Republic of the Philippines

Mindanao State University- General Santos City

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY
SY 2018-2019

QUALITY AWARDS AND SETTING QUALITY STANDARDS

A Partial Requirement in
Operations Management (TQM)

Submitted to
JIBRAN TOMINDUG, CPA
Instructor

Submitted by:
Group 8
ERICK CENDAÑA
JESSABEL FORRO
WYNCI LABARINTO
JEHANNAH J. BARAT
AMABELL R. ALFORQUE

July 10, 2019

QUALITY AWARDS AND SETTING QUALITY STANDARDS (by Amabell R. Alforque)

There are several quality awards and standards that are available for organizations
to access. The large majority of organizations that use these programs use them as tools
to help improve their quality processes and move toward implementing and successfully
practicing Total Quality Management (TQM).

Definition of Terms

Quality- a measure of excellence or a state of being free from any defects, deficiencies
and significant variations.
Award- a prize nor other mark of recognition given in honor of an achievement.
Standard- set of specifications or guidelines establish by authority to ensure that a
product, service or processes does what it is supposed to do

Quality Award
 A prize that is generally given by the government to profit organizations to
recognize excellence in organizations for their performance after assessing their
quality systems.
 Instruments of total quality management through which quality can be accesses
and improved, thus, quality awards is critical for finding new ways to improve the
quality and performance of an organization

Benefits of winning a Quality Awards on the Organization

o Recognition
o Awards make an organization more attractive to the consumers.
o It boost the organization’s reputation
o It enhances organizations morale
o Great on organization’s bottom line wherein award-winning businesses can
acquire a sales boost of 37%,as well as 44% jump in their stock price

Examples of Quality Awards

1. Malcolm Baldrige Award- a United States award that covers an extensive list of
criteria that are evaluated by independent judges if an organization chooses to
compete for the award. In many cases, organizations use then the Baldrige
criteria as a guide for their internal quality efforts rather than compete directly for
the award.
2. Deming prize- which is a Japanese quality award for which organizations from
any country can apply. The Deming Prize was named after W. Edwards Deming,
 an American statistician, author, and consultant He is widely credited with
assisting the Japanese in rebuilding their nation’s production infrastructure in the
areas of product design, product quality, and testing through the application of
statistical methods.
Take note: Awards can benefit an organization, but are often expensive and time-
consuming to enter. Thus, organizations must choose carefully the right awards strategy
to make it more worth of the time, energy and resources were allotted.
Choose the award which matches the organization’s objectives and make sure that it is
credible.

Quality Standard

Quality management standards establish a framework for how a business

manages its key activities. They identify an agreed way of doing something, either making
a product, managing a process or delivering a service.
These standards are details of requirements, specifications, guidelines and
characteristics that products, services and processes should consistently meet in order
to ensure:
 Their quality matches expectations
 They are fit for purpose
 They meet the needs of their consumers
Standards are essential element of quality management systems.

Reasons to develop standards

1. Fitness for purpose
o It is the ability of the process, product or service to fulfill a defined purpose
under specific conditions. Standards help by identifying the optimum
parameters for the performance of a process, product or service (e.g. product
standards) and the method for evaluating product conformity (such as test
method standards and quality control standards).
2. Interchangeability
o The suitability for a process, product or service to be used in place of another
to fulfil a relevant requirement is called interchangeability.
o Through a deliberate standardization process, it is possible to make
processes, products or services inter- changeable, even if they are created in
different countries.
3. Variety reduction
o Variety is the spice of life. Large number of varieties for a particular process,
product or service may be helpful to consumers and enable them to select the
most appropriate.
 o Variety reduction is one of the aims of standardization for the selection, inter
alia, of the optimum number of sizes, ratings, grades, compositions and
practices to meet prevailing needs.
4. Compatibility
o Parallel developments of processes, products or services, which are required
to be used in combination, pose problems if they are not compatible. One of
the aims of standardization is compatibility, namely, suitability of processes,
products or services to be used together under specific conditions to fulfill the
relevant requirements, without causing unnecessary interaction.
5. Transfer of technology
o Standards act as a good vehicle for technology transfer.
6. Guarding against factors that affect the health and safety of consumers
o Safety of the process, product or service is of great importance if, under certain
conditions, the use of the process, product or service may pose a threat to
human life or property
7. Removal of trade barriers
o Standards prevent such non-tariff barriers to trade by harmonizing
requirements in a manner that promotes fair competition. Purchasers can be
convinced about the quality level of a product that has been manufactured
according to a recognized standard.
8. Better communication and understanding
o Since standards contain information that is recorded in a precise and
documented form, they con- tribute towards better communication and
understanding in a large variety of settings. In public places such as airports,
railway stations and highways for instance, standardized signs play an
important role.

