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MANAGEMENT BASED ON ISO 9000 AND BUSINESS EXCELLENCE MODELS
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MASTER O F APPLIED SCIENCE
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Copyright by Shannon Macey, 2001
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Table Of Contents
L s of Figures ....... it ...... ..............................m....~.........em...........................~......... ...... x
L s o Abbreviations it f
10 Introduction .
...............................~..o.~~e...............~..... ...~...o.~....oo.~.................e.o... 1
Models for Performance Management ......,..,........ . ..................,......... ................ ............- 4 . . .. . Performance Measurement ......................................... Performance Management in R&D
. . ............................................. 5 . .
............................. ...................................... ..........7 , . . . Case Study Organisation (CSO)............................... . , ............................................... . 9 . Ornanisation o f the Thesis ............................................. .................................... . 1 0 . .. .
20 Literature Review .
.............................~...m......*.....*...... .......*........o..s.....*~..........~. 12 Introduction ............................... .............................................................................. . . . 12 .
................................ ............. . . .. ................. . . .
Models for Performance Management ................................ ....................................... . 13 Performance Measurement................. ................. .. ............. ........... ...........,. ....................-27 .. . .
2.3.1 2.3.2 2.3.3
Performance Management in R&D
........................................... ..................................... ........... -46
Addressing Issues Unique to R&D .......................................................................................
Benefits of Implernenting Quality Management in an R&D Environment ........................... 49
ISO 9000 in R&D.................................................................................................................. Motivation for Proposed Research
....................... ............................................................... 52 . . Objectives of Proposed Researcb ................................................................................................ 53
An Integnted Mode1 For Perf~~nance Muiagemcnt
.............................. ..........................................................................................54 . ...... Development of the OPIM ........................ ... .............w........9.9........ .......................... . .. 54
3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 Framework Development ......................................................................................................
Criteria Development ............................................................................................................
Development of the Assessment Questions .......................................................................... 66 Establishment of the Scoring Scheme ................................................................................... 66 Scoring Scheme Cornparison ................................................................................................ 73
4.0 Seff Assessrnent .............................................................................................. 77
4.2.1 4.2.2 4.2.3 4.2.4 4.2.5
.................................................................................................................................. 77 Self-Assessment at the Case Study Organisation ....................................................................... 77
Introduction Planning ................................................................................................................................ 78 Assessrnent............................................................................................................................ 83 Final Score ............................................................................................................................ 89
Outcomes .............................................................................................................................. 90
Evaluation o f Assessrnent Process ........................................................................................ 93
5.0 Performance Measurernent ........e.................................................................... 96
Cornparison of Assessrnent ResulW to Quriity ~ u d i Results t
..................... . . ......................96 .
Implications for Simultaneous Auditing and Assessrnent ................................................... 102
Result-based PerCormance Measurement
...................... ................................................... . . -103
Review o f Organisational Performance Measures ............................................................. 103 Review o f the Performance Measures at Case Study Organisation.................................. 104
Self.assessment, Auditing and Result-based Performance Measuremeat
Comparing Self-Assessrnent and Result-Based Performance Measurement....................... 117 The Roles of Self.Assessrnent, Quality Audits. and Result B a d Perfomance Measurement in the Organisational Performance Masurement System ......................................................................
60 Performance Management In R&D .............................................................. îîl .
The R&D Environment at the CS0
6.3.1 6.3.2 6.3.3
........................................................................................ 121 Modifying the OPIM for Use in an R&D Environment .......................... .........................122 . .
Framework .......................................................................................................................... Criteria ................................................................................................................................
Scoring ................................................................................................................................ 128 Addressing R&D Issues with the Modified OPIM .............................................................. 130
Chapter Summary ...................................................................................................................... 131
Conclusions .................................................................................................. 132
...................................................................................................132 ....... .................134 Scope for Further Research .................................................................. .. .....
Contributions of the Research
References .................................................................................................... 1 6 3
Appendices ................................................................................................... 1 4 4
.............................................................................................1 4 5 APPENDIX B . Modified OPIM for R&D .................. -..... .................................................................160 APPENDIX C . Triiiium Results ......................,... ..... ...............................................................169 APPENDIX D - Cornparison of Performance Management Mode1 Criteria ...................................... 170 APPENDIX E - Approach. Deployment and Results Adapted from the EQA ...................................175
APPENDlX A . OPIM Questionnaire
List o Tables f
-21 Table 2-1:Channeristics of Performance Management Models.......................................
22 Table 2-2:Strengths and Weaknesses of Performuice Management Models ......................
24 Table 2-3: A Cornparison of the S c o ~ Schernes from the Quairy A w d ..................... g
............................................................ -31 Table 2-5:Evaluation and Scoring Methods of the Performance Management Models .......33 Table 2-6: Description of Evaluation EIements Used in the EQA ..................................... 34 Table 2-7: Scoring Guidelines from the MBNQA ...........................................................-35 Table 2-8:Sample Score Calculation for MBNQA .......................................................... 6 3
Table 2-4:Selection of Self-AssessrnentMethod Table 2-9: Plan-Do-Check-Act Cirde of Audit and Self-Assessment Programs.................. 45 Table 3-1: InmaCaregories of the OPIM ........................................................................ 57 Table 3-2: Initial fit of Mode1Giteria to OPIM Framework ............................................. 58 Table 3-3:Changes to the OPIM Categories ............................................................... 60
Tabie 3-4:Application of Cnteria to Frarnework ............................................................. 1 6 Table 3-5:Final OPIM Framework with Comespondmg Critexia from Xntegrared Models ..64
Table 3-6:Calculauon of Scores from Preferences............................................................ 7 1 Table 3-7:OPIM Scoring Cntena.................................................................................... 72 Table 3-8: Distribution of Points Arnong Criteria of OPIM, MBNQA, and EQA .............74 Table 4-1:Sample from the Question Mauix ................................................................... 82 Table 4-2: Tirnelines for Self-Assessrnent ..................................................................8
Table 4-3: Final Score Calculauon ................................................................................. 8 9 Table 4-4:Prioritising Areas for Improvement................................................................ 90 Table 5-1: Comparing Outcomes from Self-Assessment and Q d t y Audit ....................... 96 Table 5-2: Recomrnendations, and Noncornpliance Issues and Areas for Improvement ....98 Table 5-3:Comparison of CS0 Scores on Self-Assessmenr to Audit Findings ................101 Table 5-4:Results Categories from MBNQA and EQA ............................................... 103 Table 5-5:Performance Measwes Used at the CSO ....................................................... 105 Table 5-6: Performance Measurement System Interview Questions................................. 107
Table 5-7: Applying the BaLnced Scoreard to the Performance Measurtment Syscem of the Cs0..................................................................................................................... 110 Table 5-8: Performance Mea~ures According to QuiLry, TirrP, Cos, and Flexibility ........111 Table 5-9: Performance Arev Addresseci by the OPIM.................................................113 Table 5-10: Suggested Performance Measures to Add Relating to Resources ...................115 Table 5-11: Suggested Pedomiance Meyures to Add Relating to Society........................ 116 Table 5- 12: Suggested Perfonnuice Mevures to Add Relathg to Employees .................. 116 Table 5- 13: Characteristics of Perfoxmance Measurement Methods................................. 117 Table 6-1: Chamteristics of QwLty Management Addressing Issues in R8rD ................. 123 Table 6-2: Strategy Criteria Gom the OPIM ................................................................. 127 Table 6-3:Moditied Strategy Criteria fiom the OPIM ...................................................128 Table 6-4: The Categories of the Modif1ed OPIM Addressing the R&D Issues ................ 129 Table 6-5: Scoring Sdieme f r the Modifieci OPIM ................................................... 130 o Table 6 4 Modifieci OPIM Addressing R&D Problems .................................................131
L s of Figines it
Figure 1-1: P e r f o ~ c Management ...................... e
. ............................................... . . 1
Figure 1-2: Methods for Performance Improvemmt ..........................................................3 Figure 1-3: The Relationship h e e n Performance Management and Performance Measurement .......................................................................................................... Figure 2- 1: Un-g Figure 2-2: Enablen and R& e Framewoxk for the Bddrige National QuaLF/ Award Model ..........18 of the EQA .................................................................19
Figure 2-3: The Self-assessrnent Process ........ ............................. .................................... 9 2 32 Figure 2-4: Sehssessment Process Rrgour Versus Data Qua<ty ...................................... Figure 2-5: OveMew of audit amvines........................................................................... 8 3
Figure 3-1: OPM Framewotir ............................................................................... 5
70 Figure 3-2: Measuring Preference in Triilium ...................................................................
Figure 3-3- A Cornparison of the Point Distributions Among the Models ........................ 75 Figure 4-1: Steps in the Self-Assessrnent of the CSO ....................................................... 77 Figure 4-2: Test Operations & Svategic Sourcing............................................................. 80 Figure 4-3: MvkRing and Sales................................................................................ 8 1 Figure 4-4: Product Development ................................................................................... 81 Figure 4-5: Excerpt from Find Repon ..................................................................... 8 8 Figure 5-1: Cornparison o Scores on Self-Assessmentto Audit Findings ........................ 100 f
Figure 5-2: Comparing Low Self-Assessrnent Scores to Non-Cornphces ...................... 102
Figure 5-3: Perfomance Measwement Categoxy from OPIM .................................... 104 Figure 5-4Measuring Efficiency and Effectiveness in Self-Assessrnent ...........................118
Figure 5-5: Relationship o OPIM and Derforniance Management System....................... 120 f l Figure 6-1: Deployment of O ~ a t i o n aand R&D Goals ............................................ 122
124 Figure 6-2: The Modified OPIM Framework .................................................................
List of Abbreviations
CS0 - Case Study Organisation
TQM - Total QuaLty Management BEM - Business Exceilence M & MBNQA - Malcolm Baidnge National QuaLty Award EQA - European QuaLty Award DP - Deming Plize NPD - New Product Development OPIM - Organisational Performance Improvement M d C E 0 Chef Executive Officer Go0 Chief Operating Officer
VP - Vice President
QA Qdity Asnirance PFM - Preference Function M o d e b g
Karapevovic, for invithg me to take part in this research project and for all the guidance and support that he provideci throughout the process. His knowledge of and experience in rhis field proved Livduable and was a great
1would like to thank m y supervisor, Dr. St&v
source of inspiration. 1wish to give thanks to the case study oqpkation for pamcipating in this project and for a i l the CO-opemion received whik performing my research there. Without its fwcial 1
support, this project would not have been possible. I would specifidy like to thank b o t -
Mark DeKoning and M x Jaffer for their involvement and advice. Their support was of a great benefit to the successful completion of this project.
1would Idce to thank Dr. John Blake for his valuable feedbadc and tirne spent reviewing rhis
work and Dr. Eldon Gunn for his encouragement and support. Thanlu to both for serving as memben of m y guiding comminee. Thank
ou to Dr. Walter Wdbom for his Ume spent
reviewuig some of the w o i in the thesis and for travelling to Halifax for my defence.
Thanks also to Dr. Car1Sandblom for seming as a member of my guidance cornmittee.
Thanks also to the Department of Industrial Engineering at Dalhousie University for
providing funding as well as the opportunity to serve as a teaching assistant. Thanks to ail of the Industrial Engineering deparunent staff, especially t Cindi Slaunwhite and Linda o Seamone for their cheer and fnendship.
1would like to express my sincerest gratitude to Greg Delbndge for his inexhawible
encouragement, patience and support throughout my d e s .
In today's global economy, o&tions mua ourperform &eir cornpetitors in order to survive. They must set goals and objectives chat will move t e into leadership positions in hm their indusrries. To ensure that these goals are being me5 cornplnies are developing performance management systems to help them measure and improve the efficiency and effectiveness of t h e u activities. S e v d modek have been developed to assist organisations in these efforts. Some of these models, such as ISO 9001, provide the minimum requirements for a quality management system, while orhen, like the National Quality Awards, provide a broader set of criteria that extend the prinaples of management to al1 organisational activities. Companies natudy question which model is best suited for their performance management needs. It has been suggested that the model should be selected based on the quélity maturity level of the organisation. The ISO 9001 standard for quality management provides a necessaxy foundation for the journey towards business excellenceThe Business Excellence Models can then be used to build onto this foundation. In this paper, a model that integrates ISO 9001, the Malcolm Bddnge National Quai;ty Award, the European QuaLty Award, and the Deming Pxize i developed The s Organisational Performance Improvernent Modei (OPM) i considered to be a combination s of quality assurance standards that provide the minimum recpirernents for sU1i;ty improvement, and business excellence models that illustrate the opportunities for improvement.
Using a Canadian hi& technology Company as a case midy, a p h self-assessrnent is conduaed againn the OPIM.This self-assessrnent pmcess is then compared to the two other performance meanirement methods used within the organisation t cietennine its o usefulness as a tool for p e r f o m c e irnprovement. Because the case study organisation is highly focused on its research and development activities, modifications were made to the OPIM to create a more appropriate model for application and use in an R&D environment.
The OPIM was developed specifically for the case study organisation (CSO) but can be easdy adapted to be used by other organisations. A comparry c m employ this model to evaluate its current quality management system against the minimum requirernents in the model and rhen apply the opportunities for improvement as a guide for continuous improvement. Self-assessrnent against this model wili be beneficial in enhancing the organisation's quality auditing program as well as its redt-based perfoxmance measurement system.
10 Introduction .
The purpose of any organisation is to niccessfully achieve in gods and objectives. To
remain cornpetitive, these goals need to be achieved in the most effiaent and effective
manner possible. Effectiveness and effiaency constitute the two fundamend dimensions of
performance (Neely et al, 1995). Effectiveness refers to the exrent to wbich goais are m t e, while efficiency is a m m of how economidly the h ' s resouras are udised t redise o these goals. Organtations musr continually improve their processes and the use of th& resources to realise improved o v e d performance. Perfoxmance management i the overali s process of managing aa organisation's effiaencyuid effectiveness in the adiievernent of its corporate and funaional strategies and objectives.
Performance management i a dosed loop process. Figure 1-1 illustrates this d e . s
Set Goais and Objectives
lui for I.mprwemtnr
and objectives. These cm As a firsr s e p in t i process, the organisation musc set irs hs be baseci on benchmarking, standards or other such refemce aiteria.
Once goals and objectives are determineci, performance measurement is used to nadr the progress towards these goals. Performance measurement is the quantification of the
n effiuency and effectiveness of a action (Neeiy et ai, 1995).
To narrow the gap becween the m e n t lwel of perfomunce and rhe levels required to meet
its objectives, a organisation must improve. Performance impmvement is the systematic n
process of idennfying and implementing changes to oqpisauonal processes in order to more efficiendy and effectively achieve set organisational objectives. Performance improvement can be achieved in two ways. The fvst is to elimioate problems or deficiencies. The second û to initiate actions that Mn aaualky result in improved characterïstics. There are rwo ways in which companies can elimliate problems. These are corrective and preventative actions. Corrective actions are those which are taken to eliminate the cause of
an existing non-conformity[the non-fuifilment of a requirement (ISO 9000: 20W)J or other
undesirable situation (ISO 9000: 2000). Preventive actions are those taken to elMinate the cause of a potential nonconformiry or other potentially undesirable situation (ISO9000:
Improved characteristics can be achieved through Kaizen or Quantum Leaps. Kaizen means
s m d incremental irnprovernents towards the achievement of objectives. Quantum Leaps or
breakthroughs are larger irnprovements. Both of these reduce the average nurnber of defects or reduce variation.
Figure 1-2 illusvates the concept of performance irnprovement.
Quaiify = k d o m h m deficiencies
( 0 )
+ imP'0ved characteristics (+)
F e ,once a goal or objective is reaiised, new goals should be set to continue the cycle.
Both performance measurement and improvernent are essenria if an organisation wishes to sirndtaneous~ achieve its objectives and maintain its cornpetitive edge.
measurement synem un be seen, according to Bitichi et al. (1997), as the
heart of the performance management qmem.
There are xveral wys in which an organisation can mevure its performance and plan for
improvement. One such method is to compare its puformance t o a given reference model.
There are many such modek used by o ~ t i o ntoday. Some of these models are s focused on specific processes within the organisation such the ISO 9001: ZOOO standard for sUai;ty management. Others such as National QuaLty A w d often referred to ar; business excellence models (BEM) have a broader focus and uy to encompass all aspects of
an organisation. All of these models address the m i aspects of performance management: an
performance measurernent and performance improvement.
ISO 9000: 2000 Standards for Quli;ty Management
management syste.cn standards is an international set of
T h e ISO 9000 series of @y t
nanduds that provide the minimum requkements for an organisation's quality management
system. The core standard of the series, ISO 9001, addresses the creation and implementation of a quaiity policy, the standardisation of procedures, the identification and elimination of defects, cor-ve
and preventive action, and the management review of the
quality management systea The standard is process onenteci, aïnu at customer satisfaction asniance, and focuses an organisation's attention on the effectiveness of its quaiiy
management sysrem. It was conceived as a set of essential requirements for building a
qualiy management synem that fits the company's ne& in relation to its products, services
1.1.1 -2 National Quaiity Awards
Q d y awards are models for business excellence. These models consist of viteria to which
organisations can compare their activities and results. They have been developed based on the p ~ a p l e of Total QwLty Management FQM). s TQM is a quality-oried approach chat consisu of applymg quality management techniques t h r e o u t the organisation. The
e v h t i o n criteria provide puideluies to organisations to measure their progress in these
Integration of ISO 9001 and the Business Exceknce Models
Bo& the ISO 9000 series and the quality mat& have been adopted by orgaaisations to measure and improve perfomiuice. Many oqpisations wonder whether one mode1 is better than another, and whether the choice of model should depend on the type of organisation. Many authors have mggesteci that both mo&
are important to an
organisation (van der W d e et ai, 2000; Dale, 1999; Karapetrovic and Wdborn, 2ûûlB). The
ISO 9001 standard is seen as providing the minimum reS;rements for a & y t
awardr, provide guidance for the n a sep on this joumq..
syaem or the basics to stan the joumey towards orgauisationalexceilence. The quality
Combining these modeis would provide an integrared set of criteria that codd help an organisation transition smooddy from its quaity management system t o w d the use of the business exceilence modek for improvernent. There are however, many differences between these models and as a resuh, they cannot simpiy be cur and pasteci together (Dale, 1999).
To meet a company's organisational goals, performance measurement must be used to
evaluate, control and improve organisational processes (Ghalayini and Noble, 1996). This
process is used to interpret and descnbe quantitativelythe criteria used to mesure the effectiveness of the organisation. As noted previously, performance measurement can be defmed in terms of the rwo fundamental dimensions of performance. Performance measurement is thus the process of
quanufyuig the efficiency and effectiveness of an action (Neely et al, 1995). ISO 9000
(2000) defmes effciency as the relationship bmeen results achieved and resources used and
effecriveness as the extent to which planned aaivities are realised and planned results achîeved
Three main performance mevurcment methods are used byo+tions assessment, auditing and renilr-based performculce rneasurement.
As organisations srrive to implement perfomunce management models, there is a redting
need to meanire progress and improvemenc of the impIementation efforts. Self-assessrnent involves the regular assessment and monitoring of organisational activities to determine what is working well, what needs to be improved, and what is missing (Dale and Bunney, 1 9 ) 99. Instead of compliance with the criteria of the business excelience model, self-assessment idendes an organisation's strengths and opportunities for improvement in each area of a predefmed set of criteria. Self-assessrnenu ask "how doesthe organisation meet the criteria?" and whether this approach is used consistendy (Le. well deployed) throughout the enterprise. Self-assessrnent using am-ard models is focused on finding impmvement opportuniries and new ways in which to drive the organisation down the road of business excellence (van der Weile et al., 1995).
The performance meanirement merhod used to evaiuate a organisation's qUa;ty n
management system is the quaiity audit. The audit is used to evaluate the compliance of the system widi the criteria of the ISO 9001 standard. The outcome is either compliance or non-cornpliance. Audits are designed to provide independent, objective and documenteci evaluation of the evidence that the quality system &S.
Quaity au& are used to measure the effectïveness of an organisation's quahqr system
against the selected ISO 9000 model. Audits do not however, meanire the efiaency of the
system and therefore miss one essentd aspect of perfomance.
The audits used with ISO 9000 series registration look for noncornpliance and assess whether the quJiry mern and its undeliying procedures are king followed. In other words,
+ty audits ask 'if the organisation meeu the deria", wheeas self-assessrnena ask 'how, and how well, does the organisation meet the criteria".
126.96.36.199 Result-based performance measurement
Result-based performance measurernent i another method organisations use ro meanire the s effuency and effectiveness of their processes. This involves the collection of information
and data to analyse process performance uid/or input and output characteristics (ISO 9000: 2000). To do this, companies design or adopt performance measures that ~ r o v i & valuable
information about the current performance lwels of organisational activities. Performance measwes are meuics used to quanafv performance. The set of performance measures used by an organisation fomis the performance measurement system. Firms m m carefully select these m e m e s to provide a view of key performance areas to control and improve performance lwels. It is the seleaion of this set of meanires that has proved chailenging.
Performance Management in R&D
Research and development (R&D) is an area in which there is much variability and uncenainty. The ability to innitute systematic decision-making continuous improvement, experimentation with new ideas, and tearnwork are cntical elements of the TQM philosophy that have been found to be important for a successful RBrD work environment (Gamin,
1993, Kiella and Golhar, 1997). This area of research however has been found to be weak
as, for the most part, the lirerature deals with the manufamiring and service sectors.
Due to the l w tangibildy and repetiuon found in R m &pmnents, manufamiring-based
quality practices when applied to R&D my prove dislsrrorrr (Kumar and Boyle, 2001).
There are several issues, specific to an R&D organisation, t&atshoulcf be considered. Individuai achievement,as opposeci to teamwork, has been recognised and awarded in the R&D envkonments fostering a very inciividualiswc workethic. The goals and objectives of the R&D funaion are often emphasised over the o v d company goals, leadhg to a system rhat is not f d y conducive to the achievement of these organisational goals.
In todn/s competitive marketplace, companies are faced with the prospect of
introducing new products at a fnghtening Pace in order to survive. In a shon-sighted effort to remain competitive, companies reduce the number of resources avaiiable. The R&D department is often the fim target. The expectation is that researchers will continue to perform at the same level with fewer resources.
W t increased cornpetition, organisations must recognise that R8rD/new 1h
development is one of the moa important sources of competitive advanrage for a f m
aayawama and Pearson, 200 1).
The emergence of new technology gready impacts the R8d) environment. R%D mus view technology and scientific advances as tools to assin the organisation in meeting company goals (McLaughhn, 1995). Its responsiveness to and influence on changing customer needs musr drive the R8rD organisation. The company used as a case study (case mi+ organisation) for the research in this thesis is very mu& f a e d on its research and development efforts to maintain its competirive position in the marketplace. Many of the issues lined above apply to the R&D departments
in this organisation. The n a section provides an overview of the case study organisation.
Case Study Organisation (CSO)
The companyused for this work, which we wiU caiI the case study organisation (CSO)i a s
Cinadian hrgh technology company which desigm, manufactures and markets eleamnic
components, p@ &con integrated circuits (ICs) and thick-filmhybrid circuits, for specialised applications. The organisation has rwo faciliaes with total plant space of 70,000square feet, encompassing
all aspects of integrated circuit development, muiufacnviag and marketing. Revenue
exceeds f 107 million per year. The CS0 employs ahost 500 people.
The company bas recendy reorganised into rhree divisions. The divisions are based on produa families and each indu&s marketin&sales, R&D, and manufacturing functions.
The CSO recognises that in today's fast-changing economy; initiative and ingenuity are essenùal elements of success. In 2000, it renewed its focus on RSrD, ramping up spending to approximately 17 percent of d e s .
The organisation is dedicated to quality. To ennue hi& quality produas and services, the organisation's Quality Program is registered to ISO-9001-94 and is constantiy evaluated through interna and extemal audits. The quai~ty system is currendy being updated to meet the ISO 900 1: 2000 standard for quality management.
W e the quality synem is being rnaùitained in accordance with the ISO 9001-94 standard,
the CS0 is aware that these efforts are no longer adequate to maintain their cornpetitive advantage. The company needs to continue its quality journey and expand its continuous improvement efforts. Several National Quality A . suggest cnteria that should move the
C S 0 into this nez phase of excellence.
Organisation o the Thesis f
The remainder of this thesis is organised as follows. Chapter Two is a nwqr of existing iitennire to develop a background for the problems addressed in this thesis. These top& indude: Performance Management
Performance Management in R&D Issues Uniqye to R&D ISO 9001 in R&D
It dso indudes an o v e ~ e w the motivation for and objectives of the research in this of
thesis. Chapter Three describes the development of an integrated model for performance management based on the ISO 9001: 2000 Standard for QwLty Management and severai business exceilence models. Chapter Four subsequendy reports on a pilot self-assessrnent performed in a business division at the case study organisation. This self-assessment was conducteci against the proposed model for performance management. Chapter Five compares diree me&& of perfomance measurement used by the CSO.
These include the self-assessment, the p h t y audithg prognm, and the result-based
performance measurement system. Chapter Six describes the modification of the OPIM to be more appropriate for use in an
Chapter Seven condudes the thesis with a nimmary of r e d a and convibutions of the work.
