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Chapter 3

Global Quality and International


Quality Standards
S. Thomas Foster, Jr.
Boise State University
PowerPoint
prepared by
Dave Magee
University of Kentucky
Lexington Community College
2004 Prentice-Hall

Chapter Overview

Managing Quality for the Multinational Firm


Quality Improvement: The American Way
The Malcolm Baldrige National Quality Award
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2000
Are Quality Approaches Influenced by Culture?

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Managing Quality for the MNF


Slide 1 of 4

Mechanisms That Firms Use In Globalizing


Licensing
By licensing, a U.S. corporation can allow foreign firms to sell
in restricted markets while using the design of the original
designer.

Partnering
Firms also seek international markets through joint ventures or
partnering.

Globalization
Globalization means that a firm fundamentally changes the
nature of its business by establishing production and marketing
facilities in foreign countries.
We refer to these firms as multinational corporations.
Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Managing Quality for the MNF


Slide 2 of 4

Global Factors That Affect Quality-Related Decisions


Physical
Environment

Task
Environment

Quality
Management

Social
Environment

Managing Quality: An Integrative Approach; 2nd Edition

Figure 3.3

2004 Prentice-Hall

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Managing Quality for the MNF


Slide 3 of 4

Exporting
Another means of entering international markets is to not
globalize but become an exporter.
Exporters produce their products and ship them
internationally.
Firms that are entrepreneurial in nature and plan their
exports effectively tend to have higher quality
For exporting firms, quality leads to lower price and
greater export success

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2004 Prentice-Hall

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Managing Quality for the MNF


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Export Quality Model


Firm
Characteristics

Product
Strategy

Figure 3.4

Performance

Low
LowPrice
Price
Entrepreneurship
Entrepreneurship
High
HighQuality
Quality
Export
ExportPlanning
Planning
Standardization
Standardization

Export
ExportSuccess
Success

Promotion
Promotion
Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
Slide 1 of 11

Malcolm Baldrige National Quality Award


The award is open to small (less than 500 employees) and
large firms (more than 500 employees) in the
manufacturing and service sectors.
It is not open to public-sector and not-for-profit
organizations.
There can be only two winners per category each year,
which limits the number of yearly awards to six.

Additional information on the Baldrige award


www.NIST.gov

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
Slide 2 of 11

Key Characteristics of the MBNQA


The criteria focus on business results. Companies must
show outstanding results in a variety of areas to win.
The Baldrige criteria are nonprescriptive and adaptive.
Although the focus on the Baldrige is on results, the means
for obtaining these results are not prescribed.
The criteria support company-wide alignment of goals and
processes.
The criteria permit goal-based diagnosis. The criteria and
scoring guidelines provide assessment dimensions.

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
Slide 3 of 11

Baldrige Award Framework

Figure 3.5

Organizational Profile:
Environment, Relationships and Challenges
2
Strategic
planning

5
HR develop. &
management
7
Business
results

1
Leadership

3
Customer and
market focus

6
Process
management

4
Information and analysis

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2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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MBNQA Categories
Category 1

Category 2

Award criteria for


leadership. The extent to
which top management is
involved in creating and
reinforcing goals, values,
directions, customer
involvement and other
issues.

Focuses on how the


company establishes
strategic directions and
how it sets it tactical
actions plans to implement
the strategic plans.
Concerned with methods,
measures, deployment,
and evaluation.

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2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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MBNQA Categories
Category 3

Category 4

Addresses the customer


and market focus. The
processes for listening to
and learning from
customers and markets
must be evaluated,
improved, and kept
current.

Information and analysis


relates to the firms
selection, management,
and use of information to
support company
processes and to improve
firm performance.

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2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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MBNQA Categories
Category 5

Category 6

Deals with human


resources focus. The
workforce is to be enabled
to develop and use its full
potential, aligned with
company objectives.

Examines the key aspects


of process management.
This includes customerfocus in design, delivery
process design for services
and products, support
processes, and processes
relating to partners.

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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MBNQA Categories
Category 7
Documents the results of
the other six categories
and requires a series of
tables and graphs that
demonstrate the
operational and business
results of the firm.