Purpose of quality management standards

Businesses use standards to satisfy their customers’ quality requirements and for
a range of other reasons, such as:
 Ensuring safety and reliability of their products and services
 Complying with regulations often at a lower cost
 Defining and controlling internal processes
 Meeting environmental objectives
Businesses committed to following quality management standards are often able to:
 Increase their profits
 Reduce losses or costs across the business
 Improve their competitiveness
 Gain market access across the world
 Increase consumer loyalty
Example of Quality Standards
(a) Customer Satisfaction Index- economic barometer which gauges cross-industry
satisfaction levels amongst customers in the United States economy.

(b) ISO international standards - are far most widely accepted set of quality standards
in the world. ISO 9001:2015 specifies the requirements for a quality management
system that businesses can use to develop their own quality agenda.

MALCOLM BALDRIGE AWARD (by Jessabel Forro)

Outline
1. What is Baldrige Award?
2. Who is Malcolm Baldrige?
3. Reasons
4. Significance
5. How organization is chosen?
6. 7 Pillars and Point Values
7. Example

I. What is Baldrige Award?

The award was established by the U.S. Congress in 1987 to raise

awareness of quality management and recognize U.S. Companies that have
successfully implemented quality management. The U.S. Commerce
Department National Institute of Standards & Technology manages the award
& American Society for Quality (ASQ) administers it.

Malcolm Baldrige National Quality Award is a kind of annual award given by

the government of the United States to every organization in the US (Both profit
and non-profit), which is considered to achieve exceptional or excellent
performance. This annual award has provided significant contribution to quality
improvement and business performance. This award is the nation’s highest
honor for performance excellence. The MBNQA award is named after the late
Secretary of Commerce Malcolm Baldrige, a proponent of quality
management.

Three MBNQA awards can be given annually in six categories:

  Manufacturing
 Service Company
 Small Business
 Education
 Healthcare
 Non-profit

The education and healthcare categories were added in 1999, while the
government and non-profit categories were added in 2007.

II. Who is Malcolm Baldrige?

 Secretary of Commerce from 1981 to 1987

 He was a very big proponent of quality management at a time when
quality was not a large issue.
 He helped draft one of the early versions of the Quality Improvement
Act.
 In the recognition of his contributions in showing the importance of
quality, the award was named after him.

III. Reasons for Making the Award

 Government officials saw that quality improvement was no longer an

option for an American Business, but a necessity.
 Many businesses did not think quality was an important issue
 Others knew that it was important, but did not know where to begin the
improvement process

IV. Significance of the Award in an Organization

 The criteria for winning the award are very demanding and simply trying
to align a company to them is high beneficial.
 It can be used as a motivational tool for workers to rally behind a
common goal.
 Simply by competing for the award an organization sees the importance
of quality in their business.
  The criteria use is also known as 7 Pillars of Malcolm Baldrige, where
the criteria is indeed a very important role in determining the success of
an orgnization

V. How organization is chosen

 55% of evaluation is based on how the organization is managed, 45%

on the basis of performance
 Every major part of an organization is accessed
 Continuous improvement and revaluation is very important

VI. 7 Pillars and Point Values

Malcolm Baldrige Quality Award symbolizes the highest Standards of Total
Quality Management. The award is evaluated on the basis of seven sections in
attaining global quality standards. These are:

1
•Leadership

2
•Strategic Quality Planning

3
•Customer and Market Performance

4
•Performance Measurement

5
•Human Resource Development & Managemnet

6
•Process Management

7
•Business Result

1. Leadership - How upper management leads the organization, and how the
organization leads within the community.

2. Strategy Quality Planning - How the organization establishes and plans to

implement strategic decisions

3. Customers and Market Performance – How the organization builds and maintains
strong, lasting relationships with customers.

4. Performance Management - How the organization uses data to support key

processes and manage performance.
 5. Human Resource Management and Development - How the organization
empowers and involves its workforce.

6. Process Management - How the organization designs, manages, and improves

key processes.

7. Business Results - How the organization performs in terms of customer

satisfaction, finances, human resources, supplier and partner performance,
operations, governance and social responsibility, and how the organization
compares to its competitors.

The 2017-2018 Baldrige Excellence Framework is available for the

business/nonprofit, healthcare, and education industries. The criteria focuses on
managing all components of an organization as a whole, cyber security risks, and
understanding the role of risk management within a systems perspective of
organizational performance management.

VII. Example

Studer Group
Founded in 1999, the Studer Group is a private, for-profit health care consulting
firm providing coaching, teaching, and evidenced-based tools and tactics to health care
organizations and rural hospitals throughout the United States. Corporate offices are located in
Gulf Breeze, Florida, with satellite offices in Dallas, Texas; New South Wales, New Zealand; and
Queensland, Australia. Virtual home offices are located across the United States. Revenues were
approximately $47 million in 2010, and the company employs 119 persons.
HOW DID THEY ACHIEVE THE AWARD?