The scope for htrther research i also discussed. s
2.0 Literature Review
A nwqr of existing literature has been conducted to review the foliowing aspects of
performance management: the main elemenu of performance management iaduding mewrement and improvemenr;
existing frarneworks and modeis for organisationai performance management;
the integdon of the minimum requirements for a quality management synem with die
t cntexia frorn the more holinic national @y
three organisational performance measurement methob: self-assessment, audiring, and redt-based performance m a u e e t esrmn; performance management in a research and devdopment environment;
Success of an organisation's business depends on its ability to set svafegy and objectives and then plan for the resources and activities necessary to achieve them To ensure that these pluuied activities acnially occur and lead to the fulfhent of the set objectives, the organisation needs to msnage and improve its performance. Perfomiance management is
n "the process by which the Company manages its performance i line wirh irs corponte and
functional strategies and objectivesn (Bititci et al., 1997). Performance management is
essentiai to the successful operation of the enterprise. It has become a key business process. The performance management process is a dosed loop deployment and feedback ryaem
that sans with the company's vision, broken down into business objectives and strategic goals. Action plans are created based on the achievement of these goals and objectives. To monitor the progress towuds the accompiishment of these goals and objectives, performance measurement is used to collect information, indicating where the nirrent performance gaps exist. This information is then fed into the performance improvement
process, which narrows the perfomunce gaps and then feeds information back into the process. In SV,
the main elements of performance management are:
establishment of goals and objectives pertonnance measurement performance Unprovernent These interdependent processes, hctioning hannoniousiy, usix~g various resources to
achieve goals related to the effiaency and effeaiveness of organisational processes, make up
the performance management system. (Karapetrovic and Wi11born, 1998A) There are numerous rnodels for performance management. The next section reviews several
Models for Performance Management
This section outlines the frameworks and models used by organisations today to design, implement, maintain, and improve their performance management systems. These range from models of the basic requirements for a quaRy management system such as the ISO 9000 standard for q d t y management to more holistic models for business excellence. The latter includes the Malcolm Baldnge National Q d t y Awad, the European Q d r y Award,
and the Deming Prize.
ISO 9000:2000 Standard for Quality Management
Customen in today's marketplace require assurance of the quaiity of the products or services
that they are buying. To provide this assurance, organisations look to the ISO 9000 series of standards for q d c y management to provide guiciance in the planning, implementation and maintenance of an appropriate quality system.
A @y t
system is a set of interdependent processes tbat h & o n hamoniody, using
various resources, to achieve the objectives relateci to quality (Karapeuovic and Wiibom, 1998A). The quai~ty qmem is a sub-system of the business system of an organisation. The ISO 9000 senes of standards was developed in 1987 as a set of models that stipdated the requirements upon which an e x t e d pany could assess an organisation's quality system. The senes consisted of guidance nandvds and conformance standards.
standards ISO 8402, ISO 9000, and ISO 9004, provideci interpretations for using the
conforniance standards. The conformance standards ISO 9001, ISO 9002, and ISO 9003 represented three distinct f o m of funaional capability suitable for extemai qyality assurance purposes. Companies applied the applicable standard to their organisation to assure their customers of the @ t y efforts more uaasparent. The original ISO 9000 senes was revised in 1994. The ISO 9001 standard in this version of of their products and senices and to make their quality
the model consisted of 20 elements that addressed all aspects of a q d t y srjem. This
sysem induded the organisation, allocation of responsibilities, procedures, processes, and resources that joindy led to the provision of goods and seMces in accordance with the firrn's quality policy and objectives (PG,1995). The standards emphasised the asniance of quaiity of products and services through: clarification of management poiicies and cornmiunent identifilcation of roles, responsibility and authority (Elmuti, 1996) establishment of clear instructions to ali personnel affecting qualiry development of precise procedures and instructions in al1 areas of operationai activity to e n w e consistenq and uniformity (kadi et ai., 1996)
This model has been used extensively by organisations 1over the world since its incepuon.
Today,over 400,000 companies world-wide are registered. There have been however,
severai criticisms made of the model:
tao much emphvis is piaced on documentation, creating bureauctacy in convol
rnechanisms and bodenecks when documents need to be c h g e d or updated
(Karapeuovk, 1999; Dale, 1999)
la& of emphasis on impmvement (Chin et al., 1995; Pun, 1998; Najmi and Kehoe, 2000)
la& of a suong focus on nistomer satisfaction @odinson, 1991) frequendy mistaken as a guarantee for produa quahty (Bum, 1990)
In December 20d0, the ISO 9000 senes was updated for the second time. The 1994 version, which emphasised + y t assurance, has now been replaced by ISO 9001:2000 that w s developed to assis organisations implement and operate effective quality management a systems. The sUa;ty asnuance standard provided confidence that the requirements for quaiity will be m t (Karapetrovic and Wilibom, 1998A) through quality planning and e
conuol. The new series adds the process of qwLty impmvement into a broader model emphasising quality management. Q d t y management is the combination of quality planning, q d t y conuol, and quaiity impmvement. improvemenr processes. The changes manifest themselves in the underiymg p ~ c i p l e of the model. Ir is based on s eight q d t y management principles.
1. Customer focused organisation
This new emphasis on improvement
renilted in a section of the IO 9001 standard devoted to measurement, an+ S
3. Involvement of people
4. Process approach
S. System approach to management 6. Continual impmvement
7. F a d approach to decision making 8. M u e beneficial supplier relationships
By connecting the prinaples of qu+
management to organisational processes, the 2000
version of ISO 9ûûû provides a greater orientation tawvds continual improvement and customer satisfaction, thus widening the scope and the use of the standard
The ISO 9000 senes now consists of a pair of quality management system standards: ISO
9001 and ISO 9004.
ISO 9001 s p d e s requiremerits for a qu?lity managrment system that c m be used for infernal application by oqpnktions, or for c d c a t i o n , or for contracnui purposes. It focuses on the effectiveness of the qu;Jity management system in meeting customer qukments. ( S 9004:2000) IO
ISO 9004 gives guidance on a wider range o objectives of a qu;ility management system than does ISO 9001, f particulariy f r the continuai impmvement of an organisation's o v d performance and efficiency,as wd as its o effectiveness. ISO 9004 i recommended as a guide for o ~ a t i o n whose top management wishes to move s s beyond the requirements of ISO 9001 in punuit o continual impmvement of performance. However, it is not f intendecl for certification or for c o n d purposes. (ISO 9004:2000)
These IWO standards can be used alone or a complementaxy models for an organisation's
quality management system ISO 9001 sets the essenrial requirernents and ISO 9004 shows
the way for future developments. To maintain registration status, an organisation m u s
perform intemal and extemal audits against the ISO 9001 model to show that it has met
these requirements. It can however, enhance the audit process by performing selfassessments againn the ISO 9004 model. This process can help identify strengths and areas for irnprovement in the quaiity management system i texms of its efficiency as well as its n effectiveness. If the issues identified in the self-assessrnent are addresseci, the results of the next quality audit should show irnprovement. While the ISO 9004 standard is a model for improving the efficiency and effectiveness of the
quality management system, other models have been k e l o p e d that address an even broader
set of organisationai activities. These are the National QuaLty Awarb or Business Excellence Models (BEM) as they are often referred to.
National Quality Awardc
QuaLty awards are modeis of business excellence consking of uitexia to whidi organisations cm compare their activities and resuits. This compvison process, r e f e d to
as self-assessment, involves the regular assessrnent and monitoring of organisational
activiries (Dale and Bunney, 1999). hstead of cornpliance with the criteria of a business excellence model (BEM), these assessments idenrify an organisation's suengrhs, weaknesses,
and oppormnities for impravement in each area of the criteria.
Three of the most pop& q d t y awards are the Malcolm Baldnge National Qua;ty Award,
the European Qua;ty Award and the Deming Prize. Each of these a w d has its own focus, famework, mteria and scoring method
This award is named for Malcolm Baldrige, who served as Secretary of Commerce from
198 1 und 1987. His managerial excellence conuibuted to long-term irnprovement in
efficiency and effectiveness of goverment (NIST, 2001) Organisations that aim at k i n g world-class focus on insrilling core values such as good leadership, amorner focus, respect for employees, and continuous improvement
(Pannirselvam and Ferguson, 2001). These form the basis of the MBNQAaiteria. The model embodies these essential values in a framework of seven main categones.
1. Leadership 2. Strategic P l k g
3. Customer and Market Focus
4. Information and Anaiysis
5. Human Resource Focus
6. Process Management
7. Business Results
There are two key assumptions thax devin modeL The fim is that the leadership the
s provided by top management i the primvy driver of the business. Top management m e s
organisational values and goals and direcrs orp.aiutional improvement. The second is that
the basic goal of the slUi;ty process is the delivery o mer-impruvingq d t y and d u e to f
customers (Malcolm Baldnge National Quatty Awad, 2000). Figure 2-1 provides the framework comecting and integrating the categories.
Information and Adysis
Organisations are evduated against a given set of criteria and a maximum total of 1000 points are allocated among seven award criteria Each critenon curies a different number of points in accordance with its relative value within the a w d
The European Quality Award (EQM) introduced in 1991 by the European Foundation was for Quality Management (EFQM).
The EFQM Excellence moQl is based on a set of fundamental concepts that formulare the definition of excellence (European Quality Award, 1999). These are:
amorner focus leadership and consistency of purpose
management by processes and facrs
people dwelopment & involvement continuous leaming innovation & improvement partnership development
The mode1 incorporates these Fundamend Concepts in a set of nine criteria; five o which f are 'enablers', four of which are 'redts'. The 'enablers' criteria address what an organisation
does while the 'renilrs' cover what an organiution achieves.
Figure 2-2 ilhwates the model
with the 'enablers' and 'results'.
Key Performance Redts
Innovation and Leaming
organisations are evaluated agaian a given set of criteria and a maximum total of 1000 points are allocated among nine awd criteria. Each mterion carries ii different number of
points in accordance 4 t h its relative value withiu the a w d
The Deming Prize w s established, i honour of D .W. Edwards Deming, by the Board of a n r Directon of the Japanese Union of Saentists and Engineers W E ) in 1951. Dr. Deming, one of the fathen of quaiity, i best known for his work in Japan, d e r e from 1950 onwad, s he taught top management and engineen' methob f r the management of qualiry. The o
impact of D .Deming's teachings on American manufacturing and semice organisations has r
The orignal objective of this prize w s to assess a company's use and application of a
statisticd method (Dale and Bunney, 1999).
The prize consins of a cheddisr with ten major categories. These are: 1. Policies
2. The organisation and its operation
3. Assembhg and disserninating information
5. Human resources
6. Quaiiry asnirance
7. Mallitenance 8. Improvement
10. Future plans Each pricnary category has six sub-categories (except for q d t y assurance, which has
twelve). The cheddist expiiady identifies the factors and procedures that constitute the
Company-Wide Q d t y Convol and Totai QwLty Control (CWQCrTQC) process.
Because it names specific techniques and appm&es, the c h &
Y inherendy presuiptive.
There are no pre-designateci points allocarad to the individd sukategories.
The Dmimg PNc ir not b
resuits together. Furthemiore!,
d on an udaiying fmmework linking concepts, aaiwies, processes and it does not assume an undcrtying causality. It si.& ~rovides lisr of a
desirable or good gu;ility-orieûtedmanagement pncticcs. Its focus i on poliaes and plans; s implement;iOon of p h ; information collection, a d + ;mdcontrol; resulrs flowing frorn the implemenmtion of poliaes and thtir effects; and fuwc improverncnt p h .
(Ghobadian and Woo, 1994)
Comparing the Models
Each of these rnodels har its own focus, scope, approach to evaluarion, and improvement
strateW. Table 2-1 illusvates these major differences.
ISO 9000 Conformanu (CO p r o c h and CO speafi&ons)
Iniprovan~~t (of rmthods and of o v e d business
EQA lmprovanenc (of mcthods a d of o v d business
Statisud Mcrhods (prevaition of @y t ~mblm)
spnwlists and top
Executive Identification of the
management Idmufication of conformance and non- nruigths and conformances, resulting oppominiria for in a pasdfd verdia improvemcnt, and scom i n d i h g the m;inuity of the
m n g n tv a n aaum
Design and production processes, and dimdyassociateci support
nie entire management synem, includlig ludcrstiip, pluuung and the use of infornucion and
dorelopmenr and management of people, the mcrhods used for
understanding clrstomcr and market rtquirrmenrs,and the management of kcy inuiness proceSKs.
svcngths uid oppomuiitics for improvanent, and scores indiaring the cnanuity of the managemcnt syscem The entire managanent system, induding leadership, people, policy and nntegv, puuiuships, mourccs, proceses, and the management of key business processes
dement through an auditing process
Process orientcd nrong emphasis on proces management
Giteria confmed to
the application of
p r o ~ &, ~ e
statisticd methoch and q d t y c i d a
I Basecion the vroccss
MBNQA B a 4 on an undcrjuig fnmework linlunp conceps,
EQA Based on an
Does not u n i m e
and rrnihs togerher
mdatying fnmervorklinlung concepts, &es, proceses and re& togtthff
udty,umpIy provides a list of &sirable or good quality-oricnted management pncrices
( G h o b a b and
nonconformanccsand to pxwent m>ccurrrnce of pmblans
Appendix D provides a detailed cornpuison o the elemems covered by the ISO 9001 f
standard,the MBNQA, the EQA and the Deming Prize, in each o their cntena Table 2-2 f presents an overview of the svengths and weaknesses o each model. f
Stmlgths M i n focus i on the processes wnhia the quality s
management system Quaiity system model is prescriptive and therefore the way forward is clear and unambiguous End point (achieving registration) i weii defineci s and externaüy valiàated (Najmi and Kehoe, 2000) Constinites an integrai pan of an organisation's o v e d management systern (Pun et ai, 1999) Addresses the identification and provision of resources with a focus on idkanmm, the work environment and the conml of documents Forces an organisation to describe its key processes and make thern more transparent (van der WÏde et al., 2 0 ) Broad model addressing an organisation's o v e d activities, not oniy those relateci to the quality management system Asks how the organisation meeu the criteria Focused on cunomer management
Weak i the area of humui n
Provides ody the minimum requirements for the quaiity management system Does not specificafy address technology or financiai resources Primanlyaàdress iimited areas of the enabler si& of the BEM's Little emphasis on areas that directly impact on business or organisational effectiveness (Poner and Tanner, 1996) Process criteria goes into less depth than the ISO 9001 stanàard Does not spetlftcalty îddress the use of resources in its cnteria
Process critaia ~ o e into less s
B d modei ;iddrcssingan orginisuion's o v d
activitics, not o d y those r c i a d to the qu;ility management sysrem Asks h m the o q p i m i o n meets the criteria Addresses the efficient and effective use of resourres within the o ~ s i o n Focused on the relations with the cornmunity, and customer's and ernployee's satisfaaion
Does not &as how the orguiis;ition manages customer rehionships and satisfacrionor how it contribuus to socieiy and miaimises environmentai
Focused on q d t y control Focuseci on compuiy wide qu?lay efforts, conMwus improvement Provides a List of desirable or good qu;ilisronented management pnctices
G t e r i a are confined to the
application of process a & , n& mi tc methob and q d t y tsi d d e s Crimia such as Company poiicy and p h m g d t s , or future p h are p concenieci with quîlity wmce activiries and q d t y resuits Not b d o n a n u n d e r j i n g h e w o r k linking concepts, aaivities, processes and d f s
The major points arisiig from this cornparison process are: The ISO 9000 standard provides oniy the minimum requkmeno for the q d t y management sysrem but is seen as the foundation of an organisation's total & y t efforts. The MBNQA is a broad model addressing an organisation's overaii activities, not o d y those related to the quality management system. It does not specifiulh/ address the organisation's use of resoumes.
T h e EQA is also a broad model for business excelience. Ir does not address customer
management in the same detail as the MBNQA.
The Deming PNe is a model focused on quality conaol. The criteria is not as broad as
those in the MBNQA or the EQA but provides some important pieces conceming the
use of quaiity control in a company's continuous impmvement efforts.
Table 2-3 provides a cornparison of the major categories addressed by Bdi of the qudity award models as weli as t & respective point values. h
Deming R u e
Policy and Stntegy
Orpiution and iu
Planning Customer and
Market Focus Information and Human
People Partnenhips and
1 0 1 0
Custorner Resuits society resuits People Resulu
Ir is evident that each of the awards places emphasis on different areas of their criteria. Both the EQA and the MBNQA however, assign the most points to the Results sections of their model. The Deming Prize does not single this category out as being the most important in rems of its scoring xheme (each is valwd at 10%). The MBNQA assigns 12.5% of its points to Leadership and distributes the ren of its points among Strategic Planning, Cusromer and Market Focus, Infornuon and Analysis, and Human Resource Focus
assigning 8.5% for each. The EQA however, w i p o d y 10% to Leadership d
Processes 14%. The People category i worth 9%, o d y slghrh/ higher thao in the MBNQA. s
This cornparison process has rwealed that each of the performance management madels have muiy nrengths. Each one could compensate for aaother's weaknesses. The next section examines, in further detail, the research that has been done conceming their
Integration of ISO 9001 and the Business Exceilence Models
The ISO 9001 standard for quality management is seen by many as a requed foundation for a company's @ry and performance improvement efforts (van der Weile et al., 1997, Dde, 1999, Karapmvic and Willborn, 20O1B, Russell, 2000, Meegan and Taylor, 1997). For exampie, van der Weile et al (1997) make the following comment:
Continuous improvément ody m;ikes sense if an organisation h m what is going on in reiation to the processes, which are undedying the things t a need to be improved. The ISO 9000 series forces ht an organisation to desaibe the key processes and make them more transparent.
Once the requirements for rhis standard have been met however, companies need to b d d on these foundations to extend the principles learned to ail organisational activities and not
This means irnproving a quality synern beyond the level of simply meeting spec&cations to creation of the proper
just to the activities relating to the quaiity management *en
conditions for business excellence.
The synem required for accreditationWU outline the organisationai structure, responsibilities, procedures, processes, and resources needed to knplement quaiity management. The m i t i o n zone [beyond ISO 90001 begins then at the intersection b e e n the operationai and management infrastnrctures (Meegan, 1997)
The transition from quaiity management to business excellence need not involve leaving ISO 9000 behind to move on to somRhing supenor (Meegan, 1997). To facilitate the movement from ISO 9001 quaiity management to the o v e d business excelience embodied in the
quality awards, researdien niggest that these models be integrated (Mann and Voss, 2000,
Tonk, 2000, Dale, 1999, van der Wkle et al., 2000, Pun et a. 1999). l,
Pun et al. (1999), describe a self-assessed qual~ty management sysrem using the framework of the Baldnge M
d forthe integrarion of ISO 9000: 1994, ISO 14000, and the Baldrige
criteria. In a case stuciy, the assessrnent against rhis f r a m e d d l consisted of the regukr
auditkg and performance assessments performed by the organisation.
When there i a co11ection o afk s f systems or stanfiam different ueu, efficiency is difficult and misconcepuoas and coafurion often occur. It is &us ben to elimbae possible confusion and sub-optimisation from the outset by establishing and maintaininga t o d systems approach.
(Puri et 4 1999)
Finai conclusions from Sun (2000), suggea that TQM and ISO 9000 srandards musr be
completely and systematicallyimplemented and i n t e g r a d Researchers must detemine a method of c o m b i i g ISO 9000 and TQM, and bridging the gap bnween the two.
Mann and Voss (2000) present an innovative approach used by one company IO integrare its
ISO 9000-certified management system with the Baldrige model. The company concemed
developed its ISO 9000 qmem to address all elements of the Baldnge criteria. Of parti& note is its process improvement approach that prioritises improvemenr projects based on
their expected impact on the company's Baldnge score.
Companies, who are ar present working for an "integrated quality management sysremw where ISO is a major contributor, go beyond the requirements of the standard ro M e r irnprove the performance of the organisation in various dimensions. The ISO standard is
thus the comerstone of
TQM and, as such, presents both oppotrunities and challenges.
The challenges involved in integrating ISO 9000 and TQM are well reviewed in the literantre. We have seen that ISO 9000 has been advocated as the fs step towards total xt
quality management. The ISO 9000 series and the excellence models clearly have different
goals and perspectives and define total quai~ty management at different levels of maturity (van der Wiele er ai., 2000). It is obvious then that the uiteria from the ISO 9000 series cannot simply be incorporateci into a model for business excelience. The criteria represented
in the reference models are different, ISO 9000 representing the minimum requirements and
the quaiity award models k i n g more holisric paie, 1999). I rhis were to o c w , it would f
lose much of its potency in the building of the foundatîon of an organisation's TQM activities (Dale, 1999).
The quaiity a
and quality auditing respectively for evaluation of rhe otganisauon against them. To integrate the
d models and the ISO 9001 standard use self-wessment
models would require the integration of these measurement methods. Karapetrovic and
Wiübom (2001B)explore the integration of quality audits and seif-assessment processes.
Another difficulty i integrating the ISO 9000and the @y n t of the MBNQA and the ISO 9000 system, he suggesu: The Bddrige scoring system uses percenrages, w h m s the ISO 9000 systern uses, in effect, a pus/fd
(conform;ince/nonconformuice) system Decisions need to be made as to whether to retain the
award modeis is the different
'scoring" schernes used by eadi. For example, when Tonk (îûûû) describes the integration
MBNQA percenage scoring sysrem and if so what scoring levels will be reqwred in each of the
uiterion in the new model.
Performance rneaswement is the process of coileccing data pertaining to al1 aspects of the company's activiues. This data can then be used to help control and correct waning performance areas and to set new targets for improved performance. According to Sinclair and Zain (1999, rhis meanvernent is exuemely important to organisations for several reasons:
Meanires can be analysed to enable appropriate decision making.
Measurement provides feedback and reinforces behaviour. Measurement is an integral part of continuous impmvement; "if yai m o t meanve an activity, you cannot irnprove it". Measwement "helps an organisation direct its scarce resources to the mon aMcnve impmvement opportunities*.
It has been shown that perfo~llil~lce improves if individuas are givea targets, and is . . if targets are seen as cbillenging but achievable. maxunised
Measurement is impoxtant in the maintenance of longterm focus. Measurement aiso plays an important role in quality and producOvYy improvement
(Oadand, 1993). It:
ensures that customer requirrments have been met
provides standards for establishiog cornparisons
provides visibility and a scoreboard for ~eople monitor th& own performance levels to
highlighrs quality problems and deremines which areas require priority attention
gives an indication of the costs o poor q d t y f
justifies the use of resources provides feedback for driving the improvement effort
Each of the National QluLty Awub provides guidelines for perfonning organisational selfassessments agalin the given set of criteria f r business excellence. MBNQA provides a o
Guide to Self-assessrnent and Action. The EQA provides detailed guidance to organisations
and suggests a self-assessrnent approach depending on the quaiity rnaturity of the
organisation. These organisations usually perform self-assessrnent in one of rhree ways (van der Weile et
taking the a
d guideha and foiiowing these for intemal use in the sarne way as
prescribed in the respective guidance booklets for those organisations who are putting forward a formal application for the chosen award adjusting the cnteria and/or the scoring to fit the specifîc situation and goals of the organisation
speQfying the parh and seps to be t&n h m the present situation r the end goal. o Conti (1993) suggescs that organisations should use already existing data in the assessment process and as additional information for the goal setting process. Some examples of this
cunomer survgs, amorner cornplaint statistics, marketing strategies
employee w s work safety statistics, illaess rates, absenteeism and fluctuation, q,
human resources development plans
and processes e.g. processing Ume or process liability, ~rojects gained improvements
producr e.g. e m r rate. life duration and failure rates
fmancial e.g. trends conceming profits, sales volume, renim on investment (ROI),qwlity
coas &ink and Schmidt, 1998)
The self-assessrnentprocess usually follows the Deming PLAN-DO-CHECK-ACTqde. Figure 2-3 has been adopted from the EFQM (1995). It provides an o v e ~ m the selfof
Wbde the unciersiag pmcess r e & the EQA each has its own m
the same, the ISO 9004 standard, the MBNQA and a for conducOng the self-assessment.
The assessment method suggested in the ISO 9004 standard involves the evaluation of the
mamrity of the @y t
management synem for each major dause in IO 9004 on a scale S
ranghg from 1 (no formal system) to 5 (best-inclas performance). The standard provides exvoples of t y p i d questions that cm be asked duriag the self-assessment. It i suggested s
that self-assessment can be used in a flexible way according to the needs of the organisation.
Two recommended m d o d s are to: perfoxm the self-assessrnent on an individual basis for all or part of the quality management system and then to pursue improvement. have a cross-function group of people perfonn self-assessment on ail or part of the
quality management system, followed by group review and a* n, building,to detemilie improvement prioriries and action plans.
MBNQA The Baldrige National Qwltty Progra.provides a Gui& to Self-Assesunent and Action. This document ourlines ten seps ro conducting a self-assessment. 1. Idenufy the boundaries of the organisation to be assessed. -7 2. Decide on a format for the assessment and action plan.
3. Write the business/organisaüon oveMew
4. Select seven champions and teams, one for each criteria categoty
5. Practice self-assessrnent techniques with the seven category
6. Càtegory teams prepare a response for their assigned teams
I 4 e
7. Share responses among te-
and fiiulise the fmdings
8. Assess the organisation's strengths and o p p o d t i e s for improvement
9. Develop and implement an action plan for improvement
10. Evaluate and improve the self-assessrnent and action process
EQA According to the EFQM,selectïon among assesmient methods should be dependent on the
of the organisation. Table 2-4 presenu self-wessment approaches
correspondmg to the maturity of the oqpnkation and the desired effort level.
Pilot a w d simulation
Verv detaïleci questionnaire
This approach involves the creation of a questionnaire used to gather infomtion about the perceptions of people within the organisation. Some questionnaires can consisr of simple y e h o questions. Othen provide a set of possible a m e r s nich as A-Fullyachiwed, BConsiderable progress, C-Some progress, or D-Not started. These questionnaires are dinnbuted and used alone, or as nippon for more elaborate self-assessment approaches.
In this approach, an achievement ma& is developed For each category of the award,
statements perraliing to possible achievernents by the organisation are set on a scaie from 1
(minimum achievement) to 1 (greatest achievement). 0
This is used as a basis for
management discussion and sening objectives for improvement.
Here pro-formas are created for each sub-category. The description of the critexia in the sub-category is printed at the top of the page with areas to address beneath it. The assessrnent entails fg & pro-forma itself.
in suengths, areas for improvement, and evidence collected on the
The management team is responsible for gathering dam from their unit and presenting the results to their p e r s in a workshop environment.
