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Total
Quality Management
MGT510
VU
Lesson
# 21
DESIGNING
ORGANIZATIONS FOR
QUALITY
For design,
development and implementation of a QMS,
the ISO 9000 approach is
completely
compatible
with the total quality
philosophy, though it is not as
all encompassing. ISO 9000
is
composed
of three standards:
ISO
9000:2000
Quality
Management Systems Fundamentals and
Vocabulary
ISO
9001:2000
Quality
Management Systems
Requirements
ISO
9004:2000
Quality
Management Systems Guidelines
for Performance Improvements
ISO
9001 and ISO 9004
are known as Consistent Pair and
are based and follow PDCA
methodology.
ISO
system is about standardizing the
approach organizations everywhere take in
managing and
improving
the processes that ultimately
result in producing better quality
products and services.
Specifically,
ISO 9001(2000) establishes the
requirements for quality management
systems (QMS) that
must
be employed by all organizations
registered to the standard. Registered organizations
should enjoy:
·
Wider
customer acceptance of products and
services
·
Improved
effectiveness and reliability of its
processes
·
Improved
quality of products and services
·
Improved
organizational performance and competitiveness
By
the time ISO 9000: 1987
was released, TQM was a mature
management system, well understood
by
many
in the West. It is clear that ISO's
Technical Committee 176 (TC
176), which was charged
with
ISO
9000's development, borrowed
some TQM elements, most
notably its documentation
requirements.
ISO
9000: 1994 moved a bit
closer to TQM, at least
mentioning (though not
requiring) continual
improvement.
ISO 9000:2000 made a giant
leap in comparison, especially in the
area of continual
improvement,
which has gone from
receiving just cursory treatment to
becoming a firm requirement.
In
addition,
the standard now incorporates eight
quality management principles
that come directly
from
TQM.
They are:
1.
Customer
focus
understanding customer's needs, striving
to exceed their expectations.
2.
Leadership
establishing direction, unity of purpose,
and a supportive work
environment.
3.
Involvement
of people
ensuring that all employees at
all levels are able to
fully use their
abilities
for the organization's
benefit.
4.
Process
approach
recognizing that all work is
done through processes, and
managing
them
accordingly.
5.
System
approach to management
expands on the previous principle in
that achieving
any
objective requires a system of
interrelated processes.
6.
Continua
improvement as a permanent
organizational objective, recognizing and
acting
on
the fact that no process is so
good that further
improvement is impossible.
7.
Factual
approach to decision making
acknowledging that sound decisions
must be
based
on analysis of factual data and
information.
8.
Mutually
beneficial supplier relationships
to take advantage of the synergy that
can be
found
in such relationships.
By
design, as a result of ISO 9000,
any organization supplying products or
service is able to develop
and
employ a quality management
system that is recognized by customers
worldwide. Customers
around
the globe who deal with
ISO 9000-registrered organizations
can expect that purchased
goods or
services
will conform to a set o recognized
standards.
ISO
9001's requirements for quality
management systems are generic in nature,
and are applicable to
organizations
in any industry or economic sector.
Whether the organization manufactures a
product or
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Quality Management
MGT510
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provides
a service, whether it is a company or a governmental
agency, whether it is large or
small, ISO
9000
can apply, and be used to
advantage.
To
be registered the organization must go
through a process that
includes the following
steps:
1.
Develop
(or upgrade) a quality manual that
describes how the company will
assure the
quality
of its products or services.
2.
Document
procedures (or upgrade existing
documentation) that describe
how the various
processes
for design, production, continual
improvement, and so forth, will be
operated.
This
must include procedures for
management review/audits and the
like.
3.
The
organization must provide evidence of
top management's commitment to the QMS
and
its
continual improvement.
4.
The
organization's top management
must ensure that customer
requirements are determined
and
met.
5.
