T9: Quality Management and Operations Improvement (Ch 12 & 13)
Quality defined as: 'consistent conformance to customers' expectations'
Measuring quality
'variables and attributes' approach (p.407)
'cost of quality' approach (p.409)
Market research
Quality function deployment (QFD)
Also called:
Attribute - a binary acceptable or not acceptable judgement
Variable - measured on a continuous variable scale
Prevention costs - to prevent errors
Appraisal costs - to check for errors
Internal failure costs - errors that are corrected internally
External failure cost - errors experienced by customers
Generally accepted that spending more on 'prevention' will create more than equivalent savings in the other three
Quality control
Monitoring and responding to deviations
Method
Statistical process control (SPC)
Quality management
Approaches
Total quality management (TQM)
Built on from 'quality control (QC)' and 'quality assurance (QA)'
A more all embracing approach to quality management, including all functions in an org, i.e. HR/Accounting/Marketing/etc
Popularised in the 70s/80s
Although not as fashionable now, its ideas have become generally accepted practice
A perception-expectation model of quality (p.405)
Gap 2: The concept-specification gap
Gap 3: The quality specification-actual quality gap
Gap 1: The customer's specification-operation's specification
Gap 4: The actual quality-communicated image gap
Some quality characteristics (p.407)
Reliability
Durability
Appearance
Recovery
Functionality
Contact
what to measure?
Characteristics - i.e. the actual specified requirements
Perceptions - the customers perception of the product
100% checked or samples?
Problems with 100% checks
Consider
Dangerous?
Destroy product or service?
Too costly?
Fatigue and accurancy
Info unreliable anyway
Too difficult
Error type
Type I error - decision to act when shouldn't have
Type II error - decision NOT to act, when should have
'Voice of the Customer' because of what it is trying to say
'House of quality' because of the shape
See p.203 for example
Service level agreements (SLAs) (p.402)
Can be both external and internal
Can be helpful to formalise agreed priorities
Can be unhelpful in building relationships/partnerships as too contractual and create silos
Operating/operational level agreements (OLAs)
Agrees points around HOW the SLAs agreement which actually happen
Originates and still more common in IT settings
Asserts that every person has the ability to impair quality, and therefore every person has the responsibility to improve quality
ISO9000 (p.415)
Used by over a million organisations in almost every country in the world
A universal process focus method of guiding quality
ISO = International Standards Organisation
Quality Awards Programmes
The Malcolm Baldrige National Quality Award - from America
The EFQM Excellence Model - European
The Deming Prize - from Japan
Approaches
The performance gap (p.442)
General
The Red Queen effect (Alice) - that by innovating as fast as your competitors, you will appear only to be standing still, you must innovate twice as fast to actually get any where
Define: improvement as closing the gap between current and desired improvement
- Assessing current performance
- Derive target levels
- Compare current and target levels in a way that demonstrates a need to improve
Which are the most important performance measures? Requires strategic clarity
What detailed measures to use? see table 13.1 p.444
What factors to include as performance measures? see table p.443
'Customer satisfaction', 'Overall service level', 'Operations agility'. etc
'Achieve ops objectives', 'Achieve financial objectives', etc
Speed, quality, cost, flexibility, dependability
Balanced Scorecard (p.445)
Includes:
Customer satisfaction
Internal processes
Learning and growth - innovation and other improvement activities
Addresses:
What must we excel at? - Internal processes
How do our customers see us? - Customer
How do we look to our shareholders? - Financial
How can we continue to improve and build capabilities? - Learning and growth
Historical based targets
Strategic targets
External performance-based targets
Absolute performance targets (perfection)
Depending on which target you choose to use and compare to, could derive very different judgements of current performance
Traditional financial measures (past)
Benchmarking (p.447)
Some types (not mutually exclusive)
Internal benchmarking, i.e. branches
External benchmarking, other organisations
Non-competitive benchmarking, comparing with other industries
Competitive benchmarking, own industry
Performance benchmarking, compare against own PObs, then competitor against some criteria
Practice benchmarking, compare specific systems and procedures against another organisations
As an improvement tool
Not about solutions, just ideas that may lead to solutions
Not about copying, but rather adapting
Not a 'one-off' project, but a continuous assessment
Needs resourcing
Basic rules
Use public information
Do not discard info too quickly
Must be clear on your own processes first
Be sensitive when asking for information
Strategic imitators (p.448)
The fast second - always just one step behind, saving it the initial problems (Apple)
The come from behind - a slow follower but aims to differentiate
The pioneer important - takes someone elses idea into a different market
The sandcone theory - building a foundation through the performance objectives
The importance-performance matrix (p.450)
The ' improve' zone
The 'urgent-action' zone
The 'excess?' zone
The 'appropriate' zone