Jonathan Leonardi

Summer 2017: IE673 elearning

Dr. Paul Ranky

Homework Assignment 2 July 2, 2017

1. Discuss the importance of quality partnering and strategic alliances

When a partnership or strategic alliance between suppliers, manufacturers, and customers is not
present the passing of information up and down the supply chain does not occur. This is especially
hurtful in the manufacturer-customer relationship. If a manufacturer does not partner with its
customers then the manufacturer cant better meet the requirements or needs of the end user. In a
partnership or strategic alliance the invisible walls between suppliers, manufacturers, and customers
are removed. This allows for suppliers and manufacturers to understand the needs of their customers
and continuously move towards a goal of delighting the customer. The text offers that partnering can
result in improvements in critical areas:
Processes
Products
Relationships with customers and suppliers
Customer satisfaction
Internal relationships
As discussed in previous chapters, improving the process, products, and customer satisfaction are all
staples of total quality. Improving in these critical areas increases the competitiveness of an
organization (Goetsch 64-65)

2. Discuss the various form of quality partnering and strategic alliances

Partnerships and strategic alliances come in many forms with positive impacts, for example:
consortium buying allows for organizations to negotiate better pricing, customer focus groups allow
for organizations to better understand their target market, and in-house supplier representatives
allows for suppliers to have an advocate inside the customers workplace. These are all examples of
the various forms of quality partnering and strategic alliances described by Goetsch and Davis which
are:
Internal partnering
o Defined by Goetsch and Davis as: creating an environm and establishing
mechanisms within it that that brings managers and employees, teams, and
individual employees together in mutually supportive alliances that maximize the
human resources of an organization.
o This type of partnership reduces internal competition and allows all employees to
coordinate towards continuous improvement.
Partnering with suppliers
o According to Goetsch and Davis suppliers and organizations have traditionally
adversarial relationships defined activities like the low-bid process
o The goal [of partnering with suppliers] is to create and maintain a loyal, trusting,
reliable relationship that will allow both partners to win, while promoting the
continuous improvement of quality, productivity, and competitiveness
o There are several supplier partnership requirements that must be present in order to
have a healthy supplier partnership:

Supplier personnel must have access to the end user

The quality, features, and delivery of a product need to be factored in by the
customer. Not just cost.

The supplier must guarantee quality through process controls.

Suppliers must successfully practice the Just-In-Time technique

Customers and suppliers need to be electronically integrated to succeed
Partnering with customers
o The best way to satisfy the customer is to have a partnership
o No one knows more than the customer about what they want
o Suppliers cant fully understand the way the customer uses their product unless they
completely understand the customers process
o All stakeholders need to be involved from the initiation of a product development
cycle. If not, critical activities or needs can be overlooked. Involve customers in
product development in order to avoid costly changes at later stages of the project.
Partnering with potential competitors
o The goal of partnering with potential competitors is competitiveness
o Manufacturing networks are the most common type of partnership between
competitors
o Some of the common activities that manufacturing networks participate in are:

Production

Purchasing

Technology transfer

Product development

Marketing

Education and training
o If done successfully, a manufacturing network can yield large technological
breakthroughs that an organization may have not been able to achieve if going at it
alone.
o Competitor partnerships can increase quality, productivity, and competitiveness for all
parties involved.
Global partnering
o Organizations that partner with international suppliers have better chances of
success in the global marketplace
o Understanding the needs of customers from different cultures is essential in
developing products for unfamiliar parts of the globe.
Education and business partnerships
o Improving employee work skills can be an expensive proposition
o Educational institutions can provide necessary training and other services that may
be more cost effective in comparison to hiring a private trainer or consultant (Goetsch
68-74).
3. Discuss the importance of quality culture
The values of an organization are what the organization believes to be important. A quality culture is
important because it defines quality as the organizations most important value and sets the tone for
the organizations approach to quality. Deviation from total quality is not acceptable in a quality
culture. A quality culture emphasizes both internal and external customer satisfaction and provides
the resources required to achieve total quality. Managers in a quality culture empower their
employees to take responsibility for their process and the product or service it provides (Goetsch 77-
79).
 Goetsch, David L., and Stanley B. Davis. Quality management for organizational excellence:
introduction to total quality. 8th ed. N.p.: Pearson, 2016. Print.

