Quality Management Theory

Quality Management TheoryTerms, Concepts, & Principles

In this lecture, we will discuss different terms, concepts, and principles that we will be using throughout the course.1Acronyms Industry Acronyms:ISO International Organization for StandardizationANSI American National Standards InstituteBNQP Baldridge National Quality ProgramASQ - American Society for Quality

Quality Improvement Handbook specific terms:CQIA Certified Quality Improvement AssociateBoK Body of Knowledge

Important acronyms to be aware of are listed on the slide. The textbook, myself, and many of your readings will refer back to them. It is important to know what they stand for as well as what they mean.Industry Acronyms:ISO International Organization for StandardizationANSI American National Standards InstituteBNQP Baldridge National Quality ProgramASQ - American Society for Quality

Quality Improvement Handbook specific terms:CQIA Certified Quality Improvement AssociateBoK Body of Knowledge (the Quality Improvement Handbook is a BoK by the ASQ)

2Quality Management System ModelsThe Baldridge National Quality Program Criteria for Performance ExcellenceLeadershipSenior Leaders guide and sustain your organizations governanceEthical, legal, and community responsibilitiesStrategic PlanningDevelopment of strategic objectives and action plansDeployment along with changesMeasure of ProgressCustomer and Market FocusDetermines requirements, needs, expectations, and preferences of customers and marketsBuilds relationships with customerKey factors that lead to customer acquisition, satisfaction, loyalty, and retentionBusiness expansion and sustainabilityMeasurement, Analysis, and Knowledge ManagementSelects, gathers, analyzes, manages, and improves its data, information and knowledge assets.Reviews Performance

One quality management system model is the Baldridge National Quality Program Criteria for Performance Excellence. The key factors include leadership, strategic planning, customer and market focus, and measurement, analysis, and knowledge management.Leadership refers to having top management support as well as having a strong ethical, legal, and overall high community responsibility foundation.Strategic Planning refers to the development of strategic objectives and action plans, the deployment along with changes, and the measure of progress.Customer and Market Focus determines requirements, needs, expectations, and preferences of customers and markets. The company focuses on building relationships with customers as well as the key factors that lead to customer acquisition, satisfaction, loyalty, and retention. Finally, the customer and market focus includes business expansion and sustainability.Measurement, Analysis, and Knowledge Management involves the processes that selects, gathers, analyzes, manages, and improves its data, information and knowledge assets. This also includes reviewing performance on a continuous basis.

3Quality Management System ModelsThe Baldridge National Quality Program Criteria for Performance Excellence continued

Human Resource FocusHow work systems and employee learning and motivation enables all employees to develop and utilize their full potential in alignment with you organizations overall objectives, strategy, and action plans.Organizations efforts to build and maintain a work environment and employee support climate conductive to performance excellence and personal and organizational growth.Process ManagementKey product, service, and organizational processes for creating customer and organizational value and key support processes.Encompasses all key processes and all work units.ResultsPerformance and improvement in all key areas products and service outcomes, customer satisfaction, financial and marketplace performance, human resource outcomes, operational performance, and leadership and social responsibility.

Additional key factors that the Baldridge National Quality Program Criteria for Performance Excellence has are human resource focus, process management, and results.The Human Resource Focus includes how work systems and employee learning and motivation enables all employees to develop and utilize their full potential in alignment with you organizations overall objectives, strategy, and action plans. Also, the organizations efforts to build and maintain a work environment and employee support climate conductive to performance excellence and personal and organizational growth.Process Management involves key product, service, and organizational processes for creating customer and organizational value and key support processes. The process management aspect encompasses all key processes and all work units as well.Results means the performance and improvement in all key areas products and service outcomes, customer satisfaction, financial and marketplace performance, human resource outcomes, operational performance, and leadership and social responsibility.

4Quality Management System ModelsISO 9000:2000 Family of Quality Management System StandardsCONTINUOUS IMPROVEMENTPrinciplesCustomer OrientationUnderstanding of needs and requirements of customers. Anticipating and exceeding customers expectations.LeadershipStrong leaders to establish common goals and directionEncouraging active employee participationInvolvementEnsure that all employees at all levels can participate and use all their skills to make the organization successfulProcess ManagementManagement of activities as processes

ISO 9000, section 2000 is the Family of Quality Management System Standards model which focuses heavily on continuous improvement.Principles include the following:Customer Orientation which means understanding of needs and requirements of customers as well as anticipating and exceeding customers expectations.Leadership, we need strong leaders to establish common goals and direction and encouraging active employee participation.Involvement, ensure that all employees at all levels can participate and use all their skills to make the organization successful.Process Management is the overall management of activities as processes.