 Company Success Measured By Successful Partners

Studer Group defines its success based on the results of the partners it
coaches, particularly how patients perceive the quality of care they receive from
these organizations. On the standardized Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) survey, Studer Group partners
achieve two to three times greater improvement during the same time period than
the national average. This results in a 20 percentile point advantage for Studer
Group partners over non partners on measures of patient perception of care.

Studer Group has been committed to providing innovative products and

services since its founding in 1999. Key innovations have helped grow annualized
revenue from less than $5 million during the period 1999 to 2001—when the
company first offered Introduction of Nine Principles® (described as "a roadmap
to help leaders navigate the journey to developing an excellence-based culture")—
to $45 million for 2009 to 2010. The numerous products and services driving that
growth included executive, physician, and emergency department coaching; books
such as Hardwiring Excellence and the Nurse Leader Handbook; and software
such as the Patient Call Manager™.

 Culture Achieves Highly Satisfied Customers

Studer Group integrates its customer support system with its employee
performance management processes to create a culture focused on a positive
customer experience. The firm models the Evidence-Based Leadership (EBL)
service excellence it teaches and identifies its key support mechanism as "people
interacting with people."

Studer Group's primary focus is helping its partners improve service

excellence by hardwiring its EBL framework. By practicing what it teaches, Studer
Group has adapted EBL to its own firm, resulting in sustained high levels of CEO
satisfaction and overall satisfaction with its coaching services. Since 2006,
satisfaction ratings have ranged from 4.6 to 4.9 on a 5-point scale, exceeding the
Service Performance Insight (SPI) Best Benchmark of 4.3. High levels of
satisfaction have translated into renewal rates that exceed 85 percent annually.

 Building a Great Place to Work

Overall employee satisfaction, overall employee morale, and employee

engagement based on attitude surveys conducted by Sperduto & Associates
reached or exceeded the 90th percentile from 2006 to 2009 when compared to
other organizations in the Sperduto database.
  Planning Links Strategy, People and Execution

Studer Group uses a robust, six-step strategic planning process (SPP) to

develop and deploy its strategies. A seventh step, which addresses improvements
to the SPP, has resulted in the adoption of Rapid Enterprise Development to
ensure linkage among strategy, people, and execution, as well as a focus on "Big
Rocks"— annual goals that are the most critical to achieving Studer Group's
strategic objectives.

 Senior Leaders Making a Difference

Studer Group's senior leadership has embedded EBL within the

organization to provide the framework for its internal operations. Employing EBL
processes supported by Studer's Leader Evaluation Manager™ (LEM) software
(which tracks goals and their achievement), such as the Six Pillars and Goal
Cascade, senior leaders have aligned goals, behaviors, and processes to achieve
transparent communication, high performance, and workforce engagement.
Senior leaders have created a culture at Studer Group that is values-driven,
transparent, and fosters passion for making a difference. This is accomplished
through personal modeling of values, coupled with specific "must have" tactics for
selecting, engaging, empowering, and retaining workforce members.

 Commitment to Community

To support its key local community and the health care industry, Studer
Group disseminates much of its evidence-based knowledge without charge to local
organizations and the entire care community. Additionally, Studer Group offers in-
kind donations of free coaching and training to local nonprofit organizations, as
well as sponsorships and monetary grants for attendance at its conferences. The
company's monetary and in-kind charitable donations amount to 5.1 to 6.9 percent
of its net income.

 Financial Results Exceed Peers

With a focus on financial sustainability, Studer Group's revenues have

grown more than 30 percent annually since 2001, exceeding the Association of
Management Consulting Firms (AMCF) average of 10 percent annual growth.
Studer Group's active contracts with health care organizations have steadily
increased from 2006 to 2009 for both segments of its coaching business: general
acute-care hospitals and rural hospitals. The firm's average annual contract growth
rate of 18 percent consistently outperformed the AMCF average of 5.5 percent.

DEMING PRIZE (by Wynci Labarinto)

Who was Dr. W. Edwards Deming?
Dr. W. E. Deming (1900 - 1993) was one of the world’s leaders of Quality management.
Had great impact on American and Japanese industries.

History
Dr. Deming was in Japan giving lectures on statistical process control and was recorded
for distribution and profit. Funds were donated to JUSE. Kenichi Koyanagi, the managing
director of the Japanese Union of Scientists and Engineers (JUSE), used those funds to
create the Deming prize to individuals or organizations in 1951.

