Unit 11

UNIT -11

Strategic Quality and System Management

Unit 11

Executive summary

Through this report we will understand the important role of effective operations and quality

management systems in determining the organizational success and effectiveness. We’ll also see how

these two systems help an organization to achieve their strategic objectives and goals. This report will

also pave the light on the effectiveness of operations management and quality systems management

with respect to a relevant quality change in an organization.

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Task 1

Introduction:

Operations management is very importance in managing every operation in an organization. An

operation refers to production, controlling, manufacturing of products and services, delivering them,

etc. Operations management of an organization always aims at improvement of operations and

addition of activities with great values, in to several specific techniques. It is not merely focussing on

the production and assembling of products in an organization, but it will take concern about each of

the strategic business units in an organization, whether it is large or small. Quality management deals

with determining and improving the quality of the operations, products and services, in an

organization. Through operations and quality management, the value and the reputation of an

organization will enhance. (Pfeifer, 2002). For analyzing these concepts in an organization’s scenario,

I am choosing The Ford Motor Company, one among the three leading automotive manufacturing

company in United States of America. It was founded by Henry Ford in 1903, in Michigan.

(Cotteleer, 1997).By the end of 1996, its revenue had reached up to $ 150 billion. More than 3800000

employees are working under this company. In the year 1970, due to the entry of foreign

manufacturers such as Toyota, Honda etc in to the international automotive industry, the major Auto

giants such as General Motors, Ford and Chrysler etc have lost their market. Ford responded seriously

to this crunching, by acquiring Swedish Volvo model for successfully competing in the foreign

market and also for expanding their market, worldwide. In 2000, Ford motors had started a complete

organization re-engineering business process (BPR), plan known as, ‘Ford 2000’, which aims at

reestablishment of the company’s infrastructure as a whole. This BPR focuses mainly on the reduction

in their Vehicle Centres (VC), in to five centres for covering the operations spreading in more than

200 nations. It also aims at cutting redundancies and enhancing the information technologies for

driving Ford towards success. IT acts as the link between Ford Company and its centres in the world.

Importance of effective OP

Operations management could be defined as a process of designing, developing and supplying, the

products a006Ed services of an organization. It will also carefully ensures and manage the entire

process dealing with the productions as well as the distribution of the goods and services associated

with an organization. It will help to ensure the complete and effective utilization of the important

resources available for the organization, for achieving its strategic objectives. Operations management

will also ensure the quality of products and services offered by an organization, as per the demands of

the customers. (mitsloan.mit.edu). Operations management will define the actual expectations of the

people, design and develop the products and services according to the demands, manage the inventory

process, Analyses the efficacy of every processes in an organizations. Through OM, we could identify

the actual capacity of the existing operations; improve the processes for enhancing the lifecycle of the

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products and services offered by them. OM also plays an important role in properly managing the

technologies associated with each operation in an organization. (www.jpcmediallc.com) In Ford

Motor Company, the operations management department is the major one that determines the

perfection of all operations that transform their resources and raw materials in to finished goods and

products. The key functions of OM department in Ford include: Choosing the products and processes

designing the methods for development and manufacturing Control the operations associated with

determining the performances, quality and quantity of products and services Inculcate necessary

changes and improvements for the existing operations for enhancing productivity, performance and

quality standards. Determine the standards of the operations and improve it to global standard levels

Update and review the whole processes and procedures running within the organization.

OP Process in Meeting Organisations

The effectiveness of the OM process of every organization could be analyzed and measured using

several variables, including the performance, productivity and profitability of the organization. Ford

Company is following two processes, namely, lean manufacturing and outsourcing for enhancing the

OM. Through these two processes the company had achieved compete production and operation

management as well as enhancement of whole business processes. Lean manufacturing ensures a

streamlined flow of value for the stakeholders by minimizing the wastage of resources and inventory.

