MS494: Global Supply Chain Quality and

International Quality Standards

Course Instructor: Dr Noor Muhammad

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 Global Supply Chain Quality and
International Quality Standards

Managing Quality for the Multinational Firm

Quality Improvement: The American Way
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2008
Quality Improvement: The Chinese Way
Are Quality Approaches Influenced by Culture?

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 Global Supply Chain Quality and
International Quality Standards
Managing Quality for the Multinational Firm
Licensing
Partnering
Globalization
Physical Environment
Task Environment
Social Environment
Exporter

U.S. Trade 1960–2010

Source: U.S. Department of Commerce
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 Globalization
Physical Environment
Availability of natural resources

Task Environment
The task environment of the firm has to do with the operating
structure that the firm encounters when globalizing. The economic
structures, skills of the employees, compensation structure,
technologies, and government agencies all vary when globalizing

Social Environment
The social environment facing globalizing corporations refers to
cultural factors such as language, business customs, customer
preferences, and patterns of communication
 Global Supply Chain Quality and
International Quality Standards
Managing Quality for the Multinational Firm
Changing the Physical
Environment

Wages and Costs in Mexico (Average Hourly Compensation

for Manufacturing Workers in U.S. Dollars)
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 Global Supply Chain Quality and
International Quality Standards
Managing Quality for the Multinational Firm
Global Factors that Affect Quality-related Decisions

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Global Supply Chain Quality and
International Quality Standards
Managing Quality for the Multinational Firm
Export Quality Model

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 Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
The Baldrige Performance Excellence Program
Focuses on business results
Supports company-wide alignment of
goals and processes
Permits goal-based diagnosis

The Baldrige Award

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 Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
The Baldrige Award Framework Seven Categories
 Leadership
 Strategic Planning
 Customer Focus
 Measurement, Analysis
and Knowledge
Management
 Workforce Focus
 Operations Focus
 Results

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 Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way

The Baldrige Process

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 Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Lean Production

Anything that does not add value for the customer should be
eliminated

Group of techniques or systems focused on optimizing quality

processes

A productive system whose focus is on optimizing processes

through the philosophy of continual improvement

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Shingo’s seven wastes

1. Waste of overproduction
2. Waste of waiting
3. Waste of transportation
4. Waste of processing
5. Waste of stocks
6. Waste of motion
7. Waste of making defective products

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of overproduction – This waste signifies

that an organization should produce only what

is absolutely required. Overproducing just

creates unnecessary inventory which increases

the carrying cost also.

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of waiting – This waste signifies the loss

in production which is created due to the

unavailability of raw materials as the materials

were not obtained in time. All times should be

adhered to and production should be planned

accordingly.
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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of transportation – The goods when in

transit are of no use and the longer it takes to
receive materials or send out produced goods
the more time is spent without gaining money.
The transportation process should hence be
optimized and the shortest route should be
identified and treaded into.

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of processing – There might be many

processes which are done as they were
designed initially but with passing time,
companies should continuously keep
evaluating if every process Is required or not.
All redundant processes should be done away
with.

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of stocks – Too much inventory is of no

use as the cost of carrying inventory increases.

Stocks should only be maintained so as to

meet sudden demands and optimization of

inventory should also be carried out.

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of motion – All existing processes should

first be improved before actually automating it

because technology can be implemented to

save time but the real benefits are realized only

when the process is improved and is working in

its full capacity.

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Waste of making defective products – This

states that the company should accept no
defects whatsoever and try to not produce any
defect only in the first place as money is spent
on producing the item but it cannot be sold also
due to its defect, so it is a total waste.

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way

Japanese Total Quality Control (TQC)

 Visibility
 In-process Inspection
 N = 2 Technique
 Total Involvement of the workforce
 The five S’s
 Preventive Maintenance

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 The Five ‘S’
1. Seiri (Sort): Organizing by getting rid of the unnecessary. This may include old
files, forms, tools, or other materials that have not been used within the past two or
three years.

2. Seiton (Straighten, Set): Neatness that is achieved by straightening offices and

work areas.

