STQK 6134 : TQM 9/8/2009

ISIS.UKM.2009 1

STQK 6134Total Quality Management

Mid-Term

SEM 1 : 2009/2010

• Quality Management Principle

• Quality Award – Framework

• How Quality works lead to profitability

• CRM – establish program for customer retention and loyalty

• HRM – importance of HR in QM

• Leadership role in strategic quality planning

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ISIS.UKM.2009 2

QUALITY MANAGEMENT PRINCIPLE

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Quality Management Principle

• Leadership -> top mgmt commitment

• Customer Focus -> customer oriented

• Continual Improvement -> process

• People Involvement -> teamwork -> shared goal

• Process oriented -> flowcharts

• Result Oriented

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ISIS.UKM.2009 3

Deming Philosophy

The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.

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Deming’s System of Profound Knowledge

• Appreciation for a system

• Understanding variation

• Theory of knowledge

• Psychology

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4

The ISO 9001:2000 Requirements:1. Scope

1. General2. Application

2. Normative reference3. Terms and definitions4. Quality management system

1. General requirements2. Documentation requirements

1. General2. Quality manual3. Control of documents4. Control of records

5. Management responsibility1. Management commitment2. Customer focus3. Quality policy4. Planning

1. Quality objectives2. Quality management system planning

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Deming’s 14 Points (Abridged)

1. Create and publish a company missionstatement and commit to it.

2. Learn the new philosophy.3. Understand the purpose of inspection.4. End business practices driven by price alone.5. Constantly improve system of production

and service.6. Institute training.7. Teach and institute leadership.8. Drive out fear and create trust.9. Optimize team and individual efforts.10. Eliminate exhortations for work force.11. Eliminate numerical quotas and M.B.O.

Focus on improvement.12. Remove barriers that rob people of pride

of workmanship.13. Encourage education and self-improvement.14. Take action to accomplish the transformation.

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Crosby’s Absolutes of Quality Management•Quality means conformance to requirements•Problems are functional in nature•There is no optimum level of defects•Cost of quality is the only useful measurement•Zero defects is the only performance standard

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Principles of Total Quality•Customer and stakeholder focus•Process orientation•Continuous improvement and learning•Employee engagement and teamwork•Management by fact•Visionary leadership and a strategic orientation

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ISIS.UKM.2009

QUALITY AWARD – FRAMEWORK

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Baldrige Criteria Framework: A Systems Perspective

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The framework provides a high-level overview of the Baldrige Criteria for Performance Excellence and illustrates how the Criteria provide a systems perspective for managing your organization to achieve performance excellence. From top to bottom, the framework has three basic elements—the Organizational Profile, the system operations, and the system foundation (Measurement, Analysis, and Knowledge Management).

The Organizational Profile (the umbrella at the top of the figure) sets the context for the way your organization operates. Your environment, key working relationships, and strategic challenges and advantages serve as an overarching guide for your organizational performance management system.

The system operations (middle of the figure) are composed of the six Baldrige Categories that define your operations and the results you achieve.

The leadership triad—Leadership, Strategic Planning, and Customer Focus—emphasizes the importance of a leadership focus on strategy and customers. Senior leaders set your organizational direction and seek future opportunities for your organization.

The results triad—Workforce Focus, Process Management, and Results—focuses on your workforce and key processes that accomplish the work of the organization that yields your overall performance results.

ALL actions point toward Results.

The horizontal arrow in the center of the framework links the two triads—a linkage critical to organizational success—and indicates the importance of feedback in an effective performance management system.

The system foundation (bottom of the figure) is composed of Measurement, Analysis, and Knowledge Management, which are critical to a fact-based, knowledge-driven system for improving performance and competitiveness.

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ISIS.UKM.2009

HOW QUALITY WORKS LEAD TO PROFITABILITY

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Product Quality and Business Performance -PIMS Studies

• Product quality is the most important determinant of business profitability.

• Businesses offering premium quality products and services usually have large market shares and were early entrants into their markets.

• Quality is positively and significantly related to a higher return on investment for almost all kinds of products and market situations.

• A strategy of quality improvement usually leads to increased market share but at a cost in terms of reduced short-run profitability.

• High-quality producers can usually charge premium prices.

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Quality and ProfitabilityQuality and Profitability

Improved quality of design

Higher perceived value

Increased market share

Higher prices

Increased revenues

Improved quality of conformance

Lower manufacturing and

service costs

Higher profitability

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CRM – ESTABLISH PROGRAM FOR CUSTOMER RETENTION AND LOYALTY

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CRM – establish program for customer retention and loyalty

• Marketing– Retention– loyalty

• IT– Customer DB

• Quality Management– Customer relationship– Customer Focus– Customer requirement– Customer loyalty

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ISIS.UKM.2009

HRM

– IMPORTANCE

OF

HR IN QM

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HRM – importance of HR in QM

• Visionary leadership• Customer focus

orientation– Employee attitude

• Effective communication– To-down– Bottom-up

• Congruent objective– Shared/common goal

• Staff selection and deployment

• Competent staff• Teamwork spirit• Reward and motivation

– Performance measurement

• Training and education– deployment

• Innovative and creativity– Environment should

encourage

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ISIS.UKM.2009

LEADERSHIP

ROLE

IN STRATEGIC QUALITY

PLANNING

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•vision that stimulates hope and mission that transforms hope into reality;•radical servanthood that saturates the organization;•stewardship that shepherds its resources;•integration that drives its economy;•the courage to sacrifice personal or team goals for the greater community good;•communication that coordinates its efforts;•consensus that drives unity of purpose;•empowerment that grants permission to make mistakes, encourages the honesty to admit them, and gives the opportunity to learn from them;•conviction that provides the stamina to continually strive toward business excellence

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ISIS.UKM.2009

Leading

Practices

– LeadershipLeading

Practices

– Leadership

• Create

a

customer-focused strategic

vision

and

clear quality

values• Create

and

sustain leadership

system

and environment

for empowerment,

innovation, and organizational

learning• Set

high expectations

and demonstrate personal commitment

and involvement

in

quality• Integrate

quality

values

into daily

leadership

and management

and communicate

extensively

• Review

organizational performance

• Create

an

environment

and governance

system

that fosters

legal

and ethical behavior

• Integrate

public responsibilities

and community

support

into business

practices

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Complementary leadership styles•Directing•Coaching•Supporting•Delegating

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Leadership in the Baldrige Criteria

The Leadership Category examines how an organization’s senior leaders address values, directions, and performance expectations, as well as a focus on customers and other stakeholders, empowerment, innovation, and learning. Also examined is the organization’s governance and how the organization addresses its public and community responsibilities.

1.1 Organizational Leadershipa. Senior Leadership Directionb. Organizational Governanceb. Organizational Performance Review

1.2 Social Responsibilitya. Responsibilities to the Publicb. Ethical Behaviorc. Support of Key Communities

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Strategic Planning in the Baldrige Criteria

The Strategic Planning Category examines how an organization develops strategic objectives and action plans. Also examined are how chosen strategic objectives and action plans are deployed and how progress is measured.

2.1 Strategy Developmenta. Strategy Development Processb. Strategic Objectives

2.2 Strategy Deploymenta. Action Plan Development and Deploymentb. Performance Projection

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