4. Explain the difference between traditional and modern quality cultures:

Areas of Noticeable Difference Traditional Modern

Operating Philosophy
Objectives
Management Approach
Attitudes Toward Customers
Problem-Solving Approach
Supplier Relationships
Performance-Improvement
Approach
Primary focus is return on
investment. Maximize profits
and minimize operating costs
using whatever means available.
For example: shipping defective
products, delay
capital/technology investment,
layoffs, employee benefit
reductions, etc.
Short-term objectives
weeks/months objectives only
Top executives and managers
think, plan and then direct the
employee. Give assignments and
enforce policies and rules
Inward focus on the
organizations needs
Time and energy spent assigning
blame. Look for an individual
MVP to solve the problem.
Lack of innovation and creative
thinking.
Adversarial and limited sharing
of information. Continual
pressure to reduce cost.
Triggered by problems. Erratic
and reactive
Focus on customer satisfaction.
Do what is necessary to
reasonably exceed customer
expectations even if that
increases operating costs and
lowers short-term profit. For
example: technology/capital
investment, employee training
and education, etc.
Strategic planning. Plan for the
short- and long-term objectives
within the organizational vision
Managers are coaches and
teachers. They communicate the
organizations vision, mission,
and goals. Ensure their
employees have the resources
they need to perform at peak
levels. They recognize and
reward performance
Place the highest priority on
customer satisfaction and
improving customer relations
Priority is placed on finding the
root cause of the problem. Apply
a systematic approach to solve
the problem and not just the
symptoms
Collaborative and mutually
beneficial relationship. Free flow
of information in order to
improve performance
Continuous improvement is at
the core of the operating
philosophy

Goetsch, David L., and Stanley B. Davis. Quality management for organizational excellence:
introduction to total quality. 7th ed. N.p.: Pearson, 2012. Print.
5. How do you understand who is a customer?
Traditionally, a customer is any person who may interact with a company after a product has been
produced. A more temporary view of customers also includes internal customers. An employee
whose job function precedes that of another employee is considered to be a supplier. The employee
who receives the product downstream is considered to be an internal customer (Goetsch 91-92).
6. Explain customer defined value, value analysis and retention.
Goetsch and Davis define customer-defined value as the sum of a customers perceptions of the
following factors:
Product or service quality
Service provided by the organization
The organizations personnel
The organizations image
Selling price of the product or service
Overall cost of the product or service
Different customers will weigh each of these factors differently. Customers generally understand that
all of these factors add value to a product and will not base decisions solely on selling price.

Customer value analysis is a critical tool for the total quality organization. To get a better idea of what
a customer wants out of a product or from an organization, total quality organizations will know the
answers to the following questions:
What attributes does the customer value most?
How does the customer rate the attributes?
Are the products strongest attributes in-line with the customers most important
attributes?
How do our attributes stack up against our competition?
After a time, are the customers values or preferences still the same?

Customer retention is an important measure of success and is a better measure of customer loyalty
than customer satisfaction. In order to both satisfy and retain customers an organization must (over
the long term) turn [customers] into partners and proactively seek their input rather than waiting and
reacting to feedback provided after a problem has occurred. Customer surveys, hiring test
customers, and focus groups are tools that will allow an organization to proactively seek input
(Goetsch 96-99).

7. Discuss Product innovation models for customer retention.

Continuous improvement of the product, cost, and services of an organization give superior value and
lead to customer retention. Praveen Guptas innovation model allows organizations to keep products
up-to-date, attractive, and relevant for the customers. Guptas model contains five steps:
Target the opportunity. Focus on identifying the customer needs and use them to
guide innovations
Explore the idea. Conduct a thorough research to ensure that the proposed
innovation will be successful in the marketplace
Develop alternatives. Develop a variety of alternatives for the innovation-prototypes-
and test them thoroughly to determine which is the bests
Optimize the solution. Take the chosen alternative and optimize it for production and
delivery.
 Commercialize the innovation. Develop and deploy an effective marketing program
for the innovation. Never let an innovation fail for lack of effective marketing
Gupta argues that an innovation is not complete until it has reached the marketplace (Goetsch 103).

8. Discuss employee empowerment.

Employees that are empowered receive ownership of the processes of which they are responsible.
This gives employees pride in their product or service. In order for employee empowerment to be
effective managers must provide an open, nonthreatening, creative environment that encourages
employee involvement; expects employees to think; recognizes employee value; and regards
employee ownership of processes, products, and services. Employee empowerment can have a
positive impact on cost, productivity, quality, and service. Success of an employee empowerment
initiative hinges on corporate culture. In order to empower employees managers must lessen the
divide between managers and workers.

Empowerment also allows employees to make more decisions. When a problem occurs a traditional
management style would direct the employee to involve a supervisor or manager, with a modern
approach the employee is empowered to make a decision to fix a small problem. This keeps the
manager working to solve problems at a higher level, and away from relatively small problems that
can be handled by the empowered employee. Employee empowerment also allows for a gathering of
collective brain power. Instead of a manager making all the decisions and doing all the thinking,
employees are welcome to bring their ideas to the table. A difficult problem is almost always easier to
solve with more than one perspective (Goetsch 107-108).

9. Discuss leadership for quality

Leadership for quality is defined by Goetsch and Davis as leadership from the perspective of total
quality. Leadership for quality utilizes standard leadership principles to improve people, processes,
and products. Continuous improvement in these three areas will improve quality, value, productivity,
service, market share, longevity, business expansion, and ROI.