3. Seiso (Shine, Sweep): Cleaning plant and equipment to eliminate dirtiness that
can hide or obscure problems.

4. Seiketsu (Stanardize): Standardizing locations for tools, files, equipment, and all
other materials. This often involves color coding and labeling areas so that
materials are always found in a standard location.

5. Shetsuke (Sustain): Discipline in maintaining the prior four S ’s.

European Quality Award

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Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The European Way

European Quality Award Processes, Products, and

 Leadership Services
 Strategy Customer Results
 People People Results
 Partnerships and Resources Society Results
Key Results

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 ISO 9001-2000
• The ISO 9000 family of standards is related to quality management systems
designed to help organizations ensure that they meet the needs of customers
and other stakeholders while meeting legal and regulatory requirements
related to a product. The standards are published by the International
Organization for Standardization (ISO) and available through national
standards bodies.
 Global Supply Chain Quality and
International Quality Standards
ISO 9001:2008

 Focus is for companies to document their quality

systems in a series of manuals to facilitate trade through
supplier conformance

Registration states a quality system is in place and being

adhered to

Standards are very broad and nonspecific, so they can be

adapted to many different industries and cultures

Recognized international quality standard that businesses

can follow
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Global Supply Chain Quality and
International Quality Standards
ISO 9001:2008

Three Standards: (isos: Equal)

1. ISO 9000:2008—Quality management systems:
Fundamentals and vocabulary
2. ISO 9001:2008—Quality management systems:
Requirements
3. ISO 9004:2008—Quality management: Guidelines for
Performance Improvement

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Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008

ISO 9000 -9001:2008 Five Clauses:

1. Quality Management System

2. Management System
3. Resource Management
4. Product Realization
5. Measurement Analysis and
Improvement

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 Global Supply Chain Quality and
International Quality Standards
ISO 9001:2008

ISO 9001:2008 Five Clauses:

1. Quality Management System
General Requirements- establish, document, implement, and
maintain a quality management system and continually improve its
effectiveness in accordance with the requirements of the
international standard
Documentation Requirements- include a quality policy and
quality objectives; a quality manual; documented procedures;
documents to ensure effective planning, operation, and control of
processes; and records required by the international standard.
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 Global Supply Chain Quality and International Quality Standards
ISO 9000:2008

ISO 9001:2008 Five Clauses:

2. Management System
Top management shall ensure that customer requirements are
determined and are met with the aim of enhancing customer
satisfaction
Management shall establish a quality policy
Management shall ensure that quality objectives shall be
established
Management shall ensure that responsibilities and authorities are
defined and communicated.
Management shall review the quality management system at
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 Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008

ISO 9001:2008 Five Clauses:

3. Resource Management
 Determine and provide needed resources
 Workers will be provided necessary education, training, skills,
and experience
 Determine, provide, and maintain the infrastructure needed to
achieve conformity to product requirements
 Determine and manage the work environment needed to
achieve conformity to product requirements
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 Global Supply Chain Quality and
International Quality Standards
ISO 9001:2008

ISO 9001:2008 Five Clauses:

4. Product Realization
 Develop processes needed for product realization

 Determine requirements as specified by customers

 Plan and control the design and development for its products
 Plan and carry out production and service under controlled conditions
 Determine the monitoring and measurements to be undertaken and the
monitoring and measuring devices needed to provide evidence of
conformity of product to determined requirements

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 Global Supply Chain Quality and
International Quality Standards
ISO 9001:2008

ISO 9001:2008 Five Clauses:

5. Measurement Analysis and Improvement

Plan and implement the monitoring, measurement, analysis, and

improvement process as needed
Monitor information relating to customer perceptions
Determine, collect, and analyze data to demonstrate the suitability
and effectiveness of the quality management system
Continually improve the effectiveness of the quality management
system

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Global Supply Chain Quality and
International Quality Standards
IS0 9001:2008

ISO 9000:2008 Eight Principles:

1. Customer focus
2. Leadership
3. Involvement of people
4. The Process approach
5. A systems approach to management
6. Continual Improvement
7. Factual Approach to Decision Making
8. Mutually beneficial supplier relationship

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Global Supply Chain Quality and
International Quality Standards
IS0 9001:2008

An Example of the ISO Registration Process

Step 1 is inquiry, where the client contacts registrars to
investigate the terms for registration. The prospective client
then makes a final selection of a registrar with whom he or
she is comfortable.

