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

  1. Assessing current performance
  1. Derive target levels
  1. 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