5Quality Management System ModelsISO 9000:2000 Family of Quality Management System Standards continuedSystem Management Many individual processes are interrelated and must be within the overall systemContinual ImprovementKey to long-term success and high performanceProcesses must be reviewed and continuously improved to ensure that their organization stays competitive.Fact-Based DecisionsDecisions based on factual data are more likely to make the correct decisionsClose Supplier RelationshipsPartner and work close with their suppliers ensure that both the organization and suppliers are better able to achieve success

Also included in the ISO9000:2000:System Management, many individual processes are interrelated and must be within the overall system.Continual Improvement, this is key to long-term success and high performance. Processes must be reviewed and continuously improved to ensure that their organization stays competitive.Fact-Based Decisions, decisions based on factual data are more likely to make the correct decisions.Close Supplier Relationships, we need to partner and work close with our suppliers to ensure that both the organization and suppliers are better able to achieve success.

6Quality Management System ModelsSimilarities in the Baldridge and ISO 9000:2000 quality models Strong organizational leadershipFocus on Customers Development and involvement of the organizations peopleGathering, analyzing, and using information to make decisionsProcess Management

Similarities in the Baldridge and ISO 9000:2000 quality models include:Strong organizational leadershipFocus on Customers Development and involvement of the organizations peopleGathering, analyzing, and using information to make decisionsProcess Management

7Organizational PlanningOrganizational PlanningStrategic planning development of long-range strategies including: Basic goals and objectives, external customers needs and expectations, internal stakeholders needs and expectations, risks, regulatory requirements competitors capabilities, business systems neededTactical planning translation of strategic objectives into actionable activities on a short-term basis to support the achievement of the strategic plansOperational planning development of day-to-day operating procedures addressing resources, materials and supplies, knowledge and skill sets required, processes and procedures, process improvement methods, etc.

Organizational Planning includes strategic planning, tactical planning, and operational planning.Strategic planning is development of long-range strategies including: Basic goals and objectives, external customers needs and expectations, internal stakeholders needs and expectations, risks, regulatory requirements competitors capabilities, and business systems needed.Tactical planning is the translation of strategic objectives into actionable activities on a short-term basis to support the achievement of the strategic plans.Operational planning is the development of day-to-day operating procedures addressing resources, materials and supplies, knowledge and skill sets required, processes and procedures, process improvement methods, etc.

8Quality PlanningDefinition: The process of developing a master plan linked to organizational strategy, goals, and objectives that pertain to the quality of products or services to be delivered to customersKey RequirementsPerformance indicatorsCommitment of resources to ensure that customer needs are metQuality planning is linked to the phases of organizational planning (Strategic, Tactical, and Operational)Key quality requirements and performance indicators must be established in the design, development, and implementation of all products and servicesQuality initiatives need to be associated to organization planning.

Definition of quality planning is the process of developing a master plan linked to organizational strategy, goals, and objectives that pertain to the quality of products or services to be delivered to customers include: key requirements, performance indicators, and commitment of resources to ensure that customer needs are met.Quality planning is linked to the phases of organizational planning (Strategic, Tactical, and Operational). Key quality requirements and performance indicators must be established in the design, development, and implementation of all products and services. Quality initiatives need to be associated to organization planning.

9Employee ParticipationMotivate employees to develop and utilize their full potential in support of the organizations overall goals and objectives.Empowerment employees have the authority to make decisions and take actions in their work areas without prior approval, within established boundaries.Active member in process improvementEach employee must recognize that the outputs of their individual activities provide the inputs to the next persons processRequirement of management to relinquish some of their authority and show by their actions that they expect full employee involvement and that they support actions taken by employees and decisions made by them to further the organizations goals and objectives.Generally, the person that does the work everyday is in a better position to recommend improvementsLean Manufacturing perspective eliminate wasteIs employee participation encouraged at your place of employment?