Description
The Deming Prize is an annual award presented to an organization that has
implemented TQM suitable for its management philosophy, scope/type/scale of
business, and management environment. Regardless of the types of business, any
organization can apply for the Prize under certain conditions, be it public or private,
large or small, domestic or overseas, or part of or entire organization. There is no limit
to the number of potential recipients of the Prize each year. All organizations that score
the passing points or higher upon examination will be awarded the Deming Prize.
However, the organizations wishing to apply for the Deming Prize must carry out the
TQM Diagnosis by the Deming Prize Committee no later than one year prior to the year
of application.

The purpose of the Deming Prize was to recognize those who excelled in quality control
and as a way of driving quality control.

1. Categories of the Deming Prize

As shown in the table below, the categories of the Deming Prize are the Deming Prize
for Individuals, the Deming Application Prize and the Quality Control Award for
Operations Business Units.

For individuals or groups

Given to those who have made outstanding

The Deming Prize for
contributions to the study of TQM or statistical
Individuals
methods used for TQM, or those who have made
outstanding contributions in the dissemination of
TQM
 For organizations or divisions of organizations that
manage their business autonomously
The Deming Application
Given to organizations or divisions of
Prize
organizations that have achieved distinctive
performance improvement through the application
of TQM in a designated year

For operations business units of an organization

The Quality Control Award Given to operations business units of an

for Operations Business organization that have achieved distinctive
Units performance improvement through the application
of quality control/management in the pursuit of
TQM in a designated year

Organizations Qualified for Receiving the Deming Prize

The following viewpoints are used to determine if the company should receive the prize.

1.Based on clear management leadership, management principles, type and scope of

industry, and business environment, applicant has established business objectives that
are challenging and customer oriented.

2.TQM must be implemented properly in the viewpoint 1 mentioned previously, while

achieving company goals and strategies.

3. Outstanding results obtained for business objectives and strategies as an outcome of

viewpoint 2, in the manner stated in viewpoint 1.

Criteria
The following criteria are used for the examination to determine whether or not the
applicant organizations should be awarded the Prize:

—Due date: February 20th

How to apply for The application form must be completed and submitted
the Deming Prize with necessary documents as well as the application fee.
The application deadline is February 20th.
The Deming Prize Examination Committee examines
Examination
and selects the candidates for the Prize.
 A document examination will be carried out based on the
Description of TQM Practices submitted by the applicant
organization. If the applicant organization passes the
document examination, an on-site examination will be
conducted. The Committee makes judgment according
to the evaluation criteria and reports the results to the
Deming Prize Committee.
The examination process is not open to the public, and
all possible measures are taken to ensure the
confidentiality of applicant organizations.
—Mid October
According to the report by the Committee, the Deming
Prize Committee determines the winners of the Prize
and notifies them.
Determination of
In the event that the applicant has not attained passing
the winners
points, final judgment is reserved and, unless the
applicant requests withdrawal, the status is considered
as “continued examination.” Subsequent examinations
are limited to twice during the next three years.
—Mid October
After the Prize winners have been determined by the
Deming Prize Committee as mentioned above, the
winners are announced through the proper JUSE
publication media with the reasons for receiving the
Prize. The winners are announced in the following
publications and the reasons for receiving the Prize are
stated:

Public 1) The “Nippon Keizai Shimbun” (Japan Economic

announcement of Journal)
the winners 2) The monthly magazine “Quality Management”
(published by JUSE)
3) The monthly magazine “JUSE News” (JUSE
Newsletter)
4) JUSE Home Page

The winners receive the Certificate of Merit and

supplemental prize money from Nippon Keizai Shimbun.

—Mid November
Award ceremony
The winners receive the Deming Medal with an
 accompanying Certificate of Merit from the Deming Prize
Committee. The winners also receive a written report on
the examination findings (including recommendations for
future improvement of their TQM activities.)
Winners
The Winners Presentations will take place after the
Presentations by
award ceremony.
prize winners
The prize winner is requested to submit a short report on
the status of its TQM practices three years after having
received the prize. As a rule, post-prize review for about
one-day will be conducted based on the report.
Status Report and
Post-Prize Review In lieu of this review, the prize winner may also choose
Three Years after the following to further promote and develop its TQM:
Receiving the 1) To receive TQM Diagnosis by the Deming Prize
Prize Committee Members.
2) To receive the examination for the Deming Grand
Prize (former Japan Quality Medal). (the TQM diagnosis
by the Deming Prize Committee is mandatory at least
one year prior to your desired year of application.)
Effects of the Deming Application Prize
More than 160 companies have been awarded the Deming Application Prize. As
a result, a quantum leap in the quality of their products and services has been achieved.
The Deming Application Prize, which was born in Japan, has earned an internationally
renowned reputation as a coveted quality award. This section introduces the effects that
can be expected from challenging the Prize and also words from the top management
of the Prize winning companies.

