Quality & Performance Excellence Chapter 1, Book Summary (8th Edition) James R Evans

Quality & Performance Excellence-Book Summary-8th Edition-James R Evans. Chapter 1: Introduction to Quality and Performance Excellence.

Quality & Performance Excellence-Book Summary-8th Edition-James R Evans

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Outline:
  • Defining Quality
  • Importance of Quality
  • History of Quality Assurance
  • Future Influences
  • Quality in Manufacturing
  • Quality in Services
  • New Frontiers of Quality
  • Principles, Practices, and Techniques
  • Quality Management Principles
  • Kano Model
  • Learning Cycle
  • TQ and Agency Theory
Defining Quality:

1. Efficiently providing products and services that meet or exceed customer expectations adding customer value.

2. Continuously measuring the improvement of processes and services for customers

3. Acting as promised and reporting failures

4. Doing the right thing at the right time in the right way with the right people

5. Ensuring customers come back but products do not come back.

6. Providing the best value to customers by improving everyday activities and processes

7. Beyond delivering what the customer wants, anticipating what the customer will want when he or she knows the possibilities

8. Delivering customer value across the organization through best-in-class products, services, and support.

9. Meeting and exceeding the expectations of clients, employees, and relevant constituencies in the community.

The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs – American Society for Quality -FMC

  • Fitness for use
  • Meeting or exceeding customer expectations
  • Conformance to specifications

Performance Excellence: An integrated approach to organizational performance management that results in;

  • Delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability,
  • Improvement of overall organizational effectiveness, and
  • Capabilities, and organizational and personal learning.
Importance of Quality:

The slogan/ buzzword among businesses in the 1980s and 1990s.

Quality problems still abound / plentiful in many industries, such as automotive.

Consumer expectations are high.

“We’ve made dependence on the quality of our technology a part of life” – Joseph Juran
  1. Elevations Credit Union (ECU) has been named “Best Financial Institution” by readers of the Boulder Daily Camera for 15 of the past 16 years, and repeatedly as “Best Bank,” “Best Mortgage Company,”  or “Best Customer Service” by readers of the Colorado Daily, Boulder Weekly, Longmont Times-Call,  and Loveland Reporter-Herald.
  2. Business satisfaction with the city of Coral Springs, Florida, rose from 76 percent to 97 percent over a four-year period. The city was named as one of the “Best Places to Live.”
  3. Supplier on-time delivery at Lockheed Martin Missiles and Fire Control has been essentially 100 percent since 2006, and overall supplier quality has been nearly 100 percent since 2007. Time reductions as a result of process and performance improvement programs have occurred in all lines of businesses, yielding an estimated savings of $225 million annually.
  4. The overall Net Promoter (NP) scores (a loyalty metric defined by the level of repeat sales and referrals) for MEDRAD, a manufacturer of medical imaging devices, were consistently 60 percent or higher compared to the 50 percent or higher marks for other organizations nationwide.
  5. AtlantiCare, a nonprofit health system in southeastern New Jersey, saw its system revenues grow from $280 million to $651 million over an eight-year period, reflecting an 11 percent compound annual growth rate, compared to a state average of 5.6 percent.
  6. The Pewaukee School District (PSD) is the smallest K-12 educational system in Waukesha County, Wisconsin. Despite having one of the most rigorous public school graduation requirements (28 credits) in the state, PSD achieved a 97.4 percent graduation rate in 2012– 2013 and had a higher graduation rate from 2008 through 2012 than other counties, state, and nearby high-performing districts.
History of Quality Assurance
  • Quality assurance in Ancient China.
  • Skilled craftsmanship during Middle Ages.
  • Industrial Revolution: the rise of inspection and separate quality departments.
  • Early 20th Century: statistical methods at Bell System.
  • Quality control during World War II
  • Post-war Japan: evolution of quality management
  • Quality awareness in U.S. manufacturing industry during the 1980s: from “Little Q” to “Big Q” – Total Quality Management
  • Malcolm Baldrige National Quality Award (1987).
  • Cynicism and criticism among some business executives
  • The emergence of quality management in service industries, government, health care, education, and non-profits.
  • Evolution of Six Sigma
  • Current and future challenges: maintaining a commitment to performance excellence.
Future Influences:
  • Aging population
  • Global responsibility
  • Globalization
  • Innovation
  • The increasing rate of change
  • Consumer  awareness
  • The workforce of the future
  • 21st-century quality
Quality in Manufacturing: (DCSPRFA)

Durability – the amount of use before deterioration or replacement

Conformance – the degree to which characteristics match standards

Serviceability – speed, courtesy, and competence of repair

Performance – primary operating characteristics

Reliability – The probability of operating for specific time and conditions of use.