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2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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The Baldrige Process


The first step is eligibility determination.
The completed application is sent to the National Institute of
Standards and Technology (NIST).
The application is reviewed by examiners and then by
judges, who will determine whether the application will be
given a consensus score by the examiners.
Firms that are granted Baldrige site visits sometimes refer to
themselves as Baldrige Qualified.
The site visit consists of a team of 4 to 6 examiners visiting
a company over a period not to exceed one week.
One of the most important outcomes is examiner feedback.
Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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Baldrige Evaluation Process

Figure 3.6

Receive
Receiveapplications
applications

Stage
Stage22
Consensus
Consensusreview
review

Stage
Stage33
Site
Sitevisit
visitreview
review

Stage
Stage11
Independent
Independentreview
review

Select
Selectfor
forsite
sitevisit?
visit?
Judges
Judges

Review
Reviewand
and
recommend
winners
recommend winners
Judges
Judges

No

Select
Selectfor
for
consensus
consensusreview?
review?
Judges
Judges

Yes

Feedback
report to
applicant

Yes

No
Feedback
report to
applicant

Yes

Feedback
report

No
Feedback
report to
applicant

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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Feedback Report
Scoring summary is a synthesis of the most important
strengths and areas for improvement.
Individual scoring range provides insight concerning the
relative areas of strength and areas for improvement.
Scoring distribution provides the percentage of applicants
for a particular year scoring in each of the eight scoring
bands.
Examiner comments give feedback concerning the
organization.

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2004 Prentice-Hall

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Malcolm Baldrige National Quality


Award
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Being a Baldrige Examiner


Appointment to the board of Trustees for the MBNQA
Board of Examiners is a very prestigious designations.
Examiners are unpaid volunteers, and must be willing to
give up approximately 10% of their year to serve as an
examiner.

State Awards
Full-Baldrige approach
Baldrige-lite approach
Multilevel approach

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2004 Prentice-Hall

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Quality Improvement: The Japanese


Way
Deming Prize
Awarded to individuals and groups who have contributed to
the field of quality control.

Other Japanese Contributions to Quality Thought


Juran stated that the genius of the Japanese was in their
ability to maintain a focus on the minutia and detail
associated with process improvement.
There are several uniquely Japanese contributions that are a
part of the Japanese approach to production and service.

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2004 Prentice-Hall

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Deming Prize for Quality


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Deming Prize
The Deming Prize for quality was established in 1951 by
the Japanese Union of Scientists and Engineers (JUSE).
Three categories of awards
Deming Application Prize for Division
Deming Application Prize for Small Business
Quality Control Award for Factory

There is no limit on the number of companies that can


receive the award in a given year.
The Deming Prize is much more focused on processes than
is the Baldrige.
Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Deming Prize for Quality


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Deming Categories

Policy
Organization and Operations
Collecting and Using Information
Analysis
Planning for the Future
Education and Training
Quality Assurance

Quality Effects
Standardization
Control
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2004 Prentice-Hall

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Deming Prize for Quality


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Deming Categories
Policy
The first category of the
Deming Prize addresses
the areas of management
of quality policy, quality
formation, policy
correctness and
consistency, and related
topics.

Managing Quality: An Integrative Approach; 2nd Edition

Org. and Operations


The organization and
operations portion of the
Deming application
requires the applicant to
document processes for
clarifying authority and
responsibility, and
related topics.

2004 Prentice-Hall

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Deming Prize for Quality


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Deming Categories
Information
The information that is
collected for this item
includes information that
is gathered on the outside
and inside.

Managing Quality: An Integrative Approach; 2nd Edition

Analysis
The analysis category of
the Deming Prize covers
the areas of selection of
priority problems and
themes, correct use of
analytical methods, and
use of statistical methods.

2004 Prentice-Hall

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Deming Prize for Quality


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Deming Categories
Planning for the Future
To plan well for the
future, firms must
understand their present
condition well, which is
the documentation
required for this
category.

Managing Quality: An Integrative Approach; 2nd Edition

Education & Training


Applicants document
plans and
accomplishments relating
to education and
training.

2004 Prentice-Hall

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Deming Prize for Quality


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Deming Categories
Quality Assurance

Quality Effects

As discussed in Chapter 1,
quality assurance has to
do with the design of
products and the new
product development
process.

Quality effects relate to


the documentation of
benefits, outcomes, and
results of quality
improvement.

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Deming Prize for Quality


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Deming Categories
Standardization

Control

The systems of setting


standards, monitoring
performance against the
standards, and revision of
standards are
documented.

The applicants describe


how they are using SQC,
control points, control
items, statistical thinking,
and the current state of
control in the company.