1. Quality Stabilization and Improvement

By disseminating the concept of quality and the concept of controlling/managing
business activities throughout the organization, companies have improved their day-to-
day operations. At the same time, statistical quality control methods have been utilized
and a quality assurance system has been established. These activities, together with an
enhanced quality consciousness, have allowed companies to provide customers with
quality products and services that are matched with customer requirements and
company policies and that have been properly planned, developed, designed, produced
and installed. As a result, there have been reductions in development and design
troubles, parts defects, production defects, installation defects, service defects and
market claims and complaints. Expected product and service quality has been
achieved, and it has become possible to provide products and services with attractive
quality that positively satisfy customers. Results also include improved reliability, safety
and quality that meet society's needs. Due in part to these improvements, many
companies have acquired a world-class reputation.

These quality improvements not only please customers but also bring about positive
economic results, as listed in Items (2), (3) and (4) and improve the company's
organizational constitution, as described in Items (4) through (10).

2. Productivity Improvement/Cost Reduction

Significant effects have been achieved as a result of the following improvements:
reduced development and design troubles during the new product development stage;
decreased parts defects or reduced process troubles due to the spread of TQM
promotion with vendors; lower manufacturing defects and reduction of rework and
adjustment work at the manufacturing stage; reduced installation defects at construction
companies; and increased customer satisfaction in service industry companies.
Furthermore, through a systematic approach to cost reduction during new product
development, competitive cost targets have been achieved. Activities to improve
production control systems and reduce man-hour have also enhanced productivity.

3. Expanded Sales
Through a systematic approach to satisfying customers' requirements, or to
developing competitive new products in anticipation of customers' potential
requirements, Deming Prize-winning companies have achieved improved customer
satisfaction and, as a result, have been able to expand their sales. Furthermore, they
have strengthened their management system for the initial distribution of new products
and have deployed TQM into their sales activities. These efforts have contributed to
capturing new customers or markets and to preventing out-of-stock problem situations,
both of which have resulted in increased sales.

4. Increased Profits
Item (3), expanded sales, and Item (2), improved productivity/reduced cost, work
together to increase profits. To promote TQM, of course, some expenses are inevitable,
such as education and training, payroll for TQM promotion staff and other activities and
events. However, based on the improved business performance companies have
achieved by implementing TQM, it is clear that TQM is highly cost-effective.

5. Thorough Implementation of Management Plans/Business Plans

To secure profits, it is important to implement management plans/business plans
that center on profit plans. Naturally, quality control/management must be carried out in
concordance with these plans. To logically establish policies and objectives, it is
necessary first to understand and analyze historical business performance. Then, to
efficiently achieve these policies and objectives, it is necessary to deploy them,
implement them and evaluate the results achieved.

6. Realization of Top Management's Dreams

To a greater or a lesser extent, a company has its traditions, organizational
cultures, customary business practices, the way of thinking, complex human relations,
etc. These factors, quite often, make it difficult for top management to communicate and
carry out what it intends to implement in the organization. However, by establishing the
high goal of winning the Deming Prize and by promoting TQM with an examination date
in mind, many companies are able to improve their organizational constitution. Top
management at these companies often pleasantly states, "We were able to achieve at
once many things we had wanted to accomplish for years."

As quality control/management is disseminated throughout the entire company, and as

top management's policies are promptly communicated to all levels of the company and
achieved, plant managers, department heads, section chiefs as well as supervisors
improve their understanding of business management. Moreover, their solidarity is
strengthened and, thus, it becomes possible to develop the next generation of
executives and managers. Some top managers have commented, "I have been
president for a long time and achieving my policies has never gone this well."

7. TQM by Total Participation and Improvement of the Organizational Constitution

Many executives and managers of Deming Prize-winning companies emphasize the

following:

"During the process leading up to the Deming Prize examination, the company as a
whole focused on improving product and service quality, and the organizational
constitution was strengthened. These efforts have contributed to breaking down
sectionalism, improving interdepartmental communications, removing barriers between
departments and instilling a sense of unity. Every employee has learned to see things
from the viewpoint of the entire company and has become more confident in his/her
job."

Some presidents say, "Through challenging for the Deming Prize, we became
convinced that it is possible for our company to accomplish anything when all our
employees cooperate. We have become much better at interdepartmental
communications and cross-functional management."

(8) Heightened Motivation to Manage and Improve as Well as to Promote

Standardization

Some companies commented, "Each employee has improved his/her understanding of

scientific management and ability to objectively understand the work situation.
Employees have enhanced their ability to think on their own and, thus, they have
become more capable of coming up with improvement ideas. For example, the number
of suggestions per employee has dramatically increased." Others are happy to say, "We
can promote standardization that produces good results, not just standardization for its
own sake, an effort that has greatly contributed to the establishment of standards that
are alive and in use throughout the company."

