STRATEGIC QUALITY MANAGEMENT

Overview• Elements of Strategic Management• Integrating Quality into Strategic

Management• Quality and the Management Cycle• Quality Policies• Quality Goals• Resources for Quality Activities• Training for Quality• Implementing Total Quality• Obstacles to Achieving Successful

SQM

Sanjit Sahu

Sujit Pawar

Sachin Raghuwanshi

Deepak Rautela

Strategic Quality Management (SQM)

• SQM is the process of establishing long range Quality goals & define the approach to meet them

• SQM is decided is an Corporate Level Business Strategy

• The strategy is decided for a longer span of time (5-10 years)

• SQM is decided to give the product/process of the company an unique competitive advantage over that of the competitors

Approach to implement SQM

• Identification of customer needs (Quality)– SWOT analysis– Gap analysis

• Leadership by the upper management to develop quality goals & strategies

• Translation of strategy into Annual business plan

• Implementation of strategy by line department

Employment of Strategy• Types of Strategy– Corporate Level strategy• Decided by the top management

with the aim to create a different level of identity for the company

– Business Level Strategy• Strategy by different SBUs in their

respective Business Units to achieve Corporate Strategy

– Functional Level Strategy• Strategy by different Functional

Heads in their respective departments to achieve Business Strategy• The strategy is embedded into

Organizational Culture

Corporate Strategy

Business Strategy

Functional Strategy

Why to adopt SQM• Market Leadership

– Cost Leadership• The internal qualitative work results in lowest cost of production

– Quality Leadership• Results in highest level of customer perceived form of Quality (Cost,

Quality, Flexibility, Speed, Reliability) – Service Leadership

• Results in higher level of After Sales Service convenient to customer• To increase the Strength & decrease the Weakness of the organization• Order Winning factor

– It results in winning an order from the customer ahead of their competitors

• Eg :- Cell Phones, TISCO, The Taj Group, South-west Airlines

Steps to integrate Quality into Strategic Management

1. Identifying financial goals for a product/process2. Identifying present Quality wrt that of competitor’s3. Identifying key quality parameters affecting the

purchase of the product 4. Comparison with the competitors in those parameters5. Identifying unique competitive advantage on Quality6. Identifying the internal results of Quality7. Alternative quality goals wrt competitors8. For a chosen goal, identifying departmental goals9. Development of departmental plans10. Identifying the resources required

QUALITY & THE MANAGEMENT CYCLE• Classic Management Cycle

PlanningOrganisingCommandingCoordinatingControlling

QUALITY & THE MANAGEMENT CYCLE

Quality Policies

Quality Goals

Deployment of Goals

Plans to meet goals

Organisational Structure

Resources

Measurement Feedback

Progress Review

Rewards

Training

QUALITY POLICIES• What is a Quality Policy?

Broad guide to action

Statement of principles

Precursor to procedure

Tailormade for each company

QUALITY POLICIES• Fundamentals

– Clientele– Leadership, Competitiveness or Adequacy– Standard product or a service with the products as a

part– High reliability with higher initial price or lower one– Optimization-Users’ cost or Manufacturers’ cost– Quantification of reliability, maintainability– Reliance on systems or people– Supplier participation– Participation of top management

QUALITY POLICIES

• No one set can fit all company activities

• Levels of quality policy

• May lead to Vision Statement

• Can be vague or specific

QUALITY GOALS• A goal is a statement of the desired result to be achieved

within a specified time• Goals may be created for breakthrough or control• Examples of breakthrough goals:– Quality leadership– Opportunities to improve income– Declining market share– Cost reduction opportunities– To improve image

• Examples of control goals:– Holding specifications– Holding failures– Holding costs

FORMULATION OF QUALITY GOALS

• Competitive assessment(where are we today)• Vision(what we want to be)• Strategic decision(How do we get there)• Excellence model(how do we know, when we get there)• Gap analysis(where are we versus where we want to be)• Prioritize critical few(what do we need to tackle first)• Develop tactical plans(how do we get there)• Measurement(how are we doing)• Competitive assessment(identify issues, where are we

today)

COMPETITIVE BENCHMARKING• Benchmarking is a reference point, it can be– The specification– Customer desires– Competition– Best in our industry– Best in any industry

• The process involves:– Determining characteristics to be benchmarked– Determining organizations as benchmarks– Collecting data– Determining best in class– Developing strategies including milestones– Tracking progress against milestones

DEPLOYMENT OF GOALS• Division and subdivision of the goals until specific deeds

to be done are identified

• Allocation of responsibility for doing these deeds

• Provision of the needed resources:o In the short run, investment of resources can be a

problemo Pilot teams yielding impressive results can

demonstrate benefits of such investments o Annual budgeting should consider these projects and

resources required for deployment

Training for Quality

• Training is required for broad scope quality program

• Reason for the failure of training program

– Failure to provide at the time of use– Lack of participation of line mangers in designing

training– Preference for lecture method training– Poor communication during training

Implementing Total QualityDecide

Prepare

Start

Expand

Integrate

Change in quality approach•Competitive pressure•Customer dissatisfaction•Increase in COPQ

Alternative approaches•Quality circles•Benchmarking•Additional inspection•SPC

Activities in prepare phase•Upper and middle management training•Developing goals, plans and assignments

Activities in Start phase• Middle & lower management training•Pilot projects•Revision of management system for implementation•Sustenance of new system

Activities in Expand phase• Implemented to other departments•Finalizing the following

• Teams• Measurement S/M• Additional training• Quality initiatives

Activities in Integrate phase•Finalization of goals•Deployed @ different levels•Quality role for all•Regular audits

As per average the entire implementation process would take 6 years.Results are visible within 2 years

Obstacles to Achieving Successful SQM• Lack of leadership by upper management– Example• Toyota (Toyoda & Taichi Ohno)• TI Cycles of India (Ramprasad)

• Lack of infrastructure for quality• Failure to understand for new system of quality– Example. TI Cycles of India(Vendors)

• Failure to start small– Example. Starbucks(Managers are free to make decisions)

• Reliance on specific techniques• Underestimating the time and resources required

Thank You