

– Process Management, 85

– Business Results, 450

– Customer and Market Focus, 85

Criteria Characteristics

• Results oriented

• Non-prescriptive

• Assessment

• Diagnostic

A-D and R• Approach

– how the application addresses the item– appropriateness– effectiveness– evidence of innovation

• Deployment– extent to which approach is applied– use of approach in business requirements– use of approach by all appropriate units

• Results– outcomes– current performance levels– performance levels relative to comparisons/benchmarks– rate and breadth of performance improvements– demonstration of sustained improvement

Four Stage Review Process

Leadership

• 1.1 Senior Executive Leadership

• 1.2 Management for Quality

• 1.3 Public Responsibility and Corporate Citizenship

Leadership

• Values and Expectations• Empowerment and Innovation• Performance Reviews• Findings and Improvement• Regulatory, Legal, Ethical Responsibilities• Support of Key Communities

Information and Analysis

• 2.1 Scope and Management of Quality and Performance Data and Information

• 2.2 Competitive Comparisons and Benchmarking

• 2.3 Analysis and Use of Company-level Data

Information and Analysis

• Selection and Integration of Measures / Indicators• Comparative Data and Information• Reliability• Currency w.r.t. Changing Needs• Senior Executive Reviews and Planning• Functional-level Decisions• Daily Operational Support

Strategic Quality Planning

• 3.1 Strategy Quality and Company Performance Planning Process

• 3.2 Quality and Performance Plans

Strategic Quality Planning

• Strategy Development• Strategy Objectives and Timelines• Actions Plans and Measures• Human Resource Plans• Performance Projections

Human ResourceDevelopment and Management

• 4.1 Human Resource Planning and Management

• 4.2 Employee Involvement

• 4.3 Employee Education and Training

• 4.4 Employee Performance and Recognition

• 4.5 Employee Well-being and Satisfaction

Human ResourceDevelopment and Management

• Short and Long Term Key Needs• Employee Education, Training and Development• Delivery and Reinforcement• Safe Work Environment• Support and Motivation• Satisfaction Determination• Improvement Priorities

Management of Process Quality

• 5.1 Design and Introduction of Quality Products and Services

• 5.2 Process Management: Product and Service Production and Delivery Processes

• 5.3 Process Management: Business and Support Service Processes

• 5.4 Supplier Quality• 5.5 Quality Assessment

Management of Process Quality

• Design Processes• Production and Delivery Processes• Key Supplier Products and Services• Key Support Processes• Requirements and Measures• Evaluation and Improvement

Quality and Operational Results

• 6.1 Product and Service Quality Results

• 6.2 Company Operational Results

• 6.3 Business and Support Service Results

• 6.4 Supplier Quality Results

Quality and Operational Results

• Customer Evaluations• Operational, Financial and Market Performance• Strategy-driven Results

Customer Focus and Satisfaction

• 7.1 Customer Expectations: Current and Future

• 7.2 Customer Relationship Management

• 7.3 Commitment to Customers

• 7.4 Customer Satisfaction Determination

• 7.5 Customer Satisfaction Results

• 7.6 Customer Satisfaction Comparison

Customer Focus and Satisfaction

• Customer Groups and Market Segments• Listening and Learning Strategies• Important Product and Service Features• Business Needs and Directions Currency• Accessibility and Complaint Management• Building Relationships• Competitive Performance

Leadership

• Symbolism– is it talk or walk– what is the visible role for management

• Systems• Results

– hard to measure

• Issues– is there to much going on at one time– increase weight of category

Information and Analysis

• Key purposes– Use of Info Sys to achieve quality goals

– Reporting/feedback to support quality

– Competitive Analysis/Benchmarks

• Approach and deployment orientation

• Key is the choice of indicators to track and relationship to critical business drivers

• Applicant can improve scores simply through wordsmanship, clarity of submission

• During site visit easier to observe actuals than statements on application

Strategic Quality Planning

• Category design intent: aggressive, concrete goals,• short term / long term• horizontal and vertical integration

• Expect to see documented fundamentals• Demonstrated understanding of industry• On-site review best at determining validity of submission• Shortcoming: deployment to suppliers• Long-term planning not concrete wrt to rollout and method• Components are satisfactory, burden on Great Northern• Need more emphasis on long-term success and results

Human Resource Development• Does the documentation match / support the results

– too much on deployment, not enough on results

– “50 ways to please a …”

• What about near-term programs?• Timeline on result goals not clear• Overly focused on individuals vs. teams• Results and categories are ambiguous• Warm fuzzies or real processes?

– Wish upon a star

– Needs and feelings survey

• How can tangible evidence be demonstrated?

Management of Process Quality• Rationale: is process preventive or reactive• Design of service/product offerings• Monitoring matrix• Pushed down to each department• Use of analysis tools -- business process mapping• Processes in place

– BLERA– QSEG– BLI

• Use of mainstream process management methods• Recommendations, timelines, champions identified

– weak on follow-up

Quality and Operational Analysis

• System represents linking performance results to quality progress

• Repetition in indicators

• Overall completeness lacking– weakness on benchmarking

• Can metrics be compared across industries?

Customer Focus and Satisfaction

• Relative balance in 1994 between AD & R

• Looking for commitment, proactive behaviors

• Are results comprehensive wrt all numbers and metrics?

• Who determines what the correct response level is vs. customer expectations and comparisons to industry

• Focus is based on own customers, hence how do you apply and compare benchmark data with different populations