9. Uniting Total Organizational Power and Enhancing Morale

In recent years, QC Circle activities have captured worldwide attention. QC
Circles are not just for a morale-boosting movement. In companies that have active QC
Circles, first-line supervisors and employees have acquired simple managerial and
analytical skills, have become more interested in their own work and have acquired the
ability to autonomously manage and improve their day-to-day tasks in a logical manner.
Obviously, when the efforts of each and every employee are combined, a company can
expect to generate enormous powers. Employees enjoy coming to work and, therefore,
attendance rates improve. The company's further development is accelerated, a
foundation for better labor-management relationships is laid, morale is improved and a
contribution is made to optimizing the competence of every employee. When this
occurs, staff group roles become much clearer and, thus, staff is able to concentrate its
energy on bigger and more meaningful improvement projects.

10. Establishment of Various Management Systems and the Total Management

System
As discussed in the preceding sections, when scientific management activities
through TQM penetrate the entire company, the company's organizational constitution is
genuinely improved. Quality assurance and other management systems for new product
development, profit, cost and vendor relations are established along with many other
cross-functional management systems. All these different systems then become
connected through the total management system. Moreover, standards for every
individual's action in the company become clarified as are the lines of authority and
responsibility. Thus, the organization improves its overall efficiency and effectiveness.

These great results, achieved by the Deming Prize-winning companies, would have
been difficult to achieve without challenging for the prize. Therefore, companies are
ivited and encouraged to apply for the Deming Application Prize with courage,
enthusiasm and a conviction plan as part of their pursuit for organizational constitution
improvement.
TQM Diagnosis by the Deming Prize Committee
Recommended for preparing for the Deming Prize challenge or grasping the level of
TQM

What is the TQM Diagnosis?

 Established in 1971, the TQM Diagnosis, which is provided by the Deming

Application Prize Subcommittee upon request of a company, aims to contribute to
the further development of that company’s TQM.
 It is useful to have a third party objectively diagnose the implementation status of
TQM and provide recommendations so that the company can better understand
where it stands and what it has to do to promote TQM more effectively.

2018 Deming Prize Winners

 Aiphone Co., Ltd. (Japan)

 Indus Towers Limited (India)
 OTICS Corporation (Japan)
 Ocean’s King Lighting Science & Technology Co., Ltd. (China)
 PT Komatsu Indonesia (Indonesia)
 JSW Steel Limited, Vijayanagar Works (India)

 Sundram Fasteners Limited (India)

 Toyota Housing Corporation (Japan)
 Rane NSK Steering Systems Private Limited (India)

2018 Deming Grand Prize

 Cataler Corporation (Japan)

2018 Deming Prize for Individuals

 Mr. Kunihiko Ohnuma, Board Director(Chairman), Hitachi Automotive

Systems

Distribution of winning organizations since 2000 (including prizes for 2018)

 India – 28
 Japan – 19
 Thailand – 12
 China – 3
 USA – 2
  Indonesia – 1
 Singapore – 1
 Taiwan – 1

OTHER AWARDS FOR QUALITY (by Amabell R. Alforque)

1. President’s Quality Award

Established in 1989 to recognize federal government organizations that improve their
overall performance and capabilities, demonstrate mature approaches to quality
throughout the organization, and demonstrate a sustained trend in high quality
products and services that result in effective use of taxpayer dollars. 2002 winners
include the Federal Aviation Administration, 55th Wing and Offsit Air Force Base
(Nebraska).

2. Philippine Quality Award (PQA)

 A Global Quality Award Program is a global competitiveness template that aims to
encourage and engage public and private organizations to strive for and attain
performance excellence.
 It was created by a Republic Act No. 9013, “an act establishing the Philippine
quality award in order to encourage organizations in both the private and public
sectors to attain excellence in quality in the production and/or delivery of their goods
and services.”

Awardees and Recipients of PQA

Recognition for Proficiency in Quality Management

Department of Science and Technology Regional Office No. IX (DOST IX)

The Department of Science and Technology Regional Office No. IX (DOST-IX)
is one of sixteen regional offices that the Department of Science and
Technology operates throughout the country. It takes pride in its world-caliber Regional
Standards and Technology Laboratory (RSTL) that has successfully maintained its ISO
17025:2005 accreditation for its microbiological, chemical, and calibration laboratories
over the years since its conferment in 2005 and 2011. DOST-IX’s eighty-seven (87)
officers and employees channel operations along four major service thrusts —
Technology Transfer and Management, Analytical and Testing Services;
Science/Technology Promotion, Information Dissemination, and Scholarships and
Disaster Risk Reduction and Management. All DOST-IX efforts are focused on a vision
— DOST-IX as the science, technology, and innovation leader in Western Mindanao,
is a nationally-recognized benchmark for performance excellence. It set the tone for
DOST-IX’s drive for achievement that took off in 2003 and propelled it to its latest
milestone — the 2018 Philippine Quality Award, a Recognition for Proficiency in
Quality Management.