The
organization must hire an accredited
registrar company to examine its
systems,
processes,
procedures, quality manual, and
related items. If everything is in
order,
registration
will be granted. Otherwise, the registrar
will inform the company of which
areas
require
work (but will not
inform the company specifically what
must be done), and a
second
visit will be scheduled.
6.
Once
registration is accomplished, the company will conduct
its own internal audits
to
ensure
that the systems, processes, and
procedures are working as
intended.
7.
Also
once registered, the outside registrar
will make periodic audits for the
same purpose.
These
audits must be passed to retain
registration.
An
important point to understand about
ISO 9000 is that the
organization has to respond to
all ISO 9000
requirements
and tell the registrar specifically
what it is going to do and how.
ISO does not tell
the
organization.
Assuming the registrar agrees
with the organization's plan,
registration is awarded. To
retain
that registration, the organization
must do what it said it
would do.
Before
the advent of the year 2000
release, ISO 9000 was
concerned only with the
standards which an
organization
could build its own
version of a quality management
system. ISO 9000:2000 has
closed
much
of the gap that existed with
TQM. The primary remaining
difference between ISO 9000 and
TQM
is
in the degree to which the total
organization is involved, ISO
9000 does not require the
QMS to
include
functions and levels that do
not play a direct role in
the management and execution of
the
product/service
realization processes. Functions
that are typically not
involved under the QMS
include
human
resources, finance (accounting),
sales, and marketing.
Characteristics
of Total Quality
Management
ISO
9000:2000
TQM
Customer
focus (internal and external)
Obsession
with quality
Scientific
approach to problem solving
Long-term
commitment
Partial
Teamwork
Continual
process and product
improvement
Education
and training
intensive
Freedom
through control
Unity
of purpose
Employee
involvement and empowerment
Partial
Total
Quality Management Characteristics Compared
with ISO 9000
In
comparison, the ISO 9000 quality
management system is designed to "provide
the framework for
continual
improvement to increase the
probability of enhancing customer
satisfaction and the
satisfaction
of other interested parties. It provides
confidence to the organization and
its customers that
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it
is able to provide products that
consistently fulfill requirements."
ISO claims that beyond
customer
satisfaction,
cost and risk-management benefits will
also accrue to the organization.
These benefits
translate
to improved competitiveness the same as
TQM's objective. ISO claim
these benefits result
from
emphasizing the eight quality management
principles on which the standard is
based. Following
table
provides a comparison of ISO's eight
quality management principles
with Deming's
Fourteen
Points
and TQM.
ISO
9000's Eight Quality
Management Principles
Deming's
14 Points
TQM
1.
Customer
focus
2.
Leadership
#1,
#2, #7
3.
Involvement
of people
4.
Process
approach
5.
System
approach to management
6.
Continual
improvement
#5
7.
Factual
approach to decision making
8.
Mutually
beneficial supplier
relationships
#4
ISO
9000 is Compatible with, and
can be viewed as a Subset of,
TQM
Clearly,
TQM and ISO 9000 is not
quite the same thing.
However, there is nothing inherent in
ISO 9000
that
would prevent it from
becoming part of a larger
Total Quality Management
environment. There
are
many
examples today of companies
that have
ISO
9000's Quality Management
Principles versus Deming's Fourteen
Points and TQM successfully
included
ISO 9000 as part of a larger
total quality effort.
Organizations that are
already at some level
of
TQM
maturity or CMMI level 3 maturities have
typically found it easy to
implement ISO 9000. This
is
because
a TQM environment with its
infrastructure of top management
commitment, documented
processes
and procedures, continuous improvement,
obsession with quality, and so
on, easily supports
the
requirements of ISO 9001(2000).
Designing
an ISO 9000 QMS Can
Improve Market Perception in
Global Post WTO
World
A
traditional organizational environment is
one which still operates
according to the "old way of
doing
things"
rather than according to the principles
of Total Quality Management and the
technology based
networked
post WTO world. In Pakistan,
you might say, an organization
being run as an
autocratic,
non-participatory
and "SAITH" like organization as
many in Sialkot, Guranwala, Faisalabad,
Lahore,
and
Karachi etc.