Through outsourcing Ford ensures, lower as and competitive cost for the products sold. Through these

two characteristics of OM on Ford they have achieved competitive pricing which brought them

sustained competitive advantage in the competitive automotive industry. It enhances the productivity

and profitability of the organization. (www.ventureoutsource.com). For the perfection of the

processes, an improved process combining the lean manufacturing and outsourcing known as, Lean

management outsourcing has been introduced to Ford, in recent years. Through the lean thinking

operations Ford has achieved perfect production of products with unmatched quality standards. The

integrated JIT system and time based management system also helped them a lot for remain

competitive and sustain that competitiveness in the industry.

Task 2

Quality management systems

Quality management systems play an important role in ensuring the effectiveness and perfection of

products and services along with high standards of quality. Operations and quality management are

just like the two sides of a same coin. Both these systems are critical in determining the

accomplishment of organizational objectives and targets. According to the Quality Guru, Juran, the

quality management consists of a trilogy of functions including, Planning, assurance and control of

quality. But in addition to this trilogy, quality improvement is another major aspect of Quality and

system management. Thee quality system in Ford is quite good through which they accurately

identifies the quality requirements for its products and adopt different methods for achieving high

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quality. (Rose, 2005) These QS helped Ford to accomplish its vision, ‘to become the most trusted

brand in the automotive industry’. Through high levels of quality products, Ford achieved trust and

loyalty from its customers. This will generate competitive advantage and helps to sustain it for a long

time. The loyal customers are invaluable assets to an organization. Through high quality products and

services, Ford retains its existing customers and attracts new customers towards the company. The QS

of Ford focuses mainly on its customers, for enhancing the customer satisfaction through which they

could achieve the market leader position. For ensuring the quality Ford has introduced the six sigma

strategy in all the operations. They have developed a well trained group of people headed by efficient

managers called Black belts. (Pfeifer, 2002). The six sigma strategy focuses mainly on the customers,

their demands, the philosophy and the perfection. This six sigma strategy has been considered as the

best practice in quality and systems management, which could be followed by many organizations.

Quality Management Process in meeting an Org

Through the six sigma strategy introduction in to the QS of Ford they have achieved high quality

products and services, which ensure high levels of customer as well as employee satisfaction. All

these led to the enhancements in profitability and increased revenue for the company as a whole.

Through introduction of enhanced systems for quality management, they have reduced the wastage of

resources which helped them to develop competitive pricing strategies for their high quality products

and services with a certain margin of profit. Through quality systems and development of quality

circles in the organization, they have achieved highly motivated employees who work as a team for

the achievement of organizational objectives. (www.ehow.com). They also have introduced different

approaches for ensuring quality such as, DMIAC, DFSS along with the six sigma strategy. Several

quality tools such as, Pareto diagram, tree diagram, process mapping, root cause analysis etc, were

followed in Ford ensuring high quality of products and services as well as operations.

(www.corporate.ford.com). The quality system management in Ford focuses on three factors:

Customer: all the processes in QSM focused for developing customer satisfaction through delivering

products and services of high quality overcoming their expectations. Processes: they analyzed every

operation in the perspective of the customers and identified the essential improvements for ensuring

high levels of quality. Employees; only through employee satisfaction, company could generate

customer satisfaction. Before introduction of Six sigma strategy all the employees were given proper

training and development for ensuring high levels of quality The six sigma strategy:

Critical to Quality: Attributes most important to the customer Defect: Failing to deliver what the

customer wants

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Process Capability: What your process can deliver

Variation: What the customer sees and feels

Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and

feels Design for Six Sigma: Designing to meet customer needs and process capability Through the

introduction of this six sigma strategy, Ford has achieved world class quality for its products and

services, which helped them to achieve their strategic objectives.