Thic appmach is effectivelya simulation of entering for the award. The unit undenaking the
self-assessrnentwntes a full submission document. A team of trained assessors then evduates this report.
The EFQM dso indudes in the EQA document, a figure that i i l m t e d the relationship between the rigour of the different approaches and the quaiity of data captured. (See Figure
Pro-f o n
Based on Opinion
Table 2-5 presents the evduation and scoring methods used by ach modeL
Evaluation and Scoring Evalu?tes the m;uunty of the qu;rlity managtznenr
system for cach major ciause in ISO 9009 on a s d e rianging from 1 (no formai system) to 5 (best-inîlus performuice).
No systematic approach cvident, no results, poor d t s or unpredimbIe
d t s
Problem or systemaric appfo;idr; minimum data on improvement resuits ~ a&le S y s t d c pmess-bued appmpC4 Fufy =%e of system~tlc rmprovement , & a avaiiable on t c o n f o m c e to objectives and existence of improvement vends hpmvement process in use; good resuits and susuineci improvement I I trends 5 Strongiy integrated impmvement process; best-in&s results dernonstrateci Evaiuates each element in the a d criteria bved on the appmach, the deplayment of appmch, and resuits See Table 2-6for details re?lised These are evaiuated on a d e from 0% to 100%. Evaluates each elexnent in the award criteria based on the approach, the depIoyment of approach, the resuits r e d i d , and the assessrnent and review (RADAR) of See Table 2-7 for details. these elemenu. These are evaiuated on a s d e fkm OYo to 100%. Cfiecklist is evaiuatd Each category is worth the same.
Table 2-6 desaibes the evaluation dimensions used by the EQA.
Mallod(s) d to ;iddress item
Elernmt is cvaiuatcd based on Appmpri?teness of the methods to the rrgUiranmfs Effectivcness of the use of the methods
Embodies evduation, improvemendleaming 1s b d on diable inforrmtion and &ta Alignmeat with o ~ t i o needs d Eviduice of innovation
Exrem COwhich a p p r d i applied to s
Assessrnent & Review
requtements relevant to your organisation Ue of the a p p r d by 1appropriate work s
Ue of the approach in addressing item s
OutcomesinachieVing the purposes of the item
The scope of evidence of measurernent, leaming and Unprovernent activities
CuITentperformance Performance relative to appropriate compvisons or bencbmarh breacith, and importance of ~ o u r performance impmvements Remilu me;uurement of the effectiveness of t h b r o a c h and deplayment i carrieci out s Levniag acùvities are used to idenufy and share best practice and improvement opportuniues G p from measurement and leamhg is t n a n and useci KI w identify, prioritise, plan and impIernent improvementr
Table 2-7illusuates the wduation dimensions used by theMBNQA
m a c h and Dcployment no systematic approach aident; a n d o t a l
Rcds no resuits or poor results in areas reponed improvements d m eariy good performance levels in a few areas results not r e p o d for mvry to most areas of importance to the cornpuiy's key business requirrments
i improvement trends d good performance levels reporteci for m;ury to moa ueu of importince to the company's kqr business fequirements no p a m of adverse trends d m poor performance lweis in areas of importance to the appliant's key business requinmenu some trends and/or current perfommce lwels-evaiuated against relevant cornparisons d m bencbmuks-show areas of svengrh and/or good to very good relative performance levels
evfy sages of âeveloping trends; some
eariy stages of a transition from re?cting to problems to generai improvernent orientation major gaps exist in deplayment dut wouid inhibit progress in ?chi+ the prinury
a sound, systematic a p p d , responsive to the primîry purposes of the item a faa-based improvement process in place in key areas; more emphasis is piaced on improvement than on reaction no major gaps in deployment, though someunrmayixineariyrvges
a sound, systermtic approach, responsive to overail purposes of the item a fact-based irnprovernent process i a key s management toil; dear evihence of refinmient and improved integrauon as a r e d t of improvement @es and adysk approach is well-deployeâ, with no major gaps; deployrnent may Vary mong some areas or work units a sound, systematic approach, fully
responsive to al1 the requirements of the item a very nrong, fut-based improvement p m & s is a key managem&t tool; nrong refinement and integrauon - backed by excellent axmlysis approach is f d y deployed without any sipificuit weaknesses or gaps in any ueas
current performance is good to excellent in most key ares of importance to the company's key business requirements most improvement trends andlor current performance lwels are sustained muiy to rnost trends and/or current performance levels-evaluated a g a , relevant cornparisons and/or benchmuksshow areas of leadership and very good relative performance lwels current performance is excelient in most ares of impoxtance to the company's key business requirements excellent improvement mds and/or sustained excelent performance in m s ot ares mong evidence of industry and benchmvk leadership dernonsvated in many areas
In self-assessment, once the evduation of each element is complete, the cmmhtive scores are used to calculate a fnalscore. In both the EQA and the MBNQk this is a score out of
lûûû. These IWO points have k e n distributed among the caregories of the award by the developers of these modeis based on the perceived imponanœ of each. Table 2.8 uses the MBNQA categones to illusvate how a final score is calculated. First, each category is evaluated out of 100% according to the process described previously. Nem, each score is calculated based on the total poim value of the categoty and the evaluation v h . For the Leadership category, the evaluation wu 60%, the total point value for the category is
125 so the score for Leadership is 75 (125 x 60%).
60% 45% 55% 60% 52% 40% 35%
75 38.25 46.75 51 43.35 34 157.5 370.85
Point Vaiues M h u m Score
125 85 85 85 85 85 450 IO00
Leadership Srrategic Phnning Custorner and Market Focus Information and A d y m Human Resource Focus Process Management Business Resulfs Totai
In an initial assessment such as this, mon organisations do not score more than 250 out of
World class perfoxmance would achieve a score of around 700 points, while a
score of 500 is exception@ good (Public Service Office, 2001)
A score of 200 is reporte*
typical for an initiai assessment of an organisation at the
beglining of a Baldxige-based quality effort (McWaid, and Gale, 1995). It is important to emphasise though, the importance of improvement over the a
achieved in any specific assessment.
Qrulity auditing i another method rhP o e t i o n s un use to meastue their performance. s
A quality audit is
A systematic, independent, and documenteci proces for ob
to determine the extent to which agreed aiteria ue fulfilled
audit M d m c e , and waluati~ objecüvely it
(ISO 9000: 2000)
Severai elernents are essential to the performa~lce an effective audit Fint, there is the of audit standard. Standards provide guidance on the prinaples of auditing, the management
of audit programs, the conduct of a&
as weil as the competence of auditors (ISQ 19011:
2002). ISO 10011 is the m
standard for @y t management system audi*. auditkg standard however, ISO 19011, i being drafted to integrate quality and s
environmental management system au&. There are three ~ / p e of audits that c m be p e r f o m d These are first, second and rhird s parry audits. First puty audits, o t h e W e known as intemal audits, are performed by the organisation on itself. Second p a q audits are initiated by a customer (die dient) to venfy that the organisation meas their quality requirernents. Third party audits are refemed to as exvinsic audits. These are performed by an outside f m calied a registrar and are prompted
by the organisation directiy (Goetsch and Davis, 1998).
Before performing the audit, its scope m m be defmed. This should be based on the objectives o r information desired byrhe client and should be communicated to the auditee pnor to the audit ( S 14010,1995). It is prudent r do so to ensure that the auditee is IO o prepared wirh necessary documents or objective evidence to demonstrate cornpliance to the cnteria being auditeci.
Audit criteria are the set of policies, procedures or requirements used as a reference (ISO
19011,2002). Audit evidence are the records, statements of fact or other information, which
evaluation of the coiiected a d t evidence a g d the audit &ria.
Audits should not be stand-done processes, but part of an overali auditing system (Goetsch
and Davis, 1998; Karapetrovic and Wdbom, 2ûûlA). Wdibom and Cheng (1994) suggew
thar a badine audit (a more cornprehensive and inteasive audit) establishes the starting effectiveness of the sysrem and t h du+ the eariy p e n d of implementation, regulu audits
should be scheduled at reg& intervals to mainuia the inaeases in effectiveness of the
system. As the system matures and the effectiveness stabilises, audits should be scheduied
The execution of any audit indudes sweral steps. ISO 19011 prodes a dugram to illustrate the activities involved in the auditing process (See Figure 2-5)
I n i t i b g the audit
Appointhg the audit team leader Defining objectives, scope and criteria Determinhg the feasibility o the audit f Estabidmg the audit team Establishing i n i d contan with the auditee
Conduaing document revicw Review relevant management system documents, induding record, and determining their adequacy
Prcparing for in-site audit actRritics Preparethe audit p h Arrigning woik to the audit team
Gmducting on-site wdit actinties ConducMgopeningmccting Communication during the audit Roks and responsibilRies of g i and observen u& Cdlectiag aud verifying informaion Genvllring audit fin+ Prepuing audits conciusions Conducting closing mecting
Preparing, approving and distributhgthe audit
Prepariq the audit repon Approving and distributhg the audit report
Completing the wdit
i the audit
...-... ---...-...- ---.. ..
Conducting audit foilow-up
The objectives of a quality audit, as outlined by the ISO IO0 11standard, are to: determine the conformity or nonconformity of the quality system elernents with specified requirements determine the effeaiveness of the implemented quality v e m in meeting specified
t provide the auditee with an opportunityto improve the @y
meet regulatory requirements and
permit the listing of the audited organisation's quality system in a regiaer Audits of management sysrems are invaluable in assuring that a system is perfomhg effenively and meeting its objectives. It i also a necessaxy component in the continuous s
improvement process. The achievemem of continu ou^ improvement can o d y occur if
quality audits are used in a dynamic and proactive rnanner (w;ubom, 1990; Banhelezlly and Zairi, 1994; and Peters, 1998). I organisation use a u d i a only as a tool to verify f cornpliance widi agreed standYb wïthout dieduog the aptness of the standards thernselves or seeking information about the effectiveness of the q d t y system in meeting objectives (Beeler, 1999), auditiug will not lead to impmvement.
Result-bued perfomunce measurement is a third m n h d for meaniring performance. n Redt-based measurement system is a integnl pan of an organisation's performance
It is a means of gathering data to support and CO-orciinare process the
of making decisions and taking action throughout the organisation (Schallcwyk, 1998) Organisations, and researchers in the performance management field, have developed many performance mevurement models. These models range from a balanced set of indicators that periodicdy show an organisation how it is performing in various areas of the business,
to integrated models that provide real t h e information with respect ro how thqr are
performing cmently and forecasts how thq. mry do in the future. As competitiveness increases, organisations require measurement synems that provide not onty up to date performance idonnation but also examine how these meanires interrelate so they can make
ih more informed decisions. Performance measurement systems should be aligned wt
organisationai goals and objectives. This helps to ensure that the organisation is measuring
the efficiency and the effectiveness of the activities that have the greaten effect on the
achievement of these goals. The set of measures selected by a parcicular organisation should provide m e n t information penaining to the health of the organisation and also link direcrty to suategic objectives. Traditional perfomiance meaSuTemenrs systems are based m a d y on f i n a n d performance measures 6.e. retum on invesunent, renun on sdes, productivity and profit per unit
production) that were once sufficient to s u c c e s s express a compmy's perfomunce. ~ However, organisations need more than a badrwvd giance at how w d rhey have done over the past p e n d Lgging metrics, apparent on firunad reports,were the r e d t of past decisions and are not seen as usefd in operational performance asessrnent (Ghalayuii and
s Noble, 1996). An organisation neeck to see how w d ir i doing now, in t e m of con, t h e ,
flexibility and quality. Not oniy do they need to k Company need to be: focused on organisational strategy provide data on @ , y
m their current perfomimce but also
how thqr CUI improve this perfomiance. Neely (1999) suggests that the mevures in today's
responsiveness and flexibility
encourage managers to se& improvement continually provide information on what cunomers want and how cornpetitors are performiag indicate what would happen in the short r e m and the long term Selecting a set of measures that will fulfil these requirements can be a daunting task. One
method that researchers have used is to i d e n e uiticai performance areas and
corresponding meanires to coiiea the important data This data is then used to control and improve performance i these key areas. n It is becoming increasinglyimportant for companies to understand how all areas of their meanires provide organisation are perforrning. If properly consvucted, performvv~ information to management to enable fact-based decision making. They are also important
f r effective communication. Their use increases constructive problern solving, increases o
influence, monitors progress, and gives feedback and reinforces behaviour (Sinclairand
ZaLi, 1995A). Performance measuremenr helps an organisation allocate scarce resources to processes with weaker perfomiance because it highghts areas that require these resources the most.
If an organisation dwelops performance mevurrs for each process, this may r s l in a very eut large lia of measures. The question i, how does one select a few kqr measures that wili s
ensure manageable data collection but yet provide a good indication of the naus of the organisation's health.
M q authon have trieci to develop guidelines or approaches that will help in this selection
process (Keegan et al., 1989, Fitzgerald et a. 1991, Kaplan and Norton, 1996, Dixon et al., i, 1990, Neeiy et al., 1995, Globenon, 1985). To d
authors, performance measures should: be linked to strategy
e the contributions of these
support long-terni improvement
s emphasise whar i important to the organisation currently
cover ali the appropriate elements of perfonnance, not jus the finanaal ones not be in conflict with each other enable cornparison with other organisations in the same business simple and easy to use be mainly ratio-based Uistead of an absolute nwnber be under convol of the evaluated organisational unir be desiped based on discussions with the people involved (cunomers, employees, managers) be m a d y objective Vary berween locations - one meanire is not suitable for all departmenu or sites change as circumaances do provide fan feedback stimulate continuous improvement rather than simply monitor Nurnerous performance measurernent frameworks have been developed since the late 1980s.
n These framewoh provide information about the types of measures a organisation c m use
to track perfoxmance in a "baiancedmway. This ensures the Company is not just lwking at its financiai situation as an indicator of its perfomunce but that all elements of performance
are being m
d and m o n i t o d Two of such h e w o & are the Balanced Scorecvd
developed by Kaplan and Norton (1996) and the model from Neeiy et al. (1995), w i h hc consists of four elemenrs of perfoimance. The Balanced Scorecard anernpts to capture an organisation's performance from four different perspectives. The first is a f i n a n d perspective, Le. how the organisation looks to
th& shareholden. The second is an intemal business perspective, which asks at what the organisation should excel. The third looks at how the organisation appean to the cwomers
and the founh perspective is one of innovazion and leaming which asks how the Company
cm Lnprove and create value.
This nructure is baseci on the premise t h to achieve finuiciai success, the dt;matr? purpose of a q organisation must be to satisfy customers. So orginisltons mut optimise their intemai vaiue-creating o processes. To do s ,they mua l m and th& employees must grow in their individual capabilities. (APQÇ 2 w
Neeb et al (1999) suggest that an organisation's m a n u f a h g performance measures should f into four categones. These are quality, Ume, cost and flexibility. These cm be d extended to cover the performance aspects of other deparmients as wd. T h e performance
of design and development processes for instance can be viewed from these four
Cornparison o Performance Measurement Methods f
Three methods of performance meanirement have been presented in this lirerature review. This section wdl review the work done to compare these methods in terms of their applicability and usefulness to organisations.
Auditing and Self-Assessrnent
Auditing and self-assessrnent are systematic approaches used to measure performance in an
organisation. The audits used with regard to ISO 9000 series reginnuon are mady looking
for non-compliance and wess whether the system and the undedying procedures are being followed. O n the other hanci, self-asessrnent against the a w d modek is focused on to fmding improvement opportunities and new wys in WU drive the organisation d o m
the road to business excellence (van der Weile et al., 1995).
Both audits and self-assessmentsshouid be dosed loop processes that foiiow Deming's
PLAN-DO-CHECK-ACTloop. Thk mearis planning for the audit or assessment,
perfomiing the a d t or assessment, reviewing rhe auditing or assessment process for adequacy and effeheness, and making impmvements to the process as identifed in the review.
s Each of these processes i used as an evaluation method to detemine the aatus of the
current syscem A series of audits can be used to meawe the achiwed improvement of an organisation's quaIity system but do little to indicate how fast it i going in a chosen direction s of improvement (effuency) (Karapetrovic and Wdbom, 2001B). Self-assessmentsare able s to measure this efficiency through the a of current approaches to and deployment of these approaches satisfying a given set of BEM cnteria. The uialysis should indicate whether the current approaches are sound and integrated and whether there is systematic and implemented deployment of these approaches. The remit is the ability to predict whether these are sufficient to lead to improvement of the system. Thus, the objective of an audit is to venfy compliance wt a set of cnteria and self-assessment is used to examine the ih
driven for improvement (Karapetrovic, and Wdborn, 2001A).
The r e d t of a quality audit is either compliance or non-cornpliance with the criteria. Either the organisation meets the criteria or it does not In a self-assessrnent process, the objective
is not to cornply with the cntena but to use it as a frarnework for idendjing svengths and oppominities for improvement in each area of the BEM cxkeria.
When it cornes to perfonning the audit or assessment, the procedure is sirnilar. Both
processes are designeci around DemLig's Plan-Do-Che&-Actd e .
~dentify ~ o x d s u u c n i r and mq&d o e cornpetence for audit program management
Define audit.. -.. prand respoasibdiaes
objectives, wope, mler
Select approach and scope
I I I
1 1 1 1
Identifywdit teams Ennve cornpetence and suitab* of auditors Cummuniute audit pian Manage the planning and suitability of auâitors Gxnmuniute audit pian Manage the piamhg and arecution of
Establish d-assessrnent teams
Execute w e s sment
P e r f m foÏlow-uPactions and/or audits
Identify r e q d actions Incorponte actions into p h Implement pians
Review and irnprove audit prognm h u g h
feedback and recommendations from the dent. a& and auditor
Karapevovic and Wdbm (2001A)compare the principles and practices of qualicy audits
and self-assessments for the purpose of examinlig th& compatibihty and providing the basis for integration.
The authors suggest severai suategies for increasing the capability and potential aiigriment of
audits and self-assessrnenu. These include:
Integration of reference models. This smtegy may involve a g r a d d conversion from
the basic requirements of ISO 9000 to the all-encompassing criteria of excelience
models, suggesred in literafufe. In that sense, self-assessments incorporate quality audits. Integration of evduation merhodologies. Qwlity audits w o d be used for assessing
'hard controls", while self-usessments would be used for 'softer" issues and idenufying
improvemenu. In pnctice, this strategy i already applied. s Goss-use. Quaiity audits can be applied to enhance self-assessments, and vice-versa.
Perfo~naflice Management i RkD n
A large portion of the quîliry problems rhat vise on the manufactuxing floor could have
been avoided completely with proper attention to the design process. Quaiity cannot be tested into a manufactureci p d u a , but musc be designecl imo the produa. Most of the focus of quality management research however, &als Mththe manufacniring and s e ~ c e secton and lacksRSrD focus. The quality management pracrices that are successfd in rnanufacniring environments are wd known and widely publishd The application of these manufacnuing-based d t y pnctices in an R8rD environment i not as successful due to s the lads of replication and high level of variability in RBd) projeas (Kumar and Boyle,
2001). There are also high levels of uncextainry in terms of the impact of the produa on the
market and the revenue it wiU generare over the followhg years. It i more difficult to apply s
@ t y
practices in such an environment however, the undedying concepts of quality
management are essenria to decreasing t i variab'ilityin the R&D processes. Research i hs s needed to examine an R&D operation and idennfy pertinent quality management aspects that are applicable in nich an environment. To adequately address t i problem, there needs hs to be an understanding of issues that are specific to an R&D organisation.
Addressing Issues Unique to R&D
Individuai Recognition of Achievement and Organisational Goais vs. R&D Objectives EspecialIy in North Amencan industry, the manner in which researchers and scientists in
R&D roles have been recognised and awarded has fostered a very individualistic work ethic.
Researchers often prosper by phcipating in a system that rewards individual achievement and discourages alliance building and CO-operation (McLaughlui, 1995). This individual recognition crûares an amiosphere plagued with individds working toward goals that will move hem ahead without due consideration for the overall goals of the RgrD funaion itself.
This is counterpfoductive to the achievement of these goais. Individual performance and
mards need to be replaced w t systems that reward team accomplishments. ih
A individuah are rewarded for their personal contributions to R&D activities, the s
environment becomes one that encourages the achievemat of persona1 goals
The (R&D) environment is academic and contributions to and support of o%;iniszuonai goals and objectives are minimai. In fact, mon researchen are unrwve o w h t the o ~ u o goah and f d objectives are.
It is exuemely important that r e s e d organisations ensure they are focused on projects that address the saaregic needs of the organisation and that rhese needs are being mt effuendy. e
Fast Pace and Factors that Increase Cycle Tirne In today's competitive marketplace, companies are faced dthe prospect of introducing
new products at a fnghtening pace. The ability to reduce o e s cyde rime in product n' development is viewed as the key to innovation nuicess and profitability (Cooper and
Kleinschmidt, 1994). The r e d t is a need for efficient and effective new produa development (NPD)processes that will ailow the Company to mainuin its competitiveness within its indunry. What R&D facilities are facing now ody increases the pressure while
acting as a barxier sometimes to the achievement of good processes and competitive outputs. There is a need for a systematic approach to irnproving design and development processes, and the management systems surrounding hem, to provide the bea environment for &taking cornpeutive advanrage.
Many of the factors that influence NPD cyde Ume are outside the R&D department's control, making the process that much more difficult. C o p r a t e decision making, customer needs, and orpan;Sational goals are all factors that impact the t h e to market of many new products (McLaughLR 1 9 ) 95.
As companies downsize as a meam of c o s C & U&
the R%D department i ofren the hm s
Poor o uncertain economic conditions cui cause havoc with R&û funcihg and personnel. These r uncertain conditions have a dmmxic and powerful psychologid effect on projects, innovation, and creativity.
Executives expect that the R&D function will perform successfullywith reduced resources
and unrealisric objectives (Kumar and Bayle72001). This reduction in resources affects the
spirit of the R8rD teams d o meanwhile must nniggle to keep improving cyde times to
keep up with the market.
W & moa research organisations there is a constant pressure to produce more results with
less budget in less rime. It is imperative therefore t h research organisations ensure their cnticd resources, the research naff, are focused on proieas that address the strategic needs
of the organisation and that these needs are being met efficiendy (Endres, 1992).
R&D or new ~roduct development is one o the mon important sources of cornpetitive f advantage for a f m (Jayawama and Pearson, 2001). With increased competition in today's global marketplace, organisations need to not oniy satisfy customers, they need to M e them widi their ability to foresee and f l i all their requirements. Gmpanies that do diis the ufl best are dependent on the^ R&D departments to recognise the needs of their target markets and translate them into produas and services efficiendy and effectively.
Emergencc o ncw technology f
The unergence of new technology gready impacts the RBrD environment. RSrD mua view tedinology and scient& advames as tools to assis the o~anisation meeting Company in goais (McLa.gbi.i, 1995). Inevitabiy, tedinology must be manageci within the R%D organisation to benefit all employees/shuaiolders. The ability to manage effectively can best be achieved through the implemenmion of quîlay management priuciples
Capturing the customa's changing needs
The R&D organisation m u s be driven by its responsiveness to changing cunomer needs.
This is one of the greatest challenges forRBrD hinctions. At the initial stages of a new product development project, researchers and scientists musr accurat* and precisely ascertain customer requirements. These are then translateci into a set of specificationschat defme the proâuct to be designed. A new challenge arises when customers request changes ro rheir on& requirements in the rnidst of the design stage. This may only necessitate s m d changes to the design, but could result in the design team starcing again from scratch. These changes increase cyde rime, costs, penon houn and affect the RSrD schedule, rying up employees that are requireà on other projects.
As a r e d t of these factors, the need for teamwork, efficient and effecrive management
sysrems, and appropriate management of technologies has become critical (McLaughLn,
Benefits o Implementing Quality Management in an R&D Environment f
One of the main benefits of irnplementing quality management in an R&D environment that authors have reponed is the darification of the defdtion of 'quality in RBrD' (Pa&o, 1997,
Kumar and Boyle, 2001, Pearson, et ai., 1998). Several &finitions have been suggesteù. A
review of litaamre by K
w and Boyle (2001) provides the following components of
'quaiity in R D : &'
an understanding of who the R8rD client is and his or her values and expectations
what the key technologies are and how they can be used to meet R&D clients' expectations and the needs of the entire organisation who the R&D cornpetitors are and how t h q will respond to emerging R&D clients needs Qing diuigs nght once you know you are working on the nght things?c o n c e n t h g on continually improving the system. enabling people by removing barrien, and encoUrap;ig people to make their maximum connibution
Many authors have written about the need to have systemauc processes for managing quality
to gain and remain in a cornpetitive position (Cooper et d,1990, Colurao, 1998, Auer et al., 1996). The result of irnplementing such a q d t y approach is a hm that continuody serves the needs of its customers (both internai and extemai) in an efficient and effective manner (McLaughhn, 1995).
Q d t y awarb can be w d as a yardstick for measuring 'quality in R&D' progress and
idenufylng gaps for improvement, as well as providuig a comrnon focus o r direction for
the whole Company. (Pearson,et al., 1998)
Systematic decision making, continuous improvement, experirnentation with new ideas
and teamwork are important for a successful research and developnieit environment
Several reasons have been provided in the literature for the limited use of quality management practices in R8rD. These are:
on of a qrulity myiagement prognm in RBrD nu&
d e creative
woik and be counterpductive (Brown, et d, 1994) .
the dificulty of meamring performance in R%D (Montma, 1992)
Lck of vainiog and acceptame by RBrD personnel of the "sofiwside of @ty, teamwork and participation management (Montana,1992)
thne) (PaGo, 1997)
t expectations (i.e. ahuays dohg it nght the frrn the feu that i will raise u~vea~onable
concem thar it will d e proper recognition of individual accomplishment (Parino, 1997) ciifferences in inrerpretation as to w a 4 ht
t y realiy is and how it is to be pmued
PaGo, (1997) suggesfs that some of these barriers can be overcome if there is sufficent dialogue and darity as to whar ' M t y in RBrD' means.