Features –“bells and whistles”

Aesthetics – look, feel, sound, taste, smell

Quality in Services:(2T3CA)

Time – how much time must a customer wait?

Timeliness – will service be performed when promised?

Completeness – Are all items in the order include?

Courtesy – do frontline employees greet each customer cheerfully?

Consistency – are services delivered in the same fashion for every customer, and every time for the same customer?

Accessibility and convenience – is the service easy to obtain?

Differences Between Manufacturing and Services: Customer needs and performance standards are often difficult to identify and measure

The production of services typically requires a higher degree of customization

The output of many service systems is intangible/ cannot touch

Services are produced and consumed simultaneously

Customers are often involved in the service process and present while it is being performed

Services are generally labor-intensive

Many service organizations must handle very large numbers of customer transactions.

New Frontiers of Quality: (H-GEN)
  • Health care
  • Government
  • Education
  • Not-for-Profits
  • Principles, Practices, and Techniques:
  • Principles are the foundation of the philosophy
  • Practices are activities by which the principles are implemented
  • Techniques are tools and approaches that help managers and employees make the practices effective.

Quality Management Principles:(CLPPSCCFM)

  1. Customer focus
  2. Leadership
  3. People
  4. Process Approach
  5. System Approach to Management
  6. Continual Improvement
  7. Factual Approach to Decision Making
  8. Mutually Beneficial Supplier Relationships
1. Customer Focus:
  • The customer is the principal judge of the quality
  • Organizations must build relationships with customers and increase customer engagement
  • Organizations must understand customer needs and obtain feedback
  • Customers are internal and external
  • Customer-Focused Practices
  • Researching and understanding customer needs and expectations;
  • Ensuring that goods and services are linked to customer needs and expectations;
  • Communicating customer needs and expectations throughout the organization;
  • Measuring customer satisfaction and using the results to improve;
  • Systematically managing customer relationships, and Ensuring a balanced approach between satisfying customers and other stakeholders.
2. Leadership:
  • Leadership is the responsibility of top management.
  • Senior leaders should be role models for the entire organization.
  • An organization cannot sustain quality initiatives without strong leadership.
  • Leadership Practices
  • Considering the needs of all stakeholders in decisions;
  • Establishing a clear vision of the organization’s future;
  • Setting challenging goals and targets;
  • Creating and sustaining shared values, fairness, and ethics at all levels of the organization;
  • Establishing trust and eliminating fear;
  • Providing workers with adequate resources, training, and freedom to make customer-focused decisions; and
  • Inspiring, encouraging, and recognizing worker’s contributions.
3. People:
  • A company’s success depends increasingly on the knowledge, skills, and motivation of its workforce.
  • Engagement – workers have a strong emotional bond to their organization, are actively involved in and committed to their work, feel that their jobs are important, know that their opinions and ideas have value, and often go beyond their immediate responsibilities for the good of the organization
  • Empowerment – has the authority to make decisions
  • “A sincere belief and trust in people
  • People-Focused Practices:
  • Understand the key factors that drive workforce engagement, satisfaction, and motivation
  • Design and manage work and jobs to promote engagement
  • Create an environment that ensures and improves workplace health, safety, and security
  • Develop an effective performance management system
  • Assess workforce engagement and satisfaction
  • Assess workforce capability and capacity needs
  • Make appropriate investments in development and learning
  • Manage career progression and succession planning.
Teamwork:

Vertical—teamwork between top management and lower-level employees.

Horizontal—teamwork within workgroups and across functional lines (often called cross-functional teams).

Inter-organizational—partnerships with suppliers and customers.

4. Process Approach:

A process is a sequence of activities that are intended to achieve some results.