Task 3

Strategic Quality Plan

This plan ensures high quality of products and services along with enhanced organization

performance. The formulation and execution of the strategic quality plan is not an easy task. It is a

tough job for all professionals and managers in the OM and QSM department to critically analyze and

identify the issues existing related to the quality and introduce methods and techniques for

overcoming these issues. The strategic quality planning process could be divided in to several steps:

Finding out the quality initiatives

Identifying the expectations and demands of the customers

Ensures the involvement of the employees in maintaining quality.

Facilitates benchmarking

Setting up of the long term goal and vision

Developing new standards for quality

Ensuring the effectiveness of the operations

Evaluation and monitoring the strategy with the help of several tools and techniques. In Ford, for the

proper introduction and management of quality change, they have developed a strategic quality plan,

based upon the famous ABCDE model. This model describes a step by step approach for the

development of the plan that will ensure high quality standards throughout the organization.

Assessment: this step involves the thorough analysis of the external and internal environment, the

availability of resources, the gathering of information, analysis of existing situations, SWOT analysis

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for revealing the strengths, weaknesses, opportunities and threats. Baseline: this step comprises of

analysis if the past to identify where were we?, detailed analysis of present situation, to understand

our current status with respect to quality, and forecasting for future, to realize the future requirements

of quality and formulate the plans for achieving it. All the existing gaps were identified and plans

were developed for filling these gaps in this step. Components: all the important resources, values and

mission of the organization should be analyzed and the strategic vision and targets are developed

Down –to-specific: in this step the actual plan for the achievement of set targets, incorporation of

several performance measurement systems etc are developed Evaluation: the entire process will be

monitored and evaluated on a regular basis, for measuring the progress. Introduction of several

techniques including, Balance scorecard, 360 degree feedback etc could be adopted. While developing

the goals, care should be taken that the developed target should have all the essential features to be a

SMART objective. Specific: the objective should be specific and should help in the management of

other organizational objectives. Measurable: through executing this change in strategy, the achieved

results should be measurable for the organization, in order to understand whether the organization

achieved the expected target pr not. Achievable: all the strategies and the processes should be

formulated in such a way to achieve the set targets. Then only the organization could achieve

enhancements in quality and operations management. Realistic: all the changes in the quality system

should be realistic. If the set outcome is not realistic, it will affect the quality management process of

the entire organization. Time bound: all these developed targets should be achieved within a set time

frame. The quality change process and the implementation for the new quality plan should have a

definite time period to achieve the tasks. After the successful achievement of one goal, the

organization will focus on the next.

Resource implications:

All these functional activities including OM and QSM in Ford are based upon the availability of

resources. The important resource implications will be:

Human Resources:

The human resources of the organization are considered to be the most potential resource capable of

bringing about any significant change in to the organization, in an expected manner. The employees

are the actual agents of the quality change in Ford. Before introduction of the quality change, the

introduction of Six Sigma strategy in 2000, all the employees were given proper training and

development for meeting the required standards. (Landale, 1999) They are needed to be motivated

continuously for enhancing their performance.

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Financial

resources:

This is another major resource essential for the smooth running of the organizational functions

including quality management. The quality management processes and strategies were determined

and formulated on the basis of available financial resources in Ford.

Tools and techniques:

Several tools and techniques are being used in Ford Company for bringing about the quality change,

introducing it, and for evaluating it. The success and progress of the whole process has been evaluated

using various tools. The model of continuous development has been used as a powerful tool for

management

there are various internal systems available in Ford for monitoring the performance and progress of

the whole process. All these systems are specially designed for continuously monitoring and

measuring the QSM processes within the organization.