Several authon have discussed the implications of implementing ISO 9000 in RgrD
environmenu (Cooper et ai, 1990, Davidson and Pniden, 1996, DeWeed-Nederbf et al., 1995, McLaughlin, 1995). Process driven quality synem mch as ISO 9001 are potenwüy of great vdue to control
the quality of the R&D process (Auer et al., 1996). ISO 9001: 2000 provides an "ideal" oppominity for R%D managers to achieve the
benefits of total quality management and thus improvement in various kqr performance dunensions (Jayawamaand Peuson, 2001).
W1thin the RBrD context, ISO 9001 is becomuig more popular as a way of making
people think and plan ahead and as providing a disciplineci way of capniring the R8rD
r e d t s (Cooperet a. 1990). i,
The revised version of ISO 9001 look into the dyaamic chamter of organisations m
which issues such as leadership, people involvement, v e r n approach to management, continuous ;.iprovernent and a fact -basai approach to decision-makingfor ewnple,
receive speciai attention. The need for more dynaxmc approach ro RBrD management
has been emphasised for yeus (De Weed-Nederfiof et al., 1995).
ISO 9001 addresses both the issues of better convol and continuousty raising the R&D
standards (Iayawama and P a s n îûûl). ero,
I O 9001 is a good means of providmg a framework for developing a quality syscern in S
R&D. It outlines the organisational nnicnup, management responsibilities, procedures and processes r e q d to set the base for a "hoiistic @y t management system" (Davidson and Pruden, 1996).
The Companycan adapt (select) from the specifications in the new standard,enabhg
them to ensure a good fit of the standard to their R&D activities.
The main advaatage of ISO 9000 in RBrD is that it provides a structure and consistency to
an otherwise chaotic process.
'The issues relevant to the application of quaiity management pnctices in an R&D envitonment have been addressed in this section. The n a section provides an o v e ~ e w of
the motivation for the proposed researdi.
Motivation for Roposed Research
In light of the topics reviewed in this litenture search, the following points outline the
motivation for the proposed research. 7he ISO 9001 standard for q d t y management systerns is a stepping aone on the path
to business excellence. Extending these minimum requirements for a quality
management system to encompass ail organisational processes can be a daunting task Methodologies for evduation of a d vernis desirable systern statu have been developed for quality management systerns (quality auditing) and for overd business performance (self-assessment). Both of these mdodologies have been proven to be essentiai to an organisation's compet;tiveness. There is a need to analyse the commonalties and differences between these method01ogies in order to provide a
theoretical baclspufld for th& b e n t and possible integtation (Karapetrovic and
~ b o m2001A). , Result-based performance masurement k a method01ogy for measuring a n organisation's performance. Organrwtions are Ehallenged r select a rneaningful set of o performance measures thar wili provide a broad view of organisational performance.
Whde the abject of q d t y management in a manufacturing environment has been wd
addresseci, the application of these methodologies and theu implications to a RBrD n environment hu not. Further research i needed to explore the applicability of quhty s management frameworks in rhis type of environment.
Objectives of Proposed Research
This section describes the objectives of the proposed research. These are to: develop an integrated model for performance management based on the ISO 9001
t y standard for @
management and three national @ty
awards to provide a reference
model for organisations wishing to move from the minimum requirements for their
quaiity management system to overall business excellence
condua a self-assessment against diis new reference model in a case study organisation
compare the self-assessrnent renilrs to the outcornes of a quality audit to furcher investigate the opportuniries for integration of these masurement methods
review the redt-based performance measurernent system within the case mdy
organisation and compare rhe outputs to the self-assessrnent and the quality audit
moddy the reference model f r more appropriate evaluation in an R&D environment o
30 An Integrated Mode1 For Performance Management .
This diapter addresses the development of an integrated model for performance management combining the concepts and criteria from the ISO 9000: 2000 standards and three nationai quality a d . The chapter describes the development of the framework for the rnodel and correspondhg criteria, and the establishment of a scoring scheme.
Development of the OPIM
Organisations roday must reach bqrond the minimum requkmenrs for their qualiry systws
using a more holisric approach to improve aii elements of their business. The minimum
standard ISO 9001 for an organisation's @y t system is d considered to be essential to the foundation of all quality improvernent e f r s (Karapeuovic and Wiübom, 2001B; Dale, fot 1999; van der Wiele et al., 2000;Russel, 2000). As these requiremenu are achieved however, new lwels of improvement need to be reached. Organisations musr continue to ensure that thv are meeting the requirements of the standard and also are moving forward with their improvement effoxts. The integration of elements of the ISO 9001 standard and
the criteria from the more holistic q a~ wiyaward models for business excellence provides a u i q lr framework that can be used for organisatid improvement. This section describes the development of the new mode1 for qualiry management named the Organisational Performance Irnprovement Mode1 (OPIM). The Grrr part illustrates its framework or underlymg suucture. The next sub-section discusses the application of crireria from the other models to this framework F n , i* scoring scherne is described.
the development of an appropriate
a w d are based on
The framewok for both the ISO 9001: 2000 standard and the &ty
severai undertying principles (see section 2.2.1). The f stage in the Qvelopmem of the m
A system is a set of interdependent processes that function haxmoniousiy, using various
resources, to achieve established objectives. Processes transform inputs h o outputs. The effectiveness and efficiency of the system's operations and use of resources, is quantdieci in
the system's performance results. Applying this definition to any set of processes results Li a
"system's view" (Kuapetrovic and Willbom, 1 9 A . 98)
A framework based on this 'system's view" wadd result in a comprehensive model incorponthg all of the essential elernents of the organisation.
The OPIM is a model that describes the C S 0 7 s quality system. Ir focuses on the continuous meanwmenq monitoring and control of the sysrem's performance and its impmvement (Kanpetrovic and Macey, 2001). Figure 3-1 represenrs the systems concept for applicability to the OHM. This concept is based on previous research by Kvapetrovic and Wdborn (1998A). The dotted lines nirrounàing the objectives and resources are meant to emphasise rhe active role of the processes in the system and t indicate that these elemenrs are used as o inputs to the F e m not to de-emphasise their importance.
PERFORMANCE MEASUREMENT, MONITORING, CONTROL & IMPROVEMENT
Each element of the synem portrayeci in Figure 3-1 is a main category of the OPIM framework These are:
1. Objectives 2. Resources
The fm s e p in the integrauon of other models to fonn the OPIM w s to use these a
categones and to devise sevenl sub-categones that were thought to encompass the purpose of each main category. The subsategories were created from a review of the content and
purpose of each of the a w d models u & n
evduation and the ISO 9001:2000 nuidud
Table 3-1 shows the i n i d set of caregoris and ~~b-categories the OPIM. of
1.0 o b j j v e s 1.1 Intacncd parlia 1.1.1 Cunoma 1.1.2 Ownas/ i n v a t o n 1.1.3 People 1.1.4 Supplias d parTnen 1.1.5 Society 1.2 Mui;ig~ll~llt syacm 1.2.1 Muugtmmt rtsponsibïhy 12.2 Mur;igcment mnew
13 Legd .
2.0 Rrsouras 2.1 People 2.1.1 Acquisnion 2.1.2 Deploymait 2.1.3 Worksynmis 2.1.4 Wdl-king and saisfaaion 2.1 .S TrJning p i d d2 2 L a? 2.2.1 lLsponsibilicics 2.22 Policy and nrrtegv 2.3 Infomution 2.4 infnnnicnuc 2.5 TechnoIogy 2.6 Supplim/purnaships 2.7 I 4 k c d s 2.8 N d resourccs 2.9 F i c e s
3 3 Product =&or ~ t r v i c e 3.2.1 1drnrif;caxion of producc mUor service processes 32.2 Idmrifiminn and c r a c d i 32.3 Produa d / o r m i c e ourput 32.4 Graamapropeny 32.5 V d i d a h of pnxases 3.2.6 Gntrol o f me;;llairing a d monitoring devices 3.3 RvEfuung 3.3.1 Idemifiution of nced 3.32 kifofmaricm 3.3.3 V d a r i o n o f purchascd product and/or services 3.4 Support Proccsscs 3.S. 1 Idear.i6&0n 3.5 Pluinulp
4.1 4.2 4.3 4.4 4.5
Cunoma d and uurket
People Supplia and m e r Soàery
30 P r o c e ~ ~ s . 3.1 Design and/or dcvelopmuir 3.1.1 PlaMlIlg
3.1.2 Lnprtts 3.1 -3 Aaiviues 3.1.4 Chpus 3.1.5 Revicw 3 1 6 Verification .. 3.1.7 Validation 3.1.8 Convol o f changes 3.1.9 Design and developmcnt o f p r ~ ~ e ~ ~ s
4.6 G p n k i o d effectivena 5.0 lmprovanent 5.1 monitoring and control 5.1.1 S y n m i performance 5.1.2 Cuscomasatisfaction 5.1.3 i n t d audit 5.1.4 Processes 5.1.5 Prodm a d o r service 5.1.6 GICIM~ of nonconformhy 5.2 An;ityPs o f clam 5.3 6 d v e anion 5.4 Prrvcntive acûon
The OPIM shodd be considered as a combinarion of q d t y asnvance standards that
provide the minimum requirernents for q d t y improvement and business excellence rnodels, illustating the opportuniues for improvement. The criteria in each categov of the
mode1 are split into two parts. The fmt presents the minimum requkments for the quality
management system. The second provides opportunities for improvement over and above these minimum requirements, descnbing the continuous improvement of the category. This
split wiU enable ui organisation to maintain ifs q a management system as a foundvion ui v for its conkuouc impmvement efforts. niis nsn section describes the dwebpment of the criteria for the OPIM. Once the categories of the OPIM were created, each awad model was reviewed to provide
an i n i d fit of rheir categories and sub-categoriesinto the OPIM framework Table 3-2
shows these matches.
1 MBNQA I
32 Rohua d o r service 32.1 Idadkaionof ~roduct
ISO 9001: 2060
d o r u n i i c c ~
3 1 2 khtificPioa
33.3 Produa d o r savice
VIliduion o prousses f
3 2 6 Cbtmf o masuxing and .. f
5.1.1 S ~ c m p a f o ~ c e 5.1.2 G ~ ~ a m n satisfaction 5.1.3 h a m i audi 5.1.4 Proces~s 5.1.5 lmui urd/or savicc 'dc 5.1.6 G m o noaconfonnity m I f
6.6 6.5. 6.4 6.7
52 AiillyPs o d m . f 5 3 Cormxivc action . 5.4 Prcvmuvc action
4.2 6.1.6263 188.8.131.52, 6 3
Sb,% Sb, Se
After ensuring that moa of the categories from the models were mapped to the OPIM, the contents of the awards and ISO 9001 were reviewed to ensure that the categorymatches were appropriate. This process resulted in the rearrangement and renarning of some of the caregones in the OPIM to provide a more streamllied set of cnteria. Category 5.0, labelied Irnprovement, is provided as an example. Irnprovement cannot corne from corrective ( . ) and preventive (5.4) actions done because they just remove the causes 53 (existing or otherwise potential) of problems. They do not lead to Breakthroughs, which break new ground in improvement. Breakchroughs cm be graduai (Kaizen) or innovation /
Anorher review of the category 5.0 rwealed that it &O indudeci analyus of data, intemal auditing, and measurement and monitoring These elements are all a pan of an organisation's performance management system. The category was renamed Perfozmance
under which three sub-categories were creatd Management, Monitoring and Conmiling,
and Improvement. Matching elexnenu from the other models were reshuffled to fit into the
new structure of the OPIM.
Table 3-3 illustrates the process as describeci above. The first parc of the table shows the initial sub-categones in category 5.0 and correspondmg criteria The second pan shows the modXed mb-categoies and their comespondlig criteria.
5.1 Mcinirrmair, monitoring and convoi 5.1.1 S y n a n pafomunce 5.12 Luorner satisfaction Pmrs~s Product and/or semice Conml of nonconformiry 5.1 An3ysir of duî 5.3 Conmive: action 5.4 Prcvmtive action
5.1.3 5.1.4 5.1.5 5.1.6 I n t e r d audit
5.1 Management 5.1.1 S p e m 5.1.2 Key Pcrformuicc Outcomcs 5.1.3 K y Perfonnancc Indiuton 5.2 Monitoring and Controlluig 5.2.1 Audits
5 2 2 Self-Assasrnaits .. 5.2.3 Puformancc M a s u m e n t 5.3 Improvanent 5.3.1 C o k v e and Prnteative Actions 5.3.2 Kaizcn d Quuinun L a p s
184.108.40.206 82.1.5 8.1,8.2.1. 8.4 8.5.1 8.52,8.5.3 8.5.4, Anna
illustrates the caregones and comsponding de~cn~tiom categoxy 5.0 Performance. for
5.1 Mui;igcxnent 5.11 Systan
Describe haw rht i.urrcl;uionships f i n d audits, d-wessmcats and rrsuh o m~surrmcnts managcd and imprwd are Key Performance Outcornes (EQA, 91)
5. t .3
Describe how the m c m m m n t v a n for ky performance outcornes i continuaily i m p m t d s Key Perfoxmance Indicltors (EQA, Sb) Describe the system applied to mcasurc the key performance outcornes idendicd in Kctions 4.6.1 and 4.62 of O P M
Describe how the meuwpient spem for key performance indiators is contllidy impmved 5.2 Monitoring and Conmlling
Repmaens (ISO 1,8.2.2) Dexnbe the syscun applied t o perfonn internai and extemai audits against the rquircmcnts of the ~lected management nandards, induding ISO 9001: 2Cûû and/or I S O 14001:1996. Qpmozm ( I D , 220.127.116.11) Describe h m the effectiventss, effiaency and consistency d the audit sysrun are continuaüy ;mpmvcd. Self-Assessments (IS04,18.104.22.168)
Describe the system applied to perform rcguiar self-assessrnenuagainst the The CS0 Performance improvcment M d qyJmmm3 Describe h m the effmiveness, efficiuicy and consisturcy of the self-wcssmcnt synern are concinuaiiy improveci
F i OPIM
Describe the +an applied to masure org;iniutionai performance. Illuruve the inurrclîtioriships mong the internai audit, d-assusment and r c s u i t - b d syncms for performancernasurrment.
Desaibe the +cm
appiieci to nmmre the ky paforrmnce outcornes idurtified in section
4.6.3 of OPM
3-4 I 5.2.3
Performylce~wumncnt~SOI,8.1,821,8.4) (MBNQA, 4.1al and 42) Describe the performance mevurrmait systan d to collea, moaitor, adysc, synthcsise and act upon puvpioüs (cnan;J)and performanceindiators (iuitamal) &ring to:
people suppkandputnas -ccy (MBNQA, 4.1d) Descrik h m the effecUvcness, efficimcy aud connsVncy of the performuice masurement systcm arc contindy impmved
C U S t O ~
5.3 Improvemcut(ISO1,8.5.1; IS04,8.5.1;DP,9) AcÛons 5.3.1 Corrrcuve and Pmr& i?qmmm m l , 8.52 and 8-53) ( Describe the v a n applied to m o ~ o ridenufy, + , , and rcmzve the cxisting ;and potenriai auses of nonconformiriesin inpmccws, outprru, objectives, rcsources and d u . (IS04,8.5.2 and 8-53) Desaibc how the conrctive and prevcntive actions ur used in the business piau and how theu effcctivaress is continuîlty improvcd. 5.3.2 Kaizen and Quannun b p s (IS04,8.5.4 and Anncx B)
Describe the syncm applied to c o n ~ u c d impme the feuurcs in inputs, processcs, outputs, y objectives, NSOWCS and rrnilu.
Describe how the effecWenus of the continuai impmamnt +an
To better integrate the requirements of the ISO 9001 standard and the non-prexiipnve criteria in the qualiry a w d , each category of the OPIM was split into rwo aspects, the
'MinimumRequirements' and 'Opportunities for Improvement'.
The OPIM should be considered as a combination of quaiity assurance srandards that provide the minimum requinmenu for quality improvement and business excellence modek, iliustnting the oppomuiities for improvernent. (Karapetrovic and Macey, 2001)
Table 3-5 outlines the fuial OPIM and the comesponding cnteria of the MBNQA,EQA, Deming Pnze, and ISO 9001, ISO 9004.
Please note that there is no entry in element 5.2.2 from the MBNQA or EQA. The reason for this is that these a w d do not specifically address self-assessrnentin their uiteria but provide further guidance in sepante documents on this process. Please refer to the
Approach to Evduation t h supplement the EQA and
Guidelines f r self-assessment o
that accompanies the MBNQA for comsponding elemems.
Once the framework and ait& for the OPIM were cornplme, a document cded 'OPIM
Fundamentas" was created to describe the undertying frarnewods of the OPIM, its content, terminoiogy and application (Karapev~Mc Macey, 2001). and
This document is meant to accompany the OHM Criteria and contains general information
about the OPIM induding its relationship with the CSO's performance management system, the framework of the OPIM,the content of its criteria, a description of terminology used,
and notes pertaining to its application.
Development of the Assessment Questions
Once the model w u complete, it was ready to be wd as a reference for conducting selfassessments. To couen appropriate information for a self-assessment, the criteria were translated into a set of questions to be used in assessment interviews. The questions were based on the cnteria of the OPIM and were specific enougb to capture suffiuent information with which to evaluate each element in the OPIM. The questions were designeci to be open ended to obtain as much information as possible. Appendk A contains the set of questions for the assessment. Please note that category four is the r e d t s section that is used to evaiuate the results obtained in all other sections of the
model. For this reason, there are no questions for this category in the questionnaire but
evidence of the results in each pertinent category are collecteci from interviewees when questions pertaining t these categories are asked. These questions ask the inte~ewee o to provide perception measures or performance indicaton that indicate performance relative to
the respective category critena.
Establishment o the Scoring Scheme f
This model was developed as a set of criteria against &ch a self-assessrnent could be conducted in a praaicai sertlig. Although, not the main puipose of self-assessment, it is ofren beneficial to calculate a score from the assessment that can be compared from one
assessrnent to the next IO monitor i r n p r o v ~ ~ ~al quantitative muiner. As seen in ia t Chapter 2, each of the refemce models has its own scoring scheme and evduation methods.
An appropriate scoring xheme w u required for the OPM. The rwo a w d considered as
models for the scoring xheme for the OPIM w r the MBNQA and the EQA. These have ee
the most complete and comprehensive methods of evaluation. The evduation scales are
detailed, enabling the wesson to be more p r k in their evaluation The evduation of
each element is based on the three or four criteria outlined (approach, deployment, r e d s , assessrnent and review). To create a scoring scheme for the OPIM, it was fim necessvy to assign point values to each of the categories of the OPIM. The OPIM was developed to help an organisation improve its business performance. It wu therefore important to incorporate the perceiveci contribution of each categoq to the organisation's perfomiuice into the final disuibution of points. A multi-criteria decision making methodology, was used to determine this distribution of point values. This approach enables each organisation uàng the OPIM to incorporate the impacts of each category to their specifc business.
Preference Function Modeliing
Mdti-cnteria decision making involves the selection of one alternative from a given set of altemarives based on a set of criteria. Preference Function Modelling is a decision analysis method010gy for mulUsriteria decision makiog. It is used to create a mathematicai mode1 of the decision-maker's preferences for alternatives based on a set of critenk more detaii see Banilai (1998, 1997). A typical multi-cnteria decision involves the cornparison of several alternatives based on a set of criteria. Take for example the purchse of a car. A decision-makerwould have a set of cars to choose from. To make this choice, several elements rnight be considerd colour, pnce, fuel economy, wa~anty, These are the cri& etc. for the decision. The outcome of the decision would the selection of one car out of the set of cars.
The Trillium software (Badai, 2001) MS developed to encapsdate preference function modeliing rhmiy into a foxmat for practical use. To use Trilliu111, rwo inpurs are requked. These are a set of alternative outcornes for a decision, and a set of aiteria upon which the deusion wiu be made. Once these are fed imo the model, decision-makersrank the alternatives on each uitenon by compaxing tnplets. The result of diis process is a positioning of these aitematives on an interval sale (a preference function). N a , the usen indicate uade-offs between the criteria This allows waghu to be detennined for each critenon. The set of weights is then used to resolve e d preference function (or rankings on each interval scale) into one overail preference function. R e f e h g again to the car example, once the altemacives are listed in the software, the decision-maker is then asked to describe the set of criteria that wili form the basis for the decision. Next each of the altemative are compared on one criterion. For instance, if we have a blue Ford, a red Chiysler, and a green Toyota, the decision-makeris asked for his or her preference for a blue car when compared to the altematives for green and r d This is done for each criterion. Once this is done, the decision-maka provides mde-offs between the criteria. For example, how many units of price would one trade for how many units of fuel economy?
This methodology is used to select one out of a set of alternatives. However, in this application, the software was used for a slighdy different purpose. The hope was to develop a function of values to be applied to the OPIM categories. The software was used to rank the caregones of the mode1 based on their relative contributions to business performance. These ranks would then be trandated into a set of vaiues for each of the categories. Thur instead of selecting one car, we are creating a set of weights that would dow us to evaluate any given car on a single, uni-dimensional scde that weights the car's characteristics
The foilowing describes the development of this function of values for the OPIM.
TOdetennine the dimibution of scores among the categones of the OPIM,the Trillium software was iwd In this o v e d function, the htghest ranked element f~anslates the into
category that is worch the mon points. The relative contribution of each category t business performance w u captured using the o opinions of top management and those who had experience with BEM and self-assessrnent process. A review of literature rwealed several instances where authors that have vied to
determine the relationship betweai quality management practices and business performance.
In 1999, Teniovski md Samson used several performance ourcomes as representations of business perfomiance. These agreed with the connnicrs used by other researchers. The
performance outcomes w r produaivity, competitive advantage, emplayee monle, coa of ee quaiity, customer relationships, and product &y t. These outcomes were adopted to help
defme business perfomance in the decision modelling process.
To dwelop the peference function for OPIM,the foUowiq process was followed. The alternatives are the categones in the OPIM and the criteria are the six components of
business identifid Sweral people, independent of one another, ranked the set of alternatives in sets of five on each decision cnteria Figure 3-2 shows the scale used in the
Trillium software with severai elements from the OPIM positioned on it. After these rankings were complete it was necessary to determine the uade-offs between the cntena to indicare to the software which cnteria was the moa important to the organisation at the
present Ume. The Chief Executive Officer, Chief Operathg Officer, Vice President of Finance, and the Vice President and General Manager of Division A were asked to indicate the importance of each of these to the CSO in the Trillium software.
Appendix C contains the raw data taken from the Trilliurn software.
The end renilr of this anal* from 50 to 150.
was a rmkiqof all the OPIM categories on an intemai scale
It was decided that 1000 points would also be the t o d point value to facilitate cornparison
with the other award assessments.
The following process was used to change the ranks of the alternatives on the preference function into scores out of 1000 for the OPIM.
1. The preferences on the scale were summed.
2. The sum was divided by 1000 to give a f~rctor.
3. Each individual preference value was divided by this factor to uuisform them into
scores. The sum of al1 the resulting values wu 1000.Table 3-6 shows the results of this process.
4. The resulting scores were rouded to give the result in Table 3-7.
People * m t customcr Rdalionships
Scotc out of 1000
4.9 84 48.09 46.69
Performance Managamt Performmce h p m e m c ~ l t
120 3.5 119 3.4 1 17 3 .5 111 3.2 196 2.2 187 2.3 12526
4.9 26 4.5 26 4.9 25 4. 8 23 4.0 19 41.61 40.49 3. 1 96 3.9 87 3.6 84 38.46 35.65 33.54 3.6 21 30.69
Performance Monitoring and Cent* Peopk Resulu Proccsxs
120 189 1.9 189 1.8 103 1.
St;ikehol&r Objectives Raiisation Ptoccrxs Cwomer Ws t Supplier and P m a M Shareholdcr Results
9.5 49 8.8 93 8. 68 8. 28 50 39.6 035 3.09356
28.89 28.06 26.77 1.6 61 ZOO0
4.4 SU&&~S 4.5 S O U m 4.6 Svstem
' 5 2Monitoring and G n u o l h g . 5.3 Improvement
The process of g a t h e ~ information or preferences from the decision-makeisin the CS0 g was difficult. niey quenioned the impact of their decisions and were initially concemed that they did not f d y understand the Triilium software. Decision-makersunderstood the
concept of favouMg one cntenon over another but w r a little unsure of the merhod used ee
in the software to capture these uade-offs. Once this was clarified, thqr were more
comfortab1e wRh entering their preferences into the mode1 for a + n. element to comprehend wu the idea of uade-offs. The most dZficult
the MBNQA criteria in the OPIM Processes utegory are p e r than the poinrs i the n EQA The uiteria from each of these a d that fdn o the Results catego'y of the OPIM it
make up between 43 and 45% o the respective award points. The aiteria from each of these f
awads that f u l inro the Performance category of the OPIM make up between 7.5 and 8.5%
o the respective awad points. f
OrganhonalTp Public Responsibilityand Citizenship Development Sv?te&~ Smtegy Deployment Custorner and Market Knowledge 1.% 29
85 .% 4% 4% 4%
4% 24.5% 3.5%
Policy and Smtegy
Processes (14%) s 1/5
Work Systerns Employee Education, Tninllig and Development Employee Well Being and
P m e r s h i p s and Resources (9%)s - I / S
borner Focused Results Ficiai and Mvket Results Humas Resource R d u Supplier and Partner Resuits ~ t i o n aEffenivmess R e d a i Measurement of Organisationai Performance Analysis of Organisationîl Performance
25 .% 85 .% 1.% 15 115 .%
8% 25 .% 11.5% 45%
Customer Results People Results SocietyResula Kcy Pcrfommcc Results ( l job) x L 12
Resulrs ( 15%)
1 7.541, 1
1/ 2 7.5%
Customer Satisfaction and Relationships Cusromer md Market Knowledge P d u a and Service Processes Supplier and Pamer Processes Suppon Processes 22.5%
45 .% 8.5% 45 .% 4% 5.5% 15 .% 15 .% 17%
7.5% Pracesses ( 1 -4%) s 4 / . V 1 3 , Pannerships and 1.8%, Rttsuurces (9%) s 1/ 5
Cornparison of Category Point Values
i O OPIM 1 HMBNQA 1 O EQA
4 1 1
There are siight differences between the models in ternis of the preference given to each category. The EQA and the MBNQA are both very focuzed on the results categones. A large percentage of the total points have been assigneà to this category in these cwo models. The s c o ~ scheme developed for the OPIM has points that are more evenly disvibuted g among the categories. n i e point value of the resources categoiy in the OPIM is aiso verdifferent from those of the other models. The Resources category was deemed to be of greatest importance to the organisation's perfoxmance. This is very 1ogica.I. It is often forgotten that no systern exists widiour resources. A V e m is not jus a set of processes thar interact to produce an output. Resources are ememely important as input into these processes. The q d t y o these f resources needs to be high to obtain quality outputs. One cannot cast inarmpetent employees, unreliable equipment, or poor materials into a sysrern and expea satisfacto'y results. It is interesting to note that resources are worth the lean in the scoring scherne of
This redt is a h v e y important to companies moving beyond ISO 9000 towub business excellence. The main focus o IsO 9001 is on pmesses. TOmove beyond this standard, f companies musr begin to concentrate on &ek resources as a next sep.
