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CREATING QUALITY AT STRATEGIC, TACTICAL AND OPERATIONAL LEVEL

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Total Quality Management ­ MGT510
VU
Lesson # 31
CREATING QUALITY AT STRATEGIC, TACTICAL AND OPERATIONAL LEVEL
In 1950 Deming drew the following picture on a blackboard for a handful of Japanese executives:
Consumer
Design and redesign
research
Suppliers
Inputs
Outputs
Customers
Processes
Many people see this as simply a diagram of a typical Production or Operation System that is linked to
customers and suppliers. Visionaries in the practice of TQ see this as a new model of an organization
chart from a strategic perspective.
The Functional Structure and Operations
In the functional structure, the organization is divided into functions such as operations, marketing, MIS
and maintenance, each of which is headed by a manager. In such organizations communication occurs
vertically up or down the chain of command, rather than horizontally across functions. Functional
structures provide organizations with a clear chain of command and allow people to specialize in the
aspect of the work for which they are best suited. They also make it easy to evaluate people based on a
narrow but clear set of responsibilities. For these reasons functional structures are common in both
manufacturing and service organizations at plant and business unit levels.
Problems with Functional Structure
Despite its popularity, the functional structure is designed primarily for the administrative convenience
of the organization, rather than for providing high-quality service to customers. From a TQ point of
view, the functional structure has several inadequacies.
The Functional Structure Separates Employees from Customers
Few employees in the functional organization have direct contact with customers or even a clear idea of
how their work combines with the work of others to satisfy customers. The functional structure tends to
insulate employees from learning about customer expectations and their degree of satisfaction with the
service or product the firm is providing. Being insulated from customers encourages in workers a
narrow conception of their responsibilities. This is often expressed in statements such as "It's not my
job" or "I just work here." Even when such employees want to help customers, they often have such a
limited understanding of how their organizational system works that they are unable to do so. This often
results in demotivated workers and poor quality work.
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Total Quality Management ­ MGT510
VU
Functional Structure for a Manufacturing Company
President
Marketing
Production
Finance
Engineering
Director
Director
Director
Director
Manager
Manager
Plant # 1
Plant # 2
Operations
Quality Control
Purchasing
Accounting
Manager
Manager
Manager
Manager
Most of us have experienced this phenomenon when we call a large organization trying to get help and
get switched to several different people before (if we're lucky) finding someone willing and able to help
us. If our needs as customers relate to the product or service as a whole, but the knowledge and
responsibilities of anyone with whom we deal relate only to their function, we are doomed to
disappointment.
The Functional Structure Inhibits Process Improvement
No organizational unit has control over a whole processes, although most processes involve a large
number of functions. This is because the breakup of the organization into functions is usually unrelated
to the processes used to deliver a product to the customer. This structure is likely to create complex,
wasteful processes, as people do things in one area that must be redone or undone, in another.
For example, some organization maintain a group of engineers whose sole responsibility is to redesign
products so that they can be manufactured effectively. The engineers who design the products in the
first place worry only about product performance, not manufacturability. (For another example of
problems in coordinating design and manufacturing.) Worse yet, if one function tries to improve its
part, it may well make things worse (more wasted time and effort, more cost) for another part of the
process. In this environment, continuous process improvement doesn't stand a chance. This arrangement
obviously stands in the way of continuous process improvement. Organizations pursuing TQ often
retain their quality assurance departments, but these units act more as coaches or facilitators to
employees, rather than as the group with primary responsibility for quality. In summary, the functional
organization compromises total quality in several ways: It distances people from customers and
insulates them from customer expectations. It promotes complex and wasteful processes and inhibits
process improvement. It separates the quality function from the rest of the organization, providing
people with an excuse for not worrying about quality.
Redesigning Organizations for Quality
Poor organization design can be devastating to a company. One of Deming's 14 Points is to "break
down barriers between departments" because "people in various departments must work as a team."
This slogan captures in a nutshell what the TQ philosophy entails for organizational design. People
cannot contribute to customer satisfaction and continuous improvement if they are confined to
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Total Quality Management ­ MGT510
VU
functional prisons where they cannot see customers or hear their voices. Some of the more effective
ways to break down these barriers are to focus on processes, recognize internal customers, create a
team-based organization, reduce hierarchy, and use steering committees.