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2004 Prentice-Hall

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Other Japanese Contributions to


Quality
Slide 1 of 7

Lean Production
Japanese Total Quality Control (TQC)
Visibility
In-Process Inspection
N = 2 Technique
Total Involvement of the Workforce
The Five Ss

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2004 Prentice-Hall

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Other Japanese Contributions to


Quality
Slide 2 of 7

Lean Production
Two views emerge in the literature that pertain to Lean
(a.k.a. just-in-time (JIT) manufacturing).
The first view of Lean is a philosophical view of waste
reduction. This view asserts that anything in the process
that does not add value for the customer should be
eliminated.
The second view of Lean is a systems view stating the JIT
is a group of techniques or systems focused on optimizing
quality processes.

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Other Japanese Contributions to


Quality
Slide 3 of 7

Japanese Total Quality Control


Just as the Japanese Lean approach requires attention to
detail in every aspect of the process, so does the TQC
approach.
This attention to detail runs deep in the Japanese culture.

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2004 Prentice-Hall

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Other Japanese Contributions to


Quality
Slide 4 of 7

Visibility
Problems must be made visible before they can be
addressed.
Andon or warning lights
Line-stop authority

In-Process Inspection
All work is inspected at each stage of the process.
Workers inspect their own work.

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2004 Prentice-Hall

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Other Japanese Contributions to


Quality
Slide 5 of 7

N = 2 Technique
The N = 2 technique is an alternative to acceptance sampling.
Usually, an acceptance sampling plan involves rules such as:
If 2 or fewer defects, accept the lot.
If more than 2 defects, reject the lot.

Total Involvement of Workforce


Horizontal deployment means that all departments are involved
in quality.
Vertical deployment means that all levels of management and
workers are actively involved in quality.
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2004 Prentice-Hall

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Other Japanese Contributions to


Quality
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The Five Ss. The five Ss are a sequential process that


companies follow to literally clean up their acts. The
Ss are:
Seri: organizing by getting rid of the unnecessary.
Seiton: neatness that is achieved by straightening offices and
work areas.
Seiso: cleaning plant and equipment to eliminate dirtiness
that can hide or obscure problems.
Seiketsu: standardizing locations for tools, files, equipment,
and all other materials.
Shetsuke: discipline in maintain the prior four Ss.

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2004 Prentice-Hall

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Other Japanese Contributions to


Quality
Slide 7 of 7

Quality Circles
Are natural work teams made up of workers that are
empowered to improve processes they use.

Preventive Maintenance (PM)


The idea behind this concept is that the worst condition a
machine should ever by is on the day you purchase it.

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Quality Improvement: The European


Way
ISO 9000:2000
Is the European standard for quality that has been expanded
worldwide.

European Quality Award (EQA)


The highest level is the EQA for the most accomplished
applicant in a given year.
The second level given is the European Quality Prize for
other firms that meet the award criteria.

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2004 Prentice-Hall

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European Quality Award


European Quality Award Model
People
management

Leadership

Policy and
strategy

Figure 3.7

People
satisfaction

Processes

Resources

Enablers

Managing Quality: An Integrative Approach; 2nd Edition

Customer
satisfaction

Business
results

Impact on
society

Results

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ISO 9000:2000
Slide 1 of 11

Worldwide Impact
On a worldwide basis, ISO 9000:2000 has had a much more
significant impact than any of the quality awards in terms of
the number of companies that have implemented the
approach..

Focus of ISO 9000:2000


The focus of ISO 9000:2000 is for companies to document
their quality systems in a series of manuals to facilitate trade
through supplier conformance.

ISO
Organization for International Standards
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ISO 9000:2000
Slide 2 of 11

Three Standards
1. ISO 9000:2000 - Quality management systems Fundamentals and vocabulary.
2. ISO 9001:2000 - Quality management systems Requirements.
- These are used for internal implementation, contractual
purposes, or for third-party registrations.
3. ISO 9004:2000 - Quality management - Guidelines for
Performance Improvement
- These include continual improvement and enhancing
overall performance.
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ISO 9000:2000
Slide 3 of 11

ISO 9001:2000 consists of 5 clauses.

Clause 4: Quality Management System


Clause 5: Management System
Clause 6: Resource Management
Clause 7: Product Realization
Clause 8: Measurement, Analysis and Improvement

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ISO 9000:2000
Slide 4 of 11

ISO 9001:2000 Clause 4


Quality Management System
Includes development, design, implementation, and
maintenance of quality management documents.