Employee participation is vital for any quality model to be successful. We need to be sure to motivate employees to develop and utilize their full potential in support of the organizations overall goals and objectives.Employee Empowerment means that employees have the authority to make decisions and take actions in their work areas without prior approval, within established boundaries. Ensuring that employees are active members in process improvement. Each employee must recognize that the outputs of their individual activities provide the inputs to the next persons process. This is not always easy for management because it requires management to relinquish some of their authority and show by their actions that they expect full employee involvement and that they support actions taken by employees and decisions made by them to further the organizations goals and objectives. This means NO MICRO-MANAGERS.Generally, the person that does the work everyday is in a better position to recommend improvements, which falls into play with lean manufacturing. The lean manufacturing perspective is to eliminate waste. We dont want to waste our employees expertise and skillsets, we want to use them. So, it just makes sense for employees to be involved in the decision making process.Is employee participation encouraged at your place of employment?

10Systems and ProcessesProcess Management Approach is based on the ability of an organization to:Identify all its processes Recognize the inputs and outputs of each processDocument the processes for implementationIdentify the owners of the processesImplement the processesMeasure the outcomes of the implementationContinually improve the efficiency and effectiveness of the processes

The Process Management Approach is based on the ability of an organization to:Identify all its processes ,Recognize the inputs and outputs of each process,Document the processes for implementation,Identify the owners of the processes,Implement the processes,Measure the outcomes of the implementation, and Continually improve the efficiency and effectiveness of the processes.

11System and ProcessesSIPOC AnalysisDefining the linkage system with suppliers, inputs, process, outputs, customersHelps with the understanding of how the process functions from a process management perspective.

SIPOC Analysis is defining the linkage system with suppliers, inputs, process, outputs, and customers. The SIPOC analysis helps with the understanding of how the process functions from a process management perspective.

12VariationSpecial Cause Variation Unexpected causes that cannot be avoided and are not normal to the process. 15% of the observed variations in a process. Generally, the individual using the process can detect and remove the variation from the process.Change in materialSystem malfunctionNew employeeLeak in a water line

Common Cause Variation Natural causes that cannot be avoided without redesigning the process. A problem built into the process. 85% of the observed variations in a process. Management is responsible for providing the necessary inputs to correct the majority of variation problems as the problem is built into the process.Effects of TemperatureComputer Response Time slow sensorConveyor speed

Our last topic is variation. Variation is anything in our process that is different. It may be a scratch on our car that we produced or it may be a late package that we delivered. The goal of quality is to eliminate all variation. To have each process develop the same product with perfection to the specifications each and every time.There are two different types of variation, special cause variation and common cause variation.

Special Cause Variation is unexpected causes that cannot be avoided and are not normal to the process. They account for 15% of the observed variations in a process. Generally, the individual using the process can detect and remove the variation from the process. Examples include: unexpected change in material, a system malfunction, new employee, or leak in a water line.

Common Cause Variations are natural causes that cannot be avoided without redesigning the process. A problem built into the process. These account for 85% of the observed variations in a process. Management is responsible for providing the necessary inputs to correct the majority of variation problems as the problem is built into the process. Examples include: effects of temperature (you cant change the weather), computer response time such as slow sensor (it may be their for a purpose), or conveyor speed (increase it and it could send products flying across the room).

An example would be you are late for work. A special cause variation would be that you had a flat tire and no spare to fix it with. You can fix this, we make sure that you have a spare tire. A common cause variation would be that you are late due to traffic. You can not fix the traffic situation, this is a problem built within the process and management must fix this (the government). However, say you decide to try to fix it anyway, you may be tempted to take a different route. The alternative route would be to instead of driving on the expressway, you drive through the city on back roads. This may cause a whole new set of issues due to stop lights, bus stops, etc. As an employee you should not try to eliminate this problem because new variations (train stops, etc) may come up. The management of the traffic has to do this, like the government designing a bigger expressway or alternative routes. Of course in this situtation, the best option is to leave your house early and deal with this variation.13SummaryAcronymsQuality management system models including: Baldridge National Quality Program Criteria for Performance Excellence ISO9000:2000 Family of Quality Management Systems StandardsOrganizational PlanningEmployee ParticipationSystems & Processes including the SIPOC AnalysisVariation: Common Cause and Special Cause

In this lecture we have discussed:Acronyms, Quality management system models including: Baldridge National Quality Program Criteria for Performance Excellence & ISO9000:2000 Family of Quality Management Systems Standards,Organizational Planning,Employee Participation,SIPOC Analysis, and Variation.14