Strategic Quality Planning

When an organizations chooses to make quality a major competitive edge

(differentiation), it becomes the central issue in strategic planning.

This is especially reflected in vision, mission and policy guidelines of an

organization.

An essential idea behind strategic quality planning is that the product is

customer value rather than a physical product or service.
This feat cannot be achieved unless an organization creates a culture of quality
and no strategy and plan can be worthwhile unless it is carefully implemented
The process starts with the principles that quality and customer satisfaction are
the center of an organization’s future.
It brings together all the key stakeholders.
It can be highly effective, allowing the organizations to do the right thing at the
right time, every time.

There are seven steps to strategic Quality Planning:

1.Discover customer needs
2.Customer positioning
3.Predict the future
4.Gap analysis
5.Closing the gap
6.Alignment
7.Implementation
1. Customer Needs:
The first step is to discover the future needs of the customers.
Who will they be?
Will your customer base change?
What will they want?
How will they want?
How will the organization meet and exceed expectations?

2. Customer Positioning:
Next, the planners determine where organization wants to be in relation
to the customers.
Do they want to retain, reduce, or expand the customer base.
Product or services with poor quality performance should be targeted for
breakthrough or eliminated.
The organization’s needs to concentrate its efforts on areas of excellence.
3. Predict the future:
Predict the future conditions that will affect their product or service.
Demographics, economics forecasts, and technical assessments or projections
are tools that help predict the future.

4. Gap Analysis :
This step requires the planner to identify the gaps between the current state and
the future state of the organization.
An analysis of the core values and concepts is an excellent technique for
pinpointing gaps.

5. Closing the Gap:

The plan can now be developed to close the gap by establishing goals and
responsibilities.
All stakeholders should be included in the development of the plan.
6. Alignment:
As the plan is developed, it must be aligned with the mission, vision, and
core values and concepts of the organization.
Without this alignment, the plan will have little chance of success.

7. Implementation:
This last step is frequently the most difficult.
Resources must be allocated to collecting data, designing changes, and
overcoming resistance to change.
Also part of this step is the monitoring activity to ensure that progress is
being made.
The planning group should meet at least once a year to assess progress and
take any corrective action
 TQM In Service Organisations

1. Top-management Commitment;
2. Customer Focus;
3. Continuous Improvement And Innovation;
4. Training And Education;
5. Benchmarking;
6. Quality Information
7. Performance Measurement;
8. Employee Involvement;
9. Employee Encouragement;
10. Supplier Management
Though the service sector lags behind manufacturing in the adoption of TQM but
the increasing importance of the service sector in terms of employment potential
and contribution to national income forms a backbone of social and economic
development of a country and is emerging as the largest and fastest growing
sector in the world economy.

It is widely believed that its principles are equally relevant to service

organizations as both use facilities as inputs to satisfy customer’s needs.

Ex of service sectors:
health-care, food supply and distribution, education, banking and information
technology sectors
 1. Reasons For Failure

2. Inadequate Attention To Different QM Practices During Tqm Implementation In The Service

Organizations
3. Failure To Develop An Implementation Framework That Fits To A Specific Service
Organization
4. Lack Of Top And Middle Management Commitment,
5. Unrealistic Expectations And Time-frame, And
6. Cost Of Tqm Implementation, Under-reliance On Statistical Methods, And Failure To Develop
And Sustain A Quality-oriented Culture
7. High Expectations Of Quick Results From Tqm Initiatives;
8. Management Reluctance In Imparting Training And Education Programs To Employees For
Better Understanding Of Tqm Philosophy And Use;
9. Lack Of Consensus, Lack Of Employee Empowerment, Poor Planning, Lack Of
Communication, Management Causing Confusion, Cross Functional Teams Are Not Employed,
And Lack Of Direction And Purpose;
10. No Targets, No Attitude To Attain Higher Productivity, Lack Of Continuous Improvement
Culture, Lack Of Coordination Between Department, Employee’s Resistance To Change, And
Best Practices Of Other Companies Are Not Benchmarked
Why Training is important in TQM based organizations?
As, at the heart of TQM is the concept of intrinsic motivation-involvement in decision
making by the employees, it means more responsibility, which in turn requires a greater
level of skill.
This must be achieved through TRAINING.

Basic Steps of Effective Training Plans

The first step in training process is to make everyone aware of what the training is all
about. Thoughts suggestions should be gathered.

The second step is to get acceptance. The trainees must feel that training will be of value to
them.