ISO 9001:2000 Clause 5


Management System
Outlines managements responsibility in developing and
maintaining a quality management system.

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ISO 9000:2000
Slide 5 of 11

ISO 9001:2000 Clause 6


Resource Management
This includes providing needed resources, personnel,
facilities, and the environment necessary to get the work done.

ISO 9001:2000 Clause 7


Product Realization
These are all of the requirements, including processes,
documents, customer requirements, specifications, designs,
and quality processes needed to produce a product.
This includes selecting and developing suppliers in a way that
ensures that purchased components satisfy requirements.
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ISO 9000:2000
Slide 5 of 11

ISO 9001:2000 Clause 8


Measurement, Analysis and Improvement
This has to do with analyzing process data and using the data
to improve operations and service to the customer.
This includes performing internal audits and monitoring and
measuring processes and products.
Also included are corrective action preventive action for
improvement.

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2004 Prentice-Hall

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ISO 9000:2000
Slide 6 of 11

Underlying Quality Management Principles

Customer Focus
Leadership
Involvement of People
The Process Approach
A Systems Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationship

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2004 Prentice-Hall

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ISO 9000:2000
Slide 7 of 11

ISO 9000:2000 Registration Process

Step 1: Inquiry
Step 2: Contract with registrar
Step 3: Phase 1 audit
Step 4: Certification audit
Step 5: Process audits (optional)
Step 6: Final certification audit
Step 7: Rolling certification (surveillance) audits

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2004 Prentice-Hall

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ISO 9000:2000
Slide 8 of 11

ISO 9000:2000 Registration Process


Step 1: Inquiry
Client contacts registrars
to investigate the terms
for registration and
makes a selection.

Managing Quality: An Integrative Approach; 2nd Edition

Step 2: Contract with


registrar
Registration steps are
determined and a price
is negotiated. A preassessment or gap
analysis may be done.

2004 Prentice-Hall

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ISO 9000:2000
Slide 9 of 11

ISO 9000:2000 Registration Process


Step 3: Phase 1 audit
Registrar performs an
onsite audit of the
documented quality
system against the
applicable standard.

Managing Quality: An Integrative Approach; 2nd Edition

Step 4: Certification
audit
Every element of the ISO
9000 standard is audited
several times during the
registration process.
During each 3-year
period, 100% of the
organization is audited.

2004 Prentice-Hall

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ISO 9000:2000
Slide 10 of 11

ISO 9000:2000 Registration Process


Step 5: Process audits
(optional)
The client may choose
business processes for
auditing to the
applicable standard,
allowing the client to
learn and experience the
registrars auditing
methods.
Managing Quality: An Integrative Approach; 2nd Edition

Step 6: Final certification


audit
Once the clients
documented quality
system has met the
applicable standard, the
registrar will conduct an
audit to determine the
systems effective
implementation.
2004 Prentice-Hall

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ISO 9000:2000
Slide 11 of 11

ISO 9000:2000 Registration Process


Step 7: Rolling
certification audits
The registrar returns on
either 6 month or
annual cycle.
Sometimes referred to
as surveillance audits.

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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ISO 14000
ISO 14000
A series of standards that provide guidelines and a
compliance standard for environmental compliance.

ISO 14001
The compliance standard for ISO 14000, Environmental
Management Systems.
Uses the same basic approach as ISO 9000:2000 with
documentation control, management system auditing,
operational control, control of records, management policies,
audits, training, statistical techniques, and corrective and
preventive action.
Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

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Are Quality Approaches Influenced


By Culture?
Quality Approaches are
Influence by Culture
The US approach
has historically been
command-andcontrol oriented.

The Japanese
approach is based on
an ethic of
consistency and
emphasis on
reduction of waste.

Managing Quality: An Integrative Approach; 2nd Edition

The Europeans have


adopted broad
standards that can be
adapted to the diverse
nation states of the EC.

2004 Prentice-Hall

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Summary

Managing Quality for the Multinational Firm


Quality Improvement: The American Way
The Malcolm Baldrige National Quality Award
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2000
Are Quality Approaches Influenced by Culture?

Managing Quality: An Integrative Approach; 2nd Edition

2004 Prentice-Hall

Slide 1-49

REMEMBER
Start reading your e-books!
Start summarizing
NEXT today is about CMM

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2004 Prentice-Hall

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