Introduction to Quality and Performance Excellence | Chapter 1

I. Formal Definitions of Quality

- The totality of features and characteristics of a product or service that bears on its
ability to satisfy given needs – American Society for Quality
o Fitness for use
o Meeting or exceeding customer expectations
o Conformance to specifications

II. Performance Excellence

- An integrated approach to organizational performance management that results in
o delivery of ever-improving value to customers and stakeholders,
contributing to organizational sustainability,
o improvement of overall organizational effectiveness and capabilities, and
o organizational and personal learning.

III. Importance of Quality

- The buzzword among business in the 1980s and 1990s
- Quality problems still abound in many industries, such as automotive
- Consumer expectations are high
- “We’ve made dependence on the quality of our technology a part of life”
– Joseph Juran

IV. History of Quality Assurance

- Quality assurance in Ancient China
- Skilled craftsmanship during Middle Ages
- Industrial Revolution: rise of inspection and separate quality departments
- Early 20th Century: statistical methods at Bell System
- Quality control during World War II
- Post-war Japan: evolution of quality management
- Quality awareness in U.S. manufacturing industry during 1980s: from “Little Q”
to “Big Q” - Total Quality Management
- Malcolm Baldrige National Quality Award (1987)
- Cynicism and criticism among some business executives
- Emergence of quality management in service industries, government, health care,
education, and non-profits
- Evolution of Six Sigma
- Current and future challenge: maintain commitment to performance excellence
V. Future Influences
- Global responsibility
- Consumer awareness
- Globalization
- Increasing rate of change
 - Workforce of the future
- Aging population
- 21st century quality
- Innovation

VI. Quality in Manufacturing

a. Performance – primary operating characteristics
b. Features – “bells and whistles”
c. Reliability – probability of operating for specific time and conditions of use
d. Conformance – degree to which characteristics match standards
e. Durability – amount of use before deterioration or replacement
f. Serviceability – speed, courtesy, and competence of repair
g. Aesthetics – look, feel, sound, taste, smell

VII. Quality in Services

a. Time – how much time must a customer wait?
b. Timeliness – will a service be performed when promised?
c. Completeness – Are all items in the order included?
d. Courtesy – do frontline employees greet each customer cheerfully?
e. Consistency – are services delivered in the same fashion for every customer, and
every time for the same customer?
f. Accessibility and convenience – is the service easy to obtain?

VIII. Differences Between Manufacturing and Services

- Customer needs and performance standards are often difficult to identify and
measure
- The production of services typically requires a higher degree of customization
- The output of many service systems is intangible
- Services are produced and consumed simultaneously
- Customers often are involved in the service process and present while it is being
performed
- Services are generally labor intensive
- Many service organizations must handle very large numbers of customer
transactions.

IX. New Frontiers of Quality

- Health care
- Education
- Government
- Not-for-Profits

X. Principles, Practices, and Techniques

- Principles are the foundation of the philosophy
 - Practices are activities by which the principles are implemented
- Techniques are tools and approaches that help managers and employees make the
practices effective

XI. Quality Management Principles

- Customer focus
o Customer is the principal judge of quality
o Organizations must build relationships with customers and increase
customer engagement
o Organizations must understand customer needs and obtain feedback
o Customers are internal and external

- Leadership
o Leadership is the responsibility of top management
o Senior leaders should be role models for the entire organization
o An organization cannot sustain quality initiatives without strong
leadership

- Involvement of People
o A company’s success depends increasingly on the knowledge, skills, and
motivation of its workforce.
o Engagement
 workers have a strong emotional bond to their organization, are
actively involved in and committed to their work, feel that their
jobs are important, know that their opinions and ideas have value,
and often go beyond their immediate responsibilities for the good
of the organization
o Empowerment
 having the authority to make decisions
o “A sincere belief and trust in people”

- Process Approach
o Understand the key factors that drive workforce engagement, satisfaction,
and motivation
o Design and manage work and jobs to promote engagement
o Create an environment that ensures and improves workplace health,
safety, and security
o Develop an effective performance management system
o Assess workforce engagement and satisfaction
o Assess workforce capability and capacity needs
o Make appropriate investments in development and learning
o Manage career progression and succession planning
 - Teamwork
o Vertical—teamwork between top management and lower-level employees.
o Horizontal—teamwork within work groups and across functional lines
(often called cross-functional teams).
o Inter-organizational—partnerships with suppliers and customers

- System Approach to Management

o A process is a sequence of activities that is intended to achieve some result
o Synthesis means looking at an organization as a whole and building on
key business attributes, including core competencies, strategic objectives,
action plans, and work systems.
o Alignment means ensuring consistency of plans, processes, measures, and
actions across the organization.
o Integration builds on alignment, so that the individual components of the
organizational system operate in a fully interconnected manner and deliver
anticipated results.