The third step is to adept to adapt the program. Is everyone ready to buy into it? Does
everyone feel they are a part of what is going to take place?

The fourth step is to adept to what has been agreed upon. What changes must be made in
behavior and attitudes.
 Total Quality Management in
Services (1)
• A user of service has a few characteristics and attributes in mind that
he or she uses as a basis for comparison among alternatives.
• Lack of one attribute may eliminate a specific service firm from
consideration.
• Quality also may be perceived as a whole bundle of attributes where
many lesser characteristics are superior to those of competitors.

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 Total Quality Management in
Services (2)
• Extensive interviews with consumer focus groups identified the
following conclusions:
• Consumers’ perception of service quality results from a comparison of their
expectations before the service vs. their actual experience with the service
• Quality perceptions are derived from the service process as well as from the
service outcome.

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Total Quality Management in Services (3)
• The research also indicated that customers, across a broad range of
service businesses, have the following expectations in descending
order of importance:
1. Reliability (consistency)
2. Responsiveness (speed)
3. Assurance (competence)
4. Empathy (customer orientation)
5. Tangibles (what he/she can see, feel, smell, hear, and taste)

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Total Quality Management in Services (4)
• Service quality is of two types, normal and exceptional
• Normal: the quality level at which the regular service is delivered
• Exceptional: quality level at which “exceptions” or “problems” are handled
• This implies that a quality control system must recognize and have prepared a set of
“plan Bs” for less-than-optimal operating conditions.

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Total Quality Management in Services (5)
• There are five TQM tools:
• Taguchi method
• Pareto charts
• Process charts
• Cause-and-effects diagrams
• Statistical process control.

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Total Quality Management in Services (6)
• Three concepts are important to understanding Taguchi approach and
method
• Quality Robustness – quality robust products/services are outputs that can be
produced with uniform consistency in adverse operating and environment
conditions.
• Quality Loss Function – identifies all costs connected with poor quality and
shows how these costs increase as the output moves away from being exactly
what the customer wants.
• Target Value is a philosophy of continuous improvement to bring the product
exactly on target.

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Total Quality Management in Services (7)
• Pareto Charts- method of organizing errors, problems, or defects to
help focus on the “critical few factors” in problem-solving efforts.
• Process Charts – are designed to help us understand a sequence of
events through which a product travels. The process chart graphs the
steps of the process and their relationships.
• Cause and Effect Diagrams – One of many available tools helpful in
identifying possible causes of quality problems.

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 Total Quality Management in Service (8)
• Statistical process control is concerned with monitoring standards,
making measurements and taking corrective actions as a product or
service is being produced

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 Kaizen
Kaizen - Japanese for "improvement

When used in the business sense and applied to the workplace, kaizen refers to
activities that continuously improve all functions and involve all employees from
the CEO to the assembly line workers.

It also applies to processes, such as purchasing and logistics, that cross

organizational boundaries into the supply chain.

It has been applied in healthcare ,psychotherapy , life-coaching, government,

banking, and other industries.

By improving standardized activities and processes, kaizen aims to eliminate

waste
The Toyota Production System is known for kaizen, where all line personnel are
expected to stop their moving production
line in case of any abnormality and, along with their supervisor, suggest an improve
ment to resolve the abnormality which may initiate a kaizen.

The PDCA cycles

The cycle of kaizen activity can be defined as:
This is also known as the Shewhart cycle, Deming cycle, or PDCA.

Continuous improvement is based on a Japanese Concept called Kaizen, is the

philosophy of continually seeking ways to improve operations.

It invloves identifying benchmarks of excellent practices and instilling a sense of

employee ownership of the process.

The focus can be on:

1. Reducing the length of time required to process requests for loans in bank
2. The amount of scrap generated at a milling machine or the number of employee
injuries.
3. Continuous improvement can also focus on problems with customers or
suppliers, such as customers who request frequent changes in shipping
quantities and suppliers that to maintain high quality.
Instilling a philosophy of continuous improvement in an organization may be a
lengthy process, and several steps are essential to its eventual success.
1. Train employees in the methods of statistical process control (SPC) and other
tools for improvement quality.
2. Make SPC methods a normal aspect of daily operations.
3. Build work teams and employee involvement.
4. Utilize problem-solving techniques within work teams.
5. Develop a sense of operator ownership of the process.
Kaizen: The Life Blood of Standardized Work
Standardized work and KAIZEN are the means by which people make the Toyota
Production System work.
People are by far the most important element of the entire system.
Without the support of everyone involved, no part of the system will work.
No matter how ingenious the method of production or service may be, for
example, if the workers do not follow rules, the entire system of production control
will fall apart

KAI” means change and “ZEN” means better.