The distribution of these points i the OPIM is based on the opinions o people in the CSO. n f
This distribution of points my have a great effect on the final score in a seif-assessment. Chapter 4 describes the performance of a self-assessrnent against the OPIM. A sensitiviry analysis is done to answer this question.
Chapter S u m n w y
This chapter described the development o an integrated model f r performance f o management based on ISO 9000 and business excelience models. This involved the creation of the model framework and corresponding criteria. A scoring scheme was also set up capnuing the specific relationships h e e n the elernenu of the modeL The next chapter describes how this proposed model was used to conduct a self-assessrnent 4 t h a division
at the CSO.
4.0 Self Assessrnent
The development of the OPIMwas describeci in Chapter k This chapter illustrates . how a self-assessrnent against this proposed mode1 was used as a meanire of organisational performance.
Self-Assessrnentat the Case Study Organisation
The CSO's quality system has been registered to the ISO 9001 standard since 1995. Since thar tirne, quality audits have been conducted to ensure the continwus cornpliance of this system. The organisation had not however, conducted a self-assessment against a mode1 for quality management or business excellence. Sweral seps were involved in conductiag the f s self-assessment a g h the OPIM (See Figure 4- 1). This induded planning, garhering wt idonnation, evduating the r e d s and the assessment process, and incorporating the r d t s into the business planning process. This secrion describes the seps involved in the pilot assessment of one of the (30's business divisions.
The planning phase of the self-assessrnent induded definmg the scope, self-messment method, resources, and tim$ines. The scope refen to the areas within the organisation rhat
This can ange from one depanment to the whole organisation. The selfassessrnent method concerns how the infonnation will be gathered to complete the s assessment. (Chapten 2 and 3 ourline several nich methods). It i important to defme the
wili be assessed
resources required to conduct a self-assessrnent before it begtas. These consist of personhoun for coUecring and analysmgthe assessment info~nation.The tirneline for the assessrnent must also be detennined in advance. This incldes times for information coileaion, a d y s ~ and presentation of the resuits to senior management. ~,
It was decided that the self-assessrnent wouid be c o n d u d in one division (Division A) of the cornpany's business. This decision was based on several factors. Fim of all, this selfassessment effort was the fm in the organisation's hisrory. Seleclhg a d e r ~ b s eof the t organisation wu deemed to be a more realistic underilkingthan a t t e m p ~ to assess all g
areas of the business. Seconcüy, the rime and resources available limited the scope of the
this particular division was selected because it was the fastes growing
business area of the Company.
It was necessary to select a self-assessrnent m t o that would be appropriate for the ehd
organisation as wd as meet the requirements and expectations of the CSO. There are sevenl choices for appropriate self-assessment method, as seen in Chapter Two. The seleaion of a self-assessrnent mode1 involves wsessing the maturity level o the f Company.
The CS0 had progressed wl in the implementation ofits quaiity system. This suggests that el it has srarted its joumey towaràs excellence, and w u 'on its wy". As a r e d t , a more rigorous assessment approach was deerned to be appmpxiate.
The main objective of this
o assessment exerQse was to collect information from the organisation t identify the
suengrhs and areas for improvement in each area. The initiators of this process were also interesteci in gaining as much information as possible from the assessment. Because of the amount of infoxmation required and the quality manuin/ level of the organisation, a variation on the pro-forma approach (see section 2-22) was selected. The pro-forma approach involves the creation of a set of pages where each page corresponds to one sub-critenon. The description of the sub-critaion is printed at the top of the page with areas r address beneath it. The information requested on the page o indudes suengths, areas for improvement and evidence. I n t e ~ e w are conducceci to collect s evidence for rhis process. Once these are finisbed, the assesson then complete the proformas.
L this self-assessment, a set of questions relating to the sub-criterion was asked of the n
inte~eweeso uy to capture its essence. The assessor then identifieci the strengths and r
areas for improvement based on the responses of the interviewees. Thus, the pro-forma
was completed by the assessor through the collection of information and evidence from the
Ir was necessary to select a subset o emplcyees wt w i h the interviewswould be f ih h c
conduaed. The set o 159 questions was disuibuted among a number of interviewees, f seleaed by the managers of the division This redted in a set of 25 interviewees from the following areas and with the following memben of the executive:
Marketing * Research and Dwelopment Ts Operations & Strategic SourSng et - Materials Planning
Vice President of Finance Chief Executke Officer (CEO) Chief Operating Officer (COO) Vice President of Division A
The following organisational charcs indicate which representatives fiom eadi are? were
A mauix contaïning the q e t o set and the names of the inten?ewees w u created. This usin
was used to ensure that d questions in the set w r asked at least three times to three l ee
different individuals. Questions were distributeci to employees through a nntified randorn no assignment (Mendenhall and Sinach, 1993). The employees were srratifid i t management and non-muugement to ennve that the questions would be asked to the appropriate parties, appropriate for their function. Table 4-3 is a piece of rhis mauix. Interviewees are listed at the top and the questions run down the length of the ma&. 'Yes" in a cell indicates that a question wrr asked of a corresponding inte~ewee.The 1st row in the marriv monitors the number of questions asked each interviewee in total to ennue an equal distribution The second last colwnn indicates the number of times a
particular question had been asked of an inrehewee to ensure at least rhree. The lasr
column indicates if ail the intewiewees asked the question were able to provide a usable answer to the question.
If this number wu not at leas three, the question was posed to
more inteMewees to get the three answers required.
Question How do leaders communiate the importance of meeting cunomer as weii as reguiatory and
legal requirements? Whar is the process for iden* and targeting cusromers, customer groups and market segments? How does the CSO address and improve workplace heaith, safety and ergonornic factors? How is design validation incorporated into the design and deveiopment processes? How do you detennine key suppon process requirements? What is the systern applied to measure your key performance indicators relating to organisationai effectiveness (meeting key objectives)? How do you &à& what key compaxtive data and information to use? How do you continuaiiy improve the effectiveners, effiàency rad consistency of the performance mevurement systern? Number of questions for each interviewee
Y s Yes e
3 3 3
Ys Yes e Ys e
A Mieliae was developed to indude al stages of the assessment process. These were developed based on previous experience in other organisations. Table 4-2 ilhinrates the
suggested and a
d rimes for the assessment.
Discussion with wessment ini&ors re: scope, wessment team, assesscnent process, tirnelines, evaiuilfion methods Presentation to managers in the division
Persons Involved 3
1 ~evelo~mmr of
0 0 0 )
manix M d up session with (QA manager and
Conducc and analyse interviews
1 Compare interviews and d
u Idenyfy OFh and r a s(3 OFI'r and 3 +'s
Write the final reporc
1 I weekl
100 0.0 3.0 00
Presentation to Management
Total Person Hours
After the ~luining complete, the next phase of the assessment involveci conducring was interviews, reviewing and e v a l b g responses, reviewing resuits, and crearion of the final report.
InteMews were scheduled through intemal e - m S Each interviewe was sent a List of questions to feview before his or her scheduled interview M i e . The interviews were conducteci by the aurhor and were recorded dire+ e-mail was made to the interviewee. Objective evidence wu also coiiected from the interviewees. This evidence included the following: customer satisfaction nwqr r& e employee satisfaction nwqr results monthly performance data from the result-based performance memement system ont0 a laprop computer. Aher each meeting, the notes taken were rwiewed and if any dacificarion was necessary, a phone c d or
This evidence was used to evaluate the Redts section of the OPM The data was reviewed
ro see if trends from the pas few yean have shown continuous impmvement.
Review of Responses
At the end of the interview process, the ansvers from each interview were reviewed. It was here that the i n i d analysis of the responses took place. The three answers to each question were midied to determine if thqr described the same approach. If al1 three answers were
sirnilar, this would indicate that there was good deployment of the approach across and
down through the division. If an inte~iewee a management position described a strong in
approach but other respondents did not concur, diis indicated that the deployment of the approach was weak. If, after getting these dvee answers, they wue ail different, the question
was posed to yet another h t e ~ e w e e .If
al1 four of these responses were different, this
niggested that there was no consistent approach to the element in question throughout the division.
After ensuring that each question had been arked a SuffiCient number of thes, the author and a member of the quaity assurance team ma to discuss and evaluate the amvers. The three or four responses to each question were Nmmanred before the evduation Each s u m m a h d question was evaluated first accordllig to the approach describeci. Appendix E, adapted from the EQA, darifies the scores given for approach, deployment and results. Each evaluator scored each question independen* as per these definitions If the scores feu
within 20% of each other then the average score was taken for t a question. This range was ht felt to be acceptabie to the assessrnent team since, as we can see in Appendix E, the range foreach score level is 20%. If however there w u a gap greater than 20%, then discussion ensued This was a vduable part of the evaluarion process. A large gap occurred onlytwice. The discussion that followed led to a re-scoring and a s d e r gap.
The following is provided as an examp1e of the evaluation process. It describes the evduation of element 5.1, Performance Management. These questions were asked in order to mess this aspect of the organisation's business. What are the systems used to mevure organisationai performance?
H o w are these synems interrelated?
How are these relationships manageci and improved?
The responses to these questions provided enough information to evaluate the approach and
deployment c the methods to satisfy the given element. f Approach: There wu some evidence of a sound approach to internai auditing and remit-based
There was no self-assessrnent process in place at that t h e .
There w u some evidence
the performance rneasurememt systern suppoxted policy
and strategy and that the interna1 auditing process w u well defined
Each department tracked its own perfonavrce measures but had its own merhod of daetmiaing which performance areas needed monitoring and how this information w u colected. Ther- was no evidence that the relationship berween the intemal auditing systern and the
s performance measurement system i managed or improved at d
The average score given was 2 % Refeming to Appeadk E, we can see that the CSO had 0. oniy some evidence of systemauc approaches to satisijmg the criteria in the given category.
The audit resulu were used u a performance measure in the q d t y u s u r u i c e
department. There was some evidence that the approach to internai auditing and remit-based performance measurement was implemaued and deployed in a systematic way. There was no evidence that any type of self-assessment process was implementedor deplayed There was no evidence of a weil-deployed and implemented method of remit-based
The average score given was 13%
Again, the assessrnent reveaied that the CS0 had little to
no evidence of systematic deployment of approaches satisfyuig the criteria in the given
M e r the xoring w u complete for each sub-category, a lia of svengths and areas for hprovement w u compiied. These were based on a bendimuking ana+ to derennine the
arez Some of &e m g t h s and areas for improvemenr were evident from the cornparison of the organisation's a p p r d e s to each part of the critek If there were apparent gaps in approaches or the deployilent of these approaches through the division, these were mentioned as part of this list as w d
A final presentation of the results of the assessrnent was made to the managers and directors
of the division The results were also communicated in a Gnal reporr that w u left wirh the
CSO. Each page of the body of the report conrained the sub-category title, the fmal score
for that section, the criteria in that category, the ls of strengths and areas for irnprovement, it
and some examples of what excellent companies do. Figure 4-5 is an excerpt from this
5.1 PRfo1111;~1ce Management
5-13 Key Performanceindiaton
Describe the qaan applied to masure Dcsaik the s)rrtan applied
tomtvunthc~ perf0~OutCOmcs &nt&d in section 4.63 of
thc krypafomlalce OutcOmCs
identifid in sections 4.6.1 and 4.6.2 of O P M Describe h m the mtuutemtni
OPIM. Describe hoprthe
muuraeait systan forkcy
for ky performance indicvon is contindy improvcd.
mwuranmtsare cxlaqcd and
wbat Excellent Compuiics Do
Each depumient is mponsiblc for u?dring iadiriclual iodicaton of effe&eness
Resuits-bwd performance mevures ur mricwed mon* in the FORM
Thcre i a system of ESD audits and i n d ISO qu?lny s auditz
Finand mevia covcr the past, prcxnt and fucurr pcrformuice
The R&D process masures cover proccss h, , ù m efficicncy, and planning quai~ty
RSrD mevurrs are avaiiable on-iine (the inmet)
The o q p i d o n lmows the uuc cons of its processes and producrs/senrices
Cycie Umc for ail ky processes i s me;isurcd
Areas f r lmprovement o
There i no formal recognition of the i n t d t i o n s h i p s s between the interd audit, self-assessrnent and =suitbased synems
Key processes have b e n identifid i n each u i ,funaion, and depvuncnt nt
of the organisation, and pmcess masuns have b e n & f i for a c h bpProcess mesures uc codatecf with product./servicc charameristics or performance factors thît uc of prime imponuice to cwomen
There are sepante systuns in cadi department for u?cking r e d t s - b d mevures It is undear which performance measures convibute the mosr to which keycompany goais
There is no evi&nce of a sysccmatic approach to impmving the measunment synem for kcy performance outcornes, kcy process, and mource performance indicaton
The= is a Lck o rncmms dating to the effective use of f
*ll)LC organisation bu dcveloptd and o v e d safety in& thu i u;idrtd u s l u s t once a month, and consists of several output masures Wre timc-lon accidents as wd as the numbu of pmrcnt?tive or behaviod musure
Once earh categoxywas evduated, the scores were uuisfured h o the final scoring template
to caiculate a f;nal score for the self-assessment.
2000 Score 50
Pemat Score 39%
Supplier ancl Pvrncr R n l c ru
Pcrfonnîna Monitoringand Gnuolling
Ova;ill OPIM S c a c
A score of 284 on the first assessrnent indicates that the CSO and the division that undenvent the d-assessmuir have embarked on the joumey towarb excellence. This score is not to be taken as an absolute accurate 'proportionw of business excellence (Le. the Company being about 28% excdlenr), but as an indicator of which areas within the organisation are further dong than others (Le. some categories received a score of 50h
whereas others scored 30%, meaning the fint category i not as developed as the second s
s one). It i not the absolute score in each category that is the most important eitha but the
translation of scores into priorities for impmvement that i the most value a d d d s
Once the fmai scores of these categones were caldateci, it was important to prioritise the
results. This would assist the in the process of selecting the area on which to focus
T i prioritisation was based on the score achiwed in a speciiic catego'y and the value of the hs
category. Table 4-4 illustrates the prioritisation process. The categones are ordered by score achieved resulting in a score index. The categones are then ordered by total point value
giving a value index. These index values are then multiplied resulting in the total index.
1 Score Index (
23 15 17 13 11
People Results Process Management Information Resources 1Techno10gy Resources &orner relationships Perfomiuice Management Supplier and P m e r Rcsults Resoufce Management Perfommce Monitoring and Conuolimg RÊ;ilis?tion Prucesses Desien Processes
Vaiue of Gtegory 44 44
41 45 49
44 33 47 43 37 43
1 Vaiue Index 1 T o d I
19 20 13 456 300 289 286 264
11 12 11 2 14 12 10 13
24 18 8 23 16 10 17
7 10 14 8
2 16 200 161 160 140
12 8 14 4
Vaiue of ' Value Index Totai Index
Gccgory 43 30 45 29
Performance Impmvement Infr;isuucnueResources Work Environment NaturalResources Shareholder Renilrs System R e d t s Strategy Development & Deployment Support Processes People fiesources &orner Results Pudashg Processes Financiai Resources SocietyResults Management
4 17 8
18 1 27
24 16 22 4 18 2 5 20 3 26 1
30 28 42
15 7 21 5 6
135 133 126 120
96 88 56 54
24 53 35 23
12 1 25
52 45 40 36 26 25
The self-assessrnentprocess providecl the CSO with severai important outcornes. Firn, the self-assessrnentprocess itself was i m p o m t . The pilot assessrnent will provide valuable information to the organisation regardmg how best to conduct their self-assessrnent process
in the future. A h , a review of the strengths and areas for improvement found i the n
assessrnent will be beneficial as an input to the m u a i business planning process. The final score on the assessrnent wili be a usefd benchmarkuip tool as weli as a good quantitative indicator of the statu of the quaiity management system and its level of business excellence.
The observations and recommendations resulting from this wessment were the following
Suppliers and partners are n t involved in the strategic planning pmcess. o There is no syscematic process to follow-up on action items to determine if they have been completed and to evaluate the gaps.
Lack of syste~llittic incorporation of leamhg and customer feedback into design processes.
No systernatic process for incorporation of current and projected infernal Nsromer requirements and priorities into the design of support processes. No review of customer related processes to ensure they are dmeeting custorner's
Collecf and use data from day t day contact with customers to enhance customer o satisfaction levels.
Provide managers with a report of only those budget items that thqr have control over.
Develop meanires for detennining the effectiwness of employee development and
Develop a formal process for providing timely feedback to suppliers and parmers on their performance. Develop a synem for waiuariag the uade-off berween maintaining 'old" techdogy
and investing in new technology.
Review the reporting of perfomance measures ro ensure that vends for the pan three
years are evident and that rargets are explicitly xared.
Irnplement a review of performance measures used to track rhe performance in each deparunent to enwe thqr are reflecting the key drives of your business.
Focus on closing the loop. Irnplement processes to e n m that outputs from co~~ective
and preventive actions become inputs to design and process control activities.
Evaluation of Assessrnent Rocess
As t i self-assessrnent was the k t for the CSO, the organisation and assessors reviewed hs the process to evaiuate its effectiveness and to suggest impmvements. This should become
pan of the assessment proceu. Severai questions should be asked within this
W s this process perceived to be successful by the employees, managers, a
assessors, and otha interested parties?
Ti process wu perceived to be successfd by the managers, and directon. The M hs presentation was proceeded by many questions and exceiieat feedback Ti indicated that the hs
suggestions arising from the self-assessrnent would be reviewed and used as pur of the business planning process. There was a lack of inteon the part of some of the interviewees. This wouid suggest that more information and support coming from management to encourage active participation in the process by employees should orin before the n m self-assessrnent is conduaed.
Was the tirneframe appropriate for pmper feedback into the business planning
process and 0 t h processes that would require input fiom this process? This self-assessrnent did not oc= at the proper t h e for the results to be fed into the business
p l h g process. These self-assessments should be perfomied doser to the beginning of the
new planning q d e for the year.
Did the question set provide sufficientinformation to enable good collection of information?
The questionnaire developed for use in this pilot assessment enabied good coiieccion of data and
information. The questions were clev to the interviewees as evidenced from the responses.
Did the selection of inte~ewees result in a good representation of a cross-section of the organisation or unit king assessed?
This proces nee& to be reviewed and imPmved in the next assessment. The inte~ewees were selected by department managers and directom. A better cross-section of employecs including,
for instance, more people involved in the re;ijisatiion processes, could be selected.
Was the scope of the assessment appropriate?
For this pilot wessment, the xope was entirely appropriate. For the n w assessrnent however,
rhis should be thought out before it is conmicred and reviewed again once it is complete.
Was the number of assessors appropriate and sufficient to conduct a good
It is benefiaal ro have a number of assessors from al1 areas of the business. This would result in
a more efficient and effective coiiection of information, since thete would be a better
understanding of the s p d c proceses Mthinthe Qputmenfs. This would eluninate Ume spent
on understanding the organisational processes.
Was the management cornmitment to the process sufficient? Management commiunent w u fady weak No xnanagen above the lwel of k o r w r ee
present at the finai presentation of the assessment redts. Self-asessrnent redts also showed a la& of management commiunent.
This self-assessmentprocess involved many people wirhli the CSO. The tirne involved was lengthy. As this was the first assessment of ths kind performed within this organisation,it is useful to evduate its value to the Company. One wayto do rhis is to compare the process
and r e d t s to those of a q d t y audit performed in the same rime LamP. This anparison
the resources required to perforrn the self-assessrnent and the quality audir
the processes themselves the type of r e d s obtained from each process the value of idonnation obrained from each to the o v e d performance of the business
The ne= chapter deais Mth such a comprison proces. It also lodrs at remit-based
perfommnce measufement in &on
to self-assessrnent and quality a u d i ~ g .
50 Performance Measurement .
The CSO uses several methods for measuring organisational perfonnance. The selfassessrnent desuibed in the previous chapter is now compareci to wo other types of perfonnance measurement used by the organisation: a quality audit conducted in the same time frame, and the red-based performance mevureman used to continuously monitor the processes 4 t h the organisation.
Cornparison of Assessrnent Results to Quality Audit Results
At the same time as the self-assessrnentwas conducted, an internd audit of the C W s quality system was performd In the year 2000, the self-assessrnentw u conducted h e e n
October 23d and December 15* (8 weeks) and the q d t y audit occurred during the week of October ZP November 2" (1w e ) The internal audit team within the Quality to ek. Assurance deparunent perfonned this audit with the assistance of an extemai consultant acting as lead auditor. Both the audit and self-assessrnent resulted in a set of recornmendauons for improvement. The audit's recommendations resulted from the non-confonnities and opportunities for improvement identified by the lead auditor. The recommendations from the self-assessrnent arose from the areas for improvement found throughout the process. Table 5-1 shows the
main areas requiring attention that were identified in each of these processes as a remit of
the prioririsation process oudines in Chapter Four.
Self-assessrnent (Oct 23-DeclS. MOO) Highest ladar People Resuits Process Miusagement Information Rtsourca TcchnologyRsourccs ûrnomcr relatioiuhips Stak&ol&r Objecrives
I n t d Quaüty Audit (Od27 Nov 2,2000) Eiemenrs Requinag Major Attcnuon 4.4 Design Conml 4.6 Rirch;rsing 4.9 Process G n t m l 4.1 1 Inspection, Masuring And Test Equipment 4.14 CoRMiVe And Prcvcntawe Action 4.17 internai Qu?liry Audits
At first g a c ,the elements identified in the self-assessrnent seem to be ver-different from lne those identified in the qualiry audit This is not surprising. The elements identifiecl in the self-assessment are mîinly categones that are not covaed by the ISO 9001-94 standard The CSO's quality system is not concenuated in these areas and as a result, these may need M e r development. The Process Management category h m the OPIM however was found to be the weakest element. This corresponds well to the audit f n i g since Process Management idns incorporates elements 4.4,4.6,4.9,and 4.1 1 of the ISO 9ûû1 standard. The category identifid in the self-assessment that does not seem to have been identifieci in the quality audit is Customer Reiationships. Elemmts 4 1 and 4 1 were identiûed i the .4 .7 n audit but no related elements stood out in the self-assessment. Customer Relationshps in the O I indudes element 43 of the I O 9001 standard and a srnail part of element 4.4 PM . S deaiing with identification of cusromer requirements. Element 4 3 was not identifieci as . requiring major attention but f d e r an+ indiates an agreement h e e n the weaknesses
within Customer Relationships and those found within element 4.4 Design Conml.
Table 5-2 shows the main recormnendations, and non-cornplance issues and ares for
improvement idendied in the self-assessrnent and audit respecciveiy. The table lins the
main caregories in the OPIM with corresponding recommendations.
T h e non-compliuice
issues and opportunities f r improvement redting from the audit have been listed o accorciingly. The issues underlined within the table have been identified as si& arising from the audit and self-assessment. As was illustrated in Table 5-1, many of the recommendations from the self-assessrnent do not correspond to any in the audit as the audit covers onty those items in the I O 9001: 1994 standard. Those that were identified as S major issues in the audit may not have been major issues in the self-assessment. This is
because other issues arising in the self-assessrnent were ranked at a higher impomnce level.
M Qurlity Audit (Oct 27 NOV 2,2000)
Focus G devcloping a process ro follow-up on action items to dccumine if thcy hne been completcd m d to ev;ihiue the gaps Review the timing of rhe digment m e y to ensure t h R i opirml to pmvide input into the ;inrnul s
Qriltrysysta Use ISO 90012m direction for dcploying stratcgic ptnn;np prinC;Plcs t o &me bmuiinkage berweai svPegic objectives & the systcm dtslgned to achieve
Provide mui;igen with a report of ody thosc budget items that they hne control over Devclop mevurs for detuminùig the effecllveness of employee devtlopmc~it uaining and Ww ROI pioccss to msurc consistent use ;uross e the division Cdlm and mriew dadinfomrztion coaccrning the effiuency and effmiveness of informuion systems
N o compiiancc issuCs
No compiiancc issucs
N o compluace issues
No c o m p ~ c isnics e
N o compLUnce issues
and availabilityof data Deveiop a synem for e v a i w the uaâc-off betwecn mîintaining 'oldw technology and investing in new technology
Consider using quahy funaion depiuyment to idaiufy the uue c u n o m a speufications & not what tbey think t y wuit h Consider ;idopUng suicca DFMEA & PFMEA during the e V t y p k s U e ts feasibiity Jgn-off a p p n d i
Develop a process to incorporace cumnt and projected i n t e d cusromer requkmcnts i d priorities into the design of nippon proces~s Implement a rcview of amorner rctted processes to ensure thy ue aiil mceting customa's rcquircments Coüm and use data from day to day contact with custorners to enhance customer satisfaction levek
Move t d tnic supplier qu;ilif~cation pkcc o in f product quaMcations Consider a formal sys~cm achicving the above for
Revicw the rcponing of performance rnclsurrs to ensure ttut uuids for the put thne ycvs am cvidcnt
i n t a d Qu?lity Audit (Oa 27 NW 2,2000)
Conrtrive and Prevenuve Action
lmplemcnt a rcview of perfomunce mesures used to crack the performance in #ch dcpvunent to ennuc thcy arc rrflccting the key &ers o your f business
k t cause ui;3yUs is i n a d a p t e Corrrcllvc actions not responded to i a timeiy n m uc , and somc n a rcspondcd to at d u i r l Mcthod f r esublishing effecrivcnessof s l t o is o ouin
Prioritise audit ;ictivillcs b w d on due-added and effective w of reu,urces Numaous comcWe isnies ourstuiding. Consider an &on Clause No objective evidence that mut?gcmuit personnel rwiewcd audit fndings Indepuidence of auditors not evident in di cases
Several issues can be ewacred from this comparison. A mjor problem identifid in the
q d t y audit (element 4.17) was that there was no objective evidence that management
personnel reviewed the audit fmdings. This was also emphasised by the fact that there were numerous corrective issues found to be outstanding. This is one of the main differences berween the self-assessrnent and auditing processes. It is evident that the outcornes or recommendatïons from the quality audits are not reviewed and acted upon to an acceptable level. The results are not fed back into the business planning process. The self-assessrnent fmdings on the other hand were presented to senior management and were considered usefil to the planning process.