When
ISO 9000 is implemented by a
traditional organization, in its
real spirit but much
depends on the
organization's
reasons for adopting ISO
9000 and the degree of
executive-level commitment to it.
Let us
take
a look from a different
view, if ISO 9000 is designed and
developed for the wrong
reasons, it can
not
become a good marketing
tool, and the organization's functional
departments especially operations
and
QA , might develop even more problems
than they had before ISO
9000. Once again
QMS
principles
are taken in its letter and
spirit.
The
eight quality management
principles are defined and
detailed in ISO 9004:2000,
Quality
management
systems Guidelines for
performance improvements.
·
Principle
1 Customer focus
·
Principle
2 Leadership
·
Principle
3 Involvement of people
·
Principle
4 Process approach
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Quality Management
MGT510
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·
Principle
5 System approach to management
·
Principle
6 Continual improvement
·
Principle
7 Factual approach to decision
making
·
Principle
8 Mutually beneficial supplier
relationships
Principle
1:
Customer
focus:
Organizations
depend on their customers and therefore
should understand current and future
customer
needs,
should meet customer requirements
and strive to exceed
customer expectations
Key
benefits:
·
Increased
revenue and market share obtained
through flexible and fast responses to
market
opportunities.
·
Increased
effectiveness in the use of the organization's
resources to enhance
customer
satisfaction.
·
Improved
customer loyalty leading to
repeat business.
Applying
the principle of customer focus typically
leads to:
·
Researching
and understanding customer needs and
expectations.
·
Ensuring
that the objectives of the organization
are linked to customer needs
and expectations.
·
Communicating
customer needs and expectations
throughout the organization.
·
Measuring
customer satisfaction and acting on the
results.
·
Systematically
managing customer
relationships.
·
Ensuring
a balanced approach between satisfying customers
and other interested parties (such
as
owners,
employees, suppliers, financiers, local
communities and society as a
whole).
Principle
2:
Leadership:
Leaders
establish unity of purpose and direction
of the organization. They should
create and maintain
the
internal environment in which
people can become fully
involved in achieving the
organization's
objectives.
Key
benefits:
·
People
will understand and be motivated towards
the organization's goals and
objectives.
·
Activities
are evaluated, aligned and
implemented in a unified
way.
·
Miscommunication
between levels of an organization will be
minimized.
Applying
the principle of leadership typically
leads to:
·
Considering
the needs of all interested parties
including customers, owners,
employees,
suppliers,
financiers, local communities
and society as a
whole.
·
Establishing
a clear vision of the organization's
future.
·
Setting
challenging goals and targets.
·
Creating
and sustaining shared values, fairness
and ethical role models at
all levels of the
organization.
·
Establishing
trust and eliminating fear.
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Quality Management
MGT510
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·
Providing
people with the required
resources, training and freedom to
act with
responsibility
and
accountability.
·
Inspiring,
encouraging and recognizing people's
contributions.
Principle
3:
Involvement
of people:
People
at all levels are the
essence of an organization and their
full involvement enables
their abilities to
be
used for the organization's
benefit.
Key
benefits:
·
Motivated,
committed and involved people
within the organization.
·
Innovation
and creativity in furthering the
organization's objectives.
·
People
being accountable for their
own performance.
·
People
eager to participate in and contribute to
continual improvement.
Applying
the principle of involvement of people
typically leads to:
·
People
understanding the importance of their
contribution and role in the
organization.
·
People
identifying constraints to their
performance.
·
People
accepting ownership of problems and their
responsibility for solving
them.
·
People
evaluating their performance against
their personal goals and
objectives.
·
People
actively seeking opportunities to enhance
their competence, knowledge and
experience.
·
People
freely sharing knowledge and
experience.
·
People
openly discussing problems and
issues.
Principle
4:
Process
approach:
A
desired result is achieved more efficiently
when activities and related
resources are managed as
a
process.