- Continual Improvement
o Incremental and breakthrough improvement
 enhancing value to the customer through new and improved
products and services;
 improving productivity and operational performance through better
work processes and reductions in errors, defects, and waste;
 improving flexibility, responsiveness, and cycle time performance;
and
 improving organizational management processes through learning

- Factual Approach to Decision Making

- Mutually Beneficial Supplier Relationships

XII. Kano Model

a. Dissatisfiers—those needs that are expected in a product or service. Such items
generally are not stated by customers but are assumed as given. If they are not
present, the customer is dissatisfied.
b. Satisfiers—needs that customers say they want. Fulfilling these needs creates
satisfaction.
c. Delighters/exciters—new or innovative features that customers do not expect.
The presence of such unexpected features, if valued, leads to high perceptions of
quality.

XIII. Learning
 - Learning – why changes are successful through feedback between practices and
results
- Learning Cycle:
i. Planning
ii. Execution of plans
iii. Assessment of progress
iv. Revision of plans based upon assessment findings

XIV. Practices for Continual Improvement

- Deploying a systematic approach to continual improvement across the
organization;
- Providing the workforce with training in the methods and tools of continual
improvement;
- Making continual improvement of products, processes, and systems an objective
for every individual;
- Establishing goals to guide, and measures to track, continual improvement; and
- Recognizing and acknowledging improvements.

XV. Factual Approach to Decision Making

- Organizations need good performance measures to drive strategies and change,
manage resources, and continuously improve
- Data and information support analysis at all levels
- Typical measures:
o product and process outcomes,
o customer-focused outcomes,
o workforce-focused outcomes,
o leadership and governance outcomes, and
o Financial and market outcomes.

XVI. Data-Driven Practices

- Ensuring that data and information are sufficiently accurate and reliable;
- Making data accessible to those who need it;
- Analyzing data and information using valid methods; and
- Making decisions and taking action based on factual analysis, balanced with
experience and intuition.

XVII. Mutually Beneficial Supplier Relationships

- Suppliers include not only companies that provide materials and components, but
also distributors, transportation companies, and information, health care, and
education providers.
- Key suppliers might provide unique design, technology, integration, or marketing
capabilities that are not available within the business and, therefore, can be critical
 to achieving such strategic objectives as lower costs, faster time-to-market, and
improved quality.

XVIII. Supplier Management Practices

- Recognizing the strategic importance of suppliers in accomplishing business
objectives, particularly minimizing the total cost of ownership;
- Identifying and selecting key suppliers; developing win– win relationships that
balance short-term gains with long-term considerations;
- Establishing trust through openness and honesty, thus leading to mutual
advantages;
- Pooling expertise and resources with partners;
- Having clear and open communication that information and future plans;
- Establishing joint development and improvement activities; and inspiring,
encouraging,
- Recognizing improvements and achievements of suppliers.

XIX. TQ and Agency Theory

- Agency relationship: a concept in which one party (the principal) engages another
party (the agent) to perform work
- Key assumption: individuals in agency relationships are utility maximizers and
will always take actions to enhance their self-interests.

XX. Contrast With TQ

- TQ views the management system as one based on social and human values,
whereas agency theory is based on an economic perspective that removes people
from the equation.
- Agency theory propounds the belief that people are self-interested and
opportunistic and that their rights are conditional and proportional to the value
they add to the organization. TQ suggests that people are also motivated by
interests other than self, and that people have an innate right to be respected.
- Agency theory assumes an inherent conflict of goals between agents and
principals, and that agent goals are aligned with principal goals through formal
contracts. In TQ, everyone in the organization shares common goals and a
continuous improvement philosophy, and goals are aligned through adoption of
TQ practices and culture.
- TQ takes a long-term perspective based on continuous improvement, whereas
agency theory focuses on short-term achievement of the contract between the
principal and agent.
- TQ leaders provide a quality vision and play a strategic role in the organization;
leaders in agency theory develop control mechanisms and engage in monitoring.