Focus on Processes
A process is how work creates value for customers. Common business process include acquiring
customer and market knowledge, fulfilling customer orders, purchasing, developing new products or
service, strategic planning, production or service delivery, distribution, research and development,
information management, performance measurement, and training, to name just a few. Individuals or
groups, known as process owners, are accountable for process performance and have the authority to
manage and improve their process. Process owners may range from high-level executives who manage
cross-functional processes to workers who run machinery on the shop floor. Assigning process owners
ensures that someone is responsible to manage the process and optimize its effectiveness.
Process versus Function
CEO
Vice President
Vice President
Department
Department
Department
Department
Department
Manager
Manager
Manager
Manager
Manager
Process A
Process B
Process C
Process D
Process E
A process focus, as opposed to the functional structure, is shown below. Nearly every major activity
within a business involves some form of cross-functional cooperation. A process perspective links all
parts of an organization together and increases employee understanding of the entire system, rather than
focusing on only a small part. In addition, it helps managers to recognize that problems arise from
processes, not people. By aligning the structure of an organization with the actual work processes that
the organization performs, customers may be served more effectively. Process management involves the
design of processes to develop and deliver products and services that meet the needs of customers, daily
control so that they perform as required, and their continual improvement.
Create a Team-Based Organization
As more and more companies accept the process view of organizations, they are structuring the quality
organization around functional or cross-functional teams, each of which has the responsibility to carry
out and improve one of the organization's core processes. Depending on the size of the organization and
the nature of the processes, teams may include everyone who contributes to a given process or only a
representative subset. Similarly, the tams may meet continuously on a crash basis until their new
process design is complete, after which they may meet periodically or on an ad hoc basis whenever
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Total Quality Management ­ MGT510
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necessary. For example, Solectron Corporation, a two-time Baldrige recipient, has a customer focus
team for each customer that includes personnel from quality, manufacturing management, project
engineering, sales, production control, test engineering, and a project buyer and program manager.
Team based Organizational Structure at one Plant
Team
Reps
Council
Safety
Team
Core Process
Teams
Safety
Reps
Innovation
Team
Quality
Reps
Team-Based Organizational Chart
Customers
Customer
Customer
Customer
Team
Team
Team
System and Support Service
Executive
Steering
Committee
CEO
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Total Quality Management ­ MGT510
VU
Strategic Planning and the Baldrige Award
The Baldrige Award recognizes the importance of integrating total quality principles with overall
business planning. The Strategic Planning category addresses strategic business planning and
deployment of plans. It stresses tat customer-driven quality and operational performance are key
strategic business issues that need to be an integral part of overall company planning, and emphasizes
that improvement and learning must be integral parts of company work processes. The special role of
strategic planning is to align work processes with the company strategic directions, thereby ensuring
that improvement and learning reinforce company priorities.
The Strategic Planning category examines how organizations.
·
Plan for the long term, and understand the key influences, risks, challenges, and other
requirements that might affect the organization's future opportunities and directions. This is to
help ensure that short-term action plans are aligned with the organization's longer-term strategic
directions.
·
Project the future competitive environment to help detect and reduce competitive threats,
shorten reaction time, and identify opportunities.
·
Develop action plans and deploy resources ­ particularly human resources ­ to achieve
alignment and consistency, and provide a basis for setting and communicating priorities for
ongoing improvement activities.
·
Ensure that deployment will be effective ­ that a measurement system enables tracking of action
plan achievement in all areas.
The integration of quality planning with business planning occurred in the 1995 criteria revision. Most
symbolic was the change in the category's title from "Strategic Quality Planning" to "Strategic
Planning." This change signaled a "major emphasis on business strategy as the most appropriate view-
of-the-future context for managing performance." The integration of quality and operational issues with
business planning became a dominant theme, with a focus on "Performance," "Competitive position,"
"Customer-related," and "Operational" themes.
The ISO-9001 model has still to work out ways how to incorporate strategic planning into business
planning; however, it does take good care of tactical and operational quality control.