Key
benefits:
·
Lower
costs and shorter cycle times through
effective use of
resources.
·
Improved,
consistent and predictable
results.
·
Focused
and prioritized improvement
opportunities.
Applying
the principle of process approach
typically leads to:
·
Systematically
defining the activities necessary to
obtain a desired result.
·
Establishing
clear responsibility and accountability
for managing key
activities.
·
Analyzing
and measuring of the capability of key
activities.
·
Identifying
the interfaces of key activities within
and between the functions of the
organization.
·
Focusing
on the factors such as resources,
methods, and materials that will
improve key
activities
of the organization.
·
Evaluating
risks, consequences and impacts of
activities on customers, suppliers and
other
interested
parties.
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Quality Management
MGT510
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Principle
5:
System
approach to management:
Identifying,
understanding and managing
interrelated processes as a system
contributes to the
organization's
effectiveness and efficiency in achieving
its objectives.
Key
benefits:
·
Integration
and alignment of the processes that
will best achieve the desired
results.
·
Ability
to focus effort on the key
processes.
·
Providing
confidence to interested parties as to the consistency,
effectiveness and efficiency of
the
organization.
Applying
the principle of system approach to
management typically leads
to:
·
Structuring
a system to achieve the organization's
objectives in the most effective
and efficient
way.
·
Understanding
the interdependencies between the processes of the
system.
·
Structured
approaches that harmonize and integrate
processes.
·
Providing
a better understanding of the roles and
responsibilities necessary for
achieving
common
objectives and thereby
reducing cross-functional
barriers.
·
Understanding
organizational capabilities and
establishing resource constraints prior
to action.
·
Targeting
and defining how specific
activities within a system
should operate.
·
Continually
improving the system through
measurement and evaluation.
Principle
6:
Continual
improvement:
Continual
improvement of the organization's overall
performance should be a permanent objective
of
the
organization.
Key
benefits:
·
Performance
advantage through improved organizational
capabilities.
·
Alignment
of improvement activities at all
levels to an organization's strategic
intent.
·
Flexibility
to react quickly to
opportunities.
Applying
the principle of continual improvement
typically leads to:
·
Employing
a consistent organization-wide approach to
continual improvement of the
organization's
performance.
·
Providing
people with training in the
methods and tools of continual
improvement.
·
Making
continual improvement of products,
processes and systems an
objective for every
individual
in the organization.
·
Establishing
goals to guide, and measures to track,
continual improvement.
·
Recognizing
and acknowledging improvements.
Principle
7 Factual approach to decision
making:
Effective
decisions are based on the analysis of
data and information
Key
benefits:
·
Informed
decisions.
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·
An
increased ability to demonstrate the
effectiveness of past decisions through
reference to
factual
records.
·
Increased
ability to review, challenge and
change opinions and decisions.
Applying
the principle of factual approach to
decision making typically
leads to:
·
Ensuring
that data and information
are sufficiently accurate
and reliable.
·
Making
data accessible to those who
need it.
·
Analyzing
data and information using
valid methods.
·
Making
decisions and taking action based on
factual analysis, balanced with experience
and
intuition.
Principle
8:
Mutually
beneficial supplier relationships:
An
organization and its suppliers are
interdependent and a mutually beneficial
relationship enhances the
ability
of both to create
value
Key
benefits:
·
Increased
ability to create value for
both parties.
·
Flexibility
and speed of joint responses to
changing market or customer
needs and expectations.
·
Optimization
of costs and resources.
Applying
the principles of mutually beneficial
supplier relationships typically
leads to:
·
Establishing
relationships that balance short-term
gains with long-term
considerations.
·
Pooling
of expertise and resources with
partners.
·
Identifying
and selecting key suppliers.
·
Clear
and open communication.
·
Sharing
information and future plans.
·
Establishing
joint development and improvement
activities.
·
Inspiring,
encouraging and recognizing improvements and
achievements by suppliers.
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