In Step 2, the client contracts with the registrar. In this

process, registration steps are determined, and a price is
negotiated. A client-signed quotation or purchase order
leads to the first stage of the certification process. Some
clients may wish to have a pre-assessment or gap-analysis
audit.

Step 3 often involves a phase 1 audit. At this stage, the

registrar performs an onsite audit of the documented quality
system against the applicable standard.
Step 4 is the certification audit. Every element of the ISO 9000:2008 standard is
audited several times during the registration process. A representative sample of an
organization’s business processes is chosen for any audit. During each three-year
period, 100% of the organization is audited. The audit program is a valuable tool that
provides a clearly and mutually defined process and snapshot of auditing—past,
present, and future.

Step 5 may involve process audits (optional). The client may choose business
processes for auditing to the applicable standard, allowing the client to learn and
experience the registrar’s auditing methods and style.

Step 6 involves the final certification audit. Once the client’s documented quality
system has met the applicable standard, the registrar conducts an audit to determine
the system’s effective implementation. This may involve interviewing the process
owners and responsible personnel as designated in the documented quality system
for processes chosen from the audit program.

After certification, Step 7 involves rolling certification audits. These are sometimes
referred to as surveillance audits , where the registrar returns on either six-month or
annual cycles.
Global Supply Chain Quality and
International Quality Standards
IS0 9001:2008

ISO 14000:
 International standard for environmental compliance
 Adoption in many countries is slow
 Firms with little environmental exposure will
adopt ISO 14000 first

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 Global Supply Chain Quality and
International Quality Standards
IS0 9001:2008

ISO 14000-1 Elements

 General Requirements Communication
 Environmental Policy Environmental Management System
 Planning Documentation
 Environmental Aspects Document Control
 Legal and other Requirements Operational Control
 Objectives and Targets Emergency Preparedness and Response
 Environmental Management Programs Checking and Corrective Action
 Implementation and Operation Monitoring and Measurement
 Structure and Responsibility Nonconformance and Corrective and
Preventative Action
 Training, Awareness, and Competence
Records
 Environmental Management System
Audit Management Review

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 Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Chinese Way

 Socialist market economy

 Low quality goods due to:
 Low Education of
Workers
 Lack of Experience
 Unfamiliar with Goods
 Short-term Workers
 GUANXI or Influence
 Personal
Relationships
 Bribery

Total Volume of Trade between the United

States and China
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Global Supply Chain Quality and
International Quality Standards
Are Quality Approaches Influenced by Culture?

 United States
 Command-and-Control Oriented
 Results Oriented
 Japanese
 Based on Ethic of Consistency
 Emphasis on Reduction of Waste
 Europeans
 adopted broad standards that can be adapted to
the diverse nation-states in the European Union
 Satisfy Employees
 Care for the Environment
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 Reference Book
Chapter Three: Global Supply Chain Quality and International Quality
Standards

Book Name
Foster, S.T. (2013). Managing Quality: Integrating the Supply Chain, 5th
Edition. Publisher: Pearson
 Group Assignment = 1
Every organization intends and struggles to enhance its business as much as it can.
Increase in the scope of business not only requires new technology but also results in the
increase of human resources and other factors to get success in the market. Focusing
these factors you need to apply all types of benchmarking using operations management,
strategic management, marketing, financial and human resources models in the context
of Total Quality Management to GIK institute by using GIK is an initiator firm. It means
that how the institute can further improve its quality management system in the
educational world in order to achieve some international quality awards.

You need to cover every aspect of these models and provide sufficient justification to
support your arguments.

Submission Deadline: Friday 11 Oct 2019, 5pm

Words Limit: 4000 – 5000
Value: 5%