As discussed previously, the renilrs of an audit are simple pass or f judgements. The d
assessrnent performed against the OPIM was given a score based on the approach and deployment of the approaches that the organisation has in place to mea the given criteria of
the model. It is difficult, therefore, to compare the f i score or outcome of these two
processes. If there were a methoci for cornpuison, the findings would show that the score on an assessment againa rhis model Qcreases with fhe number of non-conformances and elements requiring major attention in a qualicy audit performed in the same rime frune. The OPIM has attempted to incorporate the basic reqykments for the organisation's q d r y system. If there were any non-conformances arising from the audit, it should follow that the corresponding element in the OPIM would be judged as inadequate. If the minimum
reguirements have been met, the score for the eiemem in the self-assessment should be
hrgher. It does not indicate however, that ail the critexia in the corresponding element of the
seIf-assessrnent have been met. Figure 5-1 iliumtes this concept. represents the relative percentage o elemenu with: f no non-conformanceswith a low score on the assessment
no nontonfonnances with a high score on the assessment
The ana of the triangle
non-conformances with a low score on the assessment nonsonformances with a hi& score on the assessment
Wouid h?\e nonconformanceswhilc 0bt;ilring a hi& score on the self-asxssment.
The r e s h of the pilot self-assessrnent and the @y t audit with respect to the concept in Figure 5-1 are illustrateci i Table 5-3. A l m score on the seif-assessrnent is a score in the n bottom @e of the xores on the self-assessment. A hi& score is one in the top quanile
of the scores.
SeIf-assessrnent Score Low
This corresponds well with the hypothesis presented in Figure 5-1. The highest percentage of elemenrs is in the quarter for low scores and non-conformances. The lowest percentage s of elements i in the quarter for high scores and non-conforniances. The other rwo quarters
are almost equal.
Figure 5-2 compares the scores on the OPIM to the elemenu of the quality audit that weie
found to have non-conformities. On average, the self-assessrnent xores were lower when
corresponding ISO 9001 elements were found to have non-conforniinces. The results do
Vary. Keep in rnind that the elements of the OPIM in moa cases cover more than
corresponding elements of ISO 9001. It is possible to have a low score on the OPIM men
if there were no non-conformances found in the audit. There should not be however, mun, elements in the OPIM that achieve a high score if rhere are non-conforniances found in the corresponding element from the ISO 9001 standard
Implications for SirnultaneousAuditing and Assessrnent
The self-assessmentperfoxmed againa the OPIM provided much information regarding the effectiveness and the efficiency of al of the organisation's processes. In particular, suengths
and areas for improvement were identifieci in processes related to quality management. A
comparison of the resuits of the self-assessrnent and the quality audit rwealed that similar issues were idenufied in each process. The implications of this are far reaching. It is evident from this exercise that performing self-assessrnent on the elements related to q d t y management c m provide valuable information regardhg rhe effciency of these processes. This c m cl+ of such processes. the quality audit, which aims to judge the effectiveness
The men& and weaknesses identified in the self-assessrnent process are incorporated into the business pknning pmcess. This ensures that the areas for improvement, related to the quality management system, are iopns h o rhis planning process as w d . This compensates for the fact that the results of quality audits are not incaporated into the business planning process.
Self-assessrnent of the processes relating to + y t management, especdy if perforrned a opposing times of the year from the interna1 quality audits, would lead to further improvements to the efficiency and effectiveness of these processes.
Result-based Performance Measurernent
In addition to quality audiring and self-assessment, the organisation uses resulr-based
performance meanires to u n d e m d the curent perfomiyice lwel of its processes. This section fm describes a review of the measures cumntly tracked by the CSO and a comparison of rhis set of measures with measures suggested by researchers and in the national quality award models. Fin*
a cornparison of these three performance
meanirement me&& is described in the final part of the chapter.
Review of Organisationai Performance Measures
Self-assessmenr against the MBNQA and the EQA involves the evduation of organkationd
results. These reniks are assessed based on the history and trends of m m e s that have
tracked perfomiance in each of several areas. Each a w d suggests areas of performance that should be monitored by an organisation. These are found in the Results caregory of the
EQA and the Business R e d t s categoxy of the MBNQA (See Table 5-4).
MBNQA (Business Rendu) Gstomer Finuicial and Market Human Resource Supplier and P m e r Omnisauond Effectiveness
EQA (Result4 Customer People SRY Performance
It is the a
d results (trends, levels, bn e*
in each of these areas rhat are evaluated
i a seIf-assessment. The self-assessrnent does not appraise whether the organisation n
amdlymeasures perfonnuice i each of the areas. If there is no measure for a speciGc n element of performance, the element cannot be wessed. Gregory 5.2.3 of the OPIM, Performance Meanirement, uks the organisation to describe its perfomiance measurement V e m (see Figure 5-3). It is at this point that the organisation's resuit-based perfomiuice measurement system is wessed It is also here that
the organisation has the opportunity to i d e n e any gaps in ternis of areas it needs to be
Performance Mcuuremait (IS04,8.1,82 1, 8.4)
hpmmus (MBNQA, 4.1a1 and 42)
Describe the performance measurement systcm uscd to collect, monitor. analyse, synthesise and act upon perceptions (extcrnal) and performance indicators (intemal) relating to:
people supplias and partnen
W Q 4.14 N A ,
Describe how the effectiveness. emciency and consistency o f the performance measurement system are continually improved.
Review of the Performance Measures at Case Study Organisation
The CSO has IWO main divisions. Each of these has its R&D, marketing, and manufacninng
components but are assisted by the same support departments. These are cornputer services, quality conuol, quality asniance, hurnan resources, and finance. Division A focuses mady on new produa development. This means the design of new integrated circuits @Cs) to meet the needs of its customen. Most of the new products developed are manufactureci out of house. Division B has both new product development and on-site
manufacturing. The divisions are quite different h m one another but both must conuibute
to the ovedl adiwement of profitable gr&
Most departments have dwdoped their perfoxmance measures from the objectives of the
depanment, which in tum are developed h m the CSO's overall objectives. To improve
the C D ' s performance measurement system, it is important to identify gaps where aspects
of performance are not being measured.
The CSO's performance measurement system is made up of several perfomiance meanires
uacked in each depanment of the organisation. The following measures are reportecl on
monddy (See Table 5-5).
The pcrcmtage incmasc in d e s over the pmiious ycu (5 veu compound)
(Incomc/ average equity) (incorne beforc t x + d a r i a and bcnefits)/(numba of crnployces) a Percaitigc inarve in shvt pice over the pmrious y a r (5 y a r compound) This is the numba of defects o k c d on d batches submitted to QA for i
(to QA) in pans & - d o n (AIQ @pm)) Producr Group 1 P d u s t Group 2 Prodm Group 3 (AOQ ( P P ~ ) ) CAOQ (cuxoma average outgoing quaiity) Qwlny Assurance Inspection
This is the nurnber o defms observai in thc acceptable batcùa a the QA f
This is che number o defective renirns observd in the total quuitiry s d c i f
This is rime from buch urivai ro arrivai u stores
g produas want to knaw the 'rooc cause" of fdurc Clrnomcn d .. A d r m e d life testing QuîLfying Coafirmcd dcfecûve from cunoma by QA This i the p e r c a i w of corponte revenue genented from p d u c t s s
NP1 New Roduct Introductions
Pmrntage effort for top ten . .
This is the pcruntagr of anplqrcc t h e spenr on the cumnt top tai priority
Producrion rate vs. MPS (%)
Wdcr Fab. yield (%) BasiiiccyderLN
Product mU vs. MPS
1 Asscmbly Opcrations/Test/Extemal
Amui pfodunion vasrrr the w produccion schcdulc The d e r yield before elcarialunLig (physicd ody) T i from the stzrr of firn operrtioa in production to end prochicr into invmrory (m produns) The actuai mix of produas compvcd to the sch& mix of produas in nwerproducrionschcdulc Accuai prafuaion vernir the miner produaion schcdule
Master Production Schedulc (MPS) Rue (%) Yicld (%)
Number of finished pro du^ v a w numba of produns stvtcd T i from the nnof firn operaion in production to end prodricr into i uiventory The amai mù ofproduns çompued to the d d c d mix of pro& i n
Testing (Extemal and Intemal)
The actual mix of produar testcd cornpucd to the scheduicd mir of turing in ~produaionschcdulc
AIQ (ppm) Prototype cyde timc inhowc/offshorc (w-bys)
Several interviews were conmicted to gain information about the current measures being
used. These measures were reviewed wt the manager of QA, the VP of Research and ih
Developmen~ VP of Manufaauring, and the VP of Finance. Each one was asked a the number of questions pe~aining these measures. to
Quesuons Which performance indicarors are most important to you in determinhg the performance of your department?
meaSures are imponant with the possible exception of the Quai~ty Assurance Inspection Cyde Time, which i s done for customer satisfaction measures are
meilSufes are a good indication of the performance of the QA deriment.
measures thu you feel are not quite as useful as they could be?
on-rime delivery qdty(% defects) production of appropriate volumes Other healthand safety
although these need to be explained thoroughiy to the attendees at the montMy performance i meetings so that d measures used are undersrd
Do you fed thît
yourperformuice indiuton are in line with the go;ils/objectives of
How ue these
There i a database s for tmcking these measures (on-line NP1 &tabue)
How does the performance of p u r deparunent relate to the o v e d perfommce of The organisation?
The performance of the QA
depaKmenf determines the
outgoing qu;ikty o f
products and the reliability of new desim. This has a g r 2 effm on The
The performance of the R&D department determines how fast the Company grows It i the primvy s cost driver of the business and deterrnines the quality of produm.
Measures are coiiected and reponed on mon* This information is used to focus improvement efforts Set realisticaiiy based on historiai
Mon of these n w s w e s are tracked in the QIS. Finaud mesures are uacked in aflother inforniwon sysrem. The performance of the ~llil~lufacfuring affects dep;i~ment cusfomer satisfaction and ~lll~lufacniiing
M m e s are CalcUlated by accounting d e r k from information in another information
measures are the m?in indiaors of The orgmktion's performance
How often are these measures
reported on? How is the information from these measured
Measures are reporteci on monthiy Measures are used to fmd areas w here
d t y
performance is not up to targets How are targeu for The targets for aU these measures set? these measures are 1s bencharking 25% improvement done? If so how is over previous year. t h done? Target was 50°h but after improving the 'low huiging fruitn,it was more difficult to achiwe this 50% improvement.
Me;isures are collected weekly and reporteci on mon* Measures are used CO frnd problems in the production pmcess
coiiected monthly Measures indicate how the organisation is performing o v e d
Targecs are set
baseci o n forecasteci dernad, some
Targets are set
based on an increase of 20 in saies and revenues each year
benchmarking such as on-time delivery. Benchmuking is done m d y from a process perspective not just to determine
Based on this set of interviews, the foflowinglin of strengrhs and areas for improvement
The measures used in the Quaiity Assurance, R8rD and Manufactwing are felt t be o adequate to capture perfoxmance in each depanment. The meanires are felt to be in-line with the o g n s t o ' strategy. raiains The CS0uses its performance measurement infommion in monddy meetings.
A r e a s for impravemcnt
Most measures are monitored monrhly. Some may need to be mcked more o h . There is no systematic review of these measures to ennue that they are d l meeting the
needs of the organisation.
s o Littie bendimuking i done to set competitive targets f r improvement.
Targets are set according to historiai performance in R&D.
Identifying Performance Measurement Gaps
Several perfoxmance measurement models were reviewed in diaprer 2. It i useful to s
compare the set of measures used by the CSO to these models to idendy a .areas whem
the organisation does not meanire performance.
Table 5-10 places the CSO's perfoxmance measures wirhin the four penpecrives of the Balanced Scorecard (BSC).
RRurn on Average Net Assets (ROANA) Rcturn on Equity (ROE)
Vaiue addecl per pcnon per year EPS growth
I n d Business Perspective Design cycle time
Milestones on time Manufaawingcyde Urnes Design-ins Yield Supplier on-time delivery Qu?lity of supplier products Billingacmmq
Customa Perspective Customer S t s a t o Survey aifcin Fdure Assessrnent (FA) success nte Customer renvnstechnid CAOQ (CunomerAverage Outgohg Q q d ) Prûdua reliabhy Ievels On-Ume shipments Backorden Càil response Ability to accept orders
Innovation and Lcaming hvestment in NP1 New produa initùtiom New producc introductions Tnining hours per employee Tann costs as a % of salary riig
Ir is evident that the C D ' s measures fit well inro the BSC fîamework The weakest category
seems to be Innovation and Learning. The CSO should find several more measures
penaining to its performance in this area Sorne suggestions follow in the next section.
Neeiy et ai (1999) niggest that an organisation's manufacturing perfomiance measures
should f into four caregories. These are qyahty, time, con and flexibility. These can be d extended to cover the performance aspects of other deparunents as wd. The performance of design and development processes, for instance, can be viewed from these four perspectives. Table 5-8 shows how the CSO's measures can be assigned to Nedy's elements of performance.
AIQ ( P P ~ ) AOQ ( P P ~ CAOQ (customer average outgohg quality) Product reliabiikty levels Customer rcnunstechnical Production m e vs. MPS (%) P & Yield Prohuct mix vs. MPS Sdety
Muiufacnuing Lead Tie Rare of production ind&on Deliver lead time Due-Date performance Frequenq of delivery
FA m e R&D Mask d o % First tirne right Humui Rcsourccs ProductiY;ty/E mployee Tann H o m per employee riig Hit me (%) Quîlityof hire Rétention rate Testing and Stntcgic Sourcing Quality of WO accepted Muiufacturlllg Qu;ility Assurance Inspection
Production Cycie times
O n T Ï e Dehiy R&D
Design Cyde Uaie Development e f r fot Milestones on t m ie Average v k c e Human Rcsourccs Ovenime - # of employees > 100 hourdyear
Manufaauring cost Vdue added S e h g pice Running con Service con Cost of Qu;iLty Design con Distribution con Cost dative to cornpetitors
Tcning and Strategic Sourcing
On time shipments from Suppliers
D&mbility Volume Mix Resourcemix
0urPutQu;itty N-vproduct Modify~h
Manufrcturing B;ickordas Rtw Ncw p& ;n;t;lt;ons (MG) N w prohua imroducaom (MR) e Humm Resourccs
- # of cmployecs > 100 hours/year
Tcsting and Stmîegic SourQng RespoWveness of supplies (1 low - 5 hi&)
Those from the C S O ' s set o pafonxunce f
me?surrs thu do not
R O M
Value addcd per person per year
fit in these ategories
% Revenue h m NPI projects iaunchcd within last 3 years
Investment in NPI NP1 investment as % o forcas menue f Percentage e f r f r top ten priority projects fot o
This set is comprehensive. The con category however, is quice weak. This uea should be reviewed to ensure that the organisation uuly understands its c s s O n e important aspect is ot. the identification o the c o s of quaiity. This is not addressed at all by the CSO's f performance measurement system. This indudes looking at preventative, appraisal and
fadure costs to show management the costs of poor quaiïty, to idenufy opporninities for
improvement, and to idenafy hiden costs.
A third set of measurement categories is found in the Resuhs sections of the OPIM. The
OPIM incorpontes the meanires suggested by the MBNQA and the EQA. Table 5-9
compares these measures to those that are mcked bythe CSO.
Case Study Orguiisation -orner Satisfaction Survey
Fdure fina+ Success Rate -0rnerRcnims
Backordcrs GIl Response Rare (Applications)
ROE value Added
Non-Finuiciai Interfaces Motivation Satisfaction
New Prociuct Inm>micuons
Tirne to rnarket (N'PIcyde Urnes)
Hours of Tnining Employee Alignment Survey
-f o Hire Enuy level/expenence % Empluyee Productivity Accession (% hedcount)
AiQ for Offshore paru Offshore cyde tirnes On-tirne deliveries Quai~ty WO accepted of Responsiveness
Supplien and Parmen
Interfaces CRizenship Cornmunity Environment Hdth and S a f q
Health and Safety
Accidents Incidents Days lost
Design and Development
IC cyde Ume Development
T o d Development Effort AIQ for Offshore Offshore cyde h e s On-Ume deliveries Qu;ility of WO accepted Responsiveness Production rate vs.
W t y
MPS Produa mix vs.
Production cycle times
Yield AIQ Quality-ce Ins~ection i e T
Management Finances [nformauon [nfnsuucturr People
Produ&+ per employee Design Effon
Net Profit On-tirne shipments
FA Success Rate Mes Design-ins
Accordhg to the utegories of perfonnuice in the OPM, the CS0 is missing perfomiance measures that reflect the effiaent and effective use of the organisation's r e m c e s . Table 510 provides suggesred meanires that shodd be incorporateci into the CSO's m
t set of
masures to monitor the use of resomes. The suggested meanires have been taken from several sources induding the E Q A
- Suggested Pcrfamancc Measuns to Add to Existing
Supplier psice Numkr and vaiue added of p d p s Inventor-leveh and timing of deliveries Number and vliut added of innovative product solutions
1 Recoenition of m e r s ' conmbuàons
Cîsb flowitems Balance sheet items Depreciation Maintenuice corn
M t ratings
D f a rates of mu& ee
Resources inventory tumover Utility consumption Lhihation ~ & i i iof toolr ~ Value of i n t d d property Patents Royalties Accessibility kitegrity Relwance Timeliness Sharine and u s ï m knolk'ledee Vdue of intellecd capitd
EOA EQA EQA EQA EQA EQA EOA EQA EQA
EOA - -
EQA EQA EQA EQA EQA EOA EQA
In addition to the resource indicators, the CSO does not have indicators that show w a the ht organisation is adUeving in relation to s o c i q . Some of the measures that are s-ested
literanue are k e d in Table 5-1 1. The CSO should inco'pome seved of these mevures i t its m e n t set of performance measures. no
Performance as a responsible a &
in volve men^ in the communitieswhere it
Reporting on activities to wist in the presemation and SUSt3iZI;Zbility of resources
toExistingSet Disdosures of information relevant to the cornmunRy E q d oppominities practices Impact on I and nationai economies d Involvement in education and &&g ' Volumvy work a d phiianthropy Support for sport and leisure Choice of avupon Ecologid impm Reduction and eiimktion of waste and
S u g g c d Pcrfœmance Masures to Add [ Source --
EQA EQA EQA EQA EQA
The CSO d s o does not report on services for employees. Table 5-12 indudes a lia o f
suggested performance measurrs covering rhis perfomiance area.
Services for Employees
Benefit lwels Provision of facilities and services
In general these tables address the three areas where the CSO's perfomiance meanirement
system is weak Thus, performance measures should be designed or adopted to reflect
performance in the following areas:
innovation and learning
use oI resources
interaction with society evaluation of empluyee services
The 0should a h rmiew the suengdis and areas for improvement related to i s remitt based performance measurement system identifid in this chapter.
Self-rssessment, Auditing and Resuh-based Performance Measurement
It is evident that self-assessment, audiring and result-based performance meanirement are ali benefiaal to an organisation's performance improvemem efforts. Each one requires a different cype of input and each r e d t s in outpins that become inputs into the performance management system of the organisation. Table 5-13 recaps the characteristics of these
performance mesurement methods.
Opinions Obiective evi&nce Possible hi& effon le wi Quîlttative Subjeaive (Based on
Result-baseci pe dormance measunment Numeric &ta
Dependent on system Quantitative Ma+ Objective Specific
Medium effon ievel
Holistic Effiaency anci Effecûveness
Efficiency and Effectiveness
These methods each have its specific role to play but are obviousiy quite interdependent.
This next section describes the relationship arnong these meanirement methods and how
they can be used together to improve organisational perfoxmance.
Cornparhg Self-Assessrnent and Result-Based Performance Measuremcnt
The OPIM, like the EQA and the MBNQA, contains cntena that address the Enablers and Results of the performance management system. In self-assessment, the efficiency of the Enablers is judged. Their effectiveness is mevurd by the Redts. Figure 5-4 illusmates this relationship.
Efficiency o f
Ir is the R e d t s category, in fact, that represents the organisation's result-based performance
meanirement system. Performance measures are used to detennine the nirrent effecWeness
ht of organisational activities (Enablen). In other worb, to w a exrent these activities are
contributhg t the overall performance (Results) of the organisation. o
The CS0 has a well-developed result-based perfomance meanirement synem. The
meanires in this system provide quantitative and qualitative information concerning the efficiency and effectiveness of activities. For instance the CSO uses Quahy Asnirance Inspection Cyde Ume as a measure of the how efficiendy the QA department performs its
hc f inspections. It also racks customer satisfaction, w i h is an indiwor o how effectively it is meeting cunomer requirements.
O n e wodd ask then, why wouid an organisation need self-assessment. The anmer lies in
the limited abiiity of these meanires to evaiuate the approaches and deployment of
approaches used to perform organisational activities. It is hem that self-assessment becomes
important. This process imrolves a more in-depth a d p of why the activity is at the ~ current performance lweL Self-wessment, for instance, can provide information about how the QA department performs its inspection processes thus shedding light on why it's effiaency is where it i. s Resuit-based performance measurement provides a snapshot of performance levels. Selfassessrnent evaiuates the causes of these performance levels. It is &dent that these nvo
performance meanurnent methods are complementary. Used together they can provide
valuable information for improvernent.
The Roles of Self-Assessment, Quality Audits, and Result Based Performance Measurement in the Organisational Performance Measurement System
This chapter has illustrated the importance of each type of performance measurement to an organisation. Figure 5-5 illusvates how these fit into an organisation perfonnance measurement system. The result-based perfonnance measurement system consins of perforrmnce meanues. The OPIM exisrs as a reference mode1 for self-assessrnent and encompasses the elemenu that are audited against ISO 9001. The results of self-assessments
against OPIM will provide an indication of the CSO's overall performance, and therefore
will be added to the set of existing performance m e m e s .
audit* were cornpared. niis
Li this chaprer, the processes of self-wessment and @y t
reveded the several implications for the simuitaneous use of audits and self-assessments
within an organisation. The chapter dso described the review of the CSO's perfonnance
meanvernent system and rhen compared the use of redt-based perfonnance meanirement to the use o audiring and self-assessment. f
6.0 Pdormance Management In RdrD
This diaprer outlines the modification of the proposed model, the OPIM, for use in an R&D environment. These modifications were based on issues raised in the literature review and practical experience gained t h u g h the self-assessrnent conducteci at the CSO.
The R&D Environment at the CS0
The CSO, as an organisation, i very much focwd on its R&D efforts to compete in the s
fast paced marketplace. There are several R&D reams woiking in each of irs three business
areas. After interviewhg several of the managers in each of these areas, it was dixoverd that mon of the issues mentioned impact the efficiency and effectiveness of the R&D function. The R&D management is very much focused on reducing q d e Urnes and ensuring that products reach the marketplace as dose to fun as possible. It is currently woriung on increasing the awareness of the vaiue of time amongst R&D ream members. Through several benchmarkhg mdies reporteci on in the CSO's strategic pianning meeting, it w s a discovered that Ume delays con much more in the long r e m than does exceeding the project budget to get the work done on cime.
One author found, mggesteci that in a market with 20% annual growth and 12O/0 pnce drop
per year chat a delay of six months while on budget wdl earn 33% less profit over life but
introducing the same produa on rime with a 50% budget overrun cuts profits by only 4%. (From the 0 ' s strategic planning meeting) The CSO is very aware of the need to malitain its RgrD efforts. About 20% of net revenue is invested back into R&D. The CS0 i constantly exploring other markets and expanding s its opporruniaes.
Division A i involved in the design of integrated Circuits for th& application to a particular s segment of indu-. Most of these products, once designed, are manufacnued off-site. 7'he mlin activities of the division are therefore R&D relatecl.
Modifying the OPIM for Use in an R&D Environment
The OMM is based on standards and models that have not s p e a f i d y been taiiored for use in an R&D environment. To be effective as a mode1 for R%D, several modifications needed
to be made.
R&D goals and objectives shodd be defined in a waythat shows de+ how each
researcher's activities contribute to the company's goals. These should be aligned from the
a m with the goals of the organisation. If organisational objectives are undear, then the nom is generally for individwls to outperfom othen through a system that r e w d vaiues conduave to organisational goals (McLaughLn, 1995). diat are not
Overaii Organisational Goais
Organisationai goals should be translated into goais for the R&D effort and subsequently
individual goals for each researcher. The literature review outlined a number of issues that F D groups are facing in today's & marketplace. It is essential to consider each of these when designing a qwLty management
sse for the R&D environment. Table 6-1 iflusvateshow the characteristics of a wdytm designeci quality management system could vldress each of the issues.