Reed Elsevier
RELX Group is a global provider of information and analytics for professional
and business customers across industries. We help scientists make new discoveries,
lawyers win cases, doctors save lives and insurance companies offer customers lower
prices. We save taxpayers and consumers money by preventing fraud and help
executives forge commercial relationships with their clients. In short, we enable our
customers to make better decisions, get better results and be more productive.
 Scientific, Technical & Medical
 Risk & Business Analytics.
 Legal
 Exhibitions

Recognition for Commitment to Quality Management

University of Mindanao (UM)

The University of Mindanao (UM) is the first private, non-sectarian university in
Mindanao, founded on July 1946 and chartered as a university on December 1966. It
has three campuses at its main location in Davao City and five campuses in
the provincial branches. UM offers 25 graduate programs, 36 undergraduate
programs, 4 certificate programs, senior high school and basic education. To date, it
has a total student population of 43,878, becoming the largest academic institution in
Mindanao. Key characteristics of UM’s identity and culture are its vision, mission and
goals that set the strategic direction and focus of the organization. Aiming recognition
for its quality affordable open education, UM, under the leadership of its CEO
/President, Dr. Guillermo P. Torres Jr., implemented quality assurance programs that
obtained for it numerous international certifications, awards and recognitions.
AMERICAN CUSTOMER SATISFACTION INDEX (by Jehannah J. Barat and Erick
Cendaña)
I. What is ACSI

Founded by Dr. Claes Fornell in 1994, American Customer Satisfaction

Index (ACSI) is an economic barometer which gauges cross-industry
satisfaction levels amongst customers in the United States economy.
Domestic and foreign goods with a substantial market share in the US will be
judged on the customer satisfaction parameter by American Customer Satisfaction
Index (ACSI).

This national indicator benefits commercial organizations, researchers and

statisticians, policy-creators and customers equally by producing the vigor
of customer satisfaction, measure the competition amongst various customer-
oriented organizations and forecast the future avenues to improve customer
satisfaction.

In addition, Chen (2019) emphasized the importance of the American

Customer Satisfaction Index (ACSI) as it provides information on how satisfied
U.S. consumers are with the products and services available to them.

The American Customer Satisfaction Index produces four levels of indexes

or scores—a national customer satisfaction score, 10 economic sector scores, 44
industry scores, and scores for more than 300 companies and federal government
agencies. The ACSI is an important indicator of economic performance for
individual firms as well as the macro economy (Chen, 2019).

American Customer Satisfaction Index (ACSI) surveys around 180,000

customers to understand their satisfaction levels considering the products and
services they frequently use.

II. History

The American Customer Satisfaction Index (ACSI) is the only national

cross-industry measure of customer satisfaction in the United States. The ACSI
measures the quality of economic output as a complement to traditional measures
of the quantity of economic output.

The ACSI model was derived from a model originally implemented in 1989
in Sweden called the Swedish Customer Satisfaction Barometer (SCSB). Claes
Fornell, ACSI founder and Chair of ACSI LLC, developed the model and
methodology for both the Swedish and American versions.
 The ACSI was started in the United States in 1994 by researchers at the
University of Michigan and was first published in October of that same year, with
updates released each quarter. The Index was developed to provide information
on satisfaction with the quality of products and services available to consumers.
Before the ACSI, no national measure of quality from the perspective of the user
was available.

Starting in May 2010, ACSI data became available to the public on a more
frequent basis, with results released multiple times per year. This change allows
stakeholders to focus more in-depth on different segments of the economy over
the entire calendar year. The national ACSI score continues to be updated
quarterly on a rolling basis, factoring in data from 10 economic sectors and 46
industries.

III. ACSI Model

 American Customer Satisfaction Index (ACSI) is an index based on three

different values: Customer expectations, perceived quality, and perceived value.
These parameters consider different aspects of customer satisfaction. The weight
for each of these factors is calculated using a proprietary technology.

 Customer expectations evaluate what the customer considered the product or

service to be and what did they actually experience. These expectations can be
formed either from word-of-mouth or prior market research or belief in an
organization’s previously proven reputation. It is the customer's anticipation of
the quality of a company's products or services
 Perceived quality is a parameter that evaluates customer experience in the
recent past. It depends on how competitive the market is and whether the customer
has experienced the competitor products or services and also on the frequency of
usage. It is the customer's evaluation via recent consumption experience.

