Total Quality

.People-focused management system.Focus on increasing customer satisfaction and reducing costs

.A systems approach that integrates organizational functions and the entire

supply chain.Stresses learning and adaptation to

change.Based on the scientific method

Principles of Total QualityCustomer and stakeholder focusParticipation and teamworkProcess focus and continuous improvement

...supported by an integrated organizational infrastructure, a set of management practices,and a set of tools and techniques

Customer and Stakeholder Focus

Customer is principal judge of qualityOrganizations must first understand customers’ needs and expectations in order to meet and exceed themOrganizations must build relationships with customersCustomers include employees and society at large

Key Idea To meet or exceed customer

expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty.

Participation and Teamwork

Employees know their jobs best and therefore, how to improve themManagement must develop the systems and procedures that foster participation and teamworkEmpowerment better serves customers, and creates trust and motivationTeamwork and partnerships must exist both horizontally and vertically

Key Idea In any organization, the person who

best understands his or her job and how to improve both the product and the process is the one performing it.

Process Focus and Continuous ImprovementA process is a sequence of activities that is intended to achieve some result

Continuous ImprovementEnhancing value through new products and servicesReducing errors, defects, waste, and costsIncreasing productivity and effectivenessImproving responsiveness and cycle time performance

LearningThe foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approachesLearning cycle:

PlanningExecution of plansAssessment of progressRevision of plans based on assessment findings

TQ InfrastructureCustomer relationship managementLeadership and strategic planningHuman resources managementProcess managementData, information and knowledge management

Competitive AdvantageIs driven by customer wants and needsMakes significant contribution to business successMatches organization’s unique resources with opportunitiesIs durable and lastingProvides basis for further improvementProvides direction and motivation

Quality supports each of these characteristics

Key Idea

An organization that is committed to total quality must apply it at three levels: the organizational level, the process level, and the performer/job level.

Three Levels of QualityOrganizational level: meeting external customer requirementsProcess level: linking external and internal customer requirementsPerformer/job level: meeting internal customer requirements

Quality and Personal Values

Personal initiative has a positive impact on business success Quality begins with personal attitudesQuality-focused individuals often exceed customer expectationsAttitudes can be changed through awareness and effort (e.g., personal quality checklists)

Key IdeaIn the daily attempt to bring about change in the

individual parts of the organizational universe, managers, employees, professors, and students can find that personal quality is the key to unlock the door to a wider understanding of what the concept really is all about. Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).

Chapter 2

Total Quality in Organizations

Key Idea As consumer expectations have risen, a

focus on quality has permeated other key sectors of the economy, most notably health care, education, not-for-profits, and government.

Systems ThinkingA system is the functions or activities within an organization that work together for the aim of the organization.Subsystems of an organization are linked together as internal customers and suppliers.A systems perspective acknowledges the importance of the interactions of subsystems, not the actions of them individually.

Key Idea

Successful management relies on a systems perspective, one of the most important elements of total quality.

Manufacturing Systems (1 of 2)

Marketing and salesProduct design and engineeringPurchasing and receivingProduction planning and schedulingManufacturing and assemblyTool engineering

Manufacturing Systems (2 of 2)

Industrial engineering and process designFinished goods inspection and testPackaging, shipping, and warehousingInstallation and service

Quality in ServicesService is defined as “any primary or complementary activity that does not directly produce a physical product – that is, the non-goods part of the transaction between buyer (customer) and seller (provider).”

Critical Differences between Service and Manufacturing (1 of

2)

Customer needs and performance standards are more difficult to identify and measureServices requires a higher degree of customizationOutput is intangible

Critical Differences between Service and Manufacturing (2 of

2)

Services are produced and consumed simultaneouslyCustomers are often involved in actual processServices are more labor-intensive than manufacturingServices handle large numbers of transactions

Key IdeaThe American Management Association estimates that the average company loses as many as 35 percent of its customers each year, and that about two-thirds of these are lost because of poor customer service

Components of Service System Quality

EmployeesInformation technology

The Ritz-Carlton Hotel Co.

Quality Issues in Health Care

Avoidable errorsUnderutilization of servicesOveruse of servicesVariation in services

Quality in EducationActive involvement of whole school communityCommitted leadershipSystem for continuous improvementEnvironment that celebrates success

Quality in the Public Sector

Quality in the Federal GovernmentState and Local Quality Efforts