Cross-functional Perspective:

Quality & Performance Excellence Chapter 1 Cross-functional Management Perspective

Process-Focused Practices:
  • Systematically defining processes that create desired outcomes; establishing clear responsibility and accountability for managing key processes;
  • Analyzing and measuring the capability of processes;
  • Identifying the interfaces of key activities within and between the functions of the organization;
  • Focusing on the factors such as resources, methods, and materials that will improve processes; and
  • Evaluating risks, consequences, and impacts of activities on customers, suppliers, and other stakeholders.
5.Systems Approach to Management:

Synthesis means looking at an organization as a whole and building on key business attributes, including core competencies, strategic objectives, action plans, and work systems.

Alignment means ensuring consistency of plans, processes, measures, and actions across the organization.

Integration builds on alignment so that the individual components of the organizational system operate in a fully interconnected manner and deliver anticipated results.

Systems Approach Practices:

Designing the organization to achieve its objectives in the most effective and efficient way;

Understanding the interdependencies between processes;

Developing approaches that harmonize and integrate processes;

Providing a clear understanding of the roles  and responsibilities necessary for achieving objectives and reducing cross-functional barriers;

Understanding organizational capabilities; defining how specific activities and processes should operate; and

Continually improving the system through measurement and evaluation.

6. Continual Improvement:
  • Incremental and breakthrough improvement
  • enhancing value to the customer through new and improved products and services;
  • improving productivity and operational performance through better work processes and reductions in errors, defects, and waste;
  • improving flexibility, responsiveness, and cycle time performance; and
  • improving organizational management processes through learning
Practices for Continual Improvement:
  • Deploying a systematic approach to continual improvement across the organization;
  • Providing the workforce with training in the methods and tools of continual improvement;
  • Making continual improvement of products, processes, and systems an objective for every individual;
  • Establishing goals to guide, and measures to track, continual improvement; and
  • Recognizing and acknowledging improvements.
Kano Model:(DSD)

Dissatisfiers —those needs that are expected in a product or service.  Such items generally are not stated by customers but are assumed as given. If they are not present, the customer is dissatisfied.

Satisfiers—needs that customers say they want. Fulfilling these needs creates satisfaction.

Delighters/exciters—new or innovative features that customers do not expect. The presence of such unexpected features, if valued, leads to high perceptions of quality.

Learning – why changes are successful through feedback between practices and results

Learning Cycle: (PEAR)
  • Planning
  • Execution of plans
  • Assessment of progress
  • Revision of plans based upon assessment findings
  1. Factual Approach to Decision Making:

Organizations need good performance measures to drive strategies and change, manage resources, and continuously improve

Data and information support analysis at all levels

Typical measures:

  • product and process outcomes,
  • customer-focused outcomes,
  • workforce-focused outcomes,
  • leadership and governance outcomes, and
  • financial and market outcomes.
Data-Driven Practices:
  • Ensuring that data and information are sufficiently accurate and reliable;
  • Making data accessible to those who need it;
  • Analyzing data and information using valid methods; and
  • Making decisions and taking action based on factual analysis, balanced with experience and intuition.
  1. Mutually Beneficial Supplier Relationships:

Suppliers include not only companies that provide materials and components, but also distributors, transportation companies, and information, health care, and education providers.

Key suppliers might provide unique design, technology, integration, or marketing capabilities that are not available within the business and, therefore, can be critical to achieving such strategic objectives as lower costs, faster time-to-market, and improved quality.

Supplier Management Practices:
  • Recognizing the strategic importance of suppliers in accomplishing business objectives, particularly minimizing the total cost of ownership;
  • Identifying and selecting key suppliers; developing win-win relationships that balance short-term gains with long-term considerations;
  • Establishing trust through openness and honesty, thus leading to mutual advantages;
  • Pooling expertise and resources with partners;
  • Having clear and open communication that information and future plans;
  • Establishing joint development and improvement activities; and inspiring, encouraging,
  • Recognizing improvements and achievements of suppliers.
TQ and Agency Theory:
  • Agency relationship: a concept in which one party (the principal) engages another party (the agent) to perform work
  • Key assumption: individuals in agency relationships are utility maximizers and will always take actions to enhance their self-interests.
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