Wider implications of the planned strategy:

There are several implications of the strategy from both internal and external environment of the Ford

Motor Company. Financial performance:

We could analyse the improvements in performance of an organization by simply looking at its

financial stability and performance. Financial performance is a good indicator of the organizational

performance. If the organizations are unstable in their financial aspects, they could not enhance their

efficiency of business. For implementing a quality change and for achieving successful

implementation, an organization should have a thorough financial status and stability. Customer

satisfaction:

Through enhanced customer service, Ford could easily achieve increased levels of customer

satisfaction. This could be achieved through improved customer services, which helped Ford to

understand the actual needs, demands and expectations of its customers, which is crucial for the

development of the organization. (Gitlow, Oppenheim, Oppenheim, & Levine, 2007). Satisfaction of

the employees;

Only satisfied employees could deliver their maximum services to the customers for developing

customer satisfaction. Therefore, the employee satisfaction could be reflected on the results and

outcomes of the organization. For achieving this, the organization should find out the causes of failure

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and should correct them accordingly. Always improve the process and procedures for enhancing

quality. Research about the internal and external factors and environment and gathering the

information and analyze the data carefully. For the successful implementation of the quality change,

flexibility of the employees and the organization is an essential factor.

It is more important to continuously evaluate and monitor the quality management process and

change, after implementation, for the successful implementation of the quality change in an

organization. Formulation of a good strategic quality change plan could be achieved by many

organizations, while they fail to monitor the progress of the process and the strategy, in a regular

basis. This ends up in the failure of the entire processes. Ford followed the Total Quality Management

system for monitoring the whole process. They are following the Plan – Do- Check –Act model of

TQM for achieving this.

Through PDCA model, formulation of accurate PQM strategy, implementation of the strategy,

rechecking of the effectiveness of the TQM process and further actions for improvement are achieved

in Ford for proper quality management (www.brighthub.com)

Several other processes are also used for evaluation:

Increasing connectivity:

Through facilitating employee empowerment, work outs and increasing the communication among

the employees, management and the strategy, gathering of feedbacks etc is achieved through

enhancements in connectivity Change Acceleration Program:

This is an action plan for driving the quality change throughout the organization, successfully. This is

achieved by training and developing the employees’ right from the top managerial level to the bottom

level. Performance appraisals:

Several techniques for performance measurements, Benchmarking, assessments and reassessments etc

are conducted in Ford Company, in a regular basis. Facilitate the participation of the employees for

ensuring successful change in Ford.

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Task 4

Monitoring the change in Ford:

The implementation of the monitoring and evaluation strategies for reviewing the process of change

management in Ford was more difficult than executing the actually quality change strategies in the

organization. The most commonly used methods for monitoring the change management are

discussed below:

Surveys:

Several types of surveys such as customer surveys, stakeholder’s survey etc will help to monitor the

effectiveness of the quality change in Ford. The customer and stakeholder survey are also aimed at

enhancing the relationship and facilitating their involvement and participation in the change process.

The customers and the stakeholders could give a correct evaluation of the process of change,

including the improvements and disadvantages of the quality management system of Ford. Step-by-

step evaluation:

Ford follows the step by step method of reviewing the quality process. Through this process Ford

could easily identify the quality of its products and services in each stage and identify the issues at

each stage. This will enhances the accuracy of the QSM process in Ford.

Action Planning:

Through this process, Ford become more intentional as they progress through the quality change

process. This process is a step by step process involving development of quality change objectives,

development and execution of the plan for achieving those targets, gathering the feedbacks and

evaluation, improvements in the process if necessary. (Jackson, 2009).

Quality culture:

Quality culture will ensure a standard of quality which is incorporated in to the entire operations of

the organization, which leads to the development of quality environment inside s well as outside the

organization. Quality culture focuses at enhancing the employee satisfaction as well as customer

satisfaction. In Ford prior to the introduction of the Quality culture, a change was happened in the

management levels for ensuring success of the process. (www.blurtit.com). The quality culture of

Ford has been developed based upon 6 principles, which are explained below in fair details:

Togetherness in work for the accomplishment of the common target: The employees, suppliers,

customers and the company as a whole will work together for the successful implementation of the

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quality change in Ford. Ford treats all its stakeholders, customers and employees as the contributors

for implementing the quality management process within the organization. Each and every employee

of Ford will have a personal identification and commitment towards the company, which will

facilitate the success of the company as a whole. (Dowd, Tilson, & Carlton, 2002). Lack of

subsidiaries and superiors:

In Ford, all the stakeholders are treated as equal. No priorities are given to anyone, as they all have

got equal rights in the organization and have equal participation in the whole process. The qualities

and potentials of the stakeholders especially of that of its employees were correctly identified,

developed and utilized in the organization, which will contribute towards the success of the entire

organization. (Gitlow, Oppenheim, Oppenheim, & Levine, 2007) Facilitate effective communication:

Another important principle of quality culture of Ford is excellent communication among the

employees, management and the stakeholders. This will generate principle which is another basic

principle of the organization. Through communication and interaction the company will listen to the

opinions and ideas of the stakeholders and could incorporate them in to the organizational processes.

Free access to all information:

All the stakeholders are free to get all the information relating to every operational process in the

organization. Focussing on operations:

It is the various operations in Ford that will in turn determine the actual quality standard of the

products and services offered by the company. Therefore all management systems should be focused

on the processes for sustaining an excellent quality culture within the organization. Take every

success/failure as experiences:

They won’t focus on the intensity of the success and failures happening in the organization. Rather

than that, they will take all these success and failures as some experiences which helped them to judge

the corresponding strategy or process in the organization. They are developing their quality culture

through experience.

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Task 5

Strategic Quality Change in an Org

Continuous improvements of quality management and operations management systems are essential

for maintaining the high quality and operation standards in the organization. Changes have to be made

in these processes and strategies based upon the changes happening in the external and internal

environment of the organization. the major improvements I expect to happen in Ford company after

the quality change are as follows: Enhancements in customer satisfaction: as the quality of the

products and services increases, the customers will become more satisfied leading to the development

of loyalty, which generates a sustained competitive advantage for Ford. Improved employee

satisfaction: as the quality of products and services increases the employees will feel enthusiastic and

become more satisfied. This will enhance their confidence for delivering maximum performances.

Enhanced CSR: Ford is aiming at enhancing the value of its stakeholders through, which is their

major objective of Corporate Social Responsibility. This will be accomplished through the

advancements in the QSM and OM of Ford. Enhancements in profit and revenue:

Improvement to Strategic quality Change

After the introduction of six sigma strategy and TQM measures in Ford, it financial stability rises and

its profitability increases to several folds. Also their market position is also improved.

Many more advancements and improvements could be introduced in to the QSM as well as OM of

Ford. As they follow the best practice of Quality management, continuous improvement is inculcated

within the strategy. The existing quality systems in Ford could be further improved by following these

steps: Introducing advanced, continuous monitoring systems: through real time monitoring systems,

continuous evaluation of the entire quality management systems and processes, operations

management systems etc are achieved. Facilitate action learning: this unique method of collaborative

learning should be introduced in Ford for building up team of learner’s were developed known as

Action learning Set. These groups were met in a regular basis to share the ideas, opinions, feedbacks,

and issues related to quality and operations management. Through action learning, people will face

the problem and then learn to solve them. (www.cipd.co.uk) Employee empowerment: facilitation of

motivation and employee empowerment will enhance the quality management system, as the

employees feel more committed due to their increased involvement. Performance measurement: the

performance of the quality systems are analyzed during each stages and feedbacks were collected

accordingly for further improvement of the processes Continuous improvement of quality and quality

systems.

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Conclusion:

Operations and quality system management are considered as the two inevitable factors in

determining the success of an organization as a whole. In this report we have discussed about the

effectiveness and importance of OM and QSM with respect to the chosen organization, Ford Motor

Company. E have also developed a quality change plan and identified the major resource implications

for implementation of the plan. E have also discussed about the six sigma strategy and the Total

Quality Management following in Ford. We have looked in to the evaluation techniques and further

improvements in the quality systems with respect to the quality management in Ford. Every

organization should understand the importance of OM and QSM and should pay more attention to

these departments as they contribute a lot for the organization’s achievement of objectives.

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