 Perceived value is the standard of product or service in comparison to cost paid

by the customers. Value, generally, impacts the first purchase but over a period of
time becomes less impactful when it comes to building and maintaining customer
satisfaction. It is the measure of quality relative to price paid for a product or
service.

 Customer complaint is the percentage of those customers who feel there’s a

huge gap between what they were promised and what they were delivered.
This gap can lead to displeasure which is key to customer satisfaction as higher
displeasure indicate lower customer satisfaction levels.

 Customer loyalty is decided on the basis of likeliness of a customer repurchasing

from the same organization and irrespective of cost linked to various products and
services offered by this organization. It is the likelihood to repurchase from the
same supplier in the future and the likelihood to purchase a company’s
products or services at various price points (price tolerance). Customer
loyalty is the critical component of the model as it stands as a proxy for profitability.

ACSI Methodology

The American Customer Satisfaction Index is designed to be representative

of the nation’s economy as a whole. Accordingly, in selecting the companies to
measure, each of the seven major economic sectors with reachable end-users
were included in the design: (1) Manufacturing/Nondurables, (2)
Manufacturing/Durables, (3) Transportation/ Communications/Utilities, (4) Retail,
(5) Finance/Insurance, (6) Services, and (7) Public Administration/Government.

IV. Who uses ACSI

Business firms use ACSI for planning and capital-budgeting. This will help
them forecast the future avenues to improve customer satisfaction. They will be
able to measure the quality of customer’s satisfaction for the products and services
the offer.
 Researchers also use ACSI for analyzing consumer behavioral trends. By
doing so, they will be able to focus on development and improvement processes
on the products that they must focus on in order to maintain and improve they level
of customer satisfaction.

Policymakers use ACSI in order to help in the direction of the company.

V. Key American Customer Satisfaction Index (ACSI) Derivations or Findings

Established two decades ago, American Customer Satisfaction Index
(ACSI) produces multiple inferences for all organizations as well the performance
of U.S economy.

 First and foremost, customer satisfaction is integral in deciding the fate of an

organization. Organizations with high American Customer Satisfaction Index
(ACSI) scores have a high demand in the market along with better-performing
stocks.
 American Customer Satisfaction Index (ACSI) score establishes whether
members of a household will make a purchase of the particular brand or not.
Any reported ups and downs reported in American Customer Satisfaction Index
(ACSI) will play a vital role in this decision making.
 70% of Gross Domestic Product (GDP) in the U.S is reliant on customers’ will
to spend. Clearly, any growth in GDP is directly associated with customer
satisfaction which is evaluated with American Customer Satisfaction Index (ACSI).
As it’s well-known GDP is a prime indicator of the economy and American
Customer Satisfaction Index (ACSI) is an indicator of quality, any effect on
American Customer Satisfaction Index (ACSI) will directly affect GDP. Not just the
quantity but also the quality of the produced goods and services will thus, matter.

 Using results produced using American Customer Satisfaction Index (ACSI) over
the years, it’s safe to state that manufactured goods or products have higher
American Customer Satisfaction Index (ACSI) score in comparison to
services.
That is, if customers require more service for a particular job, chances are that that
particular job will have a low American Customer Satisfaction Index (ACSI) score.
Commodities such as food items or electronic goods or other artifacts will have a
higher American Customer Satisfaction Index (ACSI) in comparison to services
such as hotels and restaurants, services for electronic goods etc.

 Across all the industries where American Customer Satisfaction Index (ACSI) is
calculated, quality is superior to cost. In these industries, cost-cutting to market
 and sell a product is never effective and any promotional activities done keeping
cost in mind will fail almost always.
Organizations across all industries that focus on being better at the quality of
products and services exceed those who focus on being cost-effective

U.S. Overall Customer Satisfaction

Each quarter, the American Customer Satisfaction Index issues an update of overall U.S.
customer satisfaction that serves as a macroeconomic indicator of the health of the
U.S. economy. The national ACSI score reflects an aggregate of customer satisfaction
with companies that comprise a large cross-section of the economy, producing a gauge
of economic utility and consumer demand.
References

ACSI. (2019, June 30). Retrieved July 5, 2019, from https://www.theacsi.org/national

economic-indicator/national-sector-and-industry-results

Aditya. (2019, June). American Customer Satisfaction Index. Retrieved July 8, 2019,
from Question Pro: https://www.questionpro.com/american-customer
satisfaction-index-acsi.html#History_of_American_Customer_Satisfaction_Index

Chen, J. (2019, June 11). Retrieved July 6, 2019, from Investopedia:

https://www.investopedia.com/terms/a/american-customer-satisfaction-index.asp

Department of Trade and Industry. (2019). Philippine Quality Award. Retrieved from
https://pqa.dti.gov.ph?republic-act.php

Fornell, C. (1994, October). The American Customer Satisfaction Index:. Retrieved July
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