In other words it means change for betterment or improvement.
The Key Kaizen Practices
• The key Kaizen practices are:
• Mindset & Culture
• v customer orientation
• v quality control (QC) circles
• v suggestion system
• v discipline in the workplace
• v small-group activities
• v cooperative labor-management
• v relations
• v total quality control (TQC)
• v quality improvement
Production Process
• The production process are:
• v automation & robotics
• v autonomation
• v zero defects
• v total productive maintenance
• v (TPM)
• v kamban
• v just-in-time (JIT)
• v productivity improvement
new product development
Kaizen: Seven Key Concepts
1.Standardize-Do-Check-Act (SDCA) to Plan-DO-Check-Act (PDCA) -
Follow the
Shewhart cycle
2.The next process is the customer – Ask what you can do to improve
product or services that you pass along to the next process.
3.Quality first – Improving quality automatically improves cost and
delivery, while focus on cost usually causes deterioration in quality and
delivery.
4.Market-in, product out – Instead of pushing products into the market
and hoping customers will buy them, ask potential customers what they
need/want and develop products that meet these needs and wants.
5.Upstream management – The sooner in the design/pilot
test/production/market cycle a problem can be found and corrected, the
less time and money is wasted.
6.Speak with data – The statistical tools from Exhibit 4 will provide data
for convincing arguments.

7.Variability control and recurrence prevention – Ask ‘Why?’ five times

to get to the real cause of a problem and to avoid just treating the effect
of the problem.
Kaizen’s Problem-Solving Tools
• P – Plan
Pick a project (Pareto Principle)
Gather data (Histogram and Control Charts)
Find cause (Process Flow Diagram and Cause/Effect Diagram
Pick likely causes (Pareto Principle and Scatter Diagrams)
Try Solution (Cause/Effect 0who, what, why, when, where, how
• D – Do
• Implement solution
• C – Check
• Monitor results (Pareto, Histograms, and Control Charts)
• A – Act
• Standardize on new process
Kaizen’s Seven Deadly Wastes
1.Overproduction – Production more than production schedule
2.Waiting – Poor balance of work; operator attention time
3.Transportation – Long moves; re-stacking; pick up/put down
4.Processing – Protecting parts for transport to another process
5.Inventory – Too much material ahead of process hides problems
6.Motion – Walking to get parts because of space taken by high WIP.
7.Defects – Material and labor are wasted; capacity is lost at bottleneck
PDSA TQM IMPLEMENTATION
Shewhart developed a Plan, Do, Check, Act (PDCA) cycle for improvement process.
Deming modified it as PDSA. There are four phases – Plan, Do, Study and Act shown
in Fig. 4.1as follows:

Fig. 4.1 PDSA CYCLE

ACT PLAN

STUD
DO
Y
PDSA TQM IMPLEMENTATION
PLAN
• Establish objectives
• Establish a plan that will facilitate achieving goal
• Establish a measurement system

DO
• Plan for implementation
• Implement the plan on pilot basis

STUDY
• Compare the results with the objectives
• Identify gaps
• Analyze the causes for gaps and exeptional results, if any

ACT
• Standardize the procedure that met or exceeded the goal
• If there were gaps, improve the plan and carry out PDSA again.
BEGINNING PHASE OF TQM

The organization has decided to implement TQM after

analyzing the pros and cons. The CEO is prepared to commit
his time and resources, and therefore there should not be any
reconsideration whether TQM or not at this stage.

The prerequisite for the planning phase is that the organization

has set its goal to achieve TQM for long-term success.
PDSA for Continuous Improvement

Plan – The improvement team has to make a plan addressing the following
points, in particular:
~ What is the current situation/level of performance?
~ What are they expected results/level of performance?
~ How do they propose to go ahead to find out the best solution?

Do – After the QC has given its seal of approval, the approved action plan
has to be implemented in the Do phase on a pilot basis.

Study Phase – Once an improvement action is implemented on a trial basis

then the Do phase is completed and the study phase starts. In this phase, the
improvement team members have to assess the effectiveness of the
suggested solutions.

Act phase – If the QC is convinced that the process has been improved and
expected results are achieved, then the Act phase commences. In this phase
procedures are modified and issued.