Goetsch and Davis describe the key elements of leadership for quality as the following:
Customer Focus: The primary goal for the total quality organization is to exceed the
expectations of both internal and external customers
Obsession with Quality: Quality is pursued obsessively as the means to exceed
customer expectations
Recognizing the Structure of Work: The structural makeup of all operations must be
optimized and continuously improved.
Freedom Through Control: Work must be controlled through standardization.
Unity of Purpose: All employees must work together towards the organizations
mission. These must be clearly stated and understood.
Teamwork: Teams outperform individuals in almost all cases.
Continuing Education and Training: Employees must be empowered by education
and training to work smarter and harder.
Emphasis on Best Practices and Peak Performance: Leaders must encourage their
employees to continuously operate at the highest possible level through best
practices. Peak performance is critical in a total quality environment (Goetsch 121-
122).

10. How to lead for a better quality change?

Leading for better quality change can be achieved through the change-implementation model
described by Goetsch and Davis in Figure 9.5. The model consists of the following actions:
Develop a compelling change picture: A change picture must answer the five Ws and
one H. There is always fear around change, therefore the change picture must be
compelling and written from the perspective of the stakeholders. The change picture
must also be modified so that it is relevant to the stakeholder reading it.
Communicate the change picture to all stakeholders: This should be done both in
writing and verbally to all stakeholders. This prevents any miscommunications and
gives the stakeholders an opportunity to respond to the change picture in person. If
personnel are not given the opportunity to respond to the change picture their buy-in
to the change may be lost completely, thus inhibiting change. Another benefit of
communicating the change picture verbally is that it will give management an idea of
who will support and who will oppose the change. This positions the manager so that
he/she can allocate resources effectively during change implementation.
Conduct a comprehensive roadblock analysis: This process is also performed in-
person with the employees directly impacted by the change. A meeting where all
stakeholders can bring their heads together and discuss potential roadblocks for
implementing the change will effectively determine the path forward or required
actions required for success.
Remove or mitigate all roadblocks identified: Removing or mitigating the roadblocks
identified in the previous step is critical and must be completed before
implementation
Implement the change: This step must be performed systematically in order to reduce
the impacts of any potential problems. This systematic approach should include a
task list, schedule, milestones, and list of champions for each activity.
Monitor and adjust: Managers must continuously monitor all implementation activities
to insure successful change. Monitoring must continue until the change is no longer
considered a change but is considered to be the norm (Goetsch 128-131).

Goetsch, David L., and Stanley B. Davis. Quality management for organizational excellence:
introduction to total quality. 8th ed. N.p.: Pearson, 2016. Print.

Social networking assignment

Article 1: US Coal Plant Closures Likely To Eliminate 30 Million Tons Of Annual Coal Demand

46 coal-fired generating units are scheduled to be closed before the end of 2018. The 46 units are
located in 16 states. It is estimated that these closures will reduce coal demand by 28.2 million tons
per year or $1.1 billion. The largest impacts on coal producers will be felt in the Powder River Basin
and Illinois basin. Peabody Energy and Cloud Peak Energy are the companies that will feel the
greatest impact by these closures. There is at least one coal-fired generating unit for scheduled
closure that will remain open for limited use due to grid reliability issues. Companies should poise
themselves use these closures as an opportunity to implement sustainable green energy production.
Workers in the coal industry need to expand their skill set to be prepared for a future with less coal
and more natural gas or renewables.
Article 2: Indian Railways Proposes 800 Megawatt Solar Park

State owned Indian Railways is proposing to build an 800-megawatt solar park after the success of
the 750-megawatt Rewa solar power park which will realize a levelized tariff of 4.9cents/kWh (the
second lowest tariff for solar power ever). Indian Railways long term plan is to be able to tap into 5
gigawatts of solar capacity by 2025. This will constitute roughly 25% of its total energy consumption.
The Indian climate is suitable for solar power production and will yield relatively high rewards for
th
companies both public and private that are willing to invest heavily in it. Air pollution in India is the 13
worst in the world, with initiatives like this we are likely to see air pollution levels begin to trend
downward as the cost of building photovoltaic cells decreases and environmental regulations tighten.

Article 3: Saudi Arabia To Offer More Than 1 Gigawatt Of Solar & Wind In Second Tender Round

Saudi Arabia plans to offer 1 gigawatt worth of contracts for renewable electricity by the end of 2017.
This is part of their plan to supply 10% of the nations power via renewables like wind and solar by
2030. In order to achieve this goal Saudi Arabia will need to produce 9.5 gigawatts of energy from
renewable projects. In addition to this project , Saudi Arabia has also opened a project for bidding to
produce a 300 megawatt solar power plant and a 400 megawatt wind farm. Saudi Arabia has a good
climate for both wind and solar power initiatives. The desert is the ideal location for the capturing of
both wind and solar energy. The goal of reaching 10% power from renewables by 2030 is a high
profile decision coming from the worlds second largest crude oil producer [1]. There is some merit to
the idea that this initiative stems from the UAEs success in implementing 25% renewable power
generation and plans to increase that to 30% by 2030 [2].

Sources:

[1] http://money.cnn.com/interactive/news/economy/worlds-biggest-oil-producers/index.html

[2] http://www.alj.com/en/news/article/2016/07/middle-east-looks-renewable-energy-future

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