Contents
Organizational Effectiveness . ' 2
What is an effective organization? 4 'How is an effective organization created? 10 . . , ;
What benefits can be gained from creating an effective organization? 16Lessons Learned 16 • . • • • • . , •••;•••-. .
Chapter Questions 18
Organizational Philosophy • • ' 20
What are the key philosophical elements to delighting customersand generating organizational success? 22 .
Who are the individuals, and what are their philosophies? .24Lessons Learned 48Chapter Questions 51
Quality Systems ( 52
What standards and criteria exist to support effective qualitymanagement systems? 54 •
What is ISO 9000?. 54 ., ,, ....What are supplier certification requirements?. 61 •• ..• ;.. ;What is ISO. 14000? 63 ' ' ' . . ' , V . . . . . . ' • •What is Six Sigma? 66 . - . - ; 'What is the Malcolm Baldrige National Quality Award? 75 •Lessons Learned 80Chapter Questions 85 ; , . • : - > - • •-. ;•; . .., .-.
Creating a Customer Focus • v 90
Why is a focus on customers so important? 92 ' " ' . . ' • ,.How do customers define quality? 92 "'• iHow do customers define value? 94 ' !What is the difference between satisfaction and perceived value? 95 -•••••Why is it important to understand how the customer views the process? 96How does an effective organization create an unwavering focus,
on customers' requirements, needs, and expectations? 97How do effective organizations know what their customers want? 99.How do effective organizations capture the voice of the customer and
turn that voice into actions that drive customer-perceived value? i 100How can the Malcolm Baldrige National. Quality Award criteria help
an organization create a more effective.customer focus? 114
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CONTENTS
Lessons Learned 115Chapter Questions 117
Organizational Leadership 124
What is expected of leaders? 126How do effective leaders create an organizational culture focused on
creating value for their customers? 126How do effective leaders translate the vision and mission into day-to-day
activities? 135What are the different leadership styles of effective leaders? 137How do effective leaders manage by fact and with a knowledge
of variation? 138How do effective leaders practice ethical behavior and good ,
citizenship? 141How can the Malcolm Baldrige National Quality Award criteria help
an organization's leadership become more effective? 141Lessons Learned 143Chapter Questions 146
Strategic Planning 154
What is strategic planning? 156How do strategic plans give an effective organization a competitive edge? 161How do strategic plans support customer satisfaction and perceived value? 162How are strategic plans created? 163How do effective leaders create organizational alignment through strategy
deployment? 169How can the Malcolm Baldrige National Quality Award criteria help
an organization's leadership create effective strategic plans? 172Lessons Learned 174Chapter Questions 176
Human Resource Development and Management 184
How do employees create an effective organization? 186 - • :How do effective employees enable an organization to create value for
their customers? 188How do leaders in effective.organizations,motivate employees? 188How do leaders in effective organizations manage change? 192What modifications do effective organizations make to their reward system to
support the desired culture? 196' " ' ' ',,What types of education and training do effective organizations provide for their
employees in order to remain competitive? 199How do effective organizations use teams? 201
CONTENTS
How do individual personalities affect team performance? 203What needs to happen in order to have effective meetings? 206How can the Malcolm Baldrige National Quality Award criteria help
an organization's human resources become more effective? 208Lessons Learned 210Chapter Questions 212
8 Managing the Supply Chain 220
What is a supply chain? 222What are the benefits of effective supply chain management? 222What are the elements of effective supply chain management? 224What challenges face the development of an effective supply chain? 238How does supply chain management relate to the Malcolm Baldrige
National Quality Award? 238Lessons Learned 239Chapter Questions 241
9 Measures of Organizational Success 248
Why measure? 250What are good measures of performance? 250How are measures of performance utilized in an effective organization? 261What are the goals of a measurement system? 262What role does the cost of quality information play in an effective
organization? 265How are quality costs defined? 267What types of quality costs exist? 270What does a formal quality cost measurement system look like? 274How are quality costs utilized for decision making? 275How do the Malcolm Baldrige National Quality Award criteria support
measurement, analysis, and knowledge management for effectiveorganizations? 277
Lessons Learned 279Chapter Questions 281
1 0 Benchmarking 288
How does benchmarking help an effective organization measureits success? 290
What is the purpose of benchmarking? 291What types of benchmarking can be performed? 292What are the benefits of benchmarking? 293What are the different standards for comparison? 293How is benchmarking done? 295
CONTENTS xi
How do the Malcolm Baldrige National Quality Award criteria viewbenchmarking? 297
Lessons Learned 298Chapter Questions 299
1 1 Process Management 308
What is a process? 310How are key processes identified? 311What is the difference between a functionally structured organization
and a process-focused organization? 312Why do functionally structured organizations have more difficulty
focusing on key processes? 313What benefits does a process orientation provide? 316How do well-managed processes create value and generate customer
satisfaction? 316How are processes improved? 320Why is it important to determine the objective of the process as it relates to
the customer? 320Why is it important to identify the boundaries of the process? 322Why is it important to involve individuals from key activities in the process
improvement effort? 323, What is meant by process ownership? 323
Why is it necessary to create a process map by identifying all of the activitiesin the process? 323
Why should an effort be made to separate the non-value-added activitiesfrom the value-added activities? 330
Why should non-value-added activities be eliminated? 332What is variation, and why should it be eliminated? 335Why is it critical to determine whether the remaining value-added activities
are truly the "best practice"? 336Why should the process be redesigned using the knowledge gained during
the improvement effort? 336How do the Malcolm Baldrige National Quality Award criteria support
process management? 337Lessons Learned 340Chapter Questions 341
1 2 Lean Tools and Techniques 352
What is lean thinking? 354What is value stream process mapping? 356What is kaizen? 358What are the five Ss? 360What is kanban (pull inventory management)? 364
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What is error proofing (poka-yoke)? 365What is productive maintenance? 367What is setup time reduction (single minute exchange of dies
[SMED])? 370What are reduced batch sizes (single piece flow)? 371What is line balancing? 372What is schedule leveling? 374What is standardized work? 374What is visual management? 378Lessons Learned 378Chapter Questions 380
1 3 Problem-Solving Tools and Techniques 382
How does an effective organization make value-driven improvements? 384What are typical steps in a problem-solving process? 388What happens during the "Plan" phase? 388What happens during the "Do" phase? 437What happens during the "Study" phase? 439What happens during the "Act" phase? 440Lessons Learned 444Chapter Questions • 446
1 4 Project Management 454
Why do organizations engage in project management? 456What are the characteristics of a project? 456How are projects selected? 456What is a project proposal? 458What are the components of an effective project proposal? 460What are the characteristics of clear project goals and objectives? 460What are the components of an effective project plan? 463How are projects scheduled? 465How are resources budgeted? 476What are contingency plans and change control systems? 476What is project control? 476What must a project manager do in order to be effective? 478Lessons Learned 479Chapter Questions 481
1 5 Business Results 484
Why are business results key to effective organizations? 486How does auditing allow an effective organization to see its progress? 490What types of audits exist? 491
ORGANIZATIONAL EFFECTIVENESS xni
How is an audit designed? 491What do effective organizations audit? 493What happens when the audit is over? 496How do the Malcolm Baldrige National Quality Award criteria encourage
a focus on business results? 497Lessons Learned 498Chapter Questions 500
Appendix 1 Z Tables
Appendix 2 X and R Chart Factors
Appendix 3 Malcolm Baldrige National Quality AwardOrganizational Effectiveness Evaluation
Websites for Quality
Attribute Charts
Appendix 4
Appendix 5
Glossary
Answers to Selected Problems
Bibliography
Index
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