Issues Affccting the RdtD Enviranmcnt Individual recognition of achicvcmcnt Oqpisationll goais vs. R&D objectives
ChPrctaStics Emphask on developmcnt of team baseci
recognition R e w -d s based on- the dievernent of o ~ o n agoals l
Incrclsing cycle time
An environment that is focused on flexibiky and adîptabiiity and empowered rcsarchcrs
A systan t h e n c o q e s the systemîtic
GQfLving the customa's changing nccds
I d e rimes I A system that leaàs to improvernent in the effectiveness and efficiency of the R&D proceses which enables improved performance with fewer 1 resources ' A syaan that piaces the o r p k i o n in a position to unckmnd ascorner's current and future needs to continuously iinprove its ab* to fuifil these neeâs and remin competiùve
A sysrem that enables the effective management of technology
Emcrgence of ncw technology
The R&D hinction can be viewed as a mbsystem of the organisational management sysrem.
In this way, R&D should develop its own quaiity management system chat is aiigned and
easdy integrated with the o v e d organisational management system. This will ensure that
the R&D mbsystem is operating to achieve goals that are w d aligneci with the organisation's
overall goais. The system is comected to the overall system thmugh balances and checks to
ensure continuous alignrnent of goals and objectives. Figure 6-2 illustrates the framework
OPIM to which an RBrD subsystem has been ad& The mows in the figure depict the interrelationships between this subsystem and the o v e d OPIM to ensure
for the modified continuhg aignment. For example, compare Figures 3-1 and 6-2. ï h e OPIM can be
applied to the qmem as a whole but the items can atm be tailoreci to be used for the R&D system.
i MANAGEMENT i
The research and development funaion can be viewed as a system of processes whose most important resources are technology, people and understanding of the customers' requirements and expectations.
Once the f~amework the modified OPIM was created, the next s e p was to modify the for
cnteria to reflect the specific requirement of a quaiity management system in R&D.
The categones of the OPIM should address the follo*
The Objectives section of the modifieci OPIM should focus on management, R&D nategy fomulation and alignment with organisational suategy, and the main nakeholders of the
R&D function. These stakeholders include interna and external astomers, senior
management, people, suppiiers and Pamiers, and society.
This section should cover all resources indudeci in the origiuai OPIM but should focus on
how the RSrD function plans for, acquires, deplay$ and controls these resources Li order to
develop produas and new technology effiaendy and effectively.
The Processes section should aàdress process management and the planning and conuol of customer related processes, design and development processes, purchashg processes, and support processes. Realisation processes originally addressed in the OPIM are not required
in this version.
This section should determine how customer requirements are completely defmed. These
requirements 'drive" the design convoi process so customers are aswed that the organisation will design the appropriate processes to ensure cornpliance. The R8rD professes should be planned and designed frorn the customer's point of view. This indudes everyrhuig normally associateci with design, development, test, prototyping, and evaluation/assessment.
The R&D organisation cian re~uest supplien demonstrate evidence that pudaseci rhu
product will m a al quality reS;rements. This permits the R&D organisation to ensure l
that purchased items and seMces meet the needs of the depanment.
The key support pnxesses r e q d for effective and efficient R&D should be planned and conuolled.
In the R8rD environment, the rime lag becween action and outcome i prolonged This s
makes difficult the development of a comprehdve set of masures that accurateiy reflect the outcornes of the R&D activities. Sevenl authon have addrrssed this problem and have corne up with suggestions for meanires that can be used in R&D organisations.
The funaion of the R&D organisation is not only to develop but &O to transfer technology to o p t i o n s
and the marketplace, to enable the compuiy to meet its business goais and therefore maximise stieholder value. R&D's conuibution, therefore, i n a to be m s d simpiy by i n t d success mevurements but by its performance against interoll ;and e x t d customer satisfaction short and long-term pals. (Patiiio,
In general though, these meanires should reflect the achievement of set objectives relating to
customers, people, suppliers and pannes, society, and the synem itself. The meanires
should be reported in terms of the a
d level of performance, targeted levels o f
performance, trends over the past three to five years, uid performance relative to
This section should address the systems for perfomiance management, performance monitoring and conmlling,and performance improvernent related spediuUy to the R&D
depumients. It wu not necessvy to modify this section h m the O &
OPIM since the
departmental performance management, monitork and controulng and improvement
should be si&
to that of the CSO.
Modifications were made to the OPIM to d o w it to be more applicable to an R&D depanment within an organisation that develops, mukers, and manufactures new produm. AppendM B conuins the m&ed
version of the model. The 'organisation" refers to the
whole organisation induding marketing and manufacturing departrnents. The "R&D funcrion* refers to the RBrD department or mit.
The following is provideci as an sumpte o the modification made to the criteria of the f
Section 1.2 of the onguial OPIM perrains to the establishment of quaLty policies and
objectives and the o v e d suategic ph.ningprocess of the organisation. Table 6-2 illusuates
the critexia from this category of the OPIM.
i?q&mm&(ISOI,5.3 and 5.4.1)
Describe the sysiem for establishing quaùty poliaes and objectives.
(IS04,5.3; MBNQA,2.1; EQA, EQA, la and 2c; DP,1 l 1 3 :-:)
Describe rhe strategic planning process appLed to improve organisational performuice and set appropriate strategies and pliaes.
h p m m n k (iS01,5.4.2,5.5 and 5.6)
Describe the processes of management planning and review, a weii as the wociated s respoasibilities and authorities.
qnpimomies @Sa, 5.4-5.6; MBNQA, 1. Ib and 2 2 EQA, 2d and t e ; CP,1:4 and 15) .; Descnbe h m suacgic pians are deployed, reviewed and improved upon.
The developrnent and deployment of strategy in R&D n & e
to be linked to the overail
business planning process. This requires uuisktion of the organisatiod goals and svategic objectives into R8rD department goals and objectives. This transformation enables the R%D funaion to better understand the corporate stratefies and to ensure the aignment of
its suategic goals and purpose.
Table 6 3 illusvates the modifications that have been made to this categoiy of the OPM.
Rqukwa @SOI, 5 3 and 5 4 1 . ..) Describe the syscem f r rransiaMg organisational quîlity policies and objectives into o o p h and objectives f r the R&D function.
Qpamm (IS04,5.3;MBNQA, 2 1 EQA,EQA, la and 2c; DP, 1:1-1:3) .;
Describe the stmtegic pluroùig process applied to improve R&D performance and set appropriate strategies and policies.
ibptmm @Sol, 5.4.2,5.5 and 5.6)
Describe the processes of R&D management pluining and review, as wd as the associated responsibilities and authorities.
(IS04,5.4-5.6; MBNQA, l.lb and 2.2; EQA, Zd and 2e; DP,14 and 1:s) :
Describe how strategic plans are deplayed to the R&D function. Describe how the strategic plans, translated to the R&D function, are reviewed and irnproved upon to ennire continuing alignment wirh organisationai p h
The scoring scheme for the OPIM wu developed from the opinions of people w i t h the
organisation. These people undemuid the importance of each part of the criteria to the
performance of the business. This sarne process could be foilowed to modify the scoring scheme for R&D application. Expen opinion from those within the R8rD depments could be c a p d using the PFM software and a new distribution of points could be done.
This wu not possible in this case because of tirne collsvaints, s a change in the disuibution o of points was made to address the issues identifieci in the litennue nwqr.
Table 6-4 shows the categoxies of the modified OPIM that mon &cdy
effect these issues.
Issues Affectiag the R&D Envimmcnt Individual recognition of achievement
0rpUi;sauonal goais vs. R&D objectives Fast pace
1.1 MaMganait 1.3 Stakeholders 2.5.1 Hunan Resource Sysvm 2.5.3 Satisfaction, Involvernent and Empowerment 4.3 Peonle Rcsults 1.1 Managrnient 1.2 S m q y 4.6 System Results 2.5.1 Human Resoutre System 33 Design and devdopment processes . 4.6 System Results 2.5.1 Human Rcsource Systern 3.3 Design and devdopment processes 4.6 System Rcs&
Capturing the customer's changing neeb Emergence o n m technology f
2.5.1 Hunan Resource System 3.3 Desigu and development procases 4.6 System Results 3 2 Customer duionships 3.3 Design and development processes 4.6 System R d t s 3.2 Customer reiationships 4.1 Customer Fkdts 2.6 Technology 4.6 System Results
These categories should be vaiued the highea within the modified OPM model. Table 6-5 presents the s c o ~ scheme f r the modified OPIM.The items in boldface rype are those g o caregories that have become the moa important in the rarised s c o ~ scheme. g
Criteria 1.0 Objectives 1.1 Management 1.2 Stntcgy
OPIM Item Points
129.00 48.00 43.00 38.00
m g r ~ 0y
Modif~cd OPIM Item Points Points
146 146.00 50.00 48.00 48-00
1 Stakeholdm 3
2.3 Information 2.4 Lnfnrrnicnire 2.5 People
2.6 Tcchnoloev 2.7 Nature 2.8 Work Environment
48.50 44.00 29.00 43.00
39.00 39.00 50.00 46.00 28.00 40.00
' 3 3 Design and adcveloprnent
- - -
3.4 Purchasing 3.5 Relis;ition 3.6 Support 4.0 Resulu 4.1 Customa 4.2 Shareholders
28.00 190.00 36.00 32.00 42.00 33.50 16.00 220
43 People .
4.4 Suppliers and Partners 4.5 Sociew
- - - -
5 0Performance .
128.00 42.00 43.00
47.00 26.00 0.00 28-00 220.00 50.00 30.00 48.00 3 1.00 16.00 45.00 110.00
- - -
5 2 Monitoring and ConuoUing . 5.3 hnprovement Totai
Addressing R&D Issues with the Modifed OPIM
The moci&ed mode1 f r perfomiance management addresses many of the issues we have o seen that RgrD funcrions face today. Table 6-6 outhes how the modifications respond r o
Addfcssing R&D h b l e m s Improvement of this design udi support co~ opecation, collaboration and innovation The system used to reward and recognise R&D Irnprovement of this system to encourage teampem&el b d r e w d and recignition The development and deploymor of RdrD Improvement to ensure the alignxnent of R&D stmegic objectives objectives with organisational goals The use of technology to achieve R&D Improvement to ensure efficient and effective objectives &of technology in R&D projms to meet organisationai goais The identification of nistomer reqllemenfs and Impmvement to the pnxesses of idendj&g the Licorporuion of these recpkments into the customer qukements to ensure thar changing & s i p process customer needs are being met n i e management and improvement of design Impmvement to increase the efficiency and and development processes effectiveness of RBrD processes to shortai cycle I tïmes and maintain comOefiuVeness The rneasuremenr of results reiated to people, Improvernent of the mednument to customers and the system as a whole ensure the effectiveness of the R&D I 1 performance management system
Mocüfied Elcmcnts Design of work and job functions
This chapter illusuateci the modification of the OPM for use in an R8rD environment. The
modifications were made to address the issues outlined in the literature review. The next
section closes this thesis with a summiuy of the conclusions arising from the studyas well as some oppomuiities for future research.
70 Conclusions .
This chapter discusses the main conuibutions of the worir presentd in the thesis, followed by recommendations for future research.
Contributions o the Research f
In Chapter Three, a proposed m d for performance management that inteptes the new
t ISO 900 1standard for + y
management wirh three modek for business excelience w u
developed. The resulting model i based on a sysrems view of organisational performance. s It incorporates the requirements for a quality manageaient systern from ISO 9001 with the
identifid strengths of each model for business excellence. The redting set of aiteria represents a path towvds business exceiience. The organisation can evduate its c u r w t & y management system against the minimum requirements in the model and then use the opportunities for improvement as a guide for conMuws improvement.
A scoring scheme was developed for the model using a decision an+
model that captured
the opinions of senior management regarding the relative importance of each element in the model for business performance. The resource element was considered to be the mon important, representing the transition from the process-based ISO 9000 to a more system-
based business excellence.
Chapter Four describes how the proposed model was used to perform a seif-assessrnent of
one division in the case study organisation. A set of questions was developed to obtain
information through interviews w t a cross-section of employees from the CSO. The selfih
assessrnent was successful in obtaining mudi idonnation penainiag to the organisation's acrivities. It provided the CS0 with a comprehensive lia of areas in which to focus improvement efforts. Chapter Five compared the three perfomunce measurement rnethods used by the case study organisation. This induded a cornphon of the seif-assessrnent outcornes with the results
of a quality audit perfonned at the urne rime as a m -
of investigating the compatib*
the IWO measurement methods. The chapter ais0 compareci the use of result-based performance measurement to the ourcomes of the self-assessment and audit.
reinforcd the importance and interdependence of each method in an organisation's performance measurement efforts: result-bd performance measurement is used to capture the CUrrent performance levels withli the organisation; @ y a u d i ~ is used to detemiine g managenent system. Selfif an organisation is meeting the requkements for its assessrnent is used to enhance both of these measurement processes, as it requires that a Company evduate the effiaency of its activities. This reveals why a process i perfonniflg at s its current lwel and suggests why a qualRy au& has found non-cornpliance. The cornparison of the auditing and assessrnent showed the foIlowing management can provide Perfomiing self-wessment on eiements related to q e d d t y valuable infomiation regarding the efficiency of these processes. ' li enhanas the Iis
audit, which aims to judge the effectiveness of mch processes.
The svengths and weaknesses identified in the self-assessrnent can be incorporated into the business planning process. This ensures that the veas for improvement, rekted to the quality management system, are considered, compensahg for the absence of quality audits results, in the business planning process. Self-assessrnent of the processes relating to quality management, especiaily if p e r f o d at opposing times of the year from the internai quality audits, would lead to f d e r Mprovements in the efficiency and effectiveness of these processes. Chapter Six ouùined how modifications were made to the OPIM to create a more appropriate model for use in an R%D environment. The modiGed model addresses many of the issues facing the CSO's R&D departments i today's marketpIace. This is a renilr of the n
new focus on the most important aspects of the OPIM to W. These areas are:
Suategy dwelopment Stakeholders' objectives
Techn01ogy resources Oisromer related processes Design and development processes People renilu Syaemresults The scoling scheme was +Lo changed r reflect the new focus of the OPM for R8rD. The o vaiue of the above listeci catepies wu increased Using rhis proposed model, the organisation can assess its R8LD activities in more detaiL In summaxy, the main contributions o the wotk i this thesis are the: f n
n f development of a imegrated mode1to move beyond the minimum requirernents o ISO 9001 to create the proper conditions for business excellence
no funher investigation i t the compatibiityof self-assessment and audithg for future
alignment or integration of these performance measunment methods examination of the roles of self-assessment, audiMg, and redt-based performance measurement in the o v e d performance mevurement system a modifieci version of the OPIM which provides a good framework f r future o development and application of this model in an R&D environment
Scope for Further Research
The following are recommended issues for further research: the use of the modified OPIM to conduct a self-assessment in an R&D environment investigation into the use of self-assessment to enhance the @y t audithg process smdies on the integration of self-assessment and audit te. using an integareci evaluation
methd for measurernent against the OPM.
funher smdy of the relationships between redt-based performance measurement and self-assessrnent and their impact on business performance
funher use of the OPIM for organisationid self-assessrnent and investigation into the effectiveness of the m d for improvernent
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APPENDIX A - OPIM Qucstior~~zirc APPENDIX B - Modified OPIM for R&D APPENDrX C - Trillium Results APPENDXX D - Cornparison of Pafomunce Management M d Criteria
APPENDIX E - A p p a c h , Deployment and Results adapted from the EQA
ORGANISATIONAL PERFORMANCE IMPROVEMENT MODEL QUESTIONN.
1 2 Management .
How do you idennfu the processes needed f ryour +ty o systern? Whu are these processes?
How do you determine the sequence and interaction of these processes?
How do you continually impmve the processes and the management of the relationships h e e n processes of the + y t management system?
H m do leaders cornmunicate the importance of meeting customer as wd as regdatov and legd r e q k e n t s ? (IS04,S.l)
How do leaders ensure the availability of resources to meet these
What is the management review process and at what frequency is it conducted? (IS04,5.1) How are leaders involved with customen, parmers and representatives of
society? How are these processes continually improved?
Development What is The organisation's suategic planning process?
H w are strategic plans reviewed and impmved upon to ensure o alignrnenr with the nuTent and funire business environment?
How i the oqgmktion's m t e g y t r m s w into actionable items and s
meaninble goals? H m are!these communicated and deployed to each management level to assure individual contribution to achievement? How are responsibilties for these items eaablished and communicated to the people in the organisation? H m i progress a g a k t these plans rneasured? s
How are the p r o c e s for deplayment of strategy conUnwiiy impmved?
H m do you determine and review your customers' key requirements? How is rhis process continually improved to keep up with current and
future business needs?
How are these needs and expeaations deployed and communicated to
people throughout the organisation? Please provide any perception measures andior performance indicaton that indicate performance relative to the needs and expectations of customen. State their current levels and trends. Ls the targeted levels of it these performance indicators.
How does the organisation idenufy and review shareholders' needs and
How is this identification process continualiyimproved? How are these needs and expectations deployed and communicated throughout the organisation?
Please provide any perception measures a d o r performance indicaton that indicate perfomiuice relative to the needs and expeaations of shareholders. Include both financial and non-financial iadicators. State
th& current levek and uenb.Ls the targeted levels of these it
How does the organisation identify and review people's needs for
recognition and w o k satisfaction? (ISO), 5.2)
H w does the organisation idenrify and review people's needs for o
cornpetence and knowledge developmem? (IS04,5.2)
How are these processes continuaUy improvdi How are these neeck and expeaations deplayed and communicated
h u g h o u t the organisation? Please provide any perception measures &or performance indicaton that indicate perfonnatlce relative to the needs and expectations of
people in the organisation. State their current levels and d. Lin the q e t e d levels of these performance indicators.
How does the organisation dwelop partnerships that iink to its arategic objectives? (CABE 6.1) How does the organisation idenufy the needs of these pamerships? How are these pannerships reviewed to ensure rhey are still meeting
objectives of the relauonships?
How are these processes continually improved?
How are these nec& and expectations deployed and communicated throughout the organisation? Please provide any perception measures and/or perfomunce indicaton that indicate performance relative to the neeb and expectations of piumerships. State their current lwek and trends. List the tvgered levels of these performance indicators.
1 2 5 Society .. How do you i d e n e and manage the impacts of your products, seMces
and operations on society?
How do you identify other needs and expectations of society in the
process of sening your objectives?
How are these needs and expectations deployed and communicated
throughout the organisation?
How are these needs and expectations waluateci?
How are these processes continuallyimproved.? Please provide any perception masures d o r performance indicaton that indicate performance dative to the needs and expectations of society. State their current levels and trends. List the targeted levels of
these performance indicators.
Resources 2.1 Finances
41 . 42.
How does your department manage its budget?
How do you monitor your accual spending relative to your budget?
How do you continually irnprove t i process? hs Please provide any performance indicaton relating to fmanùal resources. Stare their current levels and trends. List the t q e t e d lwels of these indicators. (OHM 4.6.2)
How does your department manage idonnation to achieve set
46. 47. 48.
How do you monitor and convol the use of information? How do you contindly improve these processes? How do you ensure avdabilty of information? How do you detexmine the effectiveness of the information system.'
provide any performance indicators r&ting to information
resources. State di& current lwels md mnds. ~ i sthe targeted levels of t these performance indicators. (OPIM 4.6.2) 2.3 Infrastructure
H m does your deparunent manage infasmicntre resources?
How do you monitor the use of infrastructure resources?
How do you continualiy impmve these processes? Please provide any performance indicaton relating to infrasrncture resources. State rheir curent lwels and trends. Ls the targeted levels of it these performance indicators. (OHM 4.6.2)
Human Resource System
How do you idenufy characteristics and skills needed by potential
employees that match the organisation's values and needs?
How are work and job funcrions designed to support CO-operation,
collaboration, individuai initiative and innovation? What is the process for hiring and reuuiting new employees?
How is this process continually irnproved to meet future business needs?
How do you link reuwd and recognition of individuai's performance to
your suategic direction? (CABE 4.1)
How do you link reward and recognition of team performance to yuur strategic direction? (CABE4.1) Please provide uiy performance indicators relating to the human resource system. State their w e n t lwels and trends. Lin the targeted lwels of these performance indicaton. (OPIM 4.6.2)
Competenues, Training, and Development
H m do YOU as~ess/evaluate departmentai skill levels to idenufy u e a ~ for
vainiog and education?
How do you wess/evduate individual skills and areas for individual naining/ development and career progression? H m do you seek and use input from employees and th&
s u p e N i s o r s / ~ e r s education and uining needs, expectations, and on design? V N Q A 5.2)
How do you design or idenrify educational and vainiog prognms that support individual and organisation needs? How do you derexmine if an educationd or training has been effective or successful? What type of follow-up i thml s H o -does nianagement reinforce and encourage employees to use the skills, tools and techniques that thqr have leam& How do you idennfy ski11 requimnents for future business needs? Please provide any performance indicaton relating to cornpetencies, tminhg, and development. State their current levels and trends. List the targeted levels of these perfomiance indiators. (OPM 4.6.2)
2.4.3 Satisfaction, Involvement and Empowerment
How are people's suggestions and ideas captured, encouraged and
implernented?(CABE 4.2) How many suggestions have you received to date? How have these suggestions improved the division's performance?
How are people encouraged to innovate and take Rsks in order to achïwe goals? (CABE 4.2) How does The organisation detexmine the key factors that affect
employee well-being, satisfaction and motivation? Mease provide uiy performance iadicators relating to employee satisfaction, wd-being, and motivation. State their m e n t lwels and trends. Lin the targeted levels of these performance iadicators. (OPIM
4.3.1, OPM 4.3.2)
How does your deparmient manage technology to achieve set objectives? How do you monitor and control the use of tedinology?
How do you contindy "prove these processes? Please provide any performance indicaton relating to tedinology resources. State their current levels and trends. Ls the targeted levels of it these performance indicators. (OPIM 4.6.2)
H m does The organisation address and improve workplace health, s a f q and ergonomie factors? How do emplcryees take PUS in idenafying these factors and in
ixnproviog wodspiace safery! Please provide any performance indicators relating to health and s a f q results. State their current levels and trends. List the targeted levels of these performance indicators. How does the organisation determine when to upgrade/improve the work area, decor, and equipment in your location? Please provide any performance indicaton relating to the work environment. State their m e n t levels and trends. List the targeted levels of these performance indicators. (OPIM 4.6.2)
What is the process for idenufyuig naturai resources that can influence the organisation's performance? (IS04,6.7) What are your plans for rheir continued availability or contingency plans to prevent or minimise negative effects on the organisation's performance? (IS04,6.7)
How do you optimise your connimption of utilities? (EQA, 4c) What do you do to d u c e and recycle waste? (EQA, 4c)
How do you p h and develop the key pmcesses within your depamnent and how they intedate? (IS04,7.1) How do you manage these pmcesses and their iaterrelationships?
H w do you improve the efficiency and effecriveness of these processes? o Please provide any performance indicators relating ro the key processes
within your d e p m e n t . State their current lwels and trends. Ls the it
targeted levels of these performance indicators. (OHM 4.6.1)
How do you design processes that affect the organisation's rekrionships with customers?
Hm are these processes implemented and maintaineci?
How do you continuaily improve these processes? Please provide any performance indicators relating t o cunomer relationships. State their cunent levels and uends. List the targeted levels of these performance indicators. (OPIM 4.1.4)
Knowledge What is the process for idenufying and targeting customers, customer groups and market segments?
How do you consider customers of cornpetitors in this process? How do you continuaDy hprove the process of idennfying customen?
Satisfaction What processes are used for determinhg Nnomer satisfaction?
How do you follow up with customen on produas to receive prompt and actionable feedback? How do you obtain customer satisfaction information relative to cornpetitors a d o r benchmarks?
Design and/or development 3.31 Planning
101. How do you plan design and development processes to ensure that they respond to the neeb and expectations of the organisation's cusromers
and other interested parties? (IS04,7.3.1)
1 2 How do you implanent and maintain these processes? 0.
103. How do you contindy improve these processes?
104. H m do you ensure that inputs to design and development are accurate
and complete? (IS04,7.3.2)
105. How is rhis process continua& impmvd
106. How do you irnplement and maintain design and development
107. How are these processes conrinuah/ improved?
108. How do you validate output againn input requirements and acceptance
criteria to achieve interested p a q satisfaction? (iS04,7.3.2)
1 9 HOW this process continually improved? 0. is
1IO. How i âesign &ew s
incoqmrated into the design and development
î i 1 How i the design review process continualh/ improvdi . s
Vedication 112. H m is design verification incorponteci into the desigri and development processes?
113. H m i the design veficatîon process contin.aUy impfoved? s
s 114. H m i design validation incorporateci into the design and development
H m is the design validation process conUnually impmved?
H m do you incorporate changing customer/market requirements into
your designs and development processes?
117. How is the process of making design changes continualiy improved)
3.4.1 Planning 118. How do you i&nufy the resources needed, which cannot be obtained
interna& in order to defme a purchasing strategy? (IS04,7.4.1)
1 19. How do you idenufy and select capable suppliers so as to ensure
consistent quaiity and dependable nipply? (IS04,7.4.1)
120. How are these processes continualiy hproved?
for 121. How do you define processes to ensure that ~~ecification~purchased product meet the requirements of the orpi&on and interested parties? (IS04,7.4.1)
How do you implement and maintain these processes? 123. How do you continually improve these processes?
How do you plan and design realisation processes to ensure that they
respond to the neeb and expeaations of the organisation's customers and other interened parties? (IS04,7.3.1)
How do you contiauaUy improve the design of these processes?
Convol 126. How do you implement and maintain realisation processes?
How do you improve the effciency and effectiveness of these realisation
How do you determine key support process requirements? requirements?
