CHAPTER 3

STRATEGIC
QUALITY
PLANNING
The Importance of time in
Quality Management
 Two important
aspects of time

The time taken to

achieve business The speed at which
goals as a result of companies improve
quality
 A review of many studies
and writings suggests that
Real-life experience shows
time is an important
that time is a key variable
variable to consider when
in improving quality
managing successful
quality improvement

Thus, strategic planning is

Time is also an important
important for continuous
component of strategy
quality improvement
Leadership for Quality

Power of Reward Coercive

expertise power power

Referent Legitimate
power power
 LEADER SKILLS
• Knowledge helps the leader accept risk and moderate
Knowl
edge the stress

The leader must be able to communicate with other

Comm
unicati
on
leaders and subordinates

Planni
• The leader must be able to plan and make decisions
ng

• The leader must be able to formulate a coherent

Vision vision of the future
Quality and Ethics
 QUALITY

Good
Good Ethics
Business

Reliable products Ship defective

and low defect products
Companies focusing on their Environmental friendliness is
customers seen as an ethical concern

• Develop a set of ethics • More companies

⮚ By valuing employees implementing recycling
⮚ Example: Training, programs
education, health
• Making efforts to improve
⮚ Show empathy for the
environmental practices
employees
Good Quality Management = Good Ethics

Did we want to be known because of providing poor services or ship bad products?

Example:
• J.R. Simplot made a promise to
Ray Kroc at McDonald’s that
McDonald’s would never run out of
French Fries.
• They sealed their deal.
• Simplot has kept his promise.
● A study of services companies found that unethical conduct result in tarnished
customer experiences and customer dissatisfaction

⮚ Resulted in customer defections

● Integrity gets down to honesty

● Honest to our customers, employees, colleagues, family members and ourselves

● There is not a new business model that obviates the need for integrity
Quality in Halal
 QUALITY IN HALAL
• Halal industry increases rapidly
WHAT IS HALAL?
• An Arabic word meaning lawful or • Halal assurance system (HAS) set up
permitted. by companies is a basic prerequisite
• Halal are commonly used in relation to:
for application of getting Halal
certificate
• Food products
• Cosmetics • Important of HAS:
• Personal care products ▪ Ensure and maintaining the sanctity
• Pharmaceuticals and purity of the Halal products.
• Food ingredients ▪ Internal mechanism for monitoring,
controlling, improving and preventing
• Slaughtering non-conformities at Halal Critical Point
• Logistics (HCP).
WHAT IS Term that describes a comparison of
SERVICE expectations with performances.
QUALITY
?

A customer will have an expectation of

service determined by factors such as
recommendations, personal needs and
past experiences.

The expectation of service quality and

the perceived service quality result may
not be equal, thus leaving gap.
 THE CRITERIAS
RESPONSIVENESS OF SERVICE
The willingness to QUALITY
help customers and
to provide prompt (R.A.T.E.R)
service

RELIABILITY
EMPATHY
The ability to perform
The provision of
the promised service
caring, individualized
dependably and
attention to customers
accurately

TANGIBLES ASSURANCE
The appearance of The knowledge and
physical facilities, courtesy of
equipment, personnel employees and their
and communication ability to convey trust
materials and confidence
 MEASURING SERVICE QUALITY

KNOWLEDGE
GAP STANDARD DELIVERY COMMUNICATION SATISFACTION
GAP GAP GAP GAP
 CUSTOMER MANAGEMENT BY
SATISFACTION FACTS
CONTINUOUS
IMPROVEMENT

RESPECT FOR
PEOPLE
Quality as Strategy
 QUALITY STRATEGY

C0 PR
NT O
EN CE
T SS

Content refers to the variables,definition,components and concept that are included in strategy.
Process consists of the steps for developing strategy within an organization.
 PERSPECTIVE OF GENERIC STRATEGIES

COST DIFFERENTIATION FOCUS

COST OF QUALITY costs due to poor
quality

Example:
The lowest
Ink-jet colour Broad
priced items
computer
in the
printers
categories
industry. of costs :

Includes service,
maintenance and
operating the
products.
costs associated with
improving quality
PAF PARADIGM

• Direct costs of
• Two areas:
Prevention Cost

Appraisal Cost

Failure Cost
• Preventing measuring
internal failure
defects and quality.
costs and
imperfections • Activities: lab external failure
from occurring. testing, costs.
• Cost: training, inspection, test • Internal failure
quality equipment and
costs –
planning, materials,
associated with
process losses because
online failure.
engineering and of defective
tests and costs • External failure
other costs costs –
associated with associated with
assessment for associated with
ensuring quality product failure
beforehand. ISO 9000 or
quality awards. after the
production
process.
DIFFERENTIATION THROUGH QUALITY

Consider a There’s a
product you’ve decent chance
been admiring that such a
for a while that’s product will
much more benefits from
expensive that uniqueness.
the usual
market pricing.

A rival accomplishes
differentiation if the
consumer perceives
the products or
service to be unique
in some way.
 For a few products,
Neiman-
Marcus(retailer)
charges many times
the fee paid by its
competitors.

Examples: A Rolex or iPhone

Harley-Davidson is a product provides a certain
that is far more expensive status on its owner
than the ordinary motorcycle, that other products do
but dealers seem to have not.
difficulties keeping enough of
them in stock.

It is increasingly difficult to differentiate products based on quality alone.

However,
there is still much room to differentiate based on service to the customer in
many markets.
FOCUS THROUGH QUALITY
Example :
GfK Customer Incorporated
reduced the number of
A product is customers they served by 40%
mostly regional while at the same time doubling
in nature or profits. By focusing their very
aimed at a large clients for advertising
services, they can achieve
particular higher service ratings.
population
The focus is
aimed at a Focus strategy
certain can be very
consumer profitable.
group or
market
segment.

A company that emphasizes cost will use different approaches to

producing quality products than will a company that emphasizes differentiation or
focus.