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Table of Contents:
  1. OVERVIEW OF QUALITY MANAGEMENT:PROFESSIONAL MANAGERIAL ERA (1950)
  2. TOTAL QUALITY MANAGEMENT AND TOTAL ORGANIZATION EXCELLENCE:Measurement
  3. INTEGRATING PEOPLE AND PERFORMANCE THROUGH QUALITY MANAGEMENT
  4. FUNDAMENTALS OF TOTAL QUALITY AND RATERS VIEW:The Concept of Quality
  5. TOTAL QUALITY MANAGEMENT AND GLOBAL COMPETITIVE ADVANTAGE:Customer Focus
  6. TOTAL QUALITY MANAGEMENT AND PLANNING FOR QUALITY AT OFFICE
  7. LEADERS IN QUALITY REVOLUTION AND DEFINING FOR QUALITY:User-Based
  8. TAGUCHI LOSS FUNCTION AND QUALITY MANAGEMENT
  9. WTO, SHIFTING FOCUS OF CORPORATE CULTURE AND ORGANIZATIONAL MODEL OF MANAGEMENT
  10. HISTORY OF QUALITY MANAGEMENT PARADIGMS
  11. DEFINING QUALITY, QUALITY MANAGEMENT AND LINKS WITH PROFITABILITY
  12. LEARNING ABOUT QUALITY AND APPROACHES FROM QUALITY PHILOSOPHIES
  13. TOTAL QUALITY MANAGEMENT THEORIES EDWARD DEMING’S SYSTEM OF PROFOUND KNOWLEDGE
  14. DEMING’S PHILOSOPHY AND 14 POINTS FOR MANAGEMENT:The cost of quality
  15. DEMING CYCLE AND QUALITY TRILOGY:Juran’s Three Basic Steps to Progress
  16. JURAN AND CROSBY ON QUALITY AND QUALITY IS FREE:Quality Planning
  17. CROSBY’S CONCEPT OF COST OF QUALITY:Cost of Quality Attitude
  18. COSTS OF QUALITY AND RETURN ON QUALITY:Total Quality Costs
  19. OVERVIEW OF TOTAL QUALITY APPROACHES:The Future of Quality Management
  20. BUSINESS EXCELLENCE MODELS:Excellence in all functions
  21. DESIGNING ORGANIZATIONS FOR QUALITY:Customer focus, Leadership
  22. DEVELOPING ISO QMS FOR CERTIFICATION:Process approach
  23. ISO 9001(2000) QMS MANAGEMENT RESPONSIBILITY:Issues to be Considered
  24. ISO 9001(2000) QMS (CLAUSE # 6) RESOURCES MANAGEMENT:Training and Awareness
  25. ISO 9001(2000) (CLAUSE # 7) PRODUCT REALIZATION AND CUSTOMER RELATED PROCESSES
  26. ISO 9001(2000) QMS (CLAUSE # 7) CONTROL OF PRODUCTION AND SERVICES
  27. ISO 9001(2000) QMS (CLAUSE # 8) MEASUREMENT, ANALYSIS, AND IMPROVEMENT
  28. QUALITY IN SOFTWARE SECTOR AND MATURITY LEVELS:Structure of CMM
  29. INSTALLING AN ISO -9001 QM SYSTEM:Implementation, Audit and Registration
  30. CREATING BUSINESS EXCELLENCE:Elements of a Total Quality Culture
  31. CREATING QUALITY AT STRATEGIC, TACTICAL AND OPERATIONAL LEVEL
  32. BIG Q AND SMALL q LEADERSHIP FOR QUALITY:The roles of a Quality Leader
  33. STRATEGIC PLANNING FOR QUALITY AND ADVANCED QUALITY MANAGEMENT TOOLS
  34. HOSHIN KANRI AND STRATEGIC POLICY DEPLOYMENT:Senior Management
  35. QUALITY FUNCTION DEPLOYMENT (QFD) AND OTHER TOOLS FOR IMPLEMENTATION
  36. BASIC SQC IMPROVEMENT TOOLS:TOTAL QUALITY TOOLS DEFINED
  37. HOW QUALITY IS IMPLEMENTED? A DIALOGUE WITH A QUALITY MANAGER!
  38. CAUSE AND EFFECT DIAGRAM AND OTHER TOOLS OF QUALITY:Control Charts
  39. STATISTICAL PROCESS CONTROL (SPC) FOR CONTINUAL QUALITY IMPROVEMENT
  40. STATISTICAL PROCESS CONTROL….CONTD:Control Charts
  41. BUILDING QUALITY THROUGH SPC:Types of Data, Defining Process Capability
  42. AN INTERVIEW SESSION WITH OFFICERS OF A CMMI LEVEL 5 QUALITY IT PAKISTANI COMPANY
  43. TEAMWORK CULTURE FOR TQM:Steering Committees, Natural Work Teams
  44. UNDERSTANDING EMPOWERMENT FOR TQ AND CUSTOMER-SUPPLIER RELATIONSHIP
  45. CSR, INNOVATION, KNOWLEDGE MANAGEMENT AND INTRODUCING LEARNING ORGANIZATION