129. How do you plan and design suppon pnxesses to meet al key i
130. H o w do you conth&
improve the design of rhese support processes?
meeting key perfomiance mquirements?
131. How do you impiement and maintain key support processes ensure
132. How do you improve the effiuency and effectiveness of these processes?
Customer 4.1.1 Reputation (OPM 32.2) 4.1.2 L~~&~(OPhil3.2.2) 4.1.3 Outputs(OPIM1.3.1)(OPhil3.2.2) 4.1.4 Interfaces (OPIM 3.2)
4.2.1 4.2.2 4.2.3 Financial(OPM1.3.2) Non-Finanaal (OPIM 132) . Interfaces ( P M1.3.2) OI
People 4.3.1 4.3.2 4.3.3 4.3.4
Motivation (OPIM 2.4.3)
Satisfaction (OPIM 1.3.3) Achievemenu (OPIM 2.4.2) SeMces (OPIM 2.4.3)
Suppliers and Panners 4.4.1 4.4.2 Inputs ( o p h l 3.4.2) Interfaces (OPIM 1.3.4) (OPIM 3.4.2)
Society 4.5.1 4.5.2 4.5.3 4.5.4 4.5.5
Gmmunity(0PIM 1.3.5) EnWonment (OPIM 2.7) (OPIM 1.3.5)
Heaith and Safety (OPIM 2.6)
Interfaces (OPIM 1.3.5)
System 4.6.1 Processes (OPIM 3.1)
Remurces (OPIM2) Objectives (OPIM1.1.1)
Management 5.1.1 System 133. What are the systems used to measure organisauond perfoxmance?
How are these gcitems interrelafed?
135. H w are tbese relationships manageci and improved? o
K y Performance Outcornes e
136. What is the system applied to mevure your key perfoxmance indicators
reiating to organisational effectiveness (meeting key objectives)?
How do you continwUy improve this measurernent system?
K y Perfomiuice Indicators e
138. What i the syscem you use to measure your key resource performance s indicators? 139. How do you continuah/ improve rhis measurernent system?
What is the system you use r meanire your key process performance o
141. How do you continuaUy "pmve this measurnent system? 5.2 M o n i t o ~ g Controllhg and 5.2.1 Audits 142. What is the process for the performance of interna1 audits againn the
requirements of the seleaed management standards indudiag ISO
9001:2W0 OS0 9001:1994) and/or ISO 14001:1996? 143. How do you continuaMy improve the effectiveness, efficiency and consistency of this process?
144. What is the process for the perfo~nanceof exremal audits against the reS;rements of the selected management standarb induding ISO 9001:Zûûû O S 0 900 1 1 % uid/or I S O 14001: : 9) l996? 145. How do you c o n t i n d y @mve consistency o this process? f
the effectiveness, efficiency and
What is the process for perfomiing regular self-assessments against the organisation Perfomunce impmvement Model?
How do you c o n t i n d y b p o v e the effecriveness, efiiency and
consistency o rhis process? f
5.2-3 Performance Measurement How do you design or select the indicaton used to masure and analyse
the performance in your department? How do you idenufy and manage the interrelationships bmeen rhese measures?
How do you decide what key comparative data and information ro use?
How do you support the organisational performance review and planning
wt analysis of data and information? ih
How do you link the organisationai level results to R&D depamnend
and project tearn operations to enable effective support for decisionrnakllig?
How do you c o n r i n d y irnprove the effectiveness, efficiency and
consistency of the performance measurement system?
Coftective and Prwentive Actions
How do you monitor, iden*,
and remove the exisUng causes of
nonconformities in i p t ,processes, outputs, objectives, resources uid nus
155. How do you indude plans for and renilu of corrective and preventative action in the business plan?
How do you evaiuate the effectiveness of these actions for rheir
K a h n and Quantum Leaps
What û the process for initiating and c
irnplementation of new processes?
e out quautun leap projects
that lead to the revision and irnprovement of existing pmcesses or the
What i the process for initiating and ovrying out Kaizen (small s
incremend impmvement efforts) for the continual improvement of features in inputs, processes, ourpufs, objectives, resources, and results? How do you wduate and improve the effectiveness of these
APPENDIX B Mded
OPTM f r R&D o
ORGAMSAnONAL PERFORMANCE IMPROVEMENT MODEL CRITEIUA FOR1. Objectives
Describe haw the R&D funaion establishes, "plements, and maintains its quality procedures and plans to meet the qwiity policies and objectives set by the organisation.
4.land 6.1; DP, 2:l-25) Describe how the R&D function continuously improves its &y t pians and the effectiveness and effiaency of its qu?liryprocedum. Desuibe how qu&y i defineci s d ol, for the R&D fuaction (Kumar a B y e 2001)
D&be how the cornmitment of R&D management to achieve policies and objectives set by the organisation is ensureci.
(MBNQA, 1.1%EQA, 1b-d; DP, 1:6 and 10) Describe how leaders of the R&D function conmbute to the development, implementation and continuous improvement of the organisational management system, as well as their Uivolvement with d sdteholders. i 1.2 Stategy 1.2.1 Dwelopment
hpmmts (ISOI,53 .
and 5.4.1) Describe the syscern for translating organisational quahty policies and objectives into plans and objectives for the R&D funaion.
(IS04,5.3;MBNQA, 2.1; EQA, EQA, la and 2c; DP, 1:1-1:3) Describe the nntegic planning process applied to irnprove R&D performance and set appropriate suaregies and poliaes.
Rqmmm (iS01,5.4.2, and 5 6 5.5 .)
Describe the processes of R&D management p h h g and review, as well as the associateci responsibilities and atithorities,
qDportrmrtJs (IS04,5.4-5.6; MBNQA, 1.1b and 2.2; EQA,2d and 2e; DP, 1:4 and 15) Describe how m e g k p h uc deplaycd to the R&D function. Describe how the
nntegic pians, m d a e d to the R&D function, ue revicwed and improved upon to ensure continuing ;ilignment wi3i organisational pians.
Describe how st;ikeholders are iden~ed,and how t & needs and requiremeau h [iudiUiinp legal, regultory, MWP-tal, producr and protes standuds, as well as openriod) are identiûed, deployeâ, communicated and evaiuated.
@xmmtm ( i S 0 4 , 5 2 ; MBNQ& 1 2 uid 3.1; EQA,21 and 2b; DP, 2:6 and 4:l- 4:s)
Descrik h o w the process of identification, deplayment, communication and evaiuation of stakeholders and th& a& and requirements is continualiy irnproved
Customers People O r p w a t i o d Leaders
Suppbers and Puniers
h p t w m (IS01,6.1) ~ ~
D e s d e how the resources listed below in d o n s 2.2 to 2.8 and 3.4 of OPIM are managd Describe the intdtionships among these resources and how they are used to support processes listed in section 3 of OPIM. (IS04,6.1) Describe how the acquisition and deployment of resources is optimiseci to ensure effectiveness, efficienv and consistency of system operation and achievement of set objectives. JJiustrate how the use of the resources is continuously improved Describe how the commitment of long-tenn resources to R&D effom is ensureci. ('da & G o h , 1997) 2.2 Finances OS04,6.8; EQA, 4b) Desuibe how finulciai resources are planned, acquired, deployed and convolled to achieve R&D objecrives.
Describe how the efficiency and effectiveness of the use of fmancial resources is impmved.
Describe how idonnation resources are pianneci, acquired, deployd and conmiled to adiiwe RStD objectives.
(IS04,4.2and 6.5; EQA, 4e; DP,3) Describe how the efficiency and effecfiveness of the use of information resources is
to d e v e R&D objectives.
Dexribe h m
resources are pianned, acq;ed, deployed and contrdled
(IS04,6.3; EQA, 4 4 Describe how the efficiency and effecciveness of the use of
Describe how characteristics and skiils needed by potend employees are identifieci to ensure h t the current and future n & e of the R&D function will be met. Describe h m work and job functions designcd to suppon CO-opedon, collabontion, i.adividu?lhithive and innovation.
Q p f w z t k (MBNQA,5.1; EQA 3%3 4 3e) Desuilx how the human resourre system i conUnuoUS, improved. s
Campetenaes, Tann and Development riig
~ ( I S O 1 , 6 2 ) Describe the systems used to ensure continuing competency of R&D perso~eL
C&nmumm (IS04,6.2.2; MBNQA,5.t; EQA, 3b) Desuibe how k q cornpetencies are developed and sustained to achieve set levels of R&D perfomiuice. Describe how the efficiency and effectiveness of these systems are continuously improved
Satisfaction, Involvement and Empowerment
&panmm (ISOI, 6.2) Describe the system used to reward and recognise R&D personnel.
9lpnrrrniher @ S a ,6.2.1;MBNQA, 5.3; EQA, 3c) Iliunrate how a work environment that conmbutes to employee satisfaction, involvement and empowerment in O& to improve effecfiveness and effiaency i s developed, maintaineci and enhancd
Describe how technology i used to achieve R&D objectives. Describe how business s and technology strategies are integrated, communiated, and understood by aU depuunents (Kumar and Bayle, 2001)
Describe how the efficiency and effectivcnss of the use of technology i improved s
Describe how av;Utbilityo nîtunl resourœs in cnnved in order to prevent adverse f impacts on the a w i m n f n ~and negatbe effecu on the R&D perfonnuice. t
Describe h m the use of n a 4 resources i optùaised to prevent negative s environmentai impacts and improve organisationaiperformance.
Describe how work environment is
a healthy and d e workpiace.
t o achiwe R&D objectives and provide
(IS04,6.4; EQA, 4c) Desaibe how a positive influence of the work environment on human resources is maintaineci and impmved.
@ O , EQA, Sa and 5d) S L 7; Describe how R8rD pmcesses listeci Mow confom to the criteri? stated in ISO
9001: 2000 standard,section 7.
(IS04,7;EQA, Sb; DP,6 and 7) Desuibe how the effectiveness, efficiency and consistency of processes are S continuoudy improved, referxing to the guidelines mted in I O 9004:2000, section
3.1 Management (ISO1,7.1; IS04,7.1)
Describe how R&D processes are managed 3.2 Customer relationships (EQA, Sc and Se; MBNQA,3 2 ISO1,7.2.3; IS04,7.2) .% Describe how processes rhat affect the R8rD function's relauonship 6 t h customers
are desiped, implementd, xmintained, and impmved
Knowledge (iSO1,7.2.l and 7.2.2; MBNQA, 3. la)
Describe how prucesses for idendymg internai and extemai customers and their requirements are designed, implemented, maintained, and improved. Satisfaction (MBNQA,3.2b)
Describe how processes for determining internai and externai customer s t s a t o aifcin are designcd, implemented, maintained, and irnpmved
3.3 Design ancilor development 3.3.1 Pl?nning (IS01,7.3.1; I n , 7.3.1) Describe how design and developrnent processes are p h e d , implernented, maintaineci and improved to ensure t&at thev resmnd to the neeb and exuectations
Inputs (iS01,7.32; ISW7.3.2) Describe how the R&D function ensurcs t h t inputs to design and deveiopment are accurate and compled. Describe h m this process i conrinuaily improvd s
Activities (MBNQA, 6.11) Describe how design and development processes are implemented, m;iintained and impmved
Outputs (ISOI, 7.3.3; IS04,7.3.2) Desaibe how ourput r q i m n are validateci against input requirements and e un e u acceptana criteria to achieve interesteci pvty satisfaction. Describe how this process i conMii?Uy impfoved s
Review (Isol,7.3.4; I n , 7.3.3) Desaibe how the design review is incorporateci h o the design and deveiopment processes. Describe how this process is continuousfv improved.
Verification (ISOL7.3.5; IS04,7.3.3) Desaibe how the design verification is u i c o r p o d into the design and Qvelopment processes. Describe h m this process is continuody improved Validation (IS01,7.3.6; IS04,7.3.3) Describe how the design vaii&tion is i n c o r p o d into the design and dweiopment processes. Describe how this process is c o n ~ u o u d improved. y Changes (IS01,7.3.7; IS04,7.3.3) Describe how changing customer/market requirements are incorponteci into R&D design and developrnent processes 3.4 Purchasing (EQA, 4a) 3.4.1 Planning(IS01,7.4.1;IS04,7.4.1;MBNQA;6.3aland6.3a2) Descnbe how resources, which m o t be o b d intemaiiy are idenUfied in order to define a purchasing strategy. Describe how capable suppiiers are identified and seiected so as to ensure consistent quaiity and dependable nippky. Describe how are these processes continua& improved
Describe how processes ro ensure that specifications for purchad producc meet the requirements of the organisation and infefened pmies are defined, implemented, maintaineci and improved 3.5 Support Describe how requirements for key support processes are determined. Desuibe how these support processes are pknned, &signe4 and hproved Conml @ o , S l 7.5.3-7.6; IS04,7.5.2-7.6; MBNQA,6.214-5)
Describe how key support processes are implemented, maintained and impfoved to ensure meeting kqr performance reguirrments.
List the perception measUres and performance indica~ors relating to the following four componcnts of customer r d t s . S m c thci,current levels and uends.
Q P411 .. 412 .. 413 .. 414 ..
List the targetcd leveis of perception mevurcs and performance indicators. Reputaion (EQA, 611 and 6b1; MBNQA,7 I ) . d Luydty (EQA, 6a4 and 6b4; MBNQA,7 1 2 .a)
Outpufs (ISO 1, 8.2.4 and 8.3; IS04,8.2.3 and 8.3; EQA, 612 and 6b2; MBNQA,7 1 3 .a)
Interfaces (EQA, 613 and 6b3; MBNQA,7 lal) .
4 2 People (MBNQA, 7 3 IS04, 8 2 4 ) . .; ..1
Lt the perception mevures and performance indiators &ring to the following i s four componenu of people results. State their current levels and m d s .
List the targeted leveis of perception measures and perfonnuice indiaton.
42 l .. 422 .. 423 .. 424 ..
Motivation (EQA, 7 1 and 7b2) 1 Satisfaction (EQA, 7 d and 7b3)
Achievements (EQA, 7bl)
Services (EQA, 7b4)
4 3 Suppliers and Panners (IS04,82.4c) .
List the perception measures and performance indicaton reiating to the foiiowing cwo components of suppliers and panners relationships. State their current levels and
Lin the targeted leveis of perception mesures and p e r f o m c e indiators. Inputs(IS01,8.2.4;IS04,8.2.3)
Interfaces (MNBQA, 7 4 .)
4 4 Society ( I D , 8 2 4 ) . ..d
441 .. 442 ..
431 .. 432 ..
List the perception measures a d p e r f o m c e indiaton reiiating to the foiiowing five components of the rektionship to Society. State th& current leveIs and trends.
List the t v g ~ e d levels of perception mesures and performance indiCuos.
Citizenship (MBNQA, 7.512; EQA,811)
4.4.4 4.4.5 4.5 System 4.5.1
Enknment (EQ& 814)
M t h and S a f q (EQA, 81))
Processes (EQA, 9bl; MENQA, 7.511, IS04, 8.2.2)
List the key perfomance indiators rekang ro processes stated in section 3 of OPM Sute their t leveis and vends.
List the tvgeted lweis of key process perfommnce indicators.
List the key performance indiators relating to r e s o m s stated in section 2 of OPIM. State their current levels and trends.
List the targeted lm& of key resource performance indiutors.
List the key performance indiutors reiating to R&D effectiveness. State their current lwels and trends.
List the targeted lwels of key R&D performance indicators.
Describe the system applied to measure RSrD performance. Iiiustrate the interrelationships among the intemal audit, self-assessrnent and result-based V e m s for performance measurrment.
Describe how the intedxionships of i n t e r d audits, self-assessments and result rnevurements are manageci and improved.
K y Performance Outcornes (EQA, 91) e
Describe the system applied to mcasure the key performance outcornes identifieci in section 4.6.3 of OPM.
Describe how the measmmmt synmi for key performance outcornes i conUnually s
Describe the system applied to masure the key perfonnuice outcornes identifid in sections 4.6.1 and 4.62 of OPIU
Describe how the me;isuremcnt sysrem for key pcrfomance indiators is c o n ~ w i l y improved.
Monitoting and Controiiing
Describe the V e m applied to perforrn internai and extemai auclits against the requirements of the selected management suti, including IO 9001: 2000 S and/or ISO 14001:1 9 . 96
Describe how the effectiveness, effiaency and consistency of the audit system are c o n t i n d y improved.
Self-Assessments( I D , 22.214.171.124) Describe the systern applied to perfonn regular self-assessments against the Oqpmauonal Performance Impmvement Model.
Descnbe how the effectiveness, efficiency and consistency of the self-assessment system are c o n t i n d y impmved
Performance Measutment (iS04,8.1,8.2.1,8.4)
(MBNQA, 4. la 1 and 4.2)
Describe the performance measurement synem used to cokct, monitor, a* n, synthesise anâ act upon perceptions (extemal) and performance indicators 'nternai) relating to: - customers
suppliers and pvtners
Describe how the effecciveness, efficicncy and consistency of the performance measunment system are continuaüy improved.
hpmvcmait(ISO1,8.5.1;IS04,8.5.1;DP,9) 5.6.1 Corrective and Prevcntive Actions
R t q m m m (Bol, 8.52 and 8.5.3)
Describe the systmi applied to monitor, i d e n e , analyse, and remove the exisung and potend causes of nonconformiries i inputs, pfocesses, outputs, objectives, resources n
Desuibe how the c o d e and preventive actions are used in the business pian and how
th& effectiveness i continuaiiy imprwed. s Kaizen and Quantum Ir?ps (IS04,8.5.4 and Annex B)
Describe the systern applied to continuousiy improve the features in inputs, processes, outputs, objectives, resources and resuits.
Desuibe how the effecUveness of the conUnd impmement systern is incre;ised.
f s .
(iS04,8.52 and 8.5.3)
REFERENCE ClUTERK Demùig Application Prize (1996), Dsnirg F%E G d DP Orsnoiv C k p z i s , Japanese Union of Saentists and Engineers European Qu;ility A d (1999), EFQM ExadlmP M d , European Foundation for EQA
I O1 S
1!50 FDIS 9001 (2ûûû), Q&y h h p a m S y a m - Rqbmmzs, Intemational Organkation for Standudiz;ition, Geneva rso mrs 9004 (20001, G-~W , International O ~ u o for Standardization, Genwa n Maicolm Baidrige Natiod Quaiity Award (2W0), Crieiiafi A+nmx? E x d h ~ M n , , Gaithersburg
Kieiia, M. L,G o k , D. Y., (1997),
'Td Quaiity Management in an R8cD Environment", inrenraakll
J d o f O p e r m i c m & R d d m Mmqpmt, Vol 17, No. 2, pp. 184-198.
Kumar, V., Boyle, T., (2001), 'A quality management implementation framework for manufactuing-based
R&D envkonrnents", I
M JuanafofQuhy & R$raEilrtyMhqpmt, Vol. 18, No. 3,2001, pp. 336-
APPENDIX C Trillium Resuits
Scoring for OPIM
81 7 .5
6.9 89 8.9 74
75.46 61.72 56.41 76.17
87.58 100 97.87 86.09
100 8.7 14
9.5 05 72.92 71.84 8.2 67
68.74 67.77 68.86 5.6 82
100 38.39 10.55 71.03
StakeholderObjectives Management of Rwources
lû û 8.9 51 3.8 93 8.8 43 8.3 48 94.44 78.73 3. 28 6.8 89 3. 68 6. 03 49.48 79.62 53.77
RÊsources People Technology
WorkEnWonment Management of Processes customeir Relationships Design Processes Purchashg Processes &uon Processes Suppon Processes Customer R e d u 'Sheholder R e s u l c People Results Supplier and Panner Renilts SociqResults System Results Performance Management Perforrmnce Monitoring and
97.7 8.3 74 31-01 89.75 83.8 79.33 89.2 88.49 8. 71 72.36 37.98 30.47 100 50.06 O 67.21 7.6 28 59.52
8.5 57 8.1 14 59.37 53.86 87.37
- 78.02 - 63.42 - 10048.67
9.6 14 7.4 41 1.3 91 94.47 77.82
8.3 99 91.7 6.9 63 80.06 92.97
71.42 5.3 56 48.32 60.13 48.72
77.21 72.19 49.43 79.06 79.56
8.4 98 61.66 51.83 30.76 6.9 82 58.45 6. 1 96 7. 14
46.26 48.21 5.1 11 5.3 46 6.9 17 2.2 88 37.65 63.03 68.46 89.37
100 80.56 8.9 93 1.7 24 7.3 00 7.9 49 93.49 69.65
51.85 5. 1 05 62.94 49.16 4.1 84 51.41
95-36 59.66 75.78 55.09 62.8 28.53 72.49 72.98 47.53 4. 1 65 92.56 89.05
44.95 8.5 20 811 .2
35.34 8.1 89 9. 11
37.17 43.72 53.31
APPENDLX D - Cornparison o Perfknance Muiagemmt Model G i t m a f
senior leaders gui& the or&;inis;ition and
EQA Examines how leaders develop and facihate the achievement of mission and vision, develop values, and ensure t the h o ~ o d management systern i s developed and
h k i n g for evidence of management coIIMifment to the
management system and that top managanent
knowledge and enthuskm of leaders, hmeffectively leaders impiement TQM, and senior management's role i the management n
The needs and expectwons o interesteci f pmies are met The quaiity poiicy is
system (qms) is pianned
Responsibility and authority i defmed s The review of the qms
1 Examines how the 1 Examine how the 1
company addresses its responsibilities to the public and how it practices g d cihnship Suaregy and policy Examines the company's strategy deveiopment and deplayment processes compaxxy's leaders are involved with representatives of society Examines how the compvry unplements its mission and vision
Examines how the company fulGIs its s d mponsibilities
Looking for f evidence o a
the planning of
p o h and
qdty objectives the quaiity management mem
q u ; i l i ~ ~ ~
&den& that the ~qpktion determines and provides the resourccs nceded to implement and &an ti the
Exunuies h m the company pians and manages its intan?l resources in order to suppon its policy and strategy and the effective operation of its processes
system and to enhance customer satisfaction
Examines how the compv~y ui;iEyses i n f o r d o n on qu;ility, customen, opemionai and
Examines how the compauy's information sysrem is m a q e d to ensuredata validity, integrity
Exvnines how the company pians and
information i s collecteci and =bed to support decision making
evidence t h t the compuiy &termines, provides and maintains the
illhsmcture needed to achieve
effectively the Company manages
resources and supplies so that material inventories are m e is mkiimised Examines how the Eompany evduates and exploits techno1og)r Examines how the ~ompany 's manages its
Na specificaiiy included
Examines how the
Examines how the compaq-es,
Dcming f i e
Company appiies Qu;ilityconcepts i t its human no resource docation and management
develops and reieves the full potend of its paformuice Examines how the Company secks input h m ernployecs and their supervisors on. . educaüon and trvnrngnceds Examines h m the Company support business objectives
Examines how the company promotes the involvement and empowerment of its people
Looking for evidence that the company ensures the necessary cornpetence for
Eduution and Training
personnel performing woiir
Exvnincs how people's kncswiedge and cornpetencies are
q ;lv uii
Examines h m the companyf eduatiod poliaes and plans consider QC management and how it reviews the effectiveness of the educationai whu eciucatiod
Examines how the
Employee wellbeing and satisfaction
organisation maintains a work enWoument that contributes to employee wdking and satisfaction
m;uded, recognised and cared for and how the company promotes the dialogue between i d and the wo~le
Examines how people are
evidence that the company pians and develops the processes a& for p d u c t
Processclualiw Examines how the ComPvIy m=%= its key product and
DcmingPrizc Great emphasis on the quaiity assurance of products and services
service design, delivery, and
Examines how the company designs, -, a =d improves its processes to support its policy and strategy
Examines the compq's performance and Unprovernent in the folluwing key
Customer satisfaction evidencë h t the company monitors inforniluon
cwomer requirements are deterrnined and fulfied with the aim of enhancing customer satisfaction
Humui resoufces organisational effecriveness r management and s;i Examines how the compvry determines requiremenw
expectation, and preferences of cunomers and
Examines what the company is achieving in &on to: Exterd customers People Society Key Performance R4ts
Prim+ concerned with quality assurance activities and
Examines the compuiy's perfonnuice and improvement in customcr sarisfaction
Examines what the zomp;uiy i s ichieving in relation to its exterd customers
perception of fuifiient of
ISO9001:2OOO 1 MBNQA 1 EQA SuppIiers/pumtn mamgamc a d performvlce Lcdnng for Ervnincr how the Examines how the &ce rhîr the manages cornp h and corncompany cv;ilu?us its supplia and manages its and selecu me ring extad nippliers based on processes pvtnerships to th& ab&y to support.itspolicy and stnregy and W P P& P ~ in accorcfance with the effective t e company's h operation o its f
Focused on excension of
management CO suppliers of the fum
APPENDIX E - Apprt ich, Deploymi it and Results Ada~ted lrom the EQA
Attributes Sound: Approach h u a clear rationaie There are wcii àefined and àeveloped processes Approach focuses on nakeholder needs Intcgnttd: Approach suppons policy and nrategy Approach is linked IO othcr approaches as appmpriate
No evidence or anecdotal Some evidence
No eviâence or anecdotai
da evidence cr
Approach is implemented Syncrnatic: Approach is deplyed in a nniauredway
No evidence or anecdod No evidence or anecdotal
Trends: T m & are positive and/or there is sunained g d p c r f o m c e
No redts or
Positive trenb and/or satisfactory pcrfomiiuicc on somc muhs
Tugcts: Targcts arc achievcd Targets ue appropriate
Positive trends and/or sustaincâ food pcrformzncc onmanyds over at leas ihrcc Y = ' FavowbIe and appropriate in
Strongly positive trends md/or sustaincd excellent pcrfomunce on mon rcsutts over at l 3ym m Favounble and appropriate in mon
Strongiy positive vmds and/or sustaincd excellent ü performance in a vcls over at leas 5Y -
No r e d s or anecdotai information
Favourable and appropriate in some